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[Markets] Furious Migrant Mob "Forcefully Prevents" German Police From Deporting Asylum Seeker

It appears that nationalists were on to something when they warned about "no go" zones in Germany, Sweden and other European countries that have taken in millions of migrants from Syria, Afghanistan, Eritrea and elsewhere since 2015.

While progressive Europeans scoffed, a report by RT illustrates how law enforcement is losing control of some neighborhoods. In a shocking incident that unfolded in the town of Ellwangen in Southern Germany, police officers were forced to release an asylum seeker who had been detained and was set to be ejected from the country.

Migrants

The reason? A an angry mob surrounded them and began demand that the Togolese national be released in an "aggressive and threatening" manner.

After failing to disperse or contain the crowd, the overwhelmed officers were left with no choice but to let the detained man go free to avoid "a drastic escalation of the situation that could occur otherwise."

At one point the mob swelled from 50 to more than 150 migrants. Just as violence appeared inevitable, the migrants sent a peace emissary who delivered a chilling message to the overwhelmed police: They could leave safely if they removed the man's handcuffs and released him tot eh crowd within two minutes.

Otherwise, the migrants would storm the gates of the ward. Following the incident, the man who had been detained has not yet been found.

But perhaps the most shocking detail from the story was the response by the local police chief, who appeared to defend the migrants, saying they too appeared to be in an "extremely tense situation." Though he also praised the officers for their bravery "under such exceptional circumstances."

The deputy head of the Aalen police department, Bernhard Weber, praised the actions of the officers "under such exceptional" circumstances. "I can only show great respect for my colleagues," who were able to "keep a cool head" in such a situation, he said in a statement, apparently implying that, even though a massive breach of public order would justify the use of force by the police, it was not really necessary.

At the same time, he seemed to seek to downplay the incident. "We believe that those who confronted [the police], were also in an extremely tense situation," Weber said, adding that the migrants apparently "got carried away" by some sort of a corporate feeling and took the actions "they would have probably never taken following a thorough consideration."

The police chief admitted, though, that "it is clear that a state governed by the rule of law should not let itself be barred from enforcing this rule of law by an aggressive mob." The police emphasized that it has launched a probe into the incident over the unlawful release of a detainee and a breach of public order.

Unsurprisingly, the incident prompted an outcry from local politicians who told reporters that the migrants should be held legally accountable for their actions.

The incident, however, provoked concerns among local politicians. "Attacks on police officers are unacceptable," Uli Sckerl, a member of the regional parliament from the Green Party, told journalists. He also said that such behavior should be followed by legal consequences. "Frustration does not justify crimes," he added.

The faction leader of the right-wing populist Alternative for Germany party in the regional parliament, Bernd Goedel, condemned the incident by calling it the "state's failure." "If the authorities show that they can yield to pressure even once, then one will see the same situations in the future," he warned. The leader of the regional parliament's faction of the Free Democrats, Hans-Ulrich Ruelke, also described the incident as an "alarming situation."

The migrant crisis has grown so acute in Germany that last year Chancellor Angela Merkel was forced to walk back her "open door" policy and announce that Germany would limit the number of refugees it accepts to 200,000 per year (though she also recently said the country would let in an additional 10,000 who had been selected by the UN).

Unfortunately, appalling incidents like the one described above aren't unique to Germany. Last year, Swedish police told a journalist investigating the rape of a 12-year-old girl that they hadn't started investigating the case because they "cannot cope" with the sheer volume of cases.

Published:5/4/2018 1:58:19 AM
[Markets] "It's Up To Europe" - Paul Craig Roberts On What Can Be Done To Save The World

Authored by Paul Craig Roberts,

It is up to Europe whether or not the Earth dies in nuclear Armageddon.

European governments do not realize their potential to save the world from Washington’s aggression, because the western Europeans are accustomed to being Washington’s vassal states since the end of World War 2, and the eastern and central Europeans have accepted Washington’s vassalage since the collapse of the Soviet Union. Vassalage pays well if all the costs are not counted.

By joining NATO, the eastern and central Europeans permitted Washington to move US military presence to Russia’s borders. This military presence on Russia’s borders gave Washington undue confidence that Russia also could be coerced into a vassal state existence. Despite the dire fate of the two finest armies ever assembled—Napoleon’s Grand Army and that of Germany’s Wehrmacht—Washington hasn’t learned that the two rules of warfare are: (1) Don’t march on Russia. (2) Don’t march on Russia.

Because of Europe’s subservience to Washington, Washington is unlikely to learn this lesson before Washington marches on Russia.

Washington in its hubristic idiocy has already begun this march piecemeal with the coup in Ukraine and with its attacks on Syrian military positions. As I wrote earlier this week, Washington is escalating the crisis in Syria.

What can stop this before it explodes into war is eastern and central Europe’s decision to disengage as enablers of Washington’s aggression.

There are no benefits to Europe of being in NATO. Europeans are not threatened by Russian aggression, but they are threatened by Washington’s aggression against Russia. If the American neoconservatives and their Israeli allies succeed in provoking a war, all of Europe would be destroyed. Forever.

What is wrong with European politicians that they take this risk with the peoples that they govern?

Europe is still a place of beauty constructed by humans over the ages—architecturally, artistically, and intellectually—and the museum should not be destroyed. Once free of Washington’s vassalage, Europe could even be brought back to creative life.

Europe is already suffering economically from Washington’s illegal sanctions against Russia forced upon Europeans by Washington and from the millions of non-European refugees flooding the European countries fleeing from Washington’s illegal wars against Muslim peoples, wars that Americans are forced to fight for the benefit of Israel.

What do Europeans get for the extreme penalties imposed on them as Washington’s vassals? They get nothing but the threat of Armageddon. A small handful of European “leaders” get enormous subsidies from Washington for enabling Washington’s illegal agendas. Just take a look at Tony Blair’s enormous fortune, which is not the normal reward for a British prime minister.

Europeans, including the “leaders,” have much more to gain from being connected to the Russia/China Silk Road project. It is the East that is rising, not the West. The Silk Road would connect Europe to the rising East. Russia has undeveloped territory full of resources—Siberia—that is larger than the United States. On a purchasing power parity basis, China is already the world’s largest economy. Militarily the Russian/Chinese alliance is much more than a match for Washington.

If Europe had any sense, any leadership, it would tell Washington good-bye.

What is the value to Europe of Washington’s hegemony over the world? How do Europeans, as opposed to a handful of politicians receiving bags full of money from Washington, benefit from their vassalage to Washington? Not one benefit can be identified. Washington’s apologists say that Europe is afraid of being dominated by Russia. So why aren’t Europeans afraid of their 73 years of domination by Washington, especially a domination that is leading them into military conflict with Russia?

Unlike Europeans and Russians, Americans have scant experience with wartime casualties. Just one World War 1 battle, the Battle of Verdun, produced more casualties than the battle deaths that US has experienced in all the wars of its existence beginning with the Revolutionary War for independence from Britain.

The World War 1 Battle of Verdun,which took place prior to the US entry into the war, was the longest and most costly battle in human history. An estimate in 2000 found a total of 714,231 casualties, 377,231 French and 337,000 German, for an average of 70,000 casualties a month; other recent estimates increase the number of casualties to 976,000 during the battle, with 1,250,000 suffered at Verdun during the war.

In contrast, US casualties for World War 1 after US entry were 53,402 battle deaths and 200,000 non-mortal woundings.

Here is the list of US battle deaths from the War of Revolution through the “global war on terror” as of August 2017:

  • American Revolution: 4,435
  • War of 1812: 2,260
  • Wars against native Americans (1817-1898): 1,000
  • Mexican War: 1,733
  • War of Northern Aggression :
  • North: 104,414
  • South: 74,524
  • Spanish-American War: 385
  • World War 2: 291,557
  • Korean War: 33,739
  • Vietnam War: 47,434
  • Gulf War: 148

This comes to 561,629 battle deaths

If we add the battle deaths of the global war on terror as of Aug. 2017 - 6,930 - we have 568,559 US battle deaths in all US wars.

That compares to 714,231 casualties, from which I am unable at this time to separate battle deaths from non-mortal wounds and maiming from a single World War 1 battle that did not involve US soldiers.

In other words, except for the Confederate States and native Americans, who endured enormous Union war crimes, the US has no experience of war. So Washington enters war with ease. The next time, however, will be Armageddon, and Washington will no longer exist. And neither will the rest of us.

US deaths in World War 1 were low because the US did not enter the war until the last year. Similarly in World War 2. Japan was defeated by the loss of her navy and air force and by the firebombing of Tokyo and other Japanese cities, which required few US battle deaths. The nuclear attacks on Hiroshima and Nagasaki were gratuitous and took place when Japan was asking to surrender. Approximately 200,000 Japanese civilians died in the nuclear attacks and no Americans except prisoners of war held in those cities. In Europe, as in World War 1, the US did not enter the war against Germany until the last year when the Wehrmacht had already been broken and defeated by the Soviet Red Army. The Normandy invasion faced scant opposition as all German forces were on the Russian front.

If there is a World War 3 the US and all of the Western world would be immediately destroyed as nothing stands between the West and the extraordinary nuclear capability of Russia except the likelihood of complete and total destruction. If China enters on Russia’s side, as is expected, the destruction of the entirety of the Western World will be for all time.

Why does Europe enable this scenario? Is there no humanity, no intelligence left anywhere in Europe? Is Europe nothing but a collection of cattle awaiting slaughter from the machinations of the crazed American neocons? Are there no European political leaders with one ounce of common sense, one ounce of integrity?

If not, doom is upon us as there is no humanity or intelligence in Washington.

Europe must take the lead, especially the central Europeans. These are peoples who were liberated from the Nazis by the Russians and who have in the 21st century experienced far more aggression from Washington’s pursuit of its hegemony they they have experienced from Moscow.

If Europe breaks away from Washington’s control, there is hope for life. If not, we are as good as dead.

Published:5/4/2018 1:28:19 AM
[Markets] Taiwan Livid After China Secretly Installs Cruise Missiles On Contested Spratly Islands

Tensions continue to flare up in the South China Sea, as Beijing has reportedly installed anti-ship cruise missiles and surface-to-air missile systems on three outposts in the region, as reported by CNBC on Wednesday, which cited sources with direct knowledge of U.S. intelligence reports. The missiles have reportedly been installed on Fiery Cross Reef, Subi Reef and Mischief Reef.

Fiery Cross Reef

The land-based anti-ship cruise missiles, designated as YJ-12B, allow China to strike surface vessels within 295 nautical miles of the reefs. Meanwhile, the long-range surface-to-air missiles designated as HQ-9B, have an expected range of targeting aircraft, drones and cruise missiles within 160 nautical miles. -CNBC

As we've documented again and again (and again and again), China's military buildup in the Pacific, particularly surrounding the Spratly Islands, a collection of small islands, cays and atolls in the South China Sea, is one of the greatest long-term risks to peace and stability in the US and many of China's neighbors, who have territorial claims in the region that may conflict with China's.

Subi Reef, July 2012 vs. December 2017

If confirmed, the installations would mark the first Chinese missile deployments in the Spratly Islands - a territory with claims by several Asian countries, including Taiwan and Vietnam. Chinese foreign ministry spokeswoman Hya Chunying says that the missiles are required to protect China's sovereignty.

China's missile placement comes on the heels of an april deployment of radar jammers on the Spratly islands, capable of scrambling military communications and radar systems used by US ships - a clear rebuke to the US and China's neighbors.

A US official confirmed to WSJ in April that "China has deployed military jamming equipment to its Spratly Island outposts." Furthermore, the equipment was likely installed during the last 90 days.

The U.S. assessment is supported by a photo taken last month by the commercial satellite company DigitalGlobe and provided to The Wall Street Journal. It shows a suspected jammer system with its antenna extended on Mischief Reef, one of seven Spratly outcrops where China has built fortified artificial islands since 2014, moving sand onto rocks and reefs and paving them over with concrete.

China’s Defense Ministry didn’t respond to a request for comment. -WSJ

The move allows China to further project its rapidly growing military influence in the region - most recently approaching the government of Vanuatu to build a permanent military base on the South Pacific Island nation.

Those who do not intend to be aggressive have no need to be worried or scared,” ministry spokeswoman Hua Chunying told reporters in Beijing.

China’s Defense Ministry did not immediately respond to a request for comment on the latest report.

The foreign ministry said China has irrefutable sovereignty over the Spratly Islands and that its necessary defensive deployments were for national security needs and not aimed at any country. -Reuters

Mawanwhile, Taiwan called the new missile installations "irresponsible," presidential office spokesman Alex Huang said on Thursday. Taiwan "will not bow down to pressure from Beijing" Foreign Minister Joseph Wu said, but "will work with friendly nations to uphold regional peace and stability and ensure our rightful place in the international community."

In response to China's increased provocations in the region, Tsai Shih-Ying of Taiwan's ruling Democratic Progressive Party, asking the National Defence Minister Yen Teh-fa for details surrounding Taiwan’s military program to procure a new modern main battle tank.

Yen told Tsai that Taiwan’s military would soon make a bid to purchase M1A2 tanks, an American third-generation main battle tank — the most modern armored tank in the world, from the Pentagon in the second half of 2018.

Yen also stated that the American tanks could help transfer technology to the island’s defense industry, Taiwan’s Central News Agency reported, as quoted by South China Morning Post.

“The Taiwan Strait is very likely to replace the Korean peninsula as the hottest flashpoint in the region,” he warned.

“In response to the changing situation, Taiwan’s military has also increased its combat readiness.”

"In one or two months, China will hold more long-range military training and increase combined forces operations when engaged in such activities in waters near Taiwan,” Yen said when responding to another lawmaker Chiang Chi-chen about Beijing’s increased military exercises in the Taiwan Strait and the East China Sea.

Greg Poling, a South China Sea expert at Washington’s Center for Strategic and International Studies think-tank, said deploying missiles on the outposts would be important.

These would be the first missiles in the Spratlys, either surface to air, or anti-ship,” he said.

He added that such deployments were expected as China built missile shelters on the reefs last year and already deployed such missile systems on Woody Island further to the north.

Poling said it would be a major step on China’s road to dominating the South China Sea, a key global trade route. -Reuters

“Before this, if you were one of the other claimants ... you knew that China was monitoring your every move. Now you will know that you’re operating inside Chinese missile range. That’s a pretty strong, if implicit, threat,” said Poling.

China's increased presence in the South China Sea is "a substantial challenge to US military operations in the region," says US Navy Adm. Philip Davidson, the expected nominee to replace US Pacific Command Chief Adm. Harry Harris. 

In written testimony to the Senate Armed Services Committee, he writes that the development of China's various forward operating bases in controversial waters appear to be complete. 

"The only thing lacking are the deployed forces. Once occupied, China will be able to extend its influence thousands of miles to the south and project power deep into Oceania," Davidson wrote. "In short, China is now capable of controlling the South China Sea in all scenarios short of war with the United States."

Published:5/4/2018 12:29:07 AM
[Entertainment] Cheryl Burke and Matthew Lawrence Are Engaged Cheryl Burke, Matthew Lawrence, Ed Sheeran Concert, HYDE LoungeTalk about a birthday to remember! As Cheryl Burke celebrated her special day, the Dancing With the Stars pro received a romantic proposal from her longtime boyfriend Matthew...
Published:5/3/2018 11:28:27 PM
[Markets] Exposed: The Naked Truth About Robert Mueller

Authored by Rep Louis Gohmert via Director Blue blog,

Robert Mueller has a long and sordid history of illicitly targeting innocent people. His many actions are a stain upon the legacy of American jurisprudence. He lacks the judgment and credibility to lead the prosecution of anyone.

I do not make these statements lightly. Each time I prepared to question Mueller during Congressional hearings, the more concerned I became about his ethics and behavior. As I went back to begin compiling all of that information in order to recount personal interactions with Mueller, the more clearly the big picture began to come into focus.

At one point I had to make the decision to stop adding to this compilation or it would turn into a far too lengthy project. My goal was to share some firsthand experiences with Mueller -- as other Republican Members of Congress had requested -- adding, “You seem to know so much about him.”

This article is prepared from my viewpoint to help better inform the reader about the Special Prosecutor leading the effort to railroad President Donald J. Trump through whatever manufactured charge he can allege.

Judging by Mueller's history, it doesn't matter who he has to threaten, harass, prosecute or bankrupt to get to allege something or, for that matter, anything. It certainly appears Mueller will do whatever it takes to bring down his target -- ethically or unethically -- based on my findings.

What does former Attorney General Eric Holder say? Sounds like much the same thing I just said. Holder has stated, "I've known Bob Mueller for 20, 30 years; my guess is he’s just trying to make the case as good as he possibly can."

Holder does know him. He has seen Mueller at work when Holder was obstructing justice and was therefore held in Contempt of Congress. He knows Mueller’s FBI framed innocent people and had no remorse in doing so.

Let’s look at what we know. What I have accumulated here is absolutely shocking upon the realization that Mueller's disreputable, twisted history speaks to the character of the man placed in a position to attempt to legalize a coup against a lawfully-elected President. Any Republican who says anything resembling, “Bob Mueller will do a good job as Special Counsel,” “Bob Mueller has a great reputation for being fair,” or anything similar; either (a) wants President Trump indicted for something and removed from office regardless of his innocence; (b) is intentionally ignorant of the myriad of outrageous problems permeating Mueller’s professional history; or (c) is cultivating future Democrat votes when he or she comes before the Senate someday for a confirmation hearing.

There is simply too much clear and convincing evicdence to the contrary. Where other writers have set out information succinctly, I have quoted them, with proper attribution. My goal is to help you understand what I have found.

ROBERT MUELLER - BACKGROUND

In his early years as FBI Director, most Republican members of Congress gave Mueller a pass in oversight hearings, allowing him to avoid tough questions. After all, we were continually told, “Bush appointed him.” I gave him easy questions the first time I questioned him in 2005 out of deference to his Vietnam service. Yet, the longer I was in Congress, the more conspicuous the problems became. As I have said before of another Vietnam veteran, just because someone deserves our respect for service or our sympathy for things that happened to them in the military, that does not give them the right to harm our country later. As glaring problems came to light, I toughened up my questions in the oversight hearings. But first, let's cover a little of Mueller's history.

MUELLER: THE WHITEY BULGER AFFAIR

The Boston Globe noted Robert Mueller’s connection with the Whitey Bulger case in an article entitled, “One Lingering Question for FBI Director Robert Mueller.” The Globe said this: “[Mike] Albano [former Parole Board Member who was threatened by two FBI agents for considering parole for the men imprisoned for a crime they did not commit] was appalled that, later that same year, Mueller was appointed FBI director, because it was Mueller, first as an assistant US attorney then as the acting U.S. attorney in Boston, who wrote letters to the parole and pardons board throughout the 1980s opposing clemency for the four men framed by FBI lies. Of course, Mueller was also in that position while Whitey Bulger was helping the FBI cart off his criminal competitors even as he buried bodies in shallow graves along the Neponset…”

Mueller was the head of the Criminal Division as Assistant U.S. Attorney, then as Acting U.S. Attorney. I could not find any explanation online by Mueller as to why he insisted on keeping the defendants in prison that FBI agents—in the pocket of Whitey Bulger— had framed for a murder they did not commit. Make no mistake: these were not honorable people he had incarcerated. But it was part of a pattern that eventually became quite clear that Mueller was more concerned with convicting and putting people in jail he disliked, even if they were innocent of the charges, than he was with ferreting out the truth. I found no explanation as to why he did not bear any responsibility for the $100 million paid to the defendants who were framed by FBI agents under his control. The Boston Globe said, “Thanks to the FBI’s corruption, taxpayers got stuck with the $100 million bill for compensating the framed men, two of whom, Greco and Tameleo, died in prison.”

The New York Times explained the relationship this way: “In the 1980's, while [FBI Agent] Mr. Connolly was working with Whitey Bulger, Mr. Mueller was assistant United States attorney in Boston in charge of the criminal division and for a period was the acting United States attorney here, presiding over Mr. Connolly and Mr. Bulger as a ’top echelon informant.'

Officials of the Massachusetts State Police and the Boston Police Department had long wondered why their investigations of Mr. Bulger were always compromised before they could gather evidence against him, and they suspected that the FBI was protecting him.”

If Mr. Mueller had no knowledge that the FBI agents he used were engaged in criminal activity, then he certainly was so incredibly blind that he should never be allowed back into any type of criminal case supervision. He certainly helped continue contributing to the damages of the framed individuals by working relentlessly to prevent them from being paroled out of prison even as their charges were in the process of being completely thrown out.

Notice also the evidence of a pattern throughout Mueller's career: the leaking of information to disparage Mueller’s targets. In the Whitey Bulger case, the leaks were to organized crime --- the Mafia.

One of the basic, most bedrock tenets of our Republic is that we never imprison people for being “bad” people. Anyone imprisoned has to have committed a specific crime for which they are found guilty. Not in Mueller’s world. He has the anti-Santa Claus list; and, if you are on his list, you get punished even if you are framed.

He never apologizes when the truth is learned, no matter how wrong or potentially criminal or malicious the prosecution was. In his book, you deserve what you get even if you did not commit the crime for which he helped put you away. This is but one example, though -- as Al Pacino once famously said -- “I’m just getting warmed up!” 

REP. CURT WELDON ATTACKED AND CRUSHED BY ROBERT MUELLER

During my first term in Congress, 2005 to 2006, Congressman Curt Weldon delivered some powerful and relentless allegations about the FBI having prior knowledge that 9/11 was coming. He repeatedly alleged that there was documentary evidence to show that 9/11 could have been prevented and thousands of lives saved if the FBI had done its job. He held up documents at times while making these claims in speeches on the floor of the House of Representatives.

I was surprised that FBI Director Mueller seemed to largely ignore these allegations. It seemed to me that he should either admit the FBI made significant mistakes or refute the allegations. Little did I know Mueller’s FBI was preparing a response, but it certainly was not the kind of response that I would have expected if an honorable man had been running that once hallowed institution.

You can read two of Congressman Weldon’s speeches on the House floor that are linked below. After reading the excerpts I have provided, you may get a window into the mind of the FBI Director or someone under Mueller’s control at the FBI. The FBI literally destroyed Congressman Weldon's public service life, which then foreclosed his ability to use a national platform to expose what he believed were major problems in the FBI fostered under the Clinton administration. Here is but one such excerpt of a speech wherein he spoke of the failure of FBI leadership, then under the direction of the Clinton administration and as came within Mueller’s control just before 9/11. Shockingly, the Mueller FBI failed to even accept from the military any information on the very terrorists who would later go on to commit the atrocities of

9/11, much less act upon it.

The U.S. gleaned this information through development of a surveillance technology called Able Danger. On October 19, 2005, Rep. Curt Weldon delivered the following statement on the House floor.

Mr. Speaker, back in 1999 when I was Chair of the Defense Research Subcommittee, the Army was doing cutting-edge work on a new type of technology to allow us to understand and predict emerging transnational terrorist threats. That technology was being done at several locations but was being led by our Special Forces Command. The work that they were doing was unprecedented. And because of what I saw there, I supported the development of a national capability of a collaborative center that the CIA would just not accept.

In fact, in November 4 of 1999, two years before 9-11, in a meeting in my office with the Deputy Secretary of Defense, Deputy Director of the CIA, Deputy Director of the FBI, we presented a nine-page proposal to create a national collaborative center.

When we finished the brief, the CIA said we did not need that capability, and so before 9/11 we did not have it. When President Bush came in after a year of research, he announced the formation of the Terrorism Threat Integration Center, exactly what I had proposed in 1999. Today it is known as the NCTC, the National Counterterrorism Center.

But, Mr. Speaker, what troubles me is not the fact that we did not take those steps. What troubles me is that I now have learned in the last four months that one of the tasks that was being done in 1999 and 2000 was a Top Secret program organized at the request of the Chairman of the Joint Chiefs of Staff, carried out by the General in charge of our Special Forces Command, a very elite unit focusing on information regarding al Qaeda. It was a military language effort to allow us to identify the key cells of al Qaeda around the world and to give the military the capability to plan actions against those cells, so they could not attack us as they did in 1993 at the Trade Center, at the Khobar Towers, the USS Cole attack, and the African embassy bombings.

What I did not know, Mr. Speaker, up until June of this year, was that this secret program called Able Danger actually identified the Brooklyn cell of al Qaeda in January and February of 2000, over one year before 9/11 ever happened.

In addition, I learned that not only did we identify the Brooklyn cell of al Qaeda, but we identified Mohamed Atta as one of the members of that Brooklyn cell along with three other terrorists who were the leadership of the 9-11 attack.

I have also learned, Mr. Speaker, that in September of 2000, again, over one year before 9-11, that [the] Able Danger team attempted on three separate occasions to provide information to the FBI about the Brooklyn cell of al Qaeda, and on three separate occasions they were denied by lawyers in the previous administration to transfer that information.

Mr. Speaker, this past Sunday on “Meet the Press,” Louis Freeh, FBI Director at the time, was interviewed by Tim Russert. The first question to Louis Freeh was in regard to the FBI's ability to ferret out the terrorists. Louis Freeh's response, which can be obtained by anyone in this country as a part of the official record, was, ‘Well, Tim, we are now finding out that a top-secret program of the military called Able Danger actually identified the Brooklyn cell of al Qaeda and Mohammed Atta over a year before 9/11.’

And what Louis Freeh said, Mr. Speaker, is that that kind of actionable data could have allowed us to prevent the hijackings that occurred on September 11.

So now we know, Mr. Speaker, that military intelligence officers working in a program authorized by the Chairman of the Joint Chiefs of Staff, the General in charge of Special Forces Command, identified Mohammed Atta and three terrorists a year before 9/11, tried to transfer that information to the FBI [and] were denied; and [that] the FBI Director has now said publicly if he would have had that information, the FBI could have used it to perhaps prevent the hijackings that struck the World Trade Center, the Pentagon, and the plane that landed in Pennsylvania and perhaps saved 3,000 lives and changed the course of world history.

Curt Weldon gave a series of speeches, recounting what he saw and what he knew, regarding the failures of the FBI and the Clinton administration to share information that could have prevented 9/11.

Congressman Weldon tried to hold those accountable in the FBI and CIA that he felt had mishandled actionable intelligence which he said could have thwarted the 9/11 attacks. He recounted many examples of similar intelligence failures.

In 2006, the Robert Mueller-led FBI took horrendously unjust actions to derail Curt Weldon’s reelection bid just weeks before the vote—actions that were later described as a “hit job”: “Each of Weldon’s 10 previous re-elections had been by sizable margins. Polls showed he was up by 5-7 points [in the fall of 2006]. Three weeks prior to the election, however, a national story ran about Weldon based upon anonymous sources that an investigation was underway against him and his daughter, alleging illegal activities involving his congressional work. Weldon had received no prior notification of any such investigation and was dumbfounded that such a story would run especially since he regularly briefed the FBI and intelligence agencies on his work.

A week after the news story broke, alleging a need to act quickly because of the leak, FBI agents from Washington raided the home of Weldon’s daughter at 7:00AM on a Monday morning… Local TV and print media had all been alerted to the raid in advance and were already in position to cover the story. Editor's note: Sound familiar?

Within hours, Democratic protesters were waving “Caught Red-Handed” signs outside Weldon’s district office in Upper Darby. In the ensuing two weeks, local and national media ran multiple stories implying that Weldon must also have been under investigation. Given the coverage, Weldon lost the election… To this day, incredibly, no one in authority has asked Weldon or his daughter about the raid or the investigation. There was no follow up, no questions, no grand jury interrogation, nothing.

One year after the raid the local FBI office called Weldon’s daughter to have her come get the property that had been removed from her home. That was it…The raid ruined the career of Weldon and his daughter.”

Though some blamed the Clintons and Sandy Berger for orchestrating the FBI “hit job,” we can’t lose sight of the fact that the head of the FBI at the time was Robert Mueller. Please understand what former FBI officials have told me: the FBI would never go after a member of Congress, House or Senate, without the full disclosure to and the blessing of the FBI Director. Even if the idea on how to silence Curt Weldon did not come from Director Mueller himself, it surely had his approval and encouragement.

The early morning raid by Mueller’s FBI -- with all the media outside -- who had obviously been alerted by the FBI, achieved its goal of abusing the U.S. Justice system to silence Curt Weldon by ending his political career. Mueller’s tactics worked. If the Clintons and Berger manipulated Weldon’s reelection to assure his defeat, they did it with the artful aid of Mueller, all while George W. Bush was President. Does any of this sound familiar?

People say those kinds of things just don’t happen in America. They certainly seemed to when Mueller was in charge of the FBI and they certainly seem to happen now during his tenure as Special Counsel. It appears clear that President Obama and his adjutants knew of Mueller’s reputation and that he could be used to take out their political opponents should such extra-legal actions become politically necessary.

To the great dismay of the many good, decent and patriotic FBI agents, Obama begged Mueller to stay on for two years past the 10 years the law allowed. Obama then asked Congress to approve Mueller’s waiver allowing him to stay on for two extra years. Perhaps the leaders in Congress did not realize what they were doing in approving it. I did. It was a major mistake, and I said so at the time. This is also why I objected strenuously the moment I heard Deputy Attorney General Rod Rosenstein appointed his old friend Bob Mueller to be Special Counsel to go after President Trump.

ROD ROSENSTEIN

I was one of the few who were NOT surprised when Mueller started selecting his assistants in the Special Counsel’s office. Many had reputations for being bullies, for indicting people who were not guilty of the charges, for forcing people toward bankruptcy by running up their legal fees (while the bullies in the Special Counsel’s office enjoy an apparently endless government budget), or by threatening innocent family members with prosecution so the Special Counsel’s victim would agree to pleading guilty to anything to prevent the Kafka-esque prosecutors from doing more harm to their families.

AN ILLEGAL RAID ON CONGRESS BY MUELLER

There is a doctrine in our governmental system that mandates each part of government must have oversight to prevent power from corrupting --- and absolute power from corrupting absolutely. The Congress and Senate are accountable to the voters as is the President. Our massive and bloated bureaucracy is supposed to be accountable to the Congress.

A good example would be complaints against the Department of Justice or, specifically, the FBI.

If constituents or whistleblowers within those entities have complaints, a Congressman’s office is a good place to contact. Our conversations or information from constituents or whistleblowers are normally privileged from review by anyone within the Executive Branch. It must be so.

If the FBI could raid our offices anytime an FBI agent were to complain to us, no FBI agent could ever afford to come forward, no matter how egregious the conduct they sought to disclose.

Whistleblowers in the FBI must know they are protected. They always have known that in the past. As I learned from talking with attorneys who had helped the House previously with this issue, if the FBI or another law enforcement entity needed to search something on the House side of the Capitol or House office buildings, they contacted the House Counsel, whether with a warrant or request. The House Counsel with approval of the Speaker, would go through the Congress Members' documents, computers, flash drives, or anything that might have any bearing on what was being sought as part of the investigation.

They would honestly determine what was relevant and what was not, and what was both irrelevant and privileged from Executive Branch review. Normally, if there were a dispute or question, it could be presented to a federal judge for a private in-chamber review to determine if it were privileged or relevant. If the DOJ or FBI were to get a warrant and gather all of the computers and documents in a Congressman’s office without the recovered items being screened to insure they are not privileged from DOJ seizure, the DOJ would be risking that an entire case might be thrown out because of things improperly recovered and “fruit of the poisonous tree,” preventing the use of even things that were not privileged.

FBI Director Mueller, however,, seemed determined to throw over 200 years of Constitutional restraints to the wind so he could let Congress know he was the unstoppable government bully who could potentially waltz into our offices whenever he wished.

In the case of Congressman William Jefferson, Democrat of Louisiana, Mueller was willing to risk a reversal of a slam dunk criminal case just to send a message to the rest of Congress: you don’t mess with Mueller. That Congressman Jefferson was guilty of something did not surprise most observers when, amidst swirling allegations, $90,000 in cold hard cash was found in his freezer. As we understood it, the FBI had a witness who was wired and basically got Jefferson on tape taking money. They had mountains of indisputable evidence to prove their case. They had gotten an entirely appropriate warrant to search his home and had even more mountains of evidence to nail the lid on his coffin, figuratively speaking.

The FBI certainly did not need to conduct an unsupervised search of a Congressman’s office to put their unbeatable case at risk. Apparently, the risk was worth it to Mueller --- he could now show the members of Congress who was in charge. Apparently, the FBI knew just the right federal judge who would disregard the Constitution and allow Mueller’s minions to do their dirty work.

I read the Application for Warrant and the accompanying Affidavit for Warrant to raid Jefferson’s office, as I did so many times as a judge.

I simply could not believe they would risk such a high-profile case just to try to intimidate Members of Congress.

In the opinion of this former prosecutor, felony judge and Appellate Court Chief Justice, they could have gotten a conviction based on what they had already spelled out in the very lengthy affidavit. The official attorneys representing the House, knowing my background, allowed me to sit in on the extremely heated discussions between attorneys for the House, DOJ attorneys, and, to my recollection, an attorney from the Bush White House, after Jefferson’s office was raided.

The FBI had gathered up virtually every kind of record, computerized or otherwise, and carted them off. I was not aware of the times that the DOJ and House attorneys, with the Speaker’s permission, had cooperated over the years. No Congressman is above the law nor is any above having search warrants issued against them which is why Jefferson’s home was searched without protest.

However, when the material is in a Congressional office, there is a critical and centuries’ old balance of power that must be preserved.

The Mueller FBI, along with the DOJ, assured everyone that all was copacetic. They would ask some of the DOJ’s attorneys review all of the material and give back anything that was privileged and unlawful for the DOJ to see. Then they would make sure none of the DOJ attorneys who participated in the review of materials (that were privileged from the DOJ’s viewing) would be allowed to be prosecutors in Jefferson’s case.

If you find that kind of thinking terribly flawed and constitutionally appalling, you would be in agreement with the former Speakers of the House, the Vice President at the time, and ultimately, the final decisions of our federal appellate court system. They found the search to be illegal and inappropriate. Fortunately for the DOJ, they did not throw the entire case out. In retrospect, we did not know at the time what a farce a DOJ “firewall” would have been. Now we do!

MUELLER'S 5-YEAR UP-OUR-OUT

In federal law enforcement, it takes a new federal agent or supervisor about five years or so after arriving at a newly assigned office to gain the trust and respect of local law enforcement officers. That trust and respect is absolutely critical to doing the best job possible. Yet new FBI Director Robert Mueller came up with a new personnel policy that would rid the FBI of thousands of years of its most invaluable experience.

In a nutshell, after an FBI employee was in any type of supervisory position for five years, he or she had to either come to Washington to sit at a desk or get out of the FBI.

In the myriad of FBI offices around the country, most agents love what they do in actively enforcing the law. They have families involved in the community; their kids enjoy their schools; and they do not want to move to the high cost of living in Washington, DC, and especially not to an inside desk job. What occurred around the country was that agents in charge of their local offices got out of the FBI and did something more lucrative. Though they really wanted to stay in, they were not allowed to do so if they were not moving to DC. Agents told me that it was not unusual for the Special Agent in Charge of a field office to have well over 20 years of experience before the policy change. Under Mueller’s policy that changed to new Special Agents in Charge having five to ten years of experience when they took over.

If the FBI Director wanted nothing but “yes” men and women around the country working for him, this was a great policy. Newer agents are more likely to unquestioningly salute the FBI figurehead in Washington, but never boldly offer a suggestion to fix a bad idea and Mueller had plenty of them.

Whether it was wasting millions of dollars on a software boondoggle or questionable personnel preferences, agents tell me Mueller did not want to hear from more experienced people voicing their concerns about his ideas or policies. An NPR report December 13, 2007, entitled, “FBI'S 'Five-And-Out' Transfer Policy Draws Criticism” dealt with the Mueller controversial policy: “From the beginning of this year (2007) until the end of September (2007), 576 agents found themselves in the five-and-out pool. Less than half of them — just 286 — opted to go to headquarters; 150 decided to take a pay cut and a lesser job to stay put; 135 retired; and five resigned outright.”

In the period of nine months accounted for in this report, the FBI ran off a massive amount of absolutely priceless law enforcement experience vested in 140 invaluable agents. For the vast part, those are the agents who have seen the mistakes, learned lessons, could advise newer agents on unseen pitfalls of investigations and pursuit of justice.

So many of these had at least 20-30 years of experience or more. The lessons learned by such seasoned agents were lost as the agents carried it with them when they left. In the 2007 NPR report, the FBI Agents Association indicated that the Five-Year-Up-or-Out program hobbles field offices and takes relationships forged there for granted. In other words, it was a terrible idea.

The incalculable experience loss damages the FBI by eliminating those in the field in a position to advise the FBI Director against his many judgment errors, which were listed in the NPR article. But this was not the only damage done.

If an FBI Director has inappropriate personal vengeance in mind or holds an inappropriate prejudice such as those that infamously motivated Director J. Edgar Hoover, then the older, wiser, experienced agents were not around with the confidence to question or guide the Director away from potential misjudgment. I also cannot help but wonder: if Mueller had not run off the more experienced agents, would they have been able to advise against and stop the kind of Obama-era abuses and corruption being unearthed right now?

Rather than admit that his 5-Year program was a mistake, Mueller eventually changed the policy to a Seven-Year-Up-or-Out Program. I once pointed out to him at a hearing that if he had applied the Five Year Up-or-Out Policy to literally everyone in a supervisory position, he himself would have had to leave the FBI by September of 2006. He did not seem to be amused.

One other problem remained that will be discussed in more detail later in this article. Before Mueller became Director, FBI agents were trained to identify certain Muslims who had become radicalized and dangerous. Mueller purged and even eliminated training that would have helped identify radical Islamic killers. By running off the more experienced agents who had better training on radical Islam before Mueller, “blinded us of the ability to identify our enemy,” as I was told by some of them, Mueller put victims in harm’s way in cities like Boston, San Diego and elsewhere.

NATIONAL SECURITY LETTER ABUSES

National Security Letters (NSL) are a tool that allows the DOJ to bypass the formality of subpoenas, applications for warrants with affidavits in support, and instead simply send a letter to an individual, business or any entity they so choose to demand that records or documents of any kind must be produced and provided to the sender.

The letter also informs the recipient that if the he or she reveals to anyone that the letter was received or what it requires to be produced, then the recipient has committed a federal felony and will be prosecuted.

It is a rather dramatic event to receive such a letter and then realize that this simple letter could have such profound power and consequences.

The Committee in the House of Representatives that has oversight jurisdiction over the DOJ is the Judiciary Committee of which I am a member. We have grilled DOJ personnel in the past over the potential for NSL abuse, but both the House and Senate Committees were reassured that there were no known abuses of this extra-constitutional power.

Unfortunately, the day came when we learned that there had been an extraordinary number of abuses.

Apparently, some of Mueller’s FBI agents had just been sending out demands for records or documents without any probable cause, which the Fourth Amendment requires. Some agents were on outright fishing expeditions just to find out what different people were doing. We were told that there may have even been thousands of NSL’s dispatched to demand documents without following either the Constitutional requirements or the DOJ’s own policy requirements.

When the Inspector General’s report revealed such absolutely outrageous conduct by FBI agents, some in Congress were absolutely livid. An NBC News report on March 9, 2007, had this headline and sub-headline: “Justice Department: FBI acted illegally on data; Audit finds agency misused Patriot Act to obtain information on citizens.”

The report went on to say, “FBI Director Robert Mueller said he was to blame for not putting more safeguards into place. ‘I am to be held accountable,’ Mueller said. He told reporters he would correct the problems and did not plan to resign. ‘The inspector general went and did the audit that I should have put in place many years ago,’ Mueller said.” Some Republicans wanted to completely eliminate such an extraordinary power that was so widely abused. Nonetheless, I could not help but wonder that if Mueller had not run off thousands of years of experience though his “Five Year Up-or-Out Policy,” perhaps young, inexperienced agents would not have been so tempted to vastly abuse the power of the NSL.

In fact, Attorney General Alberto Gonzales lost his job over the widespread, pervasive abuses under Mueller’s supervision. In retrospect, Mueller probably should have been gone first. It was his people, his lack of oversight, his atmosphere that encouraged it, and his FBI that did virtually nothing to hold people accountable.

SENATOR TED STEVENS

With Mueller as his mentor and confidant, is it any surprise that we’re now finding James Comey’s FBI found additional ways to monitor Americans and plot with Democrat loyalists in an attempt to oust a duly-elected President?

Ted Stevens had served in the U.S. Senate since 1968 and was indicted in 2008 by the U.S. Justice Department. One would think before the U.S. government would seek to destroy a sitting U.S. Senator, there would be no question whatsoever of his guilt. One would be completely wrong, at least when the FBI Director is Robert Mueller. Roll Callprovides us with General Colin Powell’s take on Ted Stevens.

“According to former Secretary of State Colin Powell, who had worked closely with the senator since his days as President Ronald Reagan’s national security adviser, the senator was ‘a trusted individual ... someone whose word you could rely on. I never heard in all of those years a single dissenting voice with respect to his integrity, with respect to his forthrightness, and with respect to the fact that when you shook hands with Ted Stevens, or made a deal with Ted Stevens, it was going to be a deal that benefited the nation in the long run, one that he would stick with.’”

Such a glowing reputation certainly did not inhibit Mueller’s FBI from putting Stevens in its cross-hairs, pushing to get an indictment that came 100 days before his election, and engaging in third world dictator-type tactics to help an innocent man lose his election, after which he lost his life. As reported by NPR, after the conviction and all truth came rolling out of the framing and conviction of Senator Stevens, the new Attorney General Eric Holder, had no choice. He “abandoned the Stevens case in April 2009 after uncovering new and ‘disturbing’ details about the prosecution…”

Unfortunately for Ted Stevens, his conviction came only eight days before his election, which tipped the scales on a close election.

Does this sound familiar yet? The allegation was that Senator Stevens had not paid full price for improvements to his Alaska cabin. As Roll Call reported, he had actually overpaid for the improvements by over twenty percent. Roll Callwent on to state:

“But relying on false records and fueled by testimony from a richly rewarded ‘cooperating’ witness… government prosecutors convinced jurors to find him guilty just eight days before the general election which he lost by less than 2 percent of the vote.”

After a report substantiated massive improprieties by the FBI and DOJ in the investigation and prosecution of Senator Stevens, the result was ultimately a complete dismissal of the conviction.

At the time there was no direct evidence that Director Mueller was aware of the tactics of concealing exculpatory evidence that would have exonerated Stevens, and the creation of evidence that convicted him in 2008. Nearly four years later, in 2012, the Alaska Dispatch News concluded: “Bottom line: Kepner (the lead FBI investigator accused of wrongdoing by Agent Joy) is still working for the FBI and is still investigating cases, including criminal probes. Joy, the whistleblower (who was the FBI agent who disclosed the FBI’s vast wrongdoing, especially of Kepner), has left the agency.”/p>

Director Mueller either did control or could have controlled what happened to the lead FBI agent that destroyed a well-respected U.S. Senator. That U.S. Senator was not only completely innocent of the manufactured case against him, he was an honest and honorable man. Under Director Mueller’s overriding supervision, the wrongdoer who helped manufacture the case stayed on and the whistleblower was punished. Obviously, the FBI Director wanted his FBI agents to understand that honesty would be punished if it revealed wrongdoing within Mueller’s organization. Further, not only was evidentiary proof of Senator Stevens’ innocence concealed from the Senator’s defense attorneys by the FBI, there was also a witness that provided compelling testimony that Stevens’ had done everything appropriately. That witness, however, was who agents sent back to Alaska by FBI Agents, unbeknownst to the Senator’s defense attorneys. This key exonerating testimony was placed out of reach for Senator Stevens’ defense. Someone should have gone to jail for this illegality within the nation’s top law enforcement agency. Instead, Senator Stevens lost his seat, and surprise, surprise, Mueller’s FBI helped another elected Republican bite the dust. Unfortunately, I am not speaking figuratively.

In August of 2010, former Senator Stevens boarded his doomed plane. But for the heinous, twisted and corrupt investigation by the FBI, and inappropriate prosecution by the DOJ, he would have still been a sitting U.S. Senator.

Don’t forget, one vote in the Senate was critical to ObamaCare becoming law. If Senator Stevens was still there, it would not have become law. In the following month after Senator Stevens’ untimely death, in September of 2010, a young DOJ lawyer, Nicholas Marsh -- who had been involved in the Stevens case -- committed suicide at his home as the investigation into the fraudulent case continued. The report expressed, "no conclusion as to his (Marsh’s) conduct," given his untimely death. Robert Luskin, an attorney for Marsh, said, "he tried to do the right thing."

If you're wondering what happened to the valuable FBI agent who was an upstanding whistleblower with a conscience, you should know that inside Mueller’s FBI, Special Agent Joy was terribly mistreated.

Orders came down from on high that he was not to participate in any criminal investigation again, which is the FBI management’s way of forcing an agent out of the FBI. On the other hand, the FBI agent who was said to have manufactured evidence against Senator Stevens -- while hiding evidence of his innocence -- was treated wonderfully and continued to work important criminal cases for Director Mueller.

If you wonder if mistreatment of an FBI agent who exposed impropriety was an anomaly in Mueller’s FBI, the Alaska Dispatch noted this about another case:

“Former FBI agent Jane Turner was treated much like Joy (the whistleblower agent in the Stevens case) after she blew the whistle on fellow agents who had taken valuable mementos from Ground Zero following the 9-11 terrorist attacks. She took the FBI to court over her treatment and ended up winning her case against the agency after a jury trial. When you blow the whistle on the FBI, ‘it's death by a million paper cuts,’ she told Alaska Dispatch. Turner said that agents who violate the FBI's omerta -- those who internally challenge the agency -- are undercut and isolated. ‘They (Mueller’s FBI supervisors) do everything they can to get you to quit’ she said.”

THE DISGUSTING TREATMENT OF DR. STEVEN HATFILL

Here is how Mollie Hemingway of The Federalist described this combined Mueller-Comey debacle:

“The FBI absolutely bungled its investigation into the Anthrax attacker who struck after the 9-11 terrorist attacks. Carl Cannon goes through this story well, and it’s worth reading for how it involves both Comey and his dear ‘friend’ and current special counsel Robert Mueller. The FBI tried — in the media — its case against Hatfill. Their actual case ended up being thrown out by the courts: Comey and Mueller badly bungled the biggest case they ever handled. They botched the investigation of the 2001 anthrax letter attacks that took five lives and infected 17 other people, shut down the U.S. Capitol and Washington’s mail system, solidified the Bush administration’s antipathy for Iraq, and eventually, when the facts finally came out, made the FBI look feckless, incompetent, and easily manipulated by outside political pressure. More from the Carl Cannon cited above, recounting how disastrous the attempt to convict Dr. Steven Hatfill for a crime he didn’t commit was: In truth, Hatfill was an implausible suspect from the outset. He was a virologist who never handled anthrax, which is a bacterium. (Ivins, by contrast, shared ownership of anthrax patents, was diagnosed as having paranoid personality disorder, and had a habit of stalking and threatening people with anonymous letters – including the woman who provided the long-ignored tip to the FBI). So what evidence did the FBI have against Hatfill? There was none, so the agency threw a Hail Mary, importing two bloodhounds from California whose handlers claimed could sniff the scent of the killer on the anthrax-tainted letters. These dogs were shown to Hatfill, who promptly petted them. When the dogs responded favorably, their handlers told the FBI that they’d “alerted” on Hatfill and that he must be the killer.

Unfortunately, both Mueller and Comey were absolutely and totally convinced of the innocent man’s guilt. They ruined his life, his relationship with friends, neighbors and potential employers. And from Carl Cannon, Real Clear Politics:

You’d think that any good FBI agent would have kicked these quacks in the fanny and found their dogs a good home. Or at least checked news accounts of criminal cases in California where these same dogs had been used against defendants who’d been convicted -- and later exonerated. As Pulitzer Prize-winning Los Angeles Times investigative reporter David Willman detailed in his authoritative book on the case, a California judge who’d tossed out a murder conviction based on these sketchy canines called the prosecution’s dog handler “as biased as any witness that this court has ever seen.” Instead, Mueller, who micromanaged the anthrax case and fell in love with the dubious dog evidence, and personally assured Ashcroft and presumably George W. Bush that in Steven Hatfill, the bureau had its man… Mueller didn’t exactly distinguish himself with contrition, either. In 2008, after Ivins committed suicide as he was about to be apprehended for his crimes, and the Justice Department had formally exonerated Hatfill – and paid him $5.82 million in a legal settlement ($2.82+150,000/yr. for 20 yrs) – Mueller could not be bothered to walk across the street to attend the press conference announcing the case’s resolution. When reporters did ask him about it, Mueller was graceless. “I do not apologize for any aspect of the investigation,” he said, adding that it would be erroneous “to say there were mistakes.”

Though FBI jurisdiction has its limitations, Mueller’s ego does not. Mueller and Comey’s next target in the Anthrax case was Dr. Bruce Ivins. As the FBI was closing in and preparing to give him the ultimate Hatfill treatment, Dr. Ivins took his own life. Though Mueller and Comey were every bit as convinced that Dr. Ivins was the Anthrax culprit as they were that Dr. Hatfill was, there are lingering questions about whether or not there was a case beyond a reasonable doubt. Since Dr. Ivins is deceased, we are expected to simply accept that he was definitely the Anthrax killer and drop the whole matter. That's a difficult ask after taxpayer money paid off Mueller’s previous victim. Mueller had relentlessly dogged Dr. Hatfill using lifedestroying, Orwellian tactics. Either Mueller was wrong when he said it would be a mistake, “to say there were mistakes,” in the railroading of Hatfill or Mueller did intentionally and knowingly persecute an innocent man.

THE FRAMING OF SCOOTER LIBBY

In 2003, there was yet another fabricated and politically-charged FBI investigation: this one "searching" for the leak of CIA agent Valery Plame's identity to the media. Robert Mueller’s close friend James Comey was at the time serving as the Deputy Attorney General. Comey convinced then Attorney General John Ashcroft that he should recuse himself from the Plame investigation while Ashcroft was in the hospital.

After Deputy A.G. Comey was successful in securing Ashcroft's recusal, Comey then got to choose the Special Counsel. He then looked about for someone who was completely independent of any relationships that might affect his independence and settled upon his own child’s godfather, nameing Patrick Fitzgerald to investigate the source of the leak. So much for the independence of the Special Counsel.

The entire episode was further revealed as a fraud when it was later made public that Special Prosecutor Fitzgerald, FBI Director Mueller, and Deputy Attorney Comey had very early on learned that the source of Plame’s identity leak came from Richard Armitage. But neither Comey nor Mueller nor Fitzgerald wanted Armitage’s scalp. Oh no. These so-called apolitical, fair-minded pursuers of their own brand of justice were after a bigger name in the Bush administration like Vice President Dick Cheney or Karl Rove. Yet they knew from the beginning that these two men were not guilty of anything.

Nonetheless, Fitzgerald, Mueller and Comey pursued Cheney’s chief of staff, Scooter Libby, as a path to ensnare the Vice President. According to multiple reports, Fitzgerald had twice offered to drop all charges against Libby if he would ‘deliver’ Cheney to him. There was nothing to deliver. Is any of this sounding familiar? Could it be that these same tactics have been used against an innocent Gen. Mike Flynn? Could it be that Flynn only agreed to plead guilty to prevent any family members from being unjustly prosecuted and to also prevent going completely broke from attorneys’ fees? That’s the apparent Mueller-ComeySpecial Counsel distinctive modus-operandi. Libby would not lie about Cheney, so he was prosecuted for obstruction of justice, perjury, making a false statement. This Spectator report from 2015 sums up this particularly egregious element of the railroading.

“… By the time Scooter Libby was tried in 2007 it wasn’t for anything to do with the Plame leak — everyone then knew Armitage had taken responsibility for that — but for lying to federal officials about what he had said to three reporters, including Miller. It is relating to this part of the story that an extraordinary new piece of information has come to light. After her spell in prison, and with her job on the line, Miller was eventually worn down to agree to hand over some redacted portions of notes of her few conversations with Libby. Several years on, she could no longer recall where she had first heard of Plame’s CIA identity, but her notes included a reference to Wilson alongside which the journalist had added in brackets ‘wife works in Bureau?’

After Fitzgerald went through these notes it was put to Miller that this showed that the CIA identity of Plame had been raised by Libby during the noted meeting. At Libby’s trial Miller was the only reporter to state that Libby had discussed Plame. His conviction and his sentencing to 30 months in prison and a $250,000 fine, rested on this piece of evidence. But Miller has just published her memoirs. One detail in particular stands out. Since the Libby trial, Miller has read Plame’s own memoir and there discovered that Plame had worked at a State Department bureau as cover for her real CIA role. The discovery, in Miller’s words, ‘left her cold’. The idea that the ‘Bureau’ in her notebook meant ‘CIA’ had been planted in her head by Fitzgerald. It was a strange word to use for the CIA. Reading Plame’s memoir, Miller realized that ‘Bureau’ was in brackets because it related to her working at State Department. (Emphasis added)

What that means is that Scooter Libby had not lied as she originally thought and testified. He was innocent of everything including the contrived offense. For his honesty and innocence, Scooter Libby spent time behind bars, and still has a federal felony conviction he carries like an albatross. The real culprit of the allegation for which the Special Counsel was appointed, and massive amounts of tax payer dollars expended was Richard Armitage. A similar technique was used against Martha Stewart. After all, Mueller’s FBI developed both cases. If the desired crime to be prosecuted was never committed, then talk to someone you want to convict until you find something that others are willing to say was not true. Then you can convict them of lying to the FBI. Martha Stewart found out about Mueller’s FBI the hard way. Unfortunately, Mueller has left a wake of innocent people whom he has crowned with criminal records. History does seem to repeat itself when it is recording the same people using the same tactics. Can anyone who has ever actually looked at Robert Mueller’s history honestly say that Mueller deserves a sterling reputation in law enforcement? One part of his reputation he does apparently deserve is the reputation for being James Comey’s mentor.

MUELLER'S EMBRACE OF THE FRIENDS OF ISLAMIC TERROR

In 2011, in one of the House Judiciary Committee’s oversight hearings, FBI Director Mueller repeatedly testified during questioning by various Members about how the Muslim community was just like every other religious community in the United States. He also referenced an “Outreach Program” the FBI had with the Muslim community.

When it was my turn to question, I could not help but put the two points of his testimony together for a purge question:

GOHMERT: Thank you, Director. I see you had mentioned earlier, and it's in your written statement, that the FBI’s developed extensive outreach to Muslim communities and in answer to an earlier question I understood you to say that you know Muslim communities were like all other communities, so I'm curious as the result of the extensive outreach program the FBI's had to the Muslim community, how is your outreach program going with the Baptists and the Catholics?

MUELLER: I'm not certain of, necessarily the rest of that, the question I would say -- there are outreach to all segments of a particular city or county or society is good.

GOHMERT: Well do you have a particular program of outreach to Hindus, Buddhists, Jewish community, agnostics or is it just an extensive outreach program to –

MUELLER: We have outreach to every one of those communities.

GOHMERT: And how do you do that?

MUELLER: Every one of those communities can be affected can be affected by facts or circumstance.

GOHMERT: I've looked extensively, and I haven't seen anywhere in any one from the FBI's letters, information that there's been an extensive outreach program to any other community trying to develop trust in this kind of relationship and it makes me wonder if there is an issue of trust or some problem like that that the FBI has seen in that particular community.

MUELLER: I would say if you look at one of our more effective tools or what we call citizens academies where we bring in individuals from a variety of segments of the territory in which the office operates . . . look at the citizens’ academy, the persons here, they are a crosssection of the community, they can be Muslim, could be Indian, they can be Baptists – GOHMERT: Okay but no specific programs to any of those. You have extensive outreach to the Muslim community and then you have a program of outreach to communities in general is what it sounds like.

We went further in the questioning. The 2007 trial of the Holy Land Foundation, the largest terrorism financing trial in American history, linked the Council on AmericanIslamic Relations (CAIR) to the Palestinian terrorist organization Hamas. CAIR was named as an unindicted co-conspirator in the case. Because of this affiliation, the FBI issued policy and guidance to restrict its non-investigative interactions with CAIR in an effort to limit CAIR’s ability to exploit contacts with the FBI. As a result, FBI field offices were instructed to cut ties with all local branches of CAIR across the country.

GOHMERT: Are you aware of the evidence in the Holy Land Foundation case that linked the Council on American-Islamic relations, CAIR, the Islamic Society of North America and the North America Islamic Trust to the Holy Land Foundation?

MUELLER: I'm not going to speak to specific information in a particular case. I would tell you on the other hand that we do not –

GOHMERT: Are you aware of the case, Director?

[CROSSTALK] MUELLER: – relationship with CAIR because of concerns –

GOHMERT: Well I've got the letter from the Assistant Director Richard Powers that says in light of the evidence – talking about during the trial – evidence was introduced that demonstrated a relationship among CAIR, individual CAIR founders, including its current president emeritus and executive director and the Palestine committee, evidence was also introduced that demonstrated a relationship between the Palestine committee and Hamas, which was designated as a terrorist organization in 1995.

In light of that evidence, he says, the FBI suspended all formal contacts between CAIR and FBI. Well now it's my understanding, and I've got documentation, and I hope you've seen this kind of documentation before, it's public record, and also the memo order from the judge in turning down a request that the unindicted co-conspirators be eliminated from the list, and he says the FBI's information is clear there is a tie here, and I'm not going to grant the deletion of these particular parties as unindicted coconspirators.

So, I'm a little surprised that you're reluctant to discuss something that's already been set out in an order, that's already been in a letter saying we cut ties in light of the evidence at this trial. I'm just surprised it took the evidence that the FBI had, being introduced at the trial in order to sever the relationships with CAIR that it (the FBI) had that showed going back to the 1993 meeting in Philadelphia, what was tied to a terrorist organization. So, I welcome your comments about that.

MUELLER: As I told you before, we have no formal relationship with CAIR because of concerns with regard to the national leadership on that.

What Director Mueller was intentionally deceptive about was that the FBI had apparently maintained a relationship and even “community partnership” instigated on his watch with CAIR and other groups and individuals that his FBI had evidence showing they were co-conspirators to terrorism. That, of course, is consistent with his misrepresentation that Mueller’s FBI had outreach programs to other religious communities just like they did with the Muslim community. They did not. He was not honest about it. In a March 2009 Senate Judiciary Committee hearing, Senator Jon Kyl (R-AZ) questioned Mueller over the FBI move to cut off contact with CAIR. Mueller responded to Kyl’s pressing over how the policy was to be handled by FBI field offices and headquarters with the following:

MUELLER: We try to adapt, when we have situations where we have an issue with one or more individuals, as opposed to institution, or an institution, large, to identify the specificity of those particular individuals or issues that need to be addressed. We will generally have -- individuals may have some maybe leaders in the community who we have no reason to believe whatsoever are involved in terrorism, but may be affiliated, in some way, shape or form, with an institution about which there is some concern, and which we have to work out a separate arrangement. We have to be sensitive to both the individuals, as well as the organization, and try to resolve the issues that may prevent us from working with a particular organization.

KYL: They try to “adapt” with members of terror-related groups? Are they as “sensitive” with other organizations? Do they work out “separate arrangements” with members of, say, the Mafia or the Ku Klux Klan for “community outreach”? Why the special treatment for radical Islamic terrorism?

A March 2012 review of FBI field office compliance with this policy by the Office of Inspector General found a discrepancy between the FBI’s enforcement policy restricting contact and interaction with CAIR and its resulting actions. Rather than FBI headquarters enforcing the rules, they hedged. Mueller set up a separate cover through the Office of Public Affairs and allowed them to work together, despite the terrorist connections.

That was the cultivated atmosphere of Mueller’s FBI. The DOJ actually set out in writing in an indictment that CAIR and some of the people Mueller was coddling were supporters of terrorism. I had understood that the plan by the Bush Justice Department was that if they got convictions of the principals in the Holy Land Foundation trial, they would come right back after the co-conspirators who were named in the indictment as co-conspirators but who were not formally indicted. In late 2008, the DOJ got convictions against all those formally indicted, so DOJ could then move forward with formally indicting and convicting the rest—EXCEPT that the November 2008 election meant it was now going to be the OBAMA DOJ with Eric Holder leading. The newly-named but not confirmed Attorney General apparently made clear they were not going to pursue any of the named co-conspirators. That itself was a major loss for the United States in its war against terrorism in the Obama administration. It was a self-inflicted refusal to go after and defeat our enemies. All of the named co-conspirators would not likely have been formally indicted, but certainly there was evidence to support the allegations against some of them, as the federal district court and the Fifth Circuit Court of Appeals had formally found. One of the problems with FBI Director Mueller is that he had already been cozying up to named co-conspirators with evidence in hand of their collusion with terrorists. That probably was an assurance to President Obama and Attorney General Holder that Mueller would fit right in to the Obama administration. He did. It also helps explain why President Obama and AG Holder wanted him to serve and extra two years as FBI Director. Mueller was their kind of guy. Unfortunately for America, he truly was!

PURGING THE FBI OF ANTI-TERROR INFORMATION

We repeatedly see cases where people were radicalized, emerge on the FBI's radar, but federal agents are instead looking for Islamophobes, not the terrorists standing in front of them. That is because Mueller’s demand of his FBI Agents, in the New Age to which he brought them, was to look for Islamophobes.

If a Mueller-trained FBI agent got a complaint about a potential radical Islamist who may pose a threat, the agent must immediately recognize that the one complaining is most likely an Islamophobe. That means the agent should first investigate whether the complainant is guilty of a hate crime. Too often it was after an attack occurred that Mueller-trained FBI agents would decide that there really was a radical Islamic threat to the United States.

The blinding of our FBI agents to the domestic threat of radical Islam is part of the beguiling damage Robert Mueller did as FBI Director. That is also the kind of damage that got Americans killed, even though Mueller may have avoided offending the radical Islamists who were killing Americans. As terrorism expert Patrick Poole continually points out in his “Known Wolf” series, the overwhelming majority of terrorist attacks on U.S. soil are committed by those the FBI has interviewed and dismissed as a threat. Here are three of the more high-profile cases:

ORLANDO: The mass killer who attacked the Pulse nightclub in June 2016, Omar Mateen, had been interviewed by the FBI on three separate occasions. The open preliminary investigation in 2013 lasted 10 months, after Mateen had told others about mutual acquaintances he shared with the Boston bombers and had made extremist statements. He was investigated again in 2014 for his contacts with a suicide bomber who attended the same mosque. At one point, Mateen was placed on TWO separate terrorism databases. He was later removed from them.

NORTHWEST AIRLINES: Umar Farouk Abdulmutallab boarded Detroitbound Northwest Flight 253 on Christmas Day 2009 with 289 other passengers wearing an underwear bomb intended to murder them all. He was well-known to U.S. intelligence officials before he boarded.

Only one month before the attempted bombing, Abdulmutallab’s father had actually gone to the U.S. embassy in Nigeria and met with two CIA officers. He directly told the CIA that he was concerned about his son’s extremism. Abdulmutallab's name was added to the Terrorist Identities Datamart Environment (TIDE) database. However, his name was not added the FBI’s Terrorist Screening Database. Or even the no-fly list. So, he boarded a plane. When asked about the near-takedown of the flight and these missteps, then-Homeland Security Secretary Janet Napolitano remarkably told CNN that “the system worked.” The only "system" that worked in this incident: a culture that values bravery, already instilled in the passengers who acted.

BOSTON: Prior to the bombing of the Boston Marathon by Tamerlan and Dzhokhar Tsarnaev in April 2013 that killed three people and injured 264 others, the FBI had been tipped off. Twice. Russian intelligence warned that Tamerlan was “a follower of radical Islam.” Initially, the FBI denied ever meeting with Tamerlan. They later claimed that they followed up on the lead, couldn’t find anything in their databases linking him to terrorism, and quickly closed the case. After the second Russian warning, Tamerlan’s file was flagged by federal authorities demanding “mandatory” detention if he attempted to leave or re-enter the United States. But Tsarnaev's name was misspelled when it was entered into the database.

An internal FBI report of the handling of the Tsarnaev’s case -unsurprisingly -- saw the FBI exonerate itself. When I asked at yet another House Judiciary Committee oversight hearing, in the wake of the Boston Marathon bombing, Mueller himself admitted in response to my questioning, that the FBI had indeed gone to the Boston mosque the bombers attended. Of course, The FBI did not go to investigate the Tsarnaevs. The bombers' mosque, the Islamic Society of Boston, was incorporated by known and convicted terrorists. The incorporation papers were signed by none other than Abduram Al-Amoudi who is currently serving 23 years in a federal prison for funding terrorism. One of the members of the Board of Trustees included a leader of the International Muslim Brotherhood, Yusef al-Qawadari, who is barred from entering the United States due to his terrorist ties. Did Mueller’s FBI go to the Boston bombers’ mosque to investigate the Tsarnaevs? This is from the House Judiciary oversight hearing transcript:

GOHMERT: The FBI never canvassed Boston mosques until four days after the April 15 attacks. If the Russians tell you that someone has been radicalized and you go check and see the mosque that they went to, then you get the articles of incorporation, as I have, for the group that created the Boston mosque where these Tsarnaevs attended, and you find out the name Al-Amoudi, which you will remember, because while you were FBI Director this man who was so helpful to the Clinton administration with so many big things, he gets arrested at Dulles Airport by the FBI and he is now doing over 20 years for supporting terrorism. This is the guy that started the mosque where the Tsarnaevs were attending, and you didn’t even bother to go check about the mosque? And then when you have the pictures, why did no one go to the mosque and say, who are these guys? They may attend here. Why was that not done since such a thorough job was done?

MUELLER: Your facts are not altogether——

GOHMERT: Point out specifically. MUELLER: May I finish my——

GOHMERT: Point out specifically. Sir, if you’re going to call me a liar, you need to point out specifically where any facts are wrong.

MUELLER: We went to the mosque prior to Boston.

GOHMERT: Prior to Boston?

MUELLER: Prior to Boston happening, we were in that mosque talking to the imam several months beforehand as part of our outreach efforts. “Outreach efforts”? Yes. That is apparently Mueller’s efforts to play figurative pattycake with the leaders and tell them how wonderful they are and how crazy all those Islamaphobes out there are, but they surely got assurance that Mueller’s FBI is after those bigots. Maybe they sat around on the floor and had a really nice meal together. One thing for certain, they weren’t asking about the Tsarnaevs! But the hearing got even worse:

GOHMERT: Were you aware that those mosques were started by Al-Amoudi?

MUELLER. I’ve answered the question, sir.

GOHMERT. You didn’t answer the question. Were you aware that they were started by Al-Amoudi?

MUELLER. No. . .

Then my time for questioning expired, leaving many questions unanswered. Why was the FBI unaware of the origins of the mosque attended by the Boston bombers? This was arguably the most traumatic Islamic terrorist attack in America since 9-11 because the explosions happened on live television at the Boston Marathon. When did the FBI become an outreach-to-terrorism organization to the detriment and disregard of its investigations? Under Director Robert Mueller’s tenure, that’s when!

In Director Mueller’s efforts to appease and please the named co-conspirators of terrorism, he was keenly attuned to their complaints that the FBI training materials on radical Islam said some things about Islamic terrorists that offended some Muslims. Never mind that the main offense was done to the American people by radical Islamists who wanted to kill Americans and destroy our way of life. Mueller wanted to make these co-conspirators feel good toward Mueller and to let them know he was pleased to appease. Director Mueller had all of the training materials regarding radical Islam “purged” of anything that might offend radical Islamic terrorists. So, in addition to using his “Five Year Up-or-Out” policy to force out so many experienced FBI agents who had been properly trained to identify radical Islamic terrorists, now Mueller was going even further. He was ensuring that new FBI agents would not know what to look for when assessing potentially radicalized individuals.

When those of us in Congress learned of the Mueller-mandated “purge” of FBI training materials, we demanded to see what was being removed. Unfortunately, Mueller was well experienced in covering his tracks, so naturally the pages of training materials that were purged were ordered to be “classified,” so most people would never get to see them.

After many terrorist attacks, we would hear that the FBI had the Islamic terrorists on their radar but failed to identify them. Now you are beginning to see why FBI agents could not spot them. They were looking more at the complainant than they were at the radical Islamist because that is what Mueller had them trained to do.

Michele Bachmann and I were extremely upset that Americans were being killed because of the terribly flawed training. We demanded to see the material that was “purged” from the training of FBI agents regarding radical Islam. That is when we were told it could not be sent over for review because the purged material was “classified.” We were authorized to review classified material, so we demanded to see it anyway. We were willing to go over to the FBI office or the DOJ, but we wanted to review the material.

We were told they would bring it over and let us review it in the Rayburn Building in a protected setting. They finally agreed to produce the material. Members of Congress Michele Bachmann, Lynn Westmoreland, and I went to the little room to review the vast amount of material. Lynn was not able to stay as long as Michele and I did, but we started pouring through the notebooks of materials. It was classified so naturally I am not allowed to disclose any specifics, but we were surprised at the amount of material that was purged from the training our agents. Some of the items that were strictly for illustration or accentuation were removed. A few were silly. But some should clearly have been left in if an FBI agent was going to know how and what a radical Islamic terrorist thinks, and what milestone had been reached in the radicalization process.

It was clear to Michele and me as we went through the purged materials that some of the material really did need to be taught to our FBI agents. For those densely-headed or radical activists who will wrongly proclaim that what I am writing is an Islamophobic complaint, please note that I have never said that all Muslims are terrorists. I have never said that, because all Muslims are not terrorists. But for the minority who are, we have to actually learn exactly what they study and learn how they think. As Patton made clear after defeating Rommel’s tanks in World War II, he studied his enemy, what he believed and how he thought. In the movie, “Patton,” he loudly proclaims, “Rommel, you magnificent ___, I read your book!”

That is how an enemy is defeated. You study what they believe, how they think, what they know. Failure to do so is precisely why so many “Known Wolves” are able to attack us. Clearly, Mueller weakened our ability to recognize a true radical Islamic terrorist. As one of my friends in our U.S. Intelligence said, “We have blinded ourselves of the ability to see our enemy! You cannot defeat an enemy you cannot define.” Robert Mueller deserves a significant amount of the credit for the inability of our federal agents to define our enemy.

PURGING COUNTER-TERRORISM TRAINING MATERIALS

FBI Special Agent Kim Jensen had spent a great deal of his adult life studying radical Islam. He is personally responsible for some extraordinary undercover work that remains classified to this day. He was tasked with putting together a program to train our more experienced FBI agents to locate and identify radicalized Muslims on the threshold of violence.

Jensen had done this well before Mueller began to cozy up with and pander to groups such as CAIR. Complaints by similar groups caused Mueller to once again demand that our agents could not be properly instructed on radical Islam.

Accordingly, Jensen’s roughly 700-pages of advanced training material on radical Islam were eliminated from FBI training and all copies were ordered destroyed.

When Director Mueller decides he wants our federal agents to be blind and ignorant of radical Islam, they are indeed going to be blind and ignorant.

Fortunately, in changing times well after Mueller’s departure as FBI Director, a new request went out to Mr. Jensen to recreate that work because at least someone in the FBI needed to know what traits to look for in a terrorist. It still did not undo the years of damage from Mueller’s commanded ignorance of radical Islam.

MUELLER'S UNETHICAL ACCEPTANCE OF APPOINTMENT AS SPECIAL PROSECUTOR

Robert Mueller had more than one direct conflict of interest that should have prohibited him from serving as the Special Counsel to investigate President Donald Trump.

For one thing, President Trump fired his close friend and confidante, disgraced FBI Director James Comey. Mueller had long served as a mentor to Comey, who would most certainly be a critical witness in any investigation of Donald Trump.

Mueller and Comey had also been exceedingly close friends beyond the mentor relationship. But Comey’s insertion of himself into so much of the election cycle -- and even its aftermath -- in conversations he had with the President himself made him a critical witness in the investigation. There is no way Mueller could sit in judgment of his dear, close friend’s credibility, and certainly no way he should be allowed to do so.

Gregg Jarrett explained one aspect of this situation quite clearly and succinctly at FoxNews.com in an article titled, “Gregg Jarrett: Are Mueller and Comey ‘Colluding’ against Trump by acting as co-special counsel?” A portion of that article reads:

The law governing the special counsel (28 CFR 600.7) specifically prohibits Mueller from serving if he has a “conflict of interest.” Even the appearance of a conflict is disallowed. The same Code of Federal Regulations defines what constitutes a conflict. That is, “a personal relationship with any person substantially involved in the conduct that is the subject of the investigation or prosecution” (28 CFR 45.2).

Comey is that person. He was substantially involved in the conversation with President Trump who may be the subject of an obstruction investigation. In fact, the former Director is the only other person involved. There were no witnesses beyond himself. A conflict of interest is a situation in which an individual has competing interests or loyalties. Here, it sets up a clash between the special counsel’s self-interest or bias and his professional or public interest in discharging his responsibilities in a fair, objective and impartial manner. His close association with the star witness raises the likelihood of prejudice or favoritism which is anathema to the fair administration of justice.

Mueller has no choice but to disqualify himself. The law affords him no discretion because the recusal is mandatory in its language. It does not say “may” or “can” or “might”. It says the special counsel “shall” recuse himself in such instances.

An excellent post by Robert Barnes, a constitutional lawyer, identifies five statutes, regulations and codes of conduct that Mueller is violating because of his conflict of interest with Comey. Byron York, chief political correspondent for the Washington Examiner recounts in detail the close personal relationship between Mueller and Comey which gives rise to the blatant conflict of interest.

Another deeply troubling aspect of Mueller’s conflict of interest is and was his role in the investigation of Russia’s effort to illegally gain control of a substantial part of United States’ precious supply of uranium. That investigation was taking place within the Mueller FBI, which should have had a direct effect on prohibiting Secretary of State Clinton from participating in the approval of the uranium sale into the hands that were ultimately the Russian government.

Of course, then U.S. Attorney Rod Rosenstein had direct control over that Russiauranium investigation in conjunction with FBI Director Mueller. It certainly appears that with what they had gleaned from that undercover investigation, they should never have been involved in any subsequent investigation that might touch on potential collusion and millions of dollars paid to the Clinton’s foundation by the very beneficiaries of the Russians' uranium schemes. Rosenstein and Mueller’s failure to warn against or stop the sale reeks of its own form of collusion, cooperation, or capitulation in what some consider a treasonous sale.

Quite the interesting duo is now in charge of all things investigatory surrounding their own actions. In fact, Rosenstein and Mueller are now in a position to dissuade others from pursuing them for their own conduct.

SPECIAL PROSECUTOR MUELLER'S TROUBLINGLY BIASED HIRES

Through it all, Mueller’s modus operandi does not seem to have ever changed. He has hired nine Democrat-supporting lawyers and zero Republicans. Certainly all attorneys likely have political views and that is not a problem so long as they do not affect their job. But not a single Republican was worthy of Mueller’s selection?

Were there no establishment Republicans who wanted to join his jihad? Mueller’s hand-picked team of Democrats reveal political views that distinctly conflict with Trump and the conservative agenda, raising questions about Mueller’s bias and his ability to conduct a fair investigation. At least nine members of Mueller’s team made significant contributions to Democrats or Democratic campaigns, while none contributed to Trump’s campaign and only James Quarles contributed to Republicans in a drastically smaller amount than what he gave to Democrats.

Analysis of Federal Election Commission records shows that Andrew Weissmann, Jeannie Rhee, Andrew Goldstein, James Quarles, Elizabeth Prelogar, Greg Andres, Brandon Van Grack, Rush Atkinson, and Kyle Freeny all contributed over $50,000 in donations to Democrats including Hillary Clinton and Barack Obama’s Presidential campaigns, various Democratic non-presidential candidates, and the Democratic National Convention. Mueller also has surprisingly strong personal ties to a number of the lawyers he hired.

Three former partners with Mueller at the Boston law firm of WilmerHale are on the payroll: Aaron Zebley, Jeannie Rhee, and James Quarles. In addition to strong personal ties to Mueller, many of the attorneys have potential conflicts in working for persons directly connected to the people and issues being investigated.

Jeannie Rhee represented Ben Rhodes, ex-Obama National Security Adviser, and the Clinton Foundation in a 2015 racketeering lawsuit, as well as Hillary Clinton in a lawsuit probing her private emails.

Aaron Zebley, former Chief of Staff to Mueller while Director of the FBI, represented Justin Cooper in the Clinton email scandal as he was responsible for setting up Clinton’s private email server. He admitted to physically damaging Clinton’s old mobile devices.

Andrew Goldstein joined the team after working under major Trump critic Preet Bharara in the U.S. Attorney’s office in New York. Bharara became a strong critic after Trump fired him as an Obama-holdover and spoke on ABC News that “there’s absolutely evidence to launch an obstruction of justice case against Trump’s team with regard to the Russia probe.” Does he sound a bit prejudiced?

Andrew Weissman, notoriously a “tough” prosecutor previously accused of “prosecutorial overreach,” has a less than stellar career after various courts reversed his prosecutions due to his questionable conduct and tactics. As director of the Enron Task Force, Weissman shattered the Arthur Andersen LLP accounting firm and destroyed over 85,000 jobs. In 2005, the conviction was reversed by the Supreme Court. In other words, the only true crime in the case was the murderous destruction of 85,000 jobs and the lives they ruined.

Weissman’s next conviction threw four Merrill Lynch executives into prison without bail for a year, only to be reversed by the 5th Circuit Court of Appeals. Weissman subsequently resigned from the Enron Task Force. A suspiciously timely move, as the public eye had just caught sight of his modus operandi. Additionally, Weissman has unsightly political ties, having attended Clinton’s electionnight celebration in New York City. He also sent an email to Acting Attorney General Sally Yates, praising her boldness on the night she was fired for refusing to enforce President Trump’s travel ban. President Trump was trying to enforce the law; Weissman was trying to enforce his bigotry against Trump and Republicans.

Peter Strzok was removed from Mueller’s team after more than 10,000 texts between him and former Mueller investigator Lisa Page were found to contain vitriolic anti-Trump tirades. They were not simply anti-Trump. They were more in the nature of desperate attempts to stop him from becoming President and talk of a nefarious insurance policy to orchestrate his removal if he were elected.

GENERAL MICHAEL FLYNN

Michael Flynn is a man entangled in manufactured controversy from the moment he stepped into his role in the Trump administration. The circumstances surrounding his take-down have become one of the more puzzling aspects of the TrumpRussia investigation. His career took him from three decades in the U.S. Army to overseeing the Pentagon’s military intelligence operation and directing the Defense Intelligence Agency. Flynn was more than qualified to act as the first national security adviser in a new administration. However, his influence and zeal made him a clear target for the Trump-Russia investigation.

As a strong supporter and friend of Donald Trump’s from the onset, he campaigned and publicly supported then-candidate Trump throughout 2016. As best I can sort it out through the media hype and hysteria, having no first-hand knowledge like the rest of America: after the successful election, during the transition period, in December 2016, Flynn reportedly conversed with a Russian ambassador.

He was “accidentally” swept up in an intelligence foreign surveillance recording. When this happens, the names of American citizens are supposed to be masked in the transcripts. Somehow Flynn’s name was magically unmasked, which apparently allowed the Obama administration to peruse his meetings and conversations. Parts of the classified transcript of that conversation were leaked to the media by rogue Deep State law breakers (criminals who Mueller seems completely disinterested in). This appears to be what fueled the media-driven narrative of Trump campaign “collusion” with Russia because Flynn had a discussion with a Russian ambassador, which conversation is absolutely legal and advisable. A media-generated doubt clouded Flynn’s reputation, as the discussion was longreported as having taken place during the campaign (which could possibly be illegal) but was later proven to have been after the election and during the transition which should not have been illegal.

After a complete pounding of media-driven hysteria, in mid-February of 2017, Flynn resigned having served only 23 days as National Security Advisor. Mueller targeted Flynn using illicitly-gathered and leaked foreign intelligence and surveillance as evidence. Nine months later after Flynn and his family were subjected to Mueller’s usual threats and intimidation, a financially exhausted Flynn entered a guilty plea on one count of lying to the FBI—the result of a Mueller-technique perjury trap as was used on Scooter Libby and Martha Stewart. What is Flynn guilty of? He apparently misremembered a conversation that took place 33 days previously? The FBI had a transcript of that conversation and already knew what information was there. They went into a conversation with Flynn not seeking answers to questions, but to try to trip him up on exact statements made in a conversation when they were already in possession of the transcript.

Flynn's unmasking has become the center of a controversy wherein those transcripts were procured under exceedingly questionable circumstances before a judge who had a questionable and undisclosed relationship with part of Mueller’s team. That judge was appointed to the Foreign Intelligence Surveillance Court (FISC), the secretive court created by the Foreign Intelligence Surveillance Act (FISA) that allows federal law enforcement to seek secretive warrants to surveil foreign persons outside of the United States who are suspected of terrorism. But the Obama administration and Mueller seemed to find it much more politically expedient to use the secret court to go after Americans who were part of the Trump team for actions that did not occur while they were part of the Trump campaign team. Strange goings-on.

One could argue that Judge Rudolph Contreras, the federal judge who accepted Flynn’s guilty plea, conveniently misremembered that he also served on the FISA court as a judge and conveniently misremembered his friendship with the FBI agent whose interview was used as evidence against Flynn. As it turns out, the FBI interview notes of that very encounter with Flynn may exonerate Michael Flynn, crushing Mueller’s case against him, not to mention the highly questionable hearing before a judge who may well have been recused much too late to save the Flynn prosecution.

FISA ABUSE

The FISA-authorized FISC is built upon the principle that highly delicate cases dealing with government surveillance of foreign agents and officials would be handled in an unbiased and respectful environment where secrecy at all costs was critical. There is supposed to be an added precaution to prevent any potential for bias in a FISA Judge by having a rotation of judges. That is why it is such a shock to find out now that Mueller’s case against Michael Flynn would happen to end up before the “randomly selected” very dear close personal friend of FBI Special Agent Peter Strzok, who hated President Trump with a passion, as evidenced in his text messages with colleague and paramour, Lisa Page. U.S. District Court Judge Rudolph Contreras, or “Rudy” as Strzok likes to refer to him, should have recused himself from such a highly sensitive case involving the ultimate attempted removal of the duly-elected President of the United States who happened to be despised by the very people who by law were required to prosecute with fairness. He was later forced to ‘recuse’ himself and be removed from the Flynn proceedings, without public explanation.

This forced recusal was an unmistakable indication that he never should have been involved in the Michael Flynn plea agreement. Judge Contreras’ conflict of interest has yet to be explained by the court. Contreras’ is one of only three local FISA court judges, and by default, is likely one of the judges who have on four occasions approved the Title I surveillance of another character in this melodrama, Carter Page. This is the case where the FBI is known to have intentionally misled the FISA court by using as evidence the illustrious “Steele Dossier,” a sordid opposition research document paid for by Hillary Clinton's presidential campaign and the Democratic National Committee (DNC). Oh, what a tangled web of crime Special Prosecutor Mueller’s team appears to have helped weave, and of which Mueller appears to be completely disinterested, all while he searches high and low for an elusive crime to pin on the President.

MUELLER IGNORES PROVABLE CRIMES BY THE CLINTON CAMPAIGN, THE FBI, THE FISC, ETC.

Strategically timed leaks of selective classified information are being used to target individuals for investigation in order to create the appearance of some sinister crime are committed.

Upon closer scrutiny, the cases fall apart.

Yet, slam dunk federal criminal cases of leaking classified material are going on under Mueller’s nose, and by those within his purview and his team. When we think of all the leaks from Mueller’s investigation, it brings to mind Wilford Brimley’s quote from Absence of Malice: “You call what's goin' on around here a leak? Boy, the last time there was a leak like this, Noah built hisself a boat.”

Case in point: Erik Prince. As Lee Smith put it in a recent article from TabletMag.com, Robert Mueller’s Beltway Cover-Up:

News that special counselor Robert Mueller has turned his attention to Erik Prince’s January 11, 2017 meeting in the Seychelles with a Russian banker, a Lebanese-American political fixer, and officials from the United Arab Emirates, helps clarify the nature of Mueller’s work. It’s not an investigation that the former director of the Federal Bureau of Investigation is leading—rather, it’s a cover-up…

Mueller is said to believe that the Prince meeting was to set up a back channel with the Kremlin. But that makes no sense. According to the foundational text of the collusion narrative, the dossier allegedly written by former British spy Christopher Steele, the Kremlin had cultivated Trump himself for years. So what’s the purpose of a back channel, when Vladimir Putin already had a key to the front door of Mar-a-Lago? Further, the collusion thesis holds that the Trump circle teamed with high-level Russian officials for the purpose of winning the 2016 election. How does a meeting that Erik Prince had a week before Trump’s inauguration advance the crooked election victory plot? It doesn’t—it contradicts it. The writer goes on to point out that serious crimes have been committed which Mueller is purposefully ignoring. Prince was thrown into the middle of Russiagate after an April 3, 2017, Washington Post story reported his meeting with the Russian banker. But how did anyone know about the meeting? After the story came out, Prince said he was shown “specific evidence” by sources from the intelligence community that the information was swept up in the collection of electronic communications and his identity was unmasked. The US official or officials who gave his name to the Post broke the law when they leaked classified intelligence. “Unless the Washington Post has somehow miraculously recruited the bartender of a hotel in the Seychelles,” Prince told the House Intelligence Committee in December, “the only way that’s happening is through SIGINT [signals intelligence].” Prince’s name was unmasked and leaked from classified signals intelligence. Oddly enough, it’s the same modus operandi used in the targeting of President Donald Trump, Attorney General Jeff Sessions and former National Security Advisor Michael Flynn. It is a federal felony to publish leaked classified information.

Ask WikiLeaks founder Julian Assange about that particular unequal application of the law. The Deep State felons who are strategically leaking this information have politically weaponized our justice system and should be prosecuted for their attempts, with malice aforethought, to manufacture the overthrow of a duly elected President of the United States. The leaks and publication of classified information alone warrant investigation and prosecution to the fullest extent of the law in this matter, yet Mueller appears utterly uninterested in those crimes even as they go to the very heart of the credibility of his investigative mandate.

Yet, as I’ve demonstrated here, the man put in charge of the investigation of "Russian Collusion"; case, Robert Mueller, has perfected the art of abuse of the justice system for personal and political gain. He is uninterested in any criminal activity that does not further his cause of damaging this President. If you think that is harsh, consider the criminality of the FISA court abuses by the Obama Department of Justice and FBI. We have all heard ad nauseum about the infamous “Steele Dossier,” the opposition research document paid for by the Clinton campaign that was used to manufacture the Russia collusion narrative and spark what became the Mueller investigation into our President. On June 18, 2017, Muller protégé and disgraced former FBI Director James Comey testified in front of the U.S. Senate Select Committee on Intelligence about the Clinton campaign-funded document, telling Congress that the document was, “salacious and unverified.” https://www.politico.com/story/2017/06/08/full-text-james-comey-trump-r…)

The Foreign Intelligence Surveillance Act, or FISA, created a court called the Foreign Intelligence Surveillance Court (FISC) to allow secret warrants to surveil agents of foreign governments, be they U.S. citizens or non-U.S. actors. In October of 2016, the Obama DOJ/FBI successfully applied for one of these secret warrants to surveil Carter Page, a short-time Trump campaign volunteer. Since these warrants against U.S. citizens are outside of the bounds of the Constitution, they have to be renewed by applying to the court every 90 days after the first warrant application is approved. These secret warrants are so serious they have to be signed off on at the highest levels. The applications in question would have been signed off on by Obama administration FBI and DOJ officials including then FBI Director James Comey. At least one of the renewal applications would have been signed off on by our current Deputy Attorney General Rod Rosenstein. At the time of the signing, they all would have had the knowledge and/or the professional and legal duty to know that the dossier was used as evidence and also had the legal duty to know the evidence origins. The same would apply to the knowledge of the penalty for submitting unverified information to the FISC for the purpose of obtaining a warrant. It is a crime to submit under the color of law an application to the FISC that contains unverified information 50 U.S. Code § 1809).

Comey’s “salacious and unverified” testimony before the Senate occurred eight months after the Clinton campaign-funded dossier was used in the first successful FISA court application to obtain a surveillance warrant against Carter Page, a Trump campaign volunteer for several months. The House Permanent Select Committee on Intelligence examined the documentation submitted to the court and concluded that the unverified information contained in the Steele dossier was in fact used in the FISC application, without disclosing to the court that it was an opposition research document paid for by Hillary Clinton and the Democratic National Committee.

Neither the initial application in October of 2016, nor any of the renewals, disclose or reference the role of the DNC, the Clinton campaign, or any other partyn in funding Steele's efforts, even though the political origins of the Steele dossier were then known to senior DOJ and FBI officials. The timing of the applications, the inclusion of material the DOJ/FBI knew to be unverified at the time, and the successful result after this fraudulent inclusion speak to the level of criminal corruption of those who sought to destroy Donald Trump’s candidacy and still seek to overturn his election. The widespread abuse of the FISA-authorized court, FISC, was laid bare in a court memorandum of review of these abuses that was declassified in 2017 and went virtually unnoticed by the media because it didn’t fit their narrative.

These are serious crimes that, left unchecked, lead nations down the path to tyranny at the hands of people who think they know better than citizens. It’s an age-old struggle America’s Founding Fathers knew well and did everything they could to prevent from happening. The FISC judges themselves have a duty to police their own courts and call to account these bad actors who, by all facts in the documentation I’ve personally seen, have committed a fraud upon the court. If these judges do not have the integrity to self-police in this matter, we in Congress must hold them accountable using the power granted to us in the Constitution. Congress has created every single federal court in the country except the Supreme Court. We have the duty to phase out, change or disband the FISC, all while developing a better solution to address the authorization of this sort of surveillance of foreign agents and actors. It is our duty to clean up the mess that the Obama administration demonstrated is far too easy to create.

If you want answers, and you can handle the truth, join me in demanding those answers from “Special Counsel” Robert Mueller, along with his resignation. If he were to resign, it could well be the only truly moral, ethical and decent action Mueller has undertaken in this entire investigation.


Hat tip: BadBlue Uncensored News.

Published:5/3/2018 11:28:27 PM
[Entertainment] Sarah Jessica Parker's Twin Daughters Make Rare Red Carpet Appearance Sarah Jessica Parker, Tabitha Hodge Broderick, Marion Loretta Elwell BroderickSarah Jessica Parker is ready for one special girls' night out. On Thursday evening, the Sex and the City star and her twin daughters showed their support for New York City...
Published:5/3/2018 10:59:17 PM
[Markets] Pentagon's War Robots Are Now Roaming The Battlefield

Self-driving vehicles have become a symbol of Silicon Valley and Detroit, with companies such as Uber, Waymo, Ford, and General Motors zooming towards the commercialization of driverless transportation.

However, few are likely aware that the United States Department of Defense (DoD) through its Defense Advanced Research Projects Agency (DARPA) could, in fact, have driverless war robots roaming the Pentagon’s battlefields much faster than Silicon Valley and Detroit can get an entirely legal self-driving vehicle onto the streets of America.

“Finding new ways to lower the risk soldiers face from hostile actors – an effort known as force protection – has become a top priority for various branches of the military after sustained conflicts in Iraq and Afghanistan,” according to Karlyn Stanley, a senior researcher at the Rand Corporation who studies autonomous vehicles.

“Unlike the commercial sector, the military is primarily interested in using autonomous technology to save lives,” she added.

During the recent US-led military conflicts in the Middle East, coalition troops discovered that terrorist organizations were using improvised explosive devices (IED) that targeted their transportation, supply, and logistics units. The rise of the IED killed or wounded thousands of allied troops, but gave way to a “multibillion-dollar industry in vehicle and body armor, autonomous vehicles, ground-penetrating radar, surveillance, electrical jamming, counterintelligence, computer analysis and computerized prostheses,” said USA Today.

“We’re going to have self-driving vehicles in theater for the Army before we’ll have self-driving cars on the streets,” Michael Griffin, the undersecretary of defense for research and engineering, told a hearing on Capitol Hill in April. “But the core technologies will be the same.”

With more than half of all the combat casualties from the transportation, supply, and logistics personnel. Griffin believes automated unmanned war robots could replace humans in completing these dangerous tasks during wartime.

“You’re in a very vulnerable position when you’re doing that kind of activity,” Griffin said. “If that can be done by an automated unmanned vehicle with a relatively simple AI driving algorithm where I don’t have to worry about pedestrians and road signs and all of that, why wouldn’t I do that?”

At the moment, the DoD has several autonomous military vehicles in development or are already in use on the battlefield.

WINGMAN

This month, the United States Army is sending its first robotic Humvee to a field training exercise to see if the autonomous combat vehicle can accurately destroy targets, as part of a new experimental program to weaponize robots.

The killer Humvee, which is called the ‘Wingman,’ is part of the Joint Capability Technology Demonstration, or JCTD program, where engineers have developed autonomously piloted weaponized vehicles in hopes it will provide direct and indirect fire support for ground troops trapped in dangerous situations on the battlefield.

THE UNMANNED ARMORED PERSONNEL CARRIERS

In a stunning show of robotic force, humans were absent last month during a field training exercise at USAG Grafenwoehr Army Base in Grafenwoehr, Germany. U.S./British Armed Forces and Department of Defense (DoD) contractors observed from the sidelines, as robots cleared simulated battlefield obstacles for manned tanks and fighting vehicles.

An unmanned M113 armored personnel carrier lays down smoke during the Robotic Complex Breach Concept demonstration at Grafenwoehr, Germany, Friday, April 6, 2018. MARTIN EGNASH/STARS AND STRIPES

An unmanned Terrier engineering vehicle clears mines during the Robotic Complex Breach Concept demonstration at Grafenwoehr, Germany, Friday, April 6, 2018. MARTIN EGNASH/STARS AND STRIPES

Robotic Breach Demo at Grafenwoehr

AUTONOMOUS DUNE BUGGY FOR US SPECIAL FORCES

For over 5-years, the United States special operations forces (SOF) have been deploying to overseas operations with a revolutionary, ultra-light all-terrain vehicle called the Polaris MRZR. The MRZR is gas powered, seats up to six, and can haul up to 1,500 lbs of payload, but light enough to fit inside an MV-22 Osprey and zip troops around the battlefield.

In February, Polaris Industries, an American manufacturer of snowmobiles, ATVs, and neighborhood electric vehicles, based in Roseau, Minnesota, revealed its MRZR X, a fully autonomous upgraded version of the MRZR at the AUVSI unmanned systems show near Washington, D.C.

Polaris Autonomous Vehicle AUSA 

SEA HUNTER

In the latest installment of the Pentagon’s preparation for the fast-approaching drone wars, a prototype autonomous ship known as the Medium Displacement Unmanned Surface Vehicle (MDUSV) has successfully been transferred to the United States Navy from the Defense Advanced Research Projects Agency (DARPA), after it completed its multi-year Anti-Submarine Warfare (ASW) Continuous Trail Unmanned Vessel (ACTUV) program.

The autonomous ship “Sea Hunter”, developed by DARPA, is shown docked in Portland, Oregon after its christening ceremony, April 7, 2016. REUTERS/Steve Dipaola

US Navy Aims To Use This ‘Sea Hunter’ Drone To Hunt Submarines

THE OX

Lockheed Martin’s Convoy Active Safety Technology (CAST) autonomously manages military vehicles to significantly reduce crew fatigue, eliminate rear-end collisions, decrease human exposure to IEDs, enhance operator situational awareness and enable a more effective response to attack.

CAST Makes Autonomous Convoys a Reality

IRONCLAD

Developed by BAE Systems, Ironclad is a new breed of an unmanned ground vehicle (UGV) designed to take on some of the most dangerous tasks on the battlefield.

Craig Fennell, Future Programmes Director at BAE Systems Land (UK) explained: “Ironclad has a unique set of capabilities for a UGV. Using high endurance battery power, it offers near silent running up to a 50km range and will come with a set of mission systems that can be quickly changed in the field. A modular connection system allows two vehicles to be connected together to handle additional loads, such as a specialized stretcher. It is also protected against blast and small arms fire to increase mission survivability.”

“The next step is for Ironclad to act autonomously as part of a battlegroup, interacting with other vehicles and ground troops to follow mission objectives. This is being tested on existing vehicles as the technology – already at a high state of readiness – is developed.”

Armed with a defense budget of over $700 billion for the coming fiscal year — which will likely soar over the course of Trump’s Pentagon-controlled presidency — the DoD’s dystopian vision for the future of the military is becoming increasingly obvious with the introduction of war robots.

Published:5/3/2018 10:59:17 PM
[Entertainment] Grey's Anatomy Teases Sarah Drew and Jessica Capshaw's Exits (and 1 Does Not Look Good) Sarah Drew, Jessica Capshaw, Grey's AnatomyTwo big Grey's Anatomy goodbyes are getting closer and closer. It looks like tonight's episode gave us a pretty good idea of where Arizona is going when she leaves at the end of...
Published:5/3/2018 9:57:50 PM
[Markets] GM Is Hiring More Part-Time Workers To Slow Job Cuts

Judging solely by the top-line numbers, the US labor market appears to be at its tightest level in decades. But if you look below the surface, of course, that narrative swiftly unravels, and the notion that the labor numbers have been at least partially goalseeked (possibly for political purposes) is almost unavoidable.

Last month, we pointed out how last month's abysmal labor-market report was in reality even softer than many analysts initially believed. Case in point: A quick peek beneath the surface revealed sizable revisions in full-time job creation and also the discouraging fact that part-time jobs created only just offset the full time jobs lost during the period.

Chart

Jobs

And as if this problem wasn't already acute enough, the plight of the part-time worker could soon be even more widely shared, as a General Motors plant in Lordstown, Ohio is considering a radical plan that would see it become almost entirely reliant on part-time workers to power one of its shifts, the Tribune Chronicle reported. The plant almost exclusively manufactures the Chevy Cruze and has already gone through a round of layoffs in 2017, when the plant eliminated its third shift and cut 1,200 workers. It announced the elimination of its second shift - which also eliminated 1,500 jobs - last month.

The cuts come as Chevy Cruze sales have dwindled, as Wolf Richter over at Wolf Street shows us in the chart below:

Chevy

Last month, GM announced that the second shift would be eliminated. But this week, the leader of the local United Auto Workers Local 1112 said the union and management might've found a way to save some of the 1,500 jobs cut from the factory's second shift.

n a rare move, the General Motors complex in Lordstown may be considering using part-time workers to fulfill the plant’s needs after it was announced last month the second shift was being eliminated, costing approximately 1,500 workers their jobs.

United Auto Workers Local 1112 president Glenn Johnson said the union’s bargaining unit was working through "details." Johnson was tight-lipped about the negotiations, saying only that there was an ongoing conversation between the parties involved. He did not reveal which parties.

Johnson added that he did not want to undermine the progress that has been made. When pressed for details, Johnson said, "you don’t know what you have until after the negotiation."

A spokesman for the plant said the company does not talk about personnel situations.

"Plans are still being discussed for what will happen when we shift from two shifts to one," the spokesman said.

He added that any employment matters "are pursued under the GM-UAW agreement."

It appears that after Congressman Timothy Ryan - a "progressive" who challenged Nancy Pelosi for party leader following Trump's victory over Hillary Clinton - urged GM to consider a "layoff aversion program," the company has decided that employing an army of part-time workers who still depend partly on government benefits might just be the way to go.

But to the workers affected - don't think of your jobs as part time work, think of it as shared work.

On April 24, U.S. Rep. Timothy J. Ryan, D-Howland, urged GM chairwoman and CEO Mary T. Barra to consider a layoff aversion program called SharedWork Ohio. The program would allow GM to reduce the laid-off workers’ hours in a uniform way. Affected employees would work a reduced set of hours each week and would be eligible for unemployment benefits in proportion to their reduced hours.

Ryan spokesman Michael Zetts said Tuesday he is not aware of whether GM would implement the program.

At least this way, every worker at the plant will be adversely affected by the layoffs, helping to ensure that none of them are earning enough to survive. Luckily for them, President Trump has established himself as a champion of wellfare programs like, say, food stamps...

...If "SharedWork Ohio" is branded a "success", we wonder: Will other US automakers scramble to mimic it? And what would happen if they did?

Published:5/3/2018 9:00:53 PM
[Entertainment] Jersey Shore Family Vacation: The Saga of Ronnie and Jen Continues and It's Just Confusing to Watch Ronnie Magro-Ortiz, Famously SingleIf there's one thing that's clear on Jersey Shore Family Vacation it's that Ronnie Magro-Ortiz has no idea what he wants. Just last week, we watched as a drunk Ronnie cried...
Published:5/3/2018 8:27:24 PM
[Markets] Irony Defined: Eric Holder's Firm Enlisted By Facebook To Investigate Bias Against Conservatives

Whatever happened to "it takes one to know one"?

Authored by Mac Slavo via SHTFplan.com,

The amount of irony here is astounding. Leftist liberal and former attorney general Eric Holder’s firm was enlisted by the leftists over at Facebook to investigate the social media giant’s bias against conservatives. There couldn’t be a more humorously ironic story than this one.

At first, it seemed like Facebook might be trying to do the right thing: investigate the bias against those who aren’t leftists using the social media platform.

The tech company enlisted a team from law firm Covington and Burling to advise them on combating perceptions of bias against conservatives. But there’s one minor detail that Breitbart happened to pick up on: Covington and Burling is the firm of Barack Obama’s left-wing former attorney general, Eric Holder.

Eric Holder was a part of the very administration that weaponized the IRS against conservatives during Barack Obama’s reign of terror.

In issuing an “apology” to the clients represented by the ACLJ, the IRS admitted that it was wrong to use the United States tax code simply because of an entity’s name. They also admitted the bombshell fact that this discrimination happened specifically because of the applicants’ political viewpoints. Keep in mind the fact that the mainstream media has spent years telling the American people that this didn’t happen.

In other words, outlets such as The Washington Post, CNN, and The New York Times directly lied to their readers and viewers to protect a Democratic president whose administration was openly breaking the law. –SHTFPlan

After the apology from the Department of Justice, Eric Holder flat out said that the DOJ should not have apologized to conservatives for using the IRS as a weapon against their political enemies.

Former Attorney General Eric H. Holder said the Trump administration was wrong to have apologized to tea party groups snared in the IRS’s targeting scandal, saying it was another example of the new team undercutting career people at the Justice Department who’d initially cleared the IRS of wrongdoing.

That apology was unnecessary, unfounded and inconsistent, it seems to me, with the responsibilities that somebody who would seek to lead the Justice Department should have done,” Mr. Holder said. –The Washington Times

Holder had ordered a criminal probe into the IRS’s handling of tea party applications after the 2013 revelation by an inspector general that the tax agency had subjected conservative groups to intrusive and inappropriate scrutiny when they applied for nonprofit status.

And not surprising in the least, that probe eventually cleared the IRS, saying that while there was bungling, there was no ill intent. The probe specifically cleared former IRS senior executive Lois G. Lerner, saying rather than a problem, she was actually a hero, reporting bad practices when she spotted them.

But have no fear, conservatives! Now this same guy’s firm has your back and will be helping Facebook with the same problem. To sum up: Facebook, a California-based company, has enlisted the same firm that is providing legal advice to their state against the Trump administration, through none other than Eric Holder, to advise them on combating perceptions of bias against conservatives.

The good news is that The Heritage Foundation will also be working with Facebook on the same issue. According to Axios, the conservative think-tank will “will convene meetings on these issues with Facebook executives.” Klon Kitchen, a former adviser to Senator Ben Sasse who now works as a tech policy expert at Heritage, has reportedly hosted an event with Facebook’s head of global policy management.

Published:5/3/2018 7:27:54 PM
[Entertainment] Birthday Girl Cheryl Burke Is Ready for a ''Fresh Start'' as She Reflects on Tough Year Cheryl Burke, 2017 Peoples Choice AwardsCheryl Burke is reflecting on the past year of her life. The dancer turns 34-years-old today and while it may not be a typical milestone birthday, she told her Instagram followers...
Published:5/3/2018 7:27:54 PM
[Entertainment] Watch Ariana Grande's Spot-On Celebrity Impressions Fans Can't Get Over Ariana Grande, Jimmy FallonWe just love the way Ariana Grande impersonates our favorite celebrities. Whether she's on YouTube, the stage or small screen, the "Side to Side" singer has wowed audiences...
Published:5/3/2018 6:57:12 PM
[Markets] Soros-Funded Group Creates App To Help Illegal Aliens Avoid Arrest, Tip Off Others

A Soros-funded "open borders" group has developed a smartphone application to assist illegal immigrants by sounding the alarm if they have been apprehended by US authorities - tipping off anyone from immigration attorneys to friends and family.

The app, Notifica (Notify), allows users to program a set of automated messages to alert a pre-selected group of individuals with the press of one button. It is available on the Google and Apple app stores. 

So when an illegal immigrant is in the process of being apprehended by US authorities, they will frantically dig around in their pockets to whip out their phones and activate the app - hopefully without being mistaken for drawing a gun.

The group which developed the app, United We Dream, describes itself as the country's largest immigrant youth-led community - boasting over 400,000 members nationwide. They claim to “embrace the common struggle of all people of color and stand up against racism, colonialism, colorism, and xenophobia.” The group advocates for protections and rights for illegal immigrants - including defending against deportation, obtaining education and acquiring “justice and liberation” for undocumented LGBT “immigrants and allies," according to Judicial Watch

United We Dream started as a project of the National Immigration Law Center (NILC), according to records obtained by Judicial Watch. Between 2008 and 2010, NILC received $206,453 in U.S. government grants, the records show. The project funded was for “immigration-related employment discrimination public education.” Headquartered in Los Angeles, NILC was established in 1979 and is dedicated to “defending and advancing the rights of immigrants with low income.” The organization, which also has offices in Washington D.C. and Berkeley, California claims to have played a leadership role in spearheading Barack Obama’s amnesty program known as Deferred Action for Childhood Arrivals (DACA), which has shielded hundreds of thousands of illegal aliens from deportation. “Ultimately, NILC’s goals are centered on promoting the full integration of all immigrants into U.S. society,” according to its website. -JW

Adrian Reyna, director of Membership and Technology Strategies for United We Dream says the app was designed "precisely to have a plan of action at your" fingertips.

"My mom doesn’t have documents, so I want to make sure that we are prepared and know what to do if something happens,” said Damaris González, an organizer with United We Dream who was brought to the US illegally in 1985 when she was nine-years-old.

Homeland Security's Immigration and Customs Enforcement (ICE) division has arrested 42% more illegal immigrants from President Trump's inauguration on January 20, 2017 to the end of Sept. 30 vs. the same period if 2016 according to Pew Research Center's analysis of ICE data. 

ICE Enforcement and Removal Operations made a total of 143,470 arrests in fiscal 2017, a 30% rise from fiscal 2016. The surge began after President Donald Trump took office in late January: From his Jan. 20 inauguration to the end of the fiscal year on Sept. 30, ICE made 110,568 arrests, 42% more than in the same time period in 2016. -Pew

Notifica offers users information and guidance on the rights of immigrants, along with tips on how to get through different scenarios. United We Dream says they are working on a second version of the app, which will include the ability to use more languages than just Spanish and English. A Summer upgrade will include Vietnamese, Korean and Chinese - as well as the ability to determine the location of where a detained individual is being held.

 

Published:5/3/2018 6:26:55 PM
[Entertainment] Yes, Gwyneth Paltrow and Brad Falchuk Have a Prenup Gwyneth Paltrow, Brad FalchukGwyneth Paltrow and Brad Falchuk are getting closer to saying "I do." A source confirms to E! News that the Avengers actress and TV writer have a prenup in place ahead of their...
Published:5/3/2018 6:26:55 PM
[Entertainment] Meghan Markle's Dad Will Attend the Royal Wedding After All Thomas Markle, Meghan Markle Meghan Markle's parents will both be in attendance at her wedding to Prince Harry. On May 19, Meghan and Harry are set to tie the knot at St. George's Chapel at Windsor Castle....
Published:5/3/2018 5:57:58 PM
[Entertainment] Zoe Saldana Is Praised by ''Partner in Crime'' Mila Kunis at Hollywood Walk of Fame Ceremony Zoe Saldana, Hollywood Walk of FameZoe Saldana has yet another accolade to add to her growing list of accomplishments. The star's name was added to the Hollywood Walk of Fame on Thursday, with the Hollywood Chamber of...
Published:5/3/2018 5:28:23 PM
[Markets] Cornell Course Examines "Derangement" Of "Climate Denialism"

Authored by Neetu Chandak via Campus Reform,

A new seminar at Cornell University is determined to shut down “climate denialism,” claiming that there is “mounting evidence” that “global warming is real.”

Deranged Authority: The Force of Culture in Climate Change, worth four academic credits, is set to be taught in the Fall 2018 semester by cultural anthropologist Jennifer Carlson.

The course description asserts that “climate denialism is on the rise,” suggesting the increase is related to the rise of “reactionary, rightwing [sic] politics in the United States, UK, and Germany.” The proposed solution to combat such denialism and assumed ignorance is “climate justice,” even though over 30,000 scientists reject global warming alarmism.

Richard Lindzen, MIT emeritus professor of meteorology and a senior fellow at the Cato Institute, found the course “an insult to the intelligence of the students.”

He clarified to Campus Reform that many scientists do not argue against slight warming of the Earth after the Little Ice Age (the unusually cool period of the Earth around the 1700s A.D.), nor do those critical of anthropogenic climate change argue that humans have made no impact on the planet, merely that the effect has been small and largely beneficial. 

“The point of such courses as are proposed for Cornell, is to replace science with belief,” Lindzen argued, adding that students are “encouraged to replace understanding with virtue signaling.”

Course readings will focus on the question of “authority” in the field of climate science, exploring “climate research, popular environmentalist texts, and industry campaigns aimed at obfuscating evidence of ecological collapse.”

The class is also influenced by Amitav Ghosh’s 2016 book Great Derangement, which, according to the course description, “suggests that the world’s collective failure to meet the challenges of climate change stems from an ongoing crisis of culture and, more fundamentally, of the imagination.”

“More fundamentally, the course moves the question of how our own senses of environmental authority are grounded in ordinary life, shaped by our respective social positions as well as our everyday practices,” the description adds. 

While the course aims to push for scientific discourse, it will also teach students to recognize indigenous “ecoauthority” so that they can “become familiar with models for ecological resiliency that do not conform to scientific or ‘expert’ discourses of climate remediation.”

The course is part of the Society for the Humanities’ general theme for the 2018-2019 school year, Authority. Courses under this theme will focus on the consequences of authority in science, law, the arts, and politics. 

“In the age of a superabundance of information, what differentiates ‘real’ (authoritative) information from ‘fake news,’ and how one can be interchanged with the other as an ‘equal’ source of authority?” the description of the theme reads. 

Stacey Langwick, the director of Undergraduate Studies in the Anthropology department, told Campus Reform that the class is a “one-time opportunity,” and “will never be taught again” because Carlson is a visiting fellow. 

Published:5/3/2018 5:28:23 PM
[Entertainment] Princess Diana at the Met Gala Is the Ultimate Throwback Thursday Princess Diana, 1995 MET GalaDo you remember when Princess Diana went to the Met Gala? It was 1996, three years before Anna Wintour took on the role as chair of the now-titled Costume Institute Gala, and the theme...
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[Entertainment] Audrina Patridge and Ryan Cabrera ''Getting Pretty Serious'' as She Attends His Concert Ryan Cabrera, Audrina PatridgeAudrina Patridge and Ryan Cabrera are the real deal! The Hills star continues to spend more and more time with her ex-boyfriend, most recently supporting the singer-songwriter at his...
Published:5/3/2018 4:28:16 PM
[Markets] Crisis In Cali: Workers Face "Buckets Of Feces And Needles" As Homelessness Worsens

Authored by Mac Slavo via SHTFplan.com,

Workers in California, who are desperately trying to clean up the state because of the skyrocketing homeless population, are facing grotesque conditions. Some workers even fear for their health after being faced with buckets of fecal matter and dirty needles.

In a democrat’s paradise, such as California, you would think all those taxes and numerous regulations would be able to house some people.  But as the taxes and regulations increase so does the homeless rate, and state workers tasked with cleaning up the mess caused by democrat’s policies are facing dire situations.

The taxes will have to continue to rise too in order to cover the cost of cleaning up the shanty towns. According to Fox News, the cost of cleaning up the state’s numerous shanty towns is also hitting record highs, and that price tag is likely to keep rising as workers tasked with tossing the vagrants’ syringes, feces, used feminine hygiene products, and buckets of urine demand safer work conditions; but that doesn’t seem possible considering their job.

The Golden State’s homeless population of more than 130,000 people is now about 25 percent of the nationwide total, and cleaning up after the surging group is getting costly — topping $10 million in 2016-17. But the human cost is getting equally untenable, a workers’ advocate says. In an official grievance filed last week, the union representing California’s maintenance workers accused the state of subjecting its members to hazardous conditions without proper training or equipment.

California will likely provide necessary equipment, and it will all fall onto the backs of the already poverty-stricken taxpayers of the state.  As more are flung into homelessness, instead of easing up on the oppressive government policies that led to this crisis, most politicians in the Golden State will buckle down and pour gasoline on the bonfire.

“It is the Union’s contention that Caltrans is not ensuring that our members are being provided the appropriate Personal Protective Equipment (PPE), necessary training, necessary vaccinations and proper compensation for the dangerous hazmat duties they are performing when cleaning up homeless encampments on State Caltrans property,” International Union of Operating Engineers director Steve Crouch said in the complaint.

Crouch said that the workers face slippery and muddy conditions in areas riddled with sharp objects, such as used needles, and that could present a health concern. Considering many of California’s big cities are dealing with Hepatitis A outbreaks because of the homeless problem, Crouch definitely should be concerned.  

“Feces and urine and feminine products and all kinds of things on the ground; needles, syringes, you know they use buckets, five-gallon buckets for toilets and it gets really disgusting,”  he said.

Workers also fear confrontations with residents of the shanty towns the state has tasked them with cleaning up.

"Sometimes they have pit bulls in there. They’ll, you know, let the dogs loose to chase the Caltrans workers out,” Crouch said.

 “Sometimes they’ll throw rocks at the Caltrans workers.”

A worker who chose to omit his name out of fear of state retaliation said he’s seen it all. “I’ve been exposed to blood, needles, women’s feminine products… five-gallon buckets of human feces,” he told The Sacramento Bee.

Published:5/3/2018 3:57:27 PM
[Entertainment] Michael B. Jordan Meets Up With Fan Who Slid Into His DMs Sylvia Wilson, Michael B. JordanSylvia Wilson is inspiring social media users everywhere after meeting up with Michael B. Jordan. Earlier this week, Wilson, a 21-year-old Temple University student, decided to slide into...
Published:5/3/2018 2:58:37 PM
[Entertainment] Why Tim Allen's Last Man Standing Can Thank Roseanne For Its Likely Revival Tim Allen, Last Man Standing, RoseanneIs the last man standing getting the last laugh? Less than one year after being canceled by ABC, Tim Allen's sitcom Last Man Standing is the next show set to be revived, E! New has...
Published:5/3/2018 2:27:56 PM
[Entertainment] G-Eazy Arrested for Assault in Sweden G-Eazy G-Eazy has been arrested in Sweden. Video footage obtained by TMZ shows the "Him & I" rapper getting loaded into a police car in Stockholm, hours after performing in the city...
Published:5/3/2018 1:56:04 PM
[Markets] OPEC Production Cuts: Is Russia Complying?

Authored by Tsvetana Paraskova via OilPrice.com,

Russia’s oil production held onto an 11-month high in April, flat compared to March and above its quota under the OPEC/non-OPEC deal for a second consecutive month, according to data by Russia’s Energy Ministry.

Russia pumped a total of 10.97 million bpd of oil in April, unchanged from March, and slightly above its quota under the production cut deal, according to energy ministry data, as carried by Reuters.

Russia’s pledge in the OPEC/non-OPEC deal is to shave off 300,000 bpd from its October 2016 level, which was the country’s highest monthly production in almost 30 years - 11.247 million bpd.

Last month, production at the larger Russian companies increased, while a decline at the smaller firms offset that growth. Production at Rosneft, the largest Russian oil company, inched up by 0.1 percent in April over March, while Gazprom Neft—which has an ambitious production growth plan—saw its oil production increase by 0.9 percent month on month. The combined production of the smaller oil companies decreased by 0.9 percent last month, offsetting the production gains at the bigger producers.

After three months of steady output, Russia’s crude oil production increased in March to 10.97 million bpd, the highest level since April 2017, as the top two Russian companies - Rosneft and Lukoil - boosted their production.

Russia is leading the non-OPEC group of oil producers part of the pact with OPEC to cut production in order to draw down inventories and boost oil prices. Analysts and official figures are already estimating that global oil stocks in developed economies are very close to or already within the five-year average—OPEC’s metric for the deal’s success.

Nevertheless, OPEC’s leader Saudi Arabia insists that there is more work to be done and the cuts should continue by the end of this year, as planned. Russia is more careful in comments, although it has repeatedly said that it is committed to the deal. Last month, Russia’s Energy Minister Alexander Novak said that at the June meeting, OPEC and allies could discuss ‘easing the cuts’ until the end of the year. 

Published:5/3/2018 1:56:04 PM
[Entertainment] Listen to Enrique Iglesias' New Song "Move to Miami" Ft. Pitbull Enrique IglesiasEnrique Iglesias and Pitbull have many of us thinking if we should "Move to Miami" after listening to their latest collaboration. The father of twins and Mr. Worldwide have...
Published:5/3/2018 12:57:49 PM
[Entertainment] Shawn Mendes Honors His "Youth": Listen to His New Song With Khalid Shawn MendesShawn Mendes wants to heal the world through his music. In three weeks, the pop singer will release his self-titled third studio album. Earlier this morning, Mendes premiered...
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[Entertainment] 13 Reasons Why Season 2 First Look Photos Are Super Intense 13 Reasons Why Season 2It looks like there will be no shortage of drama in 13 Reasons Why season two. In the first look images from the upcoming season, there's a trial, an intense confrontation, a beloved car...
Published:5/3/2018 11:55:23 AM
[Markets] Hegde Funds Liquidating: Goldman HF VIP Basket Gets Crushed

Two months ago, when we last looked at the 50 most popular long hedge fund positions as compiled by Goldman Sachs, which the bank calls its Hedge Fund VIP list, and which we have frequently dubbed the "Hedge fund Hotel California" for various obvious reasons, we offered the following observations:

What is notable about this basket, is that it tends to outperform the S&P in most periods, and did so by 170 bp YTD (3.5% vs. 1.9%) and in 64% of quarters since 2001. But this outperformance comes at a cost: if and when the selling begins, as it did in the spring of 2016 when Valeant imploded and blew up the "pharma trade"...

... the basket tends to get hit especially hard: quote Goldman, "although the basket has been a strong historical performer, it suffered its worst historical underperformance vs. the S&P 500 in late 2015 and 1H 2016 (-17% vs. -3%)." But good news followed, because thanks to another coordinated central bank intervention (the Shanghai Accord) the basket then rallied back to outperform the S&P 500 by 21 percentage points (+52% vs. +31%) between 2H 2016 and early 4Q 2017."

Well, it appears that the latest cycle of outperformance is now over, because as the following sloping head-and-shoulders chart in the GS HF VIP index shows, the bottom is about to fall out for the 50 most popular hedge fund names, as suddenly instead of frontrunning purchases, hedge funds will scramble to liquidate first before everyone else. And not to make a too fine point of it, Bloomberg also adds that "today feels like a liquidation day from popular hedge fund holdings" - because the HF VIP index is tumbling by 1.8%, its biggest drop in months, and set for the lowest close since December, wiping out all 2018 gains. Needless to say, its correlation with the S&P is almost 100%.

This means that the market's most important leadership group is now on the verge of collapse, a group which includes in the Top 5 positions names like Amazon, Facebook, Time Warner, Alphabet and Microsoft. The full list of what to short is below.

Finally for those who believe the market is indeed facing a major hedge fund liquidation event, a convenient pair trade would be to go short the entire VIP basket, while at the same time buying the 50 most shorted names as funds, facing an avalanche collateral-driven margin calls, are stopped out on their favorite shorts. The 50 most shorted names are shown below.

 

 

Published:5/3/2018 11:55:22 AM
[Entertainment] MTV Movie & TV Awards 2018: Complete List of Nominations ESC: Black Panther BeautyThe 2018 MTV Movie & TV Awards just let out a resounding, "Wakanda forever!" Nominations for the annual award ceremony were revealed Thursday, and Marvel blockbuster Black...
Published:5/3/2018 11:29:51 AM
[Markets] Argentine Peso Continues To Collapse Despite 2nd 300bps Rate-Hike In A Week

For the second time in a week, Argentina's Central Bank has hiked its key rate 300bps today (300bps on 4/27) to 33.25% for 7-Day repo in an attempt to stall the currency's freefall... for now it's not working!

Today's actions follows yesterday's collapse, as we detailed here, as Morgan Stanley analysts led by Fernando Sedano wrote in note:

"Both domestic and external factors are likely to test Argentine assets again, keeping volatility and risk premia high,"

"Because Argentina has used almost two-thirds of the FX reserves acquired this year, we think any eventual FX volatility may have to dealt with via further hikes"

Additionaly, Nomura said in a note yesterday that:

"traders will need further signs from the Macri administration and from the central bank that there's commitment to lowering inflation and narrowing the deficit...

it's important officials aren't tempted with pro-growth policies like in December/January. "

And, despite the rate-hike today - seemingly reaffirming this commitment to battle a plunge into hyperinflation, as Bloomberg reports today, Argentina's central bank (BCRA) seems cornered between a rush for dollars and a fragile economy, as spot sales and surprise rate hikes fail to arrest the peso’s depreciation and may lead officials to eye a different angle.

"Eventually, the central bank might decide to intervene in the onshore NDF (Rofex) as well," said Daniel Chodos, a strategist at Credit Suisse in Buenos Aires.

Critically, Chodos says that such a move would undermine credibility, given that a free market was one of the main planks of Macri’s government.

"The BCRA can combine all its instruments to stabilize the exchange rate market, but it is appropriate that it does not lean too much against external volatility," Mauro Roca, managing director for emerging markets sovereign research at TCW Group in Los Angeles, said yesterday.

The problem, as Bloomberg notes, is that BCRA no longer fighting against global trend.

The Argentine Peso is the worst EMFX currency today by a significant distance.

Published:5/3/2018 11:29:50 AM
[Entertainment] Céline Dion Gets Upstaged by Deadpool in "Ashes" Music Video Ryan Reynolds, Deadpool 2In the past, Céline Dion has leant her vocals to several soundtracks, including Beauty and the Beast and Titanic--and now, she's going balls to the walls for Deadpool 2. "Over the...
Published:5/3/2018 10:26:50 AM
[Entertainment] Christina Aguilera Is Done With The Voice Forever Christina Aguilera, BillboardChristina Aguilera is putting The Voice behind her. Along with CeeLo Green, Adam Levine and Blake Shelton, Aguilera was one of the reality competition's original coaches. She returned...
Published:5/3/2018 9:59:31 AM
[Entertainment] Rihanna Says She's Not Friends With Drake: "It Is What It Is" Rihanna, VogueRihanna and Drake are officially over--personally and professionally. The low-key couple called it quits years ago, and the rapper's public profession of his love may have planted the...
Published:5/3/2018 8:58:24 AM
[Markets] S&P, Dow Test Critical Support; Goldman Dumps To 7-Month Lows

Well, this is not what the asset-gatherers and commission-rakers said would happen...

The Dow hit its 200DMA...

 

The S&P is testing its 200DMA...

 

And Small Caps broke their 50- and 100-DMAs...

 

And Goldman Sachs is not helping..

 

As the global synchronous growth story collapses...

 

Published:5/3/2018 8:58:24 AM
[Entertainment] Lea Michele Dishes on Her Engagement...and Those Illiteracy Rumors Lea Michele, Watch What Happens LiveLea Michele is setting the record straight--she's can absolutely read. The Glee alum was glowing Wednesday night when she stopped by the Watch What Happens Live With Andy Cohen set...
Published:5/3/2018 8:28:49 AM
[Entertainment] Mike Myers Remembers Austin Powers' Verne Troyer: "I Miss Him" Mike Myers, Verne Troyer Less than two weeks after Verne Troyer's death, Mike Myers appeared on Jimmy Kimmel Live! and remembered his late co-star. "Verne was a fantastic human being and--yeah,"...
Published:5/3/2018 7:27:17 AM
[Markets] Pentagon Accelerates Testing Of New B61 Nuclear Gravity Bomb

President Donald Trump's promises to rebuild the American nuclear arsenal are starting to bear fruit, and according to a US Air Force general update from May 1, the US has already conducted more than two dozen tests of its new B61-12 guided nuclear gravity bomb.

As Military.com reports, plans to spend over $1 trillion to modernize the US "nuclear triad" - nuclear bombers and missiles launched from land-based silos and submarines - have been fast-tracked thanks to the new Nuclear Posture Review, as well as increased military spending authorized during the Trump administration.

Bomber

As discussed before, the new gravity nuke has been in development for years, but Trump's orders have sped up testing to the point where most of the air force's mainstay military planes have been approved to carry it. And it's widely expected that the B-2 Spirit and the futuristic B-21 Raider will be approved to carry the B61 as well. In addition to testing the B61-12, the NPR also calls for modernizing the air-launched cruise missile and intercontinental ballistic missile components of the nuclear triad.

As it stands, the US nuclear triad consists of the submarine-launched ballistic missiles, strategic bombers, which carry both gravity bombs and cruise missiles, along with land-based ICBMs. But the B61 possess an advanced capability that its cousins don't: Underground penetration. This allows it to strike fortified command and control centers, while its explosive yield is estimated at 50 kilotons.

"We've already conducted 26 engineering, development and guided flight tests," of the B61-121 gravity bomb Lieutenant General Jack Weinstein told the Air Force Association breakfast on Tuesday. "The program's doing extremely well," he said. - Sputnik.

Weinstein explained that the bombs are capable of being carried by the B-52 Stratofortress and B-2 Spirit, which can launch both conventional or nuclear payloads, and also legacy fighters such as the F-16 Fighting Falcon and F-15E Strike Eagle.

"When I say 'dual-capable aircraft,' I need to be really specific," he said. "Dual-capable aircraft is called the B-52 and B-2 - it does conventional and nuclear. It also means F-16s and Strike Eagles, and other aircraft our NATO partners fly."

During tests back in 2015, the F-35 flew with the B61-12 to measure its vibration in the aircraft's weapons bay. Both of the fourth-generation fighters will be able to deploy the B61-12 bomb. The B61-12 also conducted its third and final developmental test flight aboard an F-15E in 2015.

RT points out that the US could deploy its new B61 bombs to NATO bases in Europe - something Russia says would be tantamount to a violation of the nuclear nonproliferation treaty.

The US isn't the only superpower revamping its nuclear arsenal: earlier this year, Russian President Vladimir Putin shocked the world by unveiling during his annual state of the union address a new nuclear ICBM capable of evading US anti-ballistic missile defenses.

One hopes that the US Military Industrial Complex will be foiled in its attempts to put these two weapons in head-to-head combat, even if it means lower profits for shareholders.

Published:5/3/2018 6:55:57 AM
[Markets] Global Stocks, Dollar Slide As Nervous Traders Eye US-China Trade Talks

It has been a confusing 24 hours, with US futures slumping after yesterday's unexpectedly hawkish-yet-dovish FOMC, which first slammed the dollar, then sent the USD surging, and sparking an equity selloff even as rates remained relatively unchanged. Today's this confusion spilled over into international markets, with both Asian and European shares retreating, as traders are on edge ahead of the US-China trade talks taking place today and tomorrow.

The weakness continued this morning, when another disappointing euro-zone core CPI number (1.1%, Exp. 1.2%, last 1.3%) led to sharp rally across EGBs, dragging Treasurys higher in response, and bull-flattening the curve as 10Y yields slumped.

And while U.S. equity futures are slowly trying to grind higher from overnight lows, the response among US equities to what has so far been an impressive earnings season has left most of the bulls very disappointed, and judging by recent analyst commentary, 2018 is clearly not going according to plan (to echo what Citi said last month): 

"A slightly disappointing growth reaction thus far to the late 2017 tax cuts, no sign of a meaningful pick-up in inflation pressures and uncertainty generated by the potential for a trade war were always likely to commit the Fed to a steady as she goes message,” said Lee Ferridge of State Street Global Markets. "There might also be a little concern over recent market moves, with stocks flat so far in 2018 while US Treasury yields have moved meaningfully higher, doing some of the Fed’s tightening work for it."

European equities opened on the backfoot (Eurostoxx 50 -0.2%), perhaps anxious as US-China trade talks start in Beijing. Major bourses are lower on the day whilst Switzerland’s SMI 20 outperforms its peers. Most sectors are in the red with the exception of energy and IT. Logitech (+7.0%) shares soared following earnings, buoying the IT sector along with it. Financials underperform after euro-zone inflation data.

Asian equity markets traded mostly negative following the late US slump on Wednesday, with the Fed seen to remain firmly on track for a June hike. Nonetheless, ASX 200 (+0.9%) was the regional outperformer and gained across all sectors with miners underpinned amid upside in metals, while NAB was among the laggards after a decline in H1 cash profit. Elsewhere, Shanghai Comp. (-0.2%) and Hang Seng (-1.7%) declined after a daily net liquidity drain by the PBoC and amid trade concerns ahead of talks between US and China, with tech and telecoms related stocks pressured after reports the US is considering equipment sales restrictions on Chinese telecom firms over national security concerns. As a reminder, Japan is shut for the remainder of the week.

Of note, the Hang Seng China gauge dropped as much as 2.2% ahead of trade talks between U.S. and China which begin later on Thursday, and dragged the MSCI Asia Pacific lower by 0.2%.

"When you think about the things that have been weighing on the market -- the potential for trade war with China, Nafta breaking up, rising rates and of course the potential rolling over in growth -- I think the one that is really weighing the most heavily is trade and that’s why the market tends to swing the most violently on every new piece of news,” RiverFront Investment Group Chairman Michael Jones told Bloomberg TV.

Meanwhile, as TSY yields slumped overnight, the USD predictably weakened across the board, undoing some of yesterday's post-FOMC spike: the Bloomberg dollar index fell for first time in four sessions.

Elsewhere, in FX, the pound erased an earlier advance after U.K. services data undershot forecasts, before fading the move to claw back a 0.2% gain; while the euro pared gains after the euro-area CPI estimate for April came in below the median forecast, it was still higher for the first time in four days; The TRY spiked to a new record low against the USD after both core and headline CPI surprised to the upside with the backdrop of Erdogan's increasing pressure against higher rates. NOK stronger as Norges Bank does not hint at any dovish changes to rate path. The AUD was the best performing G-10 currency after a larger-than-expected trade surplus.

Treasuries edged higher while emerging-market currencies rebounded from a four-month low; European government bonds all rose following poor Eurozone inflation data, while Australia's 10-year yield steady at 2.80%.

In commodities, oil prices recovered from yesterday's post-DoE sell off with prices continuing to factor in the risks surrounding Iranian-US relations with the latest source reports suggesting that US President Trump is reportedly all but decided to end the nuclear agreement with Iran. In other energy newsflow, China's Sinopec is planning to cut Saudi crude oil loadings by 40% in June for a 2nd month on high prices; according to a UNIPEC official. In the metals scope, spot gold is sitting in modest positive territory following yesterday's FOMC release and a slightly softer USD. Elsewhere, aluminium prices have risen for the second consecutive session, as attention turns to developments on  US-China trade talks being conducted today. Copper was flat overnight with trade contained amid opposing forces of rising metal prices in China during early trade and a broad risk averse tone.

In geopolitical news, Reuters reported that Trump has all but decided to end nuclear agreement with Iran, according to sources which added it is unclear how he will withdraw from the agreement. Meanwhile, the WSJ added that the US is said to be considering equipment sales restrictions on Chinese telecom firms over national security concerns. In related news, a Chinese trade official commented that China will not accept pre-conditions in trade discussions and that China is more prepared than the US to cope with a trade war.

In central bank news, Norges Bank Interest Rate Decision 0.50% vs. Exp. 0.50% (Prev. 0.50%). Comments stated that outlook and balance of risks have not changed substantially, inflation is below target, as such policy rate will be raised after summer 2018. Krone is weaker than expected as measured by the import weighted exchange rate. There was little new information about growth in the Norwegian economy.

Riksbank's Jansson said that there is a limit for how expansionary policy can be, but haven't reached there yet, hopes next step will be tightening of policy; Riksbank's Skingsley not at the point where rate hikes can begin; Riksbank Governor Ingves says the rate path is a forecast, not a promise.

Today's busy calendar includes data on jobless claims, trade balance and factory orders. DowDuPont, Bombardier, Cigna and Ferrari are among companies reporting earnings

Bulletin Headline Summary from RanSquawk:

  • Norges Bank maintains post-summer hike guidance, Riksbank sticks to end of year
  • UK Services PMI and Eurozone CPI miss expectations
  • Looking ahead, highlights include US trade, weekly jobs, ISM non-mfg, factory orders, a slew of speakers and earnings

Market Wrap

  • S&P 500 futures up 0.2% to 2,633.50
  • STOXX Europe 600 down 0.2% to 386.55
  • MSCI Asia Pacific down 0.2% to 172.83
  • MSCI Asia Pacific ex Japan down 0.5% to 563.89
  • Nikkei down 0.2% to 22,472.78
  • Topix down 0.2% to 1,771.52
  • Hang Seng Index down 1.3% to 30,313.37
  • Shanghai Composite up 0.6% to 3,100.86
  • Sensex down 0.05% to 35,159.39
  • Australia S&P/ASX 200 up 0.8% to 6,098.28
  • Kospi down 0.7% to 2,487.25
  • German 10Y yield rose 0.2 bps to 0.583%
  • Euro up 0.4% to $1.2002
  • Italian 10Y yield rose 0.5 bps to 1.535%
  • Spanish 10Y yield fell 0.9 bps to 1.302%
  • Brent futures up 0.2% to $73.52/bbl
  • Gold spot up 0.6% to $1,313.06
  • U.S. Dollar Index down 0.1% to 92.40

Top Overnight News from Bloomberg

  • The dollar fell after the Federal Reserve seemed less hawkish than some had positioned for; the Bloomberg Dollar Spot Index slipped for the first time in four days; 10-year Treasuries rose for the first time in three days
  • The greenback weakened against all its G-10 peers; Norway’s krone saw the biggest advance Thursday after the Norges Bank reiterated that it could lift interest rates after the summer
  • The pound erased an earlier advance after U.K. services data undershot forecasts, before fading the move to claw back a 0.2% gain; while the euro pared gains after the euro-area CPI estimate for April came in below the median forecast, it was still higher for the first time in four days
  • Stocks in Europe followed Asian peers lower as investors began to switch their attention away from the Fed and back to earnings and the outlook for global trade ahead of talks between Chinese and U.S. officials
  • China won’t succumb to “threats” from the U.S., a senior government official said, hours before talks are to begin Thursday with a delegation of the Trump administration’s top trade policy officials
  • Federal Reserve officials made doubly sure to convey a relaxed attitude toward inflation rising above 2%, mentioning the “symmetric” nature of their target twice in a statement Wednesday that signaled no intention to accelerate a gradual tightening of monetary policy
  • The U.S. Treasury announced it will lift long-term debt sales by $73b this quarter
  • If billionaire bond investor Bill Gross is right, most of this year’s excitement in the Treasury market is done and yields won’t see a substantial move from here
  • Theresa May is facing a crisis after pro-Brexit ministers paired up with Conservative hardliners to demand a clean break from the European Union’s customs system
  • Eurozone Apr. CPI Estimate y/y: 1.2% vs 1.3% est; Core CPI 0.7% vs 0.9% est; Services CPI 1.0% vs 1.5% prev.
  • U.K. Apr. Services PMI: 52.8 vs 53.5 est; Markit note the underlying performance of the economy has continued to deteriorate
  • Norges Bank holds rates at 0.50% as expected; says upturn in the economy appears to be continuing broadly in line with the March policy report
  • Turkey Apr. CPI y/y: 10.9% vs 10.5% est; Core CPI 12.2% vs11.5% est

European equities opened on the backfoot (Eurostoxx 50 -0.2%) as US-Sino trade talks start in Beijing. Major  bourses are lower on the day whilst Switzerland’s SMI 20 outperforms its peers. Most sectors are in the red with the exception of energy and IT. Logitech (+7.0%) shares soared following earnings, buoying the IT sector along with it. Glencore (+1.1%) is at the top of the FTSE following pleasing production numbers. Other individual movers post-earnings include: Veolia (+2.5%), Gerberit (+3.1%), Infineon (+0.9%), Vonovia (-1.4%) and Smith & Nephew (-6.0%).

Top European News

  • U.K. Services Disappoint as Economy Stays Stuck in Slow Lane
  • Norway Sticks to Tightening Plan as Rate Held at Record Low
  • Danske Bank Is Slammed by Regulator in Money Laundering Probe
  • Starwood Capital Sells $1.1 Billion Portfolio of U.K. Hotels

Asian equity markets traded mostly negative following the weakness on Wall St post-FOMC, with the Fed seen to remain firmly on track for a June hike. Nonetheless, ASX 200 (+0.9%) was the regional outperformer and gained  across all sectors with miners underpinned amid upside in metals, while NAB was among the laggards after a decline in H1 cash profit. Elsewhere, Shanghai Comp. (-0.2%) and Hang Seng (-1.7%) declined after a daily net liquidity drain by the PBoC and amid trade concerns ahead of talks between US and China, with tech and telecoms related stocks pressured after reports the US is considering equipment sales restrictions on Chinese telecom firms over national security concerns. As a reminder, Japan is shut for the remainder of the week. US is said to be considering equipment sales restrictions on Chinese telecom firms over national security concerns. In related news, a Chinese trade official commented that China will not accept pre-conditions in trade discussions and that China is more
prepared than the US to cope with a trade war.

Top Asian News

  • Mahathir Probed Under Malaysia Fake News Law for Sabotage Claim
  • Fed Adds to List of Reasons Why Asia Stock Investors Are Jittery
  • Little Known China Biotech Firm Lures Top Global Stock Fund
  • Turkish Investors Get Reality Check After Inflation Accelerates

In FX, it has been very choppy trade for the DXY in the FOMC aftermath, but ultimately the index has pulled back from fresh 2018 highs around 92.830 made in the run-up to circa 92.500. To recap, the Fed’s latest assessment acknowledged inflation rising to within a whisker of its target rate, but was less upbeat on the pace of economic activity and unexpectedly added a degree of flexibility around the 2% price mandate, which has been perceived dovishly.  CAD: Another beneficiary of the broad Greenback downturn amidst rebounding oil prices and looking ahead to Canadian trade data that is expected to reveal a narrower deficit. Usd/Cad is back down in the low 1.2800 area and eyeing residual bids from 1.2820-00 that were not quite filled recently. EUR/GBP: Both movers on independent factors, as Eur/Usd revisited sub-1.1950 lows on the back of weaker than consensus Eurozone CPI and Cable retreated from 1.3600+ again in wake of the UK services PMI miss that has dragged BoE hike expectations for next week down to single digits from almost odd-on this time last month. Tech supports eyed in Eur/Usd still the major 1.1936 Fib and for Cable 1.3550. NOK/SEK: Contrasting fortunes for the 2 Scandi Crowns as the Nok is underpinned by the Norges Bank reaffirming intentions to hike ‘after Summer’ this year, but the Riksbank reiterates no tightening until the end of 2018. However, Eur/Nok and Eur/Sek are both softer on a weaker single currency

In commodities, oil prices have recovered from yesterday's post-DoE sell off with prices continuing to factor in the risks surrounding Iranian-US relations with the latest source reports suggesting that US President Trump is reportedly all but decided to end the nuclear agreement with Iran. In other energy newsflow, China's Sinopec is planning to cut Saudi crude oil loadings by 40% in June for a 2nd month on high prices; according to a UNIPEC official. In the metals scope, spot gold is sitting in modest positive territory following yesterday's FOMC release and a slightly softer USD. Elsewhere, aluminium prices have risen for the second consecutive session, as attention turns to developments on  US-China trade talks being conducted today. Copper was flat overnight with trade contained amid opposing forces of rising metal prices in China during early trade and a broad risk averse tone.

Looking at the day ahead, the April CPI report and March PPI for the Euro area will be out while the latest European Commission forecast updates will be released. For core CPI, consensus expects a +0.9% yoy print after holding at +1.0% yoy for the last 3 months (headline CPI 1.3% yoy expected). The final April services and composite PMIs in the UK will also be out in the morning. In the US preliminary Q1 nonfarm productivity and unit labour costs data are due, along with the March trade balance print, April ISM non-manufacturing, weekly initial jobless claims, March factory orders and the final March durable and capital goods orders data. Away from the data, the ECB's Villeroy, Praet, Constancio and Coeure are due to speak.

US Event Calendar

  • 7:30am: Challenger Job Cuts YoY, prior 39.4%
  • 8:30am: Nonfarm Productivity, est. 0.9%, prior 0.0%; Unit Labor Costs, est. 3.0%, prior 2.5%
  • 8:30am: Initial Jobless Claims, est. 225,000, prior 209,000; Continuing Claims, est. 1.84m, prior 1.84m
  • 8:30am: Trade Balance, est. $50.0b deficit, prior $57.6b deficit
  • 9:45am: Bloomberg Consumer Comfort, prior 57.5
  • 9:45am: Markit US Services PMI, est. 54.5, prior 54.4; Markit US Composite PMI, prior 54.8
  • 10am: ISM Non-Manf. Composite, est. 58, prior 58.8
  • 10am: Durable Goods Orders, prior 2.6%; Durables Ex Transportation, prior 0.0%
  • 10am: Cap Goods Orders Nondef Ex Air, prior -0.1%; Cap Goods Ship Nondef Ex Air, prior -0.7%
  • 10am: Factory Orders, est. 1.4%, prior 1.2%; Factory Orders Ex Trans, prior 0.1%

DB's Jim Reid concludes the overnight wrap

After the football last night Jim is too emotionally drained to contribute today as Liverpool did their best to avoid making the final of the Champions League. However they just about got there and I think he’ll be busy dusting off his rolodex for clients in Kiev later today.

Unlike the football, it wasn’t quite so easy to get excited about last night’s Fed meeting but there were still one or two interesting statement changes to highlight. Our US economists believe that the statement moved incrementally in a more hawkish direction and also towards brevity. In their view, it recognized that inflation has moved close to and is expected to continue to run near the Committee’s 2% objective. As expected, it also emphasized that the 2% objective is a “symmetric” one, allowing for some overshoot as well as undershoot of inflation – a modestly dovish modification in their view. They also note that having just about reached the inflation objective, they dropped the need to continue monitoring inflation developments closely – a hawkish innovation.

Meanwhile, with inflation about on target and with risks to the Fed’s labour market objective running to the upside with the unemployment rate seen as low and the labour market expected to “remain strong”, one interesting point that our economists made in their note (link) yesterday was that they believe a change in the balance of risks language is coming, possibly as soon as June when the Chair will have an opportunity to explain things. In a nutshell our colleagues expect to learn from the minutes to this meeting, as well as upcoming Fedspeak, that should point to a more hawkish stance of policy at the June meeting, absent any unexpected events before then.

For markets, while moves were fairly modest, they did seem to interpret the statement as overall leaning very slightly more dovish. Perhaps that reflected the removal of the sentence “the economic outlook has strengthened in recent months” however we tend to agree with our economists in that this line was just removed simply as an acknowledgment of soft Q1 growth, which was widely anticipated. In any case, Treasury yields closed off their intraday highs with 2y yields finishing at 2.489% after trading as high as 2.517% while 10y yields ended broadly unchanged at 2.967% after being at 2.994%. The 2s10s curve finished at 48bps and nearly 2bps steeper on the day. It’s worth noting that June is 97% priced in for a hike now – which is little changed compared to the day prior.

The big mover in markets yesterday was the Greenback however. The Dollar index was initially strong leading into the Fed, however proceeded to fall -0.47% after the statement was released, but then rallied +0.66% off the lows into the close. EM currencies appeared to be on the receiving end of that with the Colombian Peso, Brazilian Real, Russian Ruble, Turkish Lira and Argentine Peso down between 1% and 3%. Some headlines about the US potentially increasing sanctions on Russia didn’t seem to help the Ruble weakness in particular. In any case the rally for the US Dollar did appear to weight on US equity markets with the S&P 500 and Dow both closing -0.72% despite Apple doing its best to lead markets higher post results.

This morning in Asia, market are broadly lower with the Hang Seng in particular down -1.66%, weighted down by tech and financials stocks, while the Nikkei (-0.16%), Kospi (-0.38%) and Shanghai Comp (-0.16%) have also trended lower. Ahead of today’s China/US trade talks today, Bloomberg cited unnamed Chinese government officials indicating that Beijing will not agree to preconditions that include abandoning its advanced manufacturing program and cut the trade gap by a fixed amount.

Moving on. While monetary policy came under review, there was also some focus on the fiscal side of things yesterday too with the US Treasury quarterly refunding announcement, however there were no great surprises with a $1bn increase to all maturities which was roughly in line with expectations, representing an additional $27bn of new issuance for the upcoming quarter.

Away from the Fed, earlier in the day the focus was on some of the data in Europe. Particularly in the spotlight was a first look at the Q1 GDP print for the Euro area however there were no real surprises with the +0.4% qoq/+2.5% yoy print coming in bang in line with expectations. The Q4 2017 reading was also revised up a tenth to +0.7% qoq. While Q1 was the slowest QoQ rate of growth in the Euro area since Q3 2016, it’s interesting to note that this is the first time ever that Europe has outpaced the UK for 5 consecutive quarters. Keep in mind that the UK outpaced Europe, with the exception of one flat quarter, for 15 quarters in a row between Q2 2011 and Q4 2014.

Meanwhile, just before that we had the final April manufacturing PMIs in Europe. The final Euro area reading was revised up 0.2pts from the flash estimate to 56.2. While that represents the fourth consecutive monthly decline, the rate of decline in April at just 0.4pts is a lot more moderate than the 1-2pt declines in the first 3 months of this year. The upward revision for April appeared to be due to a combination of a slightly stronger picture in France (+0.4pts to 53.8) and the noncore countries performing marginally better than implied. One exception was Italy which fell 1.6pts and more than expected to 53.5 (vs. 54.5 expected), marking a 15-month low. We should note that the new orders series for the Euro area fell 1pt albeit to a still solid 54.5 – but the lowest since November 2016. Italy’s new order series fell a more significant 3.2pts to 52.2 and is now down 9.1pts from the January high. So the fragility still appears to lie with Italy. European equity markets returned from Monday’s holiday in a positive mood with the Stoxx  600 finishing +0.63% and DAX closing at a fresh three-month high (+1.51%), albeit helped by a weaker Euro.

In other news, as far as the daily Brexit update is concerned, much of the focus was on the headlines from the night prior concerning the ‘rebellion’ being staged by Brexiteers in the cabinet over the customs union. Some reports suggested that Davis and Fox were willing to resign over May’s option preference for the union. Staying with the UK, it’s worth noting that there was rare good news to come from the construction PMI data which rose 5.5pts to 52.5 in April, with a big rise in housing activity the main driver. Sterling pared early gains by the close (-0.28%) as a result of broad Dollar strength however 10y Gilt yields were 5.2bps higher at 1.455%.

In terms of the remaining data, ahead of payrolls on Friday in the US the ADP moderated mom, but was above expectations at 204k (vs. 198k expected) and so remains solid at a three-month annualised rate of 224k. The  Eurozone’s March unemployment rate was steady and in-line at 8.5% while Italy was slightly higher than expected at 11.0% (vs. 10.9% expected).

Looking at the day ahead, the April CPI report and March PPI for the Euro area will be out while the latest European Commission forecast updates will be released. For core CPI, consensus expects a +0.9% yoy print after holding at +1.0% yoy for the last 3 months (headline CPI 1.3% yoy expected). The final April services and composite PMIs in the UK will also be out in the morning. In the US preliminary Q1 nonfarm productivity and unit labour costs data are due, along with the March trade balance print, April ISM non-manufacturing, weekly initial jobless claims, March factory orders and the final March durable and capital goods orders data. Away from the data, the ECB's Villeroy, Praet, Constancio and Coeure are due to speak.

Published:5/3/2018 6:25:15 AM
[Markets] Restoring Strategic Balance: Russia's "Invincible" Nuclear Weapons

Via Southfront.org,

On March 1, 2018, Vladimir Vladimirovich Putin made his most important speech probably since the time of the 2007 Muenchen Conference. If 11 years ago he declared that Russia would not allow disrupting the strategic balance and losing great power status, in 2018 it was proven this has not happened and would not happen in the foreseeable future.

During his speech, Russia’s president introduced 6 high-tech weapons systems which were developed in order to preserve strategic parity that was being undermined by the US and NATO.

The core of the matter lies in the fact that, when Russia was weak, in 2002 the US unilaterally abrogated the ABM Treaty and then, pursuing the aim of neutralizing Russia’s nuclear deterrent, she began two large-scale programs.

The first was the global ABM system surrounding Russia and China. Land ABM bases were deployed in California, Alaska, Romania, and Poland, with over 100 GBI and Standard SM-3 missiles. Additional such facilities are planned for Japan, South Korea, and Qatar.

UN currently has the ability to intercept Russia’s ICBM warheads only during their terminal trajectories. However, the more modern SM3 Block II A and IB theoretically can accomplish boost-phase intercepts, before warhead separation. The US is also deploying a naval ABM component which at the moment includes 30 destroyers and 5 cruisers deployed in direct proximity to Russia.

in the Mediterranean and Black Seas, in the Sea of Japan, in the Pacific and Atlantic. These ships also carry SM3 missiles, no fewer than 150 of them. These launchers are dual-use, as they man launch not only SM3 but also Tomahawk SLCMs which are nuclear-capable.

The US also started pursuing the Prompt Global Strike (PGS) program, which seeks the ability to launch precision non-nuclear strike against any target on the planet within 1 hour.

PGS entailed the development of several hypersonic delivery vehicle types, including cruise missiles and gliding warheads.

Since these measures undermined the foundations of deterrence, namely Mutually Assured Destruction, Russia was forced to respond. It launched several weapons programs in order to nullify US and NATO superiority in that area.

Sarmat

On March 1, 2018. V. Putin presented the 5-th generation silo-based RS-28 Sarmat ICBM, a multi-stage liquid-fuel missile that will soon replace the Soviet-era R-36M2 Voyevoda (SS-18). While most of the missile’s characteristics are classified, it is known the 200-ton missile has a short active flight stage to make ABM intercept more difficult. The missile can reach the altitude of 100km and achieve speed of  Mach 7-10. While Voyevoda’s range stood at 11,000 km, Sarmat extends it to over 16-18 thousand, making possible strikes from different directions, including from over the Atlantic, Pacific, and also North and South Poles. It would force the target country to deploy a perimeter ABM defense around its borders that would be both very expensive and physically difficult. Experts believe two versions of the missile will be deployed, with different fuel loads to strike targets in the US and Western Europe.

The launch weight of the missile targeted at the US would be between 150 and 200 tons, its range—16-18 thousand km, with throw-weight of 5 tons. Sarmat targeted against Europe would have a range of 9-10 thousand km, launch weight of 100-120km, and  throw-weight of 10 tons.

When it comes to the warhead bus, as it enters the atmosphere it will carry out anti-ABM evasive maneuvers, and may carry 10-15 warheads of varying yields. If the payload consists of 10 warheads, their yield will be 750kt apiece, but if the Avangard  hypersonic maneuvering warheads are employed, the Sarmat will carry 3-5 of them at the weight of 1 ton each.

Much of the missile’s weight consists of traditional anti-ABM measures, such as decoys, or inflatable warhead imitators; spiral, corner, and dipole reflectors; and also rockets which imitate the trajectory and heat signature of warheads. Avangard warheads can also be used with conventional payloads, allowing the ICBM to strike naval squadrons from extreme distances. It’s unlikely the Sarmat would be used like that since any ICBM launch would be considered as a nuclear strike and could provoke a retaliatory strike.

Sarmat and Voyevoda have identical dimensions in order to allow to use the launch silos of the Voyevodas that will reach their service limits in 2021-2023. Sarmat is in its final launch tests. It is expected to enter service in 2018-2020, and will begin combat alert in 2020-2021. Therefore the production of new missiles will take place concurrently with the reduction in the numbers of old ones, allowing the SRF to modernize its force without reducing its strength. According to MOD representatives, all the practical, technological, and industrial problems have been resolved, so that factory capacity necessary to fulfill future orders already exists.

Even though dry launch tests were successfully completed in 2017, they will be continued in the near future to increase the system’s reliability.  There are plans to use Sarmat missiles that have exhausted their service lives to launch satellites in order to increase the cost-effectiveness of this system.

Burevestnik [Storm Petrel]—a cruise missile with a nuclear powerplant

Another weapon introduced by Russia’s president was a nuclear-powered cruise missile which, following a poll on MOD website, received the name Burevestnik. According to information presented, Russian scientists were able to create a compact nuclear power source and squeeze it into the confines of a cruise missile like the Kh-101. It cannot go supersonic, but has range an order of magnitude greater than any other weapons, which is practically unlimited. The missile can furthermore operate at ultra-low altitudes, is stealthy and highly maneuverable. It makes it quite invulnerable to existing and future anti-air and anti-missile systems. The missile underwent tests in 2017, passed them, and its power source reached the required power which ensures the necessary thrust.

According to V. Putin, it permits the development of an entirely new class of offensive weapons capable of striking targets anywhere on the planet while remaining invulnerable to defensive systems. These missiles may be carried by strategic bombers and submarines, and may be equipped with conventional or nuclear warheads.

It is believed the missile is powered by a nuclear ramjet motor, which were being developed since the 1960s, in part to propel future aircraft, but the development was curtailed due to low reliability and high risk of contamination. It’s apparent that if Russian engineers managed to overcome the pollution problem, in the future they may be used on long-range strike drones which Russian Aerospace Forces currently lack.

Poseidon (Status-6) unmanned underwater vehicle (UUV)

Russia’s president stated the country developed UUVs with a unique combination of speed, maneuverability, and range. He likely was referring to a UUV known as Status-6 but which, after a poll on MOD site, was dubbed Poseidon. That Russia has been working on such weapons has been known for a long time, including thanks to a specially prepared “leak” to the media in 2015. According to the CIA, it was a way of publicly warning the US about a likely response to ABM deployment.

The basic characteristics of this system are as follows: diameter 1.6m, length 24m, weight about 40 tons, range 10,000km, maximum speed 100-186km/h, depth of operation up to 1km. The UUV follows in the footsteps of the T-15 torpedo developed in the 1940s-1950s to deliver thermonuclear warheads to US shores in the absence of reliable missile carriers. Unlike the T-15, Poseidon is a multirole submersible system, capable of engaging a wide range of targets such as carrier battle groups, naval bases, and coast infrastructure. One of its main missions would be the delivery of a nuclear munition to enemy shores to strike important commercial targets and to inflict unacceptable costs to the enemy by creating large radioactive fallout zones, tsunamis, and other nuclear explosion effects. The UUV can also carry torpedoes, missiles, and mines to attack various surface, land, and underwater targets.  It could launch missiles using a so-called Multiple All Up Round Canister, MAC.

According to its designers, the UUV ought to unload a capsule with a cluster of cruise missiles and quickly depart to avoid falling victim to return fire. The capsule can be set up on the sea bottom and remain there for a long time, until activation. There are reports this technology was used as part of the Skif project on submarine Sarov. The UUVs would be controlled from special “command vessels”  using the standard means of  communicating with underwater vehicles, the ZEUS transmitter. The UUV would likely have a sonar for orientation purposes, a modern navigation system, and other high-tech equipment depending on the mission. utin stated that the multi-year test cycle for the nuclear power unit was finished in December 2017.

This unit has very small dimensions and an extremely high power density. It is a hundred times smaller than a submarine reactor, has greater power, and it is able to reach full power 200 times faster. Experts believe the UUV may be equipped with a nuclear reactor using the AMB-8 liquid metal heat carrier, with a power of 8-10 MW to ensure its unique speed and range. Though its top speed would likely be used only rarely. To ensure acoustic camouflage and make it appear to be a cargo vessel, its cruising speed would be 35-50  km/h with a detection range of 2-3km, and its top speed of over 180 km/h would be used only to evade attack or to deliver a nuclear munition. In any event, the UUV is invulnerable to contemporary underwater weapons. The fastest (and likely best) USN torpedo, the Mark 54 with a speed of 74km/h still can’t catch up to Poseidon or to reach its operating depth. One could use underwater nuclear mines to destroy UUVs of this sort. Such weapons (for example, UUM-125A) were developed in the US, including in the 1980s, but were closed due to their extreme cost and pollution.

Future carriers of Poseidon will be Belgorod and Khabarovsk nuclear subs, each of which could carry up to six such UUVs. Poseidon could conduct both combat and reconnaissance operations without coming into direct contact with the enemy, making them the first 5th generation submarines. Experts believe that the average cost of such a UUV would be between $30-40 million.

Kinzhal hypersonic air-launched missile system

The public also heard of the Kh-47M2 Kinzhal missile. This weapon, according to experts, is based on the Iskander ballistic missile, and represents the first successful adaptation of a ballistic missile for airborne carry.

It is known that Kinzhal’s top speed is in the neighborhood of Mach 10, or over 12,000 km/h, its combat range is about 2000 km, while flight trajectory carries it to altitudes of 50-80km above the Earth’s surface.

At the moment Kinzhal’s carrier is the MiG-31 all-weather interceptor fighter, in the future that role could also be undertaken by the Su-57 fifth-generation fighter.

The high speed fighter’s flight characteristics allow the missile to be delivered to its launch point within minutes. According to experts, Kinzhal launch procedure is as follows: ascend to the stratosphere, then launch the missile into near-orbital heights where it can reach hypersonic speed before descending onto its target while continuing to gain speed. Aerodynamic control surfaces allow the missile to maneuver throughout its trajectory and thus evade air- and missile-defense zones. It is the ability to maneuver at hypersonic speeds that gives the missile its invulnerability which increases its likelihood of striking the target. In order to intercept the Kinzhal, the Patriot PAC-3 anti-missile would have to reach the speed of Mach 15, and at the moment there is no such missile in US arsenal. The best the PAC-3 can do is Mach 4.5. Kinzhal can strike not only stationary but also mobile targets, such as warships.

The missile is also difficult to detect. It approaches its target at an angle of 90 degrees, above the cone covered by the AN/SPY-1 radar of the naval Aegis air defense system. Thus the missile could operate in a US radar blind zone.

Most information about this missile is currently classified, though it is known it could carry conventional or nuclear payloads. Even though its range is only 2,000km, experts believe it will be equipped with a nuclear propulsion system that would make it a nuclear weapon. It is not known to what extent designers were able to resolve the skin heating problem. Ensuring heat insulation was usually accomplished using ceramic plating (US and Russian space shuttles, X-51A Waverider). But the Kinzhal appears smooth. Specialists therefore believe that Kinzhal was made possible thanks to development of new materials for the missile’s skin, structure, and thermal isolation.

The first Kinzhals entered limited-scale service in December 2017, and they are already available to combat units in the Southern Military District, where the doctrine for their use is being developed.

Avangard gliding vehicle

The development of a future ICBM with a brand-new payload type in the form of a gliding vehicle was the real technological breakthrough. The testing of Avangard has been successfully concluded. According to available information, Avangard can reach the top speed of Mach 20 and is one of the possible payload options for Sarmat.

The warhead can fly in dense layers of the atmosphere over intercontinental distances, while performing evasive dog-legs both horizontally (up to several thousand kilometers) and vertically. Specialists assess that the Avangard has not only an aerodynamic control system but also a propulsion system to be able to perform such maneuvers.

In spite of flying in a plasma cloud, the warhead can receive signals from its command center. It used to be an impossible task, since plasma blocks radio waves. Another challenge that was successfully overcome was the problem of heat insulation. It cannot be ruled out that the Avangard uses new generation high-temperature ceramic composites that use silicon carbide, capable of withstanding temperatures of up to 2,000 C. By mid-March it was announced that the first Avangard carriers would become the UR-100N UTTKh (SS-19 Stiletto) ICBMs that will most likely become part of the RS-24 Yars strategic missile system. About 30 of these missiles were delivered from Ukraine in the early ‘00s to cover natural gas debts. After the Soviet break-up, they were stored un-fueled. Once Sarmat is adopted, it too will carry Avangard warheads. The Russian MOD already signed a contract for serial delivery of Avangards, and they will enter line service in the near future.

Peresvet combat laser system

Among the weapon systems “utilizing novel physics principles” was a combat laser system. According to Vladimir Putin, it also began to enter service starting in 2017 and, after a vote on the MOD website, was named Peresvet. Even though it is already entering service, relatively little is known about it. It is most likely an air defense system against drones, helicopters, and low-flying aircraft. It is possible that it’s intended to defeat the new US ABM systems and US hypersonic weapons under development. Specialists believe the laser system could be used against land targets, and that it is “charged” by miniature nuclear power cells. What is not known is its effective range, and whether it could be used to disable the adversary’s satellites.

One should note that no US or NATO official expressed doubts concerning the existence of these Russian inventions, only “disappointment” over how the information as presented. Indeed, these weapons were already known in varying degrees to the expert community, but having them presented by the Supreme Commander naturally made a greater splash. Within several hours after the presentation, leading world media reacted with restraint, though it was evident this was an utter surprise to them. In the end, it was announced that Pentagon has long known about Russian weapons developments, the US has a proper answer to such “superweapons”, and Putin’s speech was intended for the domestic audience on the eve of elections. This amounted to an indirect admission that the attempt to gain a unilateral strategic advantage by deploying ABM systems around Russia failed, and hundreds of billions of US taxpayer dollars were spent for naught. Nevertheless, Pentagon immediately demanded huge additional expenditures in order to “catch up to the Russians”, which can’t help but excite the US Military-Industrial Complex which supports Trump and whose political influence will only increase.

In any event, despite Russia’s development hypersonic nuclear weapons, the global strategic balance remains stable. Both sides retain a guaranteed ability to destroy each other. They will rethink and refine their nuclear strategies, in part because the reaction time has shrunk, due to hypersonic delivery vehicles, from 20-30 minutes to a far shorter interval. Which increases the likelihood of launching retaliatory strikes before the nuclear attack warnings are confirmed.

The new delivery vehicles are not covered by START-3 which regulates the number of warheads, ballistic missiles, and strategic bombers possessed by US and Russia. Hypersonic missiles and autonomous nuclear torpedoes are outside the treaty, so unless START-3 is not updated in the near future, it will become irrelevant. Which means that we will soon see both sides behind the negotiating table, which means the strategic balance will be preserved and the world will be made safer.

Published:5/3/2018 2:54:33 AM
[Markets] Eurasia Is Torn Between War & Peace

Authored by Pepe Escobar via The Asia Times,

Iran's top trading partner is China, while Tehran and Moscow have been improving ties as the three countries move closer to cementing a solid alliance...

Two summits the cross-border handshake that shook the world between Kim and Moon in Panmunjom and Xi and Modi’s cordial walk by the lake in Wuhanmay have provided the impression Eurasia integration is entering a smoother path.

Not really. It’s all back to confrontation: predictably the actual, working Iran nuclear deal, known by the ungainly acronym JCPOA, is at the heart of it.

And faithful to the slowly evolving Eurasia integration roadmap, Russia and China are at the forefront of supporting Iran.

China is Iran’s top trading partner – especially because of its energy imports. Iran for its part is a major food importer. Russia aims to cover this front.

Chinese companies are developing massive oil fields in Yadavaran and North Azadegan. China National Petroleum Corporation (CNPC) took a significant 30% stake in a project to develop South Pars – the largest natural gas field in the world. A $3 billion deal is upgrading Iran’s oil refineries, including a contract between Sinopec and the National Iranian Oil Company (NIOC) to expand the decades-old Abadan oil refinery.

In a notorious trip to Iran right after the signing of the JCPOA in 2015, President Xi Jinping backed up an ambitious plan to increase bilateral trade by over tenfold to US$600 billion in the next decade.

For Beijing, Iran is an absolutely key hub of the New Silk Roads, or the Belt and Road Initiative (BRI). A key BRI project is the $2.5 billion, 926 kilometer high-speed railway from Tehran to Mashhad; for that China came up with a $1.6 billion loan – the first foreign-backed project in Iran after the signing of the JCPOA.

There’s wild chatter in Brussels concerning the impossibility of European banks financing deals in Iran – due to the ferocious, wildly oscillating Washington sanctions obsession. That opened the way for China’s CITIC to come up with up to $15 billion in credit lines.

The Export-Import Bank of China so far has financed 26 projects in Iran – everything from highway building and mining to steel producing – totaling roughly $8.5 billion in loans. China Export and Credit Insurance Corp – Sinosure – signed a memorandum of understanding to help Chinese companies invest in Iranian projects.

China’s National Machinery Industry Corp signed an $845 million contract to build a 410km railway in western Iran connecting Tehran, Hamedan and Sanandaj. And insistent rumors persist that China in the long run may even replace cash-strapped India in developing the strategic port of Chabahar on the Arabian Sea – the proposed starting point of India’s mini-Silk Road to Afghanistan, bypassing Pakistan.

So amid the business blitz, Beijing is not exactly thrilled with the US Department of Justice setting its sights on Huawei, essentially because of hefty sales of value-for-money smart phones in the Iranian market.

Have Sukhoi will travel

Russia mirrors, and more than matches, the Chinese business offensive in Iran.

With snail pace progress when it comes to buying American or European passenger jets, Aseman Airlines decided to buy 20 Sukhoi SuperJet 100s while Iran Air Tours – a subsidiary of Iran Air –  has also ordered another 20. The deals, worth more than $2 billion, were clinched at the 2018 Eurasia Airshow at Antalya International Airport in Turkey last week, supervised by Russia’s deputy minister of industry and trade Oleg Bocharov.

Both Iran and Russia are fighting US sanctions. Despite historical frictions, Iran and Russia are getting closer and closer. Tehran provides crucial strategic depth to Moscow’s Southwest Asia presence. And Moscow unequivocally supports the JCPOA. Moscow-Tehran is heading the same way of the strategic partnership in all but name between Moscow and Beijing.

According to Russian energy minister Alexander Novak, the 2014  Moscow-Tehran oil-for-goods deal, bypassing the US dollar, is finally in effect, with Russia initially buying 100,000 barrels of Iranian crude a day.

Russia and Iran are closely coordinating their energy policy. They have signed six agreements to collaborate on strategic energy deals worth up to $30 billion. According to President Putin’s aide Yuri Ushakov, Russian investment in developing Iran’s oil and gas fields could reach more than $50 billion.

Iran will become a formal member of the Russia-led Eurasia Economic Union (EAEU) before the end of the year. And with solid Russian backing, Iran will be accepted as a full member of the Shanghai Cooperation Organization (SCO) by 2019.

Iran is guilty because we say so

Now compare it with the Trump administration’s Iran policy.

Barely certified as the new US Secretary of State, Mike Pompeo’s first foreign trip  to Saudi Arabia and Israel  amounts in practice to briefing both allies on the imminent Trump withdrawal of the JCPOA on May 12. Subsequently, this will imply a heavy new batch of US sanctions.

Riyadh – via Beltway darling Crown Prince Mohammad bin Salman, (MBS) – will be all in on the anti-Iran front. In parallel, the Trump administration may demand it, but MBS won’t relinquish the failed blockade of Qatar or the humanitarian disaster that is the war on Yemen.

What’s certain is there won’t be a concerted Gulf Cooperation Council (GCC) front against Iran. Qatar, Oman and Kuwait see it as counterproductive. That leaves only Saudi Arabia and the Emirates plus irrelevant, barely disguised Saudi vassal Bahrain.

On the European front, French president Emmanuel Macron has stepped up as a sort of unofficial King of Europe, leveraging himself to Trump as the likely enforcer of restrictions on Iran’s ballistic missile program, as well as dictating Iran to stay out of Syria, Iraq and Yemen.

Macron has made a direct – and patently absurd  connection between Tehran abandoning its nuclear enrichment program, including the destruction of uranium stockpiles enriched to less that 20%, and being the guilty party helping Baghdad and Damascus to defeat Daesh and other Salafi-jihadi outfits.

No wonder Tehran – as well as Moscow and Beijing – is connecting recent, massive US weapons deals with Riyadh as well as MBS’s hefty investments in the West to the Washington-Paris attempt to renegotiate the JCPOA.

Putin’s spokesman Dmitry Peskov has been adamant; the JCPOA  was the product of a strenuous seven-country negotiation over many years: “The question is, will it be possible to repeat such successful work in the current situation?”

Certainly not

Thus the suspicion widely floated in Moscow, Beijing and even Brussels that the JCPOA irks Trump because it’s essentially a multilateral, no “America First” deal directly involving the Obama administration.

The Obama administration’s pivot to Asia – which depended on settling the Iranian nuclear dossier – ended up setting off a formidable, unintended chain of geopolitical events.

Neocon factions in Washington would never admit to normalized Iranian relations with the West; and yet Iran not only is doing business with Europe but got closer to its Eurasian partners.

Artificially inflating the North Korea crisis to try to trap Beijing has led to the Kim-Moon summit defusing the “bomb the DPRK” crowd.

Not to mention that the DPRK, ahead of the Kim-Trump summit, is carefully monitoring what happens to the JCPOA.

The bottom line is that the Russia-China partnership won’t allow for a JCPOA renegotiation, for a number of serious reasons.

On the ballistic missile front, Moscow’s priority will be to sell S-300 and S-400 missile systems to Tehran, sanctions-free.

Russia-China might eventually agree with the JCPOA 10-year sunset provisions to be extended, although they won’t force Tehran to accept it.

On the Syrian front, Damascus is regarded as an indispensable ally of both Moscow and Beijing. China will invest in the reconstruction of Syria and its revamping as a key Southwest Asia node of the BRI. “Assad must go” is a non-starter; Russia-China see Damascus as essential in the fight against Salafi-jihadis of all stripes who may be tempted to return and wreak havoc in Chechnya and Xinjiang.

A week ago, at an SCO ministerial meeting, Russia-China issued a joint communiqué supporting the JCPOA. The Trump administration is picking yet another fight against the very pillars of Eurasia integration.

Published:5/3/2018 1:23:18 AM
[Markets] Russia Kills Jihadists With Weaponized Robot Ahead Of World Cup

Dramatic footage has surfaced showing Russian counter-terrorism forces slaying jihadist “sleeper cells” and “underground units” ahead of the 2018 FIFA World Cup in Russia. In the past few months, Russian troops have launched numerous counter-terrorism operations in the volatile Islamic region of Dagestan.

According to the Daily Mail, local police in Derbent, a city in the Republic of Dagestan, Russia, located on the Caspian Sea, alerted government officials about dangerous jihadist “sleeper cells” that were planning to attack the civilian population on May 01, known as a traditional holiday in Russia.

The violent video shows Russian counter-terrorism forces using heavily armored personnel carriers with tremendous firepower, pounding the building with copper and lead bullets, in the town of Derbent, where the jihadist “sleeper cells” were active.

Once the terrorist compound caught fire, all of the armored personnel carriers retreated to a safe distance, as a small armed robot was seen approaching the compound to finish off the job.

The video shows a Russian soldier remotely guiding the killer robot through the compound. Video and audio recordings relayed wirelessly back to the command notebook of the robot reveals the terrorist shouting ‘Allahu Akbar,’ followed by an explosion.

The Daily Mail reported that the heavily armed robot, mounted with a machine gun, was responsible for killing all eleven jihadis.

“Guns, bullets, knives, and grenades were discovered at the scene,” according to a statement from the Russian Investigative Committee which investigates terrorism cases. Homemade bombs and other deadly weapons were discovered in the compound before it went up in flames.

Government officials later released graphic images showing the bullet-ridden bodies of the terrorist killed in the raid –which is too gruesome to show.

Derbent, where the counter-terrorism operation was carried out, is just 590 miles southeast of Volgograd, where England will play their opening 2018 World Cup qualifying group game this summer.

Security specialists have warned about “lone jihadi” terror attacks during the upcoming 2018 World Cup starting in June. “Sunni Islamist militants, particularly Russian jihadists returning from conflict zones, are the primary source of concern for Moscow,” according to a report released Tuesday by Jane’s Defence Weekly, the defense and security wing of IHS Markit.

Jane’s Defence Weekly explains how the jihadists buildup in the disputed Northern Caucasus region, has driven Russia to unleash counter-terrorism operations leading up to the World Cup.

According to the Washington-based security consultancy the Soufan Group, Russia is the largest exporter of foreign jihadis by country, ahead of Saudi Arabia, Jordan, and Tunisia. The data shows an estimated 3,417 Russian nationals had trained and fought with ISIS and 400 had returned home by 2017.

“Returning Russian jihadists pose a likely terrorism threat to security measures at the 2018 FIFA World Cup, motivated by their opposition to the military involvement of Russia and other World Cup participants in the Middle East, and towards Iran and Saudi Arabia,” said Chris Hawkins, a senior analyst at Jane’s Terrorism and Insurgency Centre (JTIC).

While the Kremlin is expected “to intensify its counter-terrorism operations in the majority Muslim semi-autonomous Caucasus regions of Chechnya and Dagestan,” said CNBC, there is a reason to believe Putin will have his hands full ahead and during the World Cup. Russia’s tourism ministry projects more than one million foreign visitors could flood into Russia for the World Cup, which will be held across eleven cities this summer. What could go wrong?

Published:5/3/2018 12:24:16 AM
[Entertainment] The Hills' Doug Reinhardt's Wife Arrested on Domestic Violence Assault Charges Dough ReinhardtNatalie Sutton, the wife of former The Hills star Doug Reinhardt, was arrested last weekend on a misdemeanor domestic violence assault charge in Paradise Valley, AZ., E! News can confirm....
Published:5/2/2018 11:21:52 PM
[Markets] China's Long Game In Korea

Authored by Retired Colonel Lawrence Selling via The Daily Caller,

Underlying the current lovefest between North Korea and South Korea with the offer of a peace treaty to formally end the Korean War and a possible denuclearization of the peninsula are prospects more ominous for U.S. Asia-Pacific policy.

The crux of the issue is the concept of spheres of influence.

One of the chief causes of the Korea War was the perception by North Korea, China and the Soviet Union that the Korean peninsula was outside the U.S. defense perimeter. The genesis of this perception can be attributed to the January 12, 1950 National Press Club speech given by then Secretary of State Dean Acheson, which defined the U.S. sphere of influence from Japan to the Philippines.

Based on evidence from Russian archives published by the Woodrow Wilson Center for International Scholars:

“In the spring of 1950 Stalin’s policy toward Korea took an abrupt turn. During meetings with Kim Il Sung in Moscow in April, Stalin approved Kim’s plan to reunify the country by military means and agreed to provide the necessary supplies and equipment for the operation… Stalin’s purpose was not to test American resolve; on the contrary, he approved the plan only after having been assured that the United States would not intervene.

Because U.S. troops had been withdrawn from the Korean peninsula in 1949, the reasoning behind the North Korean invasion argued; “it would be a decisive surprise attack and the war would be won in three days” and “the U.S. would not have time to participate.” Retired North Korean brigadier general Chung Sang-chin said the Acheson speech was known and “produced a certain influence on Kim Il Sung.”

Stalin’s intent was to extend Soviet influence in Asia by supporting its proxy North Korea in a scenario wherein the United States could not provide a timely or effective response, thus avoiding a major confrontation and providing the Soviet Union and its communist allies an easy strategic fait accompli.

Applying the conclusions in the Wilson Center report to the current situation, where Beijing has replaced Moscow as Pyongyang’s sponsor, the North Koreans retain their own goals for reunification and are not simply puppets. Nevertheless, the Chinese continue their close supervision of North Korea.

The events now taking place represent the intersection of Chinese and North Korea aims. It is no coincidence that Kim Jong Un, in his first known trip abroad since taking power, made an official visit to China in March, just prior to initiating talks with South Korean President Moon Jae-in and later possibly attending a summit with President Trump.

The apparent North Korean about-face occurred after a long period of provocation with the development of missiles capable of hitting the United States mainland and what Kim claimed was a missile-ready hydrogen bomb.

Perhaps, like Stalin, Chinese President Xi Jinping wishes to avoid direct confrontation with the United States on the Korean peninsula, which could derail a grander strategy.

Instead, as part of that strategy, China hopes to decouple South Korea from the U.S. militarily by making the withdrawal of American forces a quid pro quo for a peace treaty and denuclearization, thereby, again placing Korea outside the U.S. defense perimeter and extending China’s sphere of influence to the shoreline of Japan.

The Trump administration should remain wary because the present aura of détente surrounding potential Korean reconciliation is inconsistent with recent Chinese actions in the Asia-Pacific region including: alleged Chinese “subversion, cyber intrusions, and harassment on the high seas” against Australia; increased Chinese military activities in the Taiwan straits; and China’s continued aggressive naval operations in the South China Sea.

In his written testimony to the Senate Armed Services Committee, Admiral Philip Davidson, nominated as the new US Pacific Command chief, said that “China is now capable of controlling the South China Sea in all scenarios short of war with the United States” and is “able to extend its influence thousands of miles to the south and project power deep into Oceania.”

The situation in Korea should not be evaluated in isolation, but considered as part of a larger, long-term Chinese strategy, in which North Korea is a partner and where the U.S. needs to maintain a posture of high vigilance and low expectations.

Published:5/2/2018 11:21:51 PM
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Published:5/2/2018 10:53:14 PM
[Markets] Syria & Iran Prove There's No Chance For North Korean Peace

Authored by Brandon Smith via Alt-Market.com,

There is a saying in geopolitics that peace summits are generally a perfect time to prepare for war. This thinking stems from the military philosophy of Sun Tzu, who believed that when a nation is weak it is important to appear strong, and when a nation is at its most dangerous it is important to appear weak or “diplomatic.” Sun Tzu also often praised the virtues of distraction and sleight of hand, not only in war, but in politics as well.

I would note that Sun Tzu and the Eastern “sleight of hand” methodology is not only a mainstay of Chinese as well as North Korean thought, but also required reading for Western covert intelligence agencies. It is important to fully understand this methodology when examining the East vs. West paradigm, because almost everything you see and hear when it comes to relations with countries like China and North Korea is theater. Their governments have hidden schemes, our governments have hidden schemes and the globalists manipulating both sides have plans that trump everything else.

Keep all of this in mind when you hear about the sudden and almost inexplicable announcements of peace summits with North Korea in May or June between Pyongyang and the Trump administration.

Looking at the scenario purely from the perspective of political motive, it’s difficult to discern why Trump has been so obsessed with North Korea since he first entered office. North Korea has always had nuclear capability as well as the ability to deploy those nukes in one form or another against the U.S. North Korea has also always been involved in further nuclear testing and missile testing. The idea that such testing today is somehow a “violation” of arbitrary international standards and etiquette is absurd. Almost every nation in the world is engaged in military expansion and development.

Then again, if one only looks at surface rhetoric and policy, it is difficult to discern why the Trump White House is equally obsessed with Syria and the Assad regime. One of the primary driving forces behind the Trump election campaign was the idea that this was a candidate that would break from establishment elites in the tradition of perpetual war. Trump’s criticisms of past presidents and their handling of Iraq and the Middle East was supposed to represent a sea change in American policies of aggression. Instead, his cabinet is now laced with the cancers of neo-conservative warhawks (fake conservatives) and globalist banking proponents.

The U.S. was supposedly mere months away from completely removing its military presence from Syria. Yet a well timed “chemical attack” on a Damascus suburb, blamed on Assad, gave Trump a perfect rationale for keeping troops in the region as well as escalating the use of force through missile bombardment. The original claim under President Obama was that we were in Syria because of the growing threat of ISIS (a terrorist movement supported by western covert intelligence). Now, the new enemy is the target globalists always intended — the Syrian government itself.

When I see news of North Korea abruptly embracing peace talks just after meetings with China and not long after wild threats were tossed around of impending nuclear conflict, I wonder about the true nature behind the abnormal shift in rhetoric. When I see Trump suddenly speaking of Kim Jong-un as “very honorable” after months of trading character attacks on social media, I have to wonder when the next false flag event similar to the Damascus farce will take place?

There are already clear signs that all is not as it seems when it comes to a potential North Korean peace agreement.

North Korea’s offer to halt nuclear testing in exchange for a truce with the U.S. rings a bit hollow when one realizes Pyongyang’s primary nuclear testing site has recently collapsed in on itself from overuse. Any halt on testing by North Korea is likely temporary as secondary sites are prepared.

It also should come as no surprise that North Korea is willing to enter into diplomatic talks only months after achieving successful tests on their first ICBMs capable of reaching the eastern seaboard of the US. Again, as Sun Tzu taught, when you are most dangerous it is important to appear weak to your enemies.

Trump’s newest National Security Adviser and neo-con warmonger, John Bolton, expressed "doubts" in interviews that North Korea will “give up” its nuclear armaments. Bolton and other globalists know full well that North Korea has no intention of disarming, and if this is going to be a prerequisite to any peace agreement then I would expect talks to fall apart before they ever begin.

During initial talks to engineer “peace” in Syria under the Obama administration, the establishment argument was that Assad would have to step down as president of Syria in order for diplomacy to move forward. Of course, as noted above, western covert agencies created ISIS out of thin air just as they created the Syrian civil war out of thin air. They caused an extreme civilian genocide through their ISIS proxies, blamed the Assad regime for the instability in the region and then, when their color revolution failed to unseat Assad, they ask him to relinquish power as a good will offering towards the peace process. See how that works?

Obviously, globalists knew Assad was never going to step down. Why would he when he knows that this was the goal behind the creation of ISIS from the very beginning? And so, Syria remains a useful point of chaos in the globalist arsenal as a larger war is an ever present possibility. It is a perpetual powder keg that could be set off anytime the globalists choose.

Iran is also an excellent example of the fraudulent nature of establishment peace agreements.  The initial agreement arrived at in 2015, called the Joint Comprehensive Plan Of Action (JCPOA), listed a drastic reduction in Iran's Uranium stockpile and enrichment facilities.  Iran seems to have complied with this request according to initial reports, and has complied with IAEA requests for inspections.  However, globalist peace deals are never fixed - they can be changed at a moment's notice to facilitate a breakdown in the agreement.

The US has recently made demands for the IAEA to inspect not only Iran's nuclear facilities but also its military sites, which were not under the original IAEA purview.  Iran, of course, is not too happy about the idea of having its military bases subject to foreign inspections.  US officials have also claimed Iran is not following the "spirit of the agreement"; not because of any supposed nuclear development, but because of Iran's support for the Assad regime in Syria.

On top of this, the US is seeking to change the original JCPOA while refusing to label the changes a "renegotiation".  Officials have called for a "supplementary deal", which to my mind is in fact a renegotiation of the original deal.  This is clearly meant to cause a collapse in the JCPOA, as Iran is unlikely to ever accept a renegotiation.

Finally, Israel is now claiming that Iran has broken the JCPOA by secretly developing nuclear technology.  Once again, like WMDs in Iraq and chemical weapons attacks in Syria, no hard evidence whatsoever has been produced to support this claim.  But, that might not matter at all as Israel has already initiated strikes against Iranian targets in Syria (Syria and Iran have a mutual defense pact), and they may very well attack Iran directly within the next year.

Globalists do not care about peace, they only care about timing their wars properly.  The same reality applies to North Korea. Here is how this situation is probably going to play out…

The Trump administration will enter into peace talks with outlandish demands of complete nuclear disarmament. North Korea has so far offered a freeze on testing, but again, this is probably due to the collapse of their main testing site. A freeze on testing is not the same as total disarmament.

North Korea will of course refuse disarmament. The establishment will push harder, causing North Korea to pull back from the talks, to reschedule talks multiple time or to abandon talks altogether. Then, the establishment will say North Korea is not serious about peace, therefore, the force of action may be justified. They will say they gave North Korea a chance to do things the easy way, but now the hard way is necessary.

North Korea missile tests will continue, and new nuke facilities will open. Trump will call for the kinetic termination of such sites.

People who actually believe that globalists will abandon one of its best geopolitical Pandora’s boxes in North Korea have still not learned their lesson from the Syrian debacle, or from Iran. These regions represent a gold mine of potential international chaos which can be used as cover for all sorts of misdeeds as well as continued economic decline.

As I have noted in past articles, it is rather convenient for the banking elites at the Federal Reserve that every time they make an announcement of further cuts to their balance sheet as well as continued interest rate hikes a new geopolitical crisis involving Donald Trump simultaneously erupts. Is this mere coincidence, or should we view it as a discernible trend?

If it is a trend, then I would expect further crisis events involving Syria, Iran and North Korea in May and June as the Fed is set to increase the size of its balance sheet reductions thereby pulling the plug on its long time policy of artificially supporting markets.

More strikes in Syria as well as destabilizing relations with Iran are likely. A collapse in talks with North Korea should be expected, followed by more plunges in stocks and other assets.

Published:5/2/2018 10:53:09 PM
[Entertainment] Russell Simmons Expresses Support for #MeToo, Isn't ''Angry'' About Rape Allegations Russell SimmonsRussell Simmons is speaking up about Hollywood's fight against sexual assault. Days ago, the hip-hop mogul and the woman accusing him of rape agreed to dismiss the $5 million lawsuit...
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Published:5/2/2018 8:51:24 PM
[Markets] "God Damn You To Hell": Ex-Trump Aide Slams Senate Over Financial Ruin Caused By Russia Probe

Former Trump campaign aide and Republican consultant Michael Caputo had some harsh words for the Senate Intelligence Committee on Tuesday.

"God damn you to hell," Caputo said in his closing statement, obtained by the Washington Examinertelling the panel that their investigation "forced" his family out of their home, leaving his children "crushed" over the mounting legal costs due to the inquiry. 

"Today, I can’t possibly pay the attendant legal costs and live near my aging father, raising my kids where I grew up,” Caputo said. “Your investigation and others into the allegations of Trump campaign collusion with Russia are costing my family a great deal of money — more than $125,000 — and making a visceral impact on my children."

Caputo said that Senate Intelligence Committee members are working together and contributing to the "swamp," pointing to the fact that a former Senate Intelligence staffer to Sen. Dianne Feinstein (D-CA) - Daniel Jones, was one of two sources in a recent McClatchy report about Michael Cohen, Trump's personal attorney whose office, home and hotel room were raided last month at special counsel Robert Mueller's request.

“But who is McClatchy’s second source? It couldn’t be Dan; he was the first source ... So who could it be — perhaps one of his former Senate Intelligence colleagues? I mean, you’re all in this together. You’re the swamp.”

Jones, a former FBI investigator who was previously one of Feinstein's top aides, is conducting an ongoing, private investigation into Trump-Russia claims using $50 million supplied by George Soros and a group of 7-10 wealthy donors from California and New York. Jones is working with opposition research firm Fusion GPS - and Christopher Steele, the former UK spy Fusion commissioned to create the infamous "Steele Dossier" which former Deputy FBI Director Andrew McCabe said was instrumental to the Trump-Russia investigation.

Caputo called for an "investigation of the investigators," demanding to know who was "coordinating this attack on President Donald Trump." 

“Forget about all the death threats against my family. I want to know who cost us so much money, who crushed our kids, who forced us out of our home, all because you lost an election,” Caputo said. “I want to know because God damn you to hell."

Published:5/2/2018 8:51:24 PM
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Published:5/2/2018 7:22:46 PM
[Markets] AFL-CIO Demands We Never Use The Self-Serve Checkout

Authored by Andrew Moran via Liberty Nation blog,

There is growing concern across the globe that automation will lead us to a dystopian future. With robots becoming ubiquitous in every aspect of our lives, the marketplace will be filled with cheap goods, but the consuming population can’t acquire them because they don’t have a job. It is a legitimate worry for millions of people, especially when you see the countless videos and news articles about a robot flipping burgers, automated arms packaging goods inside a factory, and grocery stores without cashiers.

One of the latest doom-and-gloom alarmists is the Wisconsin chapter of the AFL-CIO, which is griping about self-serve checkouts. Do unions ever do anything productive?

Last week, the labor union went to Facebook to demand its followers to “never self checkout.” The organization whined that it doesn’t want to assist corporations in firing employees just so they can boost their bottom lines.

It’s not convenient for me to help corporations fire workers so they raise their profits. I stand in line and when the lines back up, the store calls more cashiers to the front. If we keep doing it, they’ll need to hire more people. NEVER SELF CHECKOUT.

If life were only that simple.

Why hasn’t the group requested similar action for ATMs? If you avoid the bank machine and stand in line waiting for the bank teller, then the financial institution will simply hire more people. This logic, or lack thereof, can be applied to a myriad of other automated services that we enjoy today: ecommerce, digital cameras, search engines, and so much more.

But nobody is calling for an end to Google or Bing so the yellow book can be made great again. The AFL-CIO isn’t telling members to ditch mobile devices so telegrams can make a comeback.

What the labor group is conveying to the world is that it hates progress.

Automation will Benefit our Lives

Earlier this year, many Oregonians made headlines because they were complaining that a new law will allow residents in rural communities to pump their own gas. There were multiple grievances, but one of the main objections was the reduction in the number of attendants.

In 2016, up in Canada, the CBC spoke to a retiree, Bonnie Banks, who bothers people at self-serve checkouts, asking them if they “like working for Walmart for free.” She was upset that she now pumps her own gas and puts her own trash in the garbage at fast-food restaurants.

In the age of automation, there are many occupations and industries that will become obsolete. They will inevitably enter the dust bins of history.

The automobile eliminated the horse and buggy industry. The refrigerator rid the world of icemen and milkmen. Advancements in telecommunications abolished telephone operating jobs. Ride-sharing services have brought the government-protected taxi industry to its knees.

Are we any worse off than we were before? If you ask the average young person 70 years ago, he or she would admit that they cannot get along without the icebox and local telegram office. If you query the average young person today, he or she will concede they cannot live life without an iPhone or Uber.

Times change. New businesses rise. Old industries fall.

$15 Minimum Wage Is Ramping Up Automation

If you think that businesses are suddenly investing a lot more into automation, you’d be correct.

With the Fight for $15 crowd holding demonstrations, staging walkouts, and encouraging lawmakers to raisethe minimum wage, companies are reacting by automating operations.

As McDonald’s installs self-serve kiosks or mom-and-pop diners have robots in the kitchen, there is less of a demand for human cashiers and cooks. As Wal-Mart adopts self-serve checkouts, they don’t need too many cashiers on the front lines.

And you can blame entities like the AFL-CIO for the rampant rise of automation.

It is mostly immigrants, young, unskilled, and uneducated people who hold minimum wage jobs. Without these entry-level positions, thanks to the $15 fight, they can’t enhance their human capital.

New Opportunities Pop Up

In today’s world, where socialism is becoming trendy, there is a misconception that the free enterprise system is a zero-sum game — somebody wins, somebody loses. In other words, according to the left, you only become prosperous if you steal from others. Warren Buffett or Jeff Bezos get the entire pie while everyone is left with crumbs.

Nonsense. This is hardly the case in the free market.

When Microsoft was established, Bill Gates created more pies. When the iPhone was created, Steve Jobs produced more pies. When Karl Benz invented the automobile, he baked pies for the entire world.

With automation seeping into every single part of society, new opportunities will pop up. If scores of positions become antiquated, the individuals holding these jobs will do one of three things:

  • Enhance their human capital by learning new skills.

  • Fill the demand for labor in other industries.

  • Perform other roles or tasks in the company.

This is what tellers have done in the banking sector. Many branches simply transferred tellers into other important roles, such as marketing and investment advising. Ditto for business publications. Thanks to the advent of software that composes articles from news releases or corporate earnings reports, reporters can now spend more of their time on investigative journalism, interviews, and much more.

Once the car was prevalent, carriage makers didn’t raise the white flag. They either adapted to the changing conditions or applied their craft to something else.

You will always come across people like Bonnie Banks moaning about self-serve checkouts. You can stop these busybodies in their tracks by doing a couple of things: point out their hypocrisy since they likely use ATMs or the computer and provide them with a lesson in Econ 101.

The future is now, and we shouldn’t be apprehensive of its arrival. We’re all getting richer and leading happier lives because of technology. Let’s embrace it.

Published:5/2/2018 7:22:46 PM
[Markets] Billionaire Thiel Unveils Broker-Dealer Venture For Major Crypto Traders

Billionaire Peter Thiel’s venture-capital firm is investing a startup designed to optimize block trading for major cryptocurrency market participants.

The Wall Street Journal reports that Founders Fund is among the investors in the early-stage startup, called Tagomi Systems Inc., people familiar with the situation said.

Thiel's investment comes after it was revealed that Founders Fund itself has already made a "monster bet" on bitcoin.

It also confirms Thiel's bullish view on bitcoin reported in October last year when the billionaire investor argued that critics of bitcoin were "underestimating" the cryptocurrency.

“If bitcoin ends up being the cyber equivalent of gold and it has a great potential left and it’s a very different kind of thing from what people in Silicon Valley focus on—companies, not algorithms not protocols, but this might be maybe one exception that is very underestimated,” the Silicon Valley elite said.

And, in March, he said there will ultimately be only one digital equivalent to gold, and bitcoin, as the "biggest" cryptocurrency, will triumph.

The question with something like bitcoin is whether it can become a store of value. And the thing it would replace is something like gold. The analogy is it's like bars of gold in a vault that never move and you get it and it's a hedge of sorts against the whole world falling apart."

"The objections that people have to bitcoin are also objections to gold. It's this weird currency that's not backed by any government. Same thing is true of gold. It's not clear what the intrinsic value of bitcoin is. Same thing is true of gold. It may well be a bubble, but - and most bubbles are unstable and end - one of my friends has this line that 'money is the bubble that never pops', so if it is a bubble, then it is money."

"If everybody decided that a $100 bill was worthless then you wouldn't want to have a $100 bill."

According to The Wall Street Journal, the problem that the new startup aims to solve stems from a fragmented trading environment across global cryptocurrency exchanges, where, for instance, the price of bitcoin can vary between platforms. As such, the startup - co-founded by Greg Tusar, the former chief of electronic equities trading at Goldman Sachs - is building a platform that finds the best market to execute large numbers of cryptocurrency trading orders at a specific time.

Currently, buying or selling large quantities of digital currencies is tricky because the market is fragmented across more than 100 crypto exchanges around the world. Connecting to all of them requires setting up a separate account with each one, and crypto exchanges generally impose limits on daily flows in and out.

That makes it cumbersome and time-consuming to pull off a big trade, and the price of a digital currency can move dramatically before the investor finishes buying or selling.

Tagomi hopes to make it easier to make such bulk trades by borrowing a page from the stock market. In U.S. equities, broker-dealers use systems called smart order routers that dispatch their clients’ buy and sell orders to various venues, including a dozen exchanges and more than 30 off-exchange “dark pools.”

These routers make rapid-fire decisions about which market is the best place to execute a trade at any given time. Tagomi is looking to develop a similar tool for the crypto markets, according to people with knowledge of its plans.

It certainly seems clear that Thiel is making a bet (size of the bet has not been reported) that institutional interest is expected to increase dramatically in cryptocurrency trading.

Published:5/2/2018 6:23:43 PM
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Published:5/2/2018 5:51:34 PM
[Markets] The Emerging "Global Brain"

Authored by Mike Krieger via Liberty Blitzkrieg blog,

There’s been heightened chatter as of late, particularly in the Twittersphere, around the idea humanity might be undergoing a consciousness expansion. This concept seems to be going mainstream, which could be a great thing provided it doesn’t get turned into a cliché or marketing gimmick.

This notion of a human consciousness shift that could emerge and alter the paradigm on planet earth in unimaginably positive ways was something I became obsessed with last year. My interest was sparked by the infantile and demented political environment which swept across the U.S. in early 2017, and was solidified by an encounter with the concept of Spiral Dynamics generally, and the work of Ken Wilber specifically. I ended up writing a five-part series on the topic, which I’d like to revisit before moving on.

According to Wilber, the key threshold to hit in order for the next stage of human evolution to occur is 10% of the global population moving into a second tier-type consciousness (yellow based value system). To understand what that means, let’s revisit some of the key characteristics of people resonating at second-tier consciousness.

From Spiral Dynamic Integral the Netherlands:

Yellow value system Characteristics

Firstly, he noticed that a Yellow orientated lifestyle is much more free than a lifestyle in any of the other value systems. Yellow oriented people seemed to move and express themselves completely free and independent of their life environment. Contrary to people in other value systems, they were not afraid anymore to be rejected and they didn’t fear other people’s or God’s judgment. They didn’t show the need to make an impression on others and to reach the top at the cost of everything.

They also didn’t strive anymore for absolute truths and they didn’t have the need to belong to something anymore. In short: these were people without irrational fears, compulsive needs and compulsive behaviors. However, this Yellow freedom doesn’t mean that people in the Yellow value system are not connected to their environment. On the contrary, Yellow oriented people are very much involved and show a lot of compassion. The biggest difference with people from other value systems is that their life environment is not fearfully or compulsively leading them.

Now here’s Ken Wilber’s brilliant description:

That’s a lot to unpack, so let me summarize. The various stages within first-tier consciousness are all driven by a deficiency motivator. Humans operating at that level are primarily driven by a need to prove something to themselves or others, or by a need or desire to attain something. All levels of first-tier consciousness are highly tribal and see the world as us (my team) against them (the others, who are considered heathens). At the second level, humans aren’t lacking in any major physical or psychological way, and are thus motivated by what Wilber describes as “being needs,” versus “deficiency needs.” Fear dissipates as does attachment to dogma. You’re simply more understanding of different perspectives and they roles they play even if you strongly disagree.

Naturally, people obsessed with controlling others and dominating society do not wish to see humans operating en masse at second-tier. People at a higher stage of consciousness are simply more troublesome and far harder to control and manipulate. As I noted in last year’s post, What is Spiral Dynamics and Why Have I Become So Interested in It?

Based on his recent observations, he [Wilber] estimates this number [operating at a second-tier consciousness] to now be around 5%. That’s an incredible leap, and explains a lot of the current status quo panic and drive to divide and conquer everyone. To see what I mean, let’s put it in the context of the U.S. adult population, which stands at around 242 million individuals.

1% of that number is 2.4 million adults. While that’s significant, if Ken is right about his 5% estimate, we are now talking about 12 million Americans operating at a far higher level of consciousness. Not enough to win a Presidential election, but very significant and extraordinarily dangerous to the establishment. If that sort of “awakening” continues, the current paradigm has no hope of survival. As such, all of the madness being perpetrated by the media and divisive pundits on both sides needs to be seen in the context of this unfolding of consciousness. These people are in the fight for their lives to keep the current paradigm they are comfortable with alive. If you accept this view, then you recognize the importance of staying true to your values and not regressing back into first-tier type thinking. As Wilber and others explain, these are fluid states, so periods of stress or fear can result in a regression of consciousness. It’s not an exaggeration to say that preventing this from happening is of the utmost significance.

As mentioned earlier, Wilber also previously estimated we need around 10% of the world population operating at second-tier to kickstart an entirely new paradigm here on earth. Personally, I think we’re very close to that number (if not there already), and that the major catalyst has been an explosive growth of the internet and social media.

Although it’s become trendy to disparage the internet, and social media specifically, as propagators of “fake news” and tribal echo chambers, I take the opposite view. First off, fake news has always been a fundamental part of the human experience. In prior centuries, the wealthy and powerful simply had a monopoly on creating and spreading it. The establishment doesn’t care about “fake news,” it’s simply terrified that people are now able to come to their own informed (or misinformed) conclusions without gatekeepers telling them what to think and how to think. The primary driver behind the establishment panic over “fake news” is simply fear regarding a loss of narrative control. There’s nothing else to it.

Looking at the bigger picture, human beings communicating in realtime, globally, on a peer-to-peer basis using social media (as flawed as the current iterations of it are) is an extraordinary achievement with no precedent in world history. Moreover, this sort of connectivity has only been happening at scale for around a decade or so. This is a meaningless blip in the context of time, and we simply can’t imagine what the ultimate consequences will be.

My personal view is that we’re currently witnessing the emergence of what Terence McKenna called the “global brain.”

Here’s what he said about it in 1994:

The people who are not switched on don’t even know anything has happened. To them the world looks exactly like it looked five years ago. To the people who are switched on, earth is becoming a distant memory.

The internet is the global brain. The cyber-spatially connected telepathic collective domain that we’ve all been hungering for. 

Some of you may misinterpret this, so let me elaborate. When talking about a “global brain” I’m not referring to uniformity of thought at a planetary level, but rather the ultimate outcome of human beings directly talking to one another across borders. Over time, I’m completely convinced this will result in a much more compassionate, understanding and connected species, which will make manipulating us into crazy wars or other insane activities counterproductive to our wellbeing much more difficult for the types who make a habit of that sort of thing.

The “global brain” is just humanity discovering that we are all connected. That we aren’t as different as we’re led to believe, and that we certainly shouldn’t be running around killing each other to satisfy the money and power cravings of a very small, but highly motivated, type of person.

In other words, the emergence of the global brain, thanks to the internet, will in the long-run help free us from systemic manipulation and lies. I’m not talking about a utopia, but I am talking about a much healthier paradigm for our species.

It won’t happen overnight, but it is happening. Your job is to do whatever you can help it come into being.

*  *  *

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Published:5/2/2018 5:51:34 PM
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[In The News] Pres. Trump’s Religious Liberty Executive Order Helped Protect Hundreds of Charities, Schools Serving Up to 14 Million People

By R. Mitchell -

This week (May 4th) marks one year since President Trump signed an executive order protecting religious liberty — an order which has led to multiple federal agencies rolling out religious freedom protections. A Family Research Council analysis released today finds that the order enabled charities and other entities to provide up to 13.7 million ...

Pres. Trump’s Religious Liberty Executive Order Helped Protect Hundreds of Charities, Schools Serving Up to 14 Million People is original content from Conservative Daily News - Where Americans go for news, current events and commentary they can trust.

Published:5/2/2018 5:20:55 PM
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Published:5/2/2018 3:20:15 PM
[Markets] Fed Stagflation Signal Sparks Stock Slump, Yield Hump, Dollar Dump'n'Pump

Wait what...

The Fed made its statement and the machines tried to make sense of it...

It took markets about 15 minutes to figure it out....

Stocks seemed to like the message of The Fed to start with, then...

And this happened...

As investors and algos alike realized this...

On the day...Futures show the Mueller subpoena offset AAPL's exuberant impact overnight, then The FOMC hit...

On the day Small Caps clung to gains...

The Dow closed in correction territory at a one-month low close...

 

The Dollar was the only winner post-FOMC...

 

Banks did not like The Fed statement...

 

The Dollar was wild today... Dumping and Pumping after The Fed statement as algos studied the word "symmetrical"...

 

Cryptocurrencies rallied on the day (with Bitcoin Cash jumping on admission to a UK exchange)...

 

Treasuries were mixed today with the long-end higher in yield and short-end lower in yield...

 

Which meant the yield curve steepened modestly...

 

A chaotic day in commodityland with WTI confused by inventory data and PMs confused by FOMC...

 

Gold jumped out of the gate but as the markets realized what The Fed said, things reversed with gold back to unch from FOMC...

 

Published:5/2/2018 3:20:15 PM
[Markets] Tesla's "Other" Biggest Risk

With Tesla set to report results after the close, most investors will be focusing on two key risk factors: i) the often-delayed production Model 3 production ramp, and ii) the company's cash burn, which in Q3 of 2017 hit an all time high of $1.4 billion.  And whereas in the past, Elon Musk could easily slide between these two concerns, his recent erratic behavior coupled with growing rumblings that there may be terminal complications involving the company's "make or break" Model 3 rollout, has resulted in an increasing sensitivity to both the details of the Model 3 production ramp, as well as to the company's trademark gargantuan cash burn.

But while these two problems are well known, and mostly priced in, a recent Barclays report (which as the firm joked was a little too long for its US and tech clients at 89 pages), noted a third, less appreciated concern: with every quarter of delays, the competition is catching up.

Recall Barclays' own "tweetsized" summary of its report in just 5 bullet points, all of which scream one thing: the (German) competition is coming as Tesla delays:

  1. Hey @elonmusk: German OEMs & other dinos you have mocked will be rolling out exciting new BEVs -- 6 new models in ’18, & 13 in’ 19
  2. Production hell, nein; Industrie 4.0, ja: German mfg is state of the art now & gets better w/ a harmonious blend of humans + robots, AI, IoT
  3. TSLA went a robot too far? Despite the quest for an “Alien Dreadnought” @elonmusk admitted that automation needs to be dialed back, is that good for gross margins?
  4. Showdown on scale: German OEMs will leverage scale economies either thru large native EV platforms (VW) or modular approaches (BMW)
  5. With solid & profitable EVs coming while TSLA struggles, legacy OEMs deserve

And yes, Barclays is rather bearish on Tesla as a result. This is what it said two weeks ago:

"We give credit for the leadership tesla has displayed in accelerating global EV uptake, and indeed we acknowledge that at this time the model 3 is clearly the most attractive EV option at its price point. However, we continue to remain bearish on Tesla, with an UW rating and $210 price target, as we believe investors have not adequately appreciated the myriad risks involved in Tesla’s aggressive ramp. Margins are likely to remain compressed, while cash burn remains an issue. And while there may be some merit to the simplicity of the Model 3 structure and to Tesla’s lead in battery cost, any such advantages over legacy OEMs are likely more than offset by the legacy OEMs’ cost advantages in scale and other efficiencies."

To be sure, there was much more in the full report, but for the sake of prompt decision-making ahead of earnings, here is the punchline: a breakdown of the rapidly approaching competition, simplified in a few charts and tables.

First, the tipping point for EV from the standpoint of battery pricing:

This means that some competitors are already more cost-efficient:

Still, Tesla has a large sales lead over its peers... for now.

Meanwhile, the Chinese market is "much more diverse" and advanced, and dominated by locals:

China and non-China EVs in context:

China aside, the market is about to be flooded with OEM EVs:

What BEV products are hitting the market imminently?

The competition is heating up for TSLA and we see that competition is accelerating in the coming years.  Importantly, we are now seeing some of the concept cars of the past coming to showrooms. While we concede that the Model 3 doesn’t face competition yet in the ~$50k fully loaded segment (which is smaller than the $35k segment), competitors are coming in both at the model S/X ~$80-100k price point, and also at the more affordable EV price point. Just in the US and Europe (never mind the profusion of Chinese EVs) key scheduled launches include:

Upper end

  • Jaguar IPace (on sale 2q18 in europe, 3q18 in us)
  • Audi eTron (on sale 2h18 in europe then us)
  • Porsche Mission e (2q19)
  • Mercedes EQC (late 2019)
  • BMW iX3 (early 2020)

Middle/lower end

  • Chevy Bolt (on sale now)
  • Nissan Leaf (on sale now)
  • Hyundai IONQ EV (2018)
  • Hyundai Kona EV SUV (summer 2018 in europe, 4q18 in us)
  • GM Buick variant of bolt
  • VW ID Neo (2020)

A comparison of upcoming BEV product offerings

And the pipeline of EV offerings over the next 2 years.

Published:5/2/2018 2:49:59 PM
[Entertainment] Kim Kardashian in Talks With Jared Kushner to Pardon an Imprisoned Grandmother Kim Kardashian, Jared KushnerOne week after Kourtney Kardashian took Capitol Hill, E! News has learned Kim Kardashian is in talks with the White House. The Keeping Up With the Kardashians star's rep confirmed to...
Published:5/2/2018 2:49:59 PM
[Entertainment] The Real's Jeannie Mai Explains Why She Gained 17 Lbs. in Three Months Jeannie Mai Now this is a #TransformationTuesday we can get behind! The Real co-host Jeannie Mai shared a personal post on Instagram today, opening up about her recent weight gain and why she's...
Published:5/2/2018 2:19:52 PM
[Markets] Mark Mobius 'Un-Retires': Plans New Fund After Biggest EM Bond Collapse In 23 Years

Two weeks ago, 81-year-old investing legend Mark Mobius believes that the US market is on the verge of a 30% collapse that would essentially wipe out the gains of the last two years.

The renowned fund manager, who left Franklin Templeton after more than 30 years in January, said “all the indicators” point to a large fall in the markets.

“I can see a 30% drop,” said Mobius, who launched one of the world’s first emerging market funds. “When consumer confidence is at an all time high, as it is in the US, that is not a good sign.

“The market looks to me to be waiting for a trigger that will cause it to tumble. You can’t predict what that event might be — perhaps a natural disaster or war with North Korea.”

But now, just four months after "retiring," Mobius is coming back as Bloomberg reports he is setting up a new asset management firm to invest in emerging and frontier markets.

Mobius Capital Partners LLP has yet to line up outside investors and wants to raise about $1 billion within two to three years.

"I wasn’t ready to retire and I was ready for something new after 30 years at Franklin Templeton," Mobius, who has spent more than 40 years working in emerging markets, said on Wednesday.

“With all this money going in ETFs and passives, there is a real role for active management where we go into companies and we try to achieve change," he said in a Bloomberg Television interview.

His timing may be perfect - judging by the trends that are beginning to occur in EM debt and equity markets...

Bloomberg reports that foreign-currency bonds of developing nations are seeing bigger losses than during the Asian currency crisis, dot-com bust or the 2008 financial crisis. The Bloomberg Barclays gauge for emerging-market dollar debt has slid 2.5 percent since the start of the year, the worst performance in a January-April period since 1995.

U.S. Treasury yields around 3 percent are fueling the selloff, underscoring emerging markets’ vulnerability to a stronger dollar.

Additionally, Nomura's Charlie McElligott notes that emerging markets equities continue to look perhaps as the area which remains most exposed to a further re-pricing in USD, on account of asymmetric positioning accumulation and (il)liquidity.  TFF data tells us that despite Asset Managers reducing their longs by $6B last week / Leveraged Funds reducing their longs by $3.9B last week, they remain +$195.5B and $34.6B “long,” respectively. 

Since the history of the data beginning in ’11, the current AM ‘net long’ in EM eq currently sits at an absurd 2.5 z-score, while the Leveraged Fund EM ‘net long’ too remains historically high @ 0.8 z-score:

You can see this scale of this incredible “length” accumulation in the net notional positioning charts below:

*  *  *

So perhaps it is not surprising that Mobius sees opportunity to pile investor money into these markets after the carnage clears.

Frontier markets are very vulnerable to the price of oil, particularly if it rises sharply, Mobius said in the Bloomberg Television interview. “We would love to invest in Iran because they do have an active capital market, but because of the sanctions you just can’t do that. I think there’s going to be a breakthrough and there’ll be an opportunity.”

Published:5/2/2018 2:19:52 PM
[Entertainment] Inside Ciara's Year of "Life and Love": Russell Wilson's Daddy Skills, Her Kids' "Awesome" Bond and More Ciara, Russell Wilson, EasterLife is sweet for Ciara. End of story right there, perhaps, but the mother of two has been through enough in her life to truly appreciate the simpler pleasures of family and...
Published:5/2/2018 1:50:09 PM
[Entertainment] Tom Arnold Reveals He Briefly Romanced Laurie Metcalf Before Roseanne Barr Tom Arnold, Laurie MetcalfTom Arnold is opening up about his relationship history. The 59-year-old actor was a guest on The Howard Stern Show on Wednesday, where he talked about the early days of Roseanne. Arnold,...
Published:5/2/2018 1:19:48 PM
[Markets] Trump Threatens To Flex Presidential Powers Over "Witch Hunt" Russia Probe, Schumer Flips Out

President Trump in a series of Wednesday morning tweets, lashed out against the Mueller probe and the Department of Justice - threatening to "use the powers granted to the Presidency and get involved." 

The complaints follow the leak of approximately four-dozen questions the Special Counsel would like to ask the President, ranging from what Trump knew about alleged Russian efforts to interfere with the 2016 US election, to whether he tried to obstruct justice when he fired former FBI Director James Comey.

Trump and his legal team are engaged in ongoing negotiations with special counsel Robert Mueller's team over whether the president will agree to be interviewed as part of the Russia (and now Stormy Daniels) investigation. Mueller warned Trump's lawyers in a March meeting that he could issue a subpoena for the President to testify before a grand jury, according to four people familiar with the situation. 

Trump had said previously that he would be willing to have a face-to-face meeting with Mueller or his team, but more recently he has wavered on the prospect. Some of Trump’s advisers have counseled that he could risk being accused of perjury if he submits to open-ended questioning from Mueller and provides meandering answers. -Washington Post

Last year Trump said he would be "100%" willing to testify undre oath, while telling ABC News's Jonathan Karl in January "I would love to do that...I'd like to do it as soon as possible," adding “You know I think things are still in a lane, working toward a resolution of the interview issue.”

In an earlier Thursday tweet, Trump quoted former US Attorney Joe diGenova, who recently appeared on SiriusXM's The Michael Smerconish Program where he described Mueller's probe as “an outrageous, sophomoric, juvenile intrusion into the president’s unfettered power to fire anyone in the executive branch.

"The questions are an intrusion into the President's Article 2 powers under the Constitution to fire any Executive Branch Employee," tweeted Trump, citing deGenova.

diGenova and his wife, Victoria Toensing, were tapped last month to represent Trump in the Mueller probe, only to have to withdraw over conflicts. Appearing on Fox News Wednesday, Toensing suggested that Trump might be accused of perjury if something he says conflicts with claims by James Comey

Toensing, who was recruited for Trump’s legal team but did not join because of client conflicts, recalled the case of I. Lewis “Scooter” Libby, the former chief of staff to Vice President Richard B. Cheney.

Libby, whom Toensing represented, was convicted of obstruction of justice and other charges in 2007 stemming from an investigation of a leak of a CIA officer’s identity. But Libby was never charged with leaking the officer’s identity. -WaPo

Setup & Trap

Earlier in the day, Trump lashed out over the investigation - tweeting "There was no Collusion (it is a Hoax) and there is no Obstruction of Justice (that is a setup & trap)." He then pointed to the progress made over North Korea, the trade deficit with China and negotiations on NAFTA.

On Tuesday, Trump tweeted "It would seem very hard to obstruct justice for a crime that never happened! Witch Hunt!" - suggesting that he 

Schumer Flips Out

In response to Trump's threat to flex his Presidential powers, Rep. Chuck "six ways from Sunday" Schumer (D-NY) cautioned not to "go down this road," tweeting that "the powers of the Presidency do not give you the right to interfere with or shut down the Russia investigation," adding "Firing the Deputy AG or Director Mueller would create a constitutional crisis." 

Schumer warned of "severe consequences" in March if Trump moves to shut down the Mueller probe. 

Interview Still Possible

In an exclusive interview with ABC's Powerhouse Politics, White House lawyer Ty Cobb - who we subsequently learned is retiring, set to be replaced with Bill Clinton's impeachment lawyer Emmet Flood,  said that a presidential interview with Mueller's team has not been ruled out.

"It's certainly not off the table and people are working hard to make decisions and work towards an interview," said Cobb, adding "And assuming that can be concluded favorably, there'll be an interview.

“Assuming it can't be… assuming an agreement can't be reached, you know then it'll go a different route."

Cobb, as it turns out, is being replaced by Emmet T. Flood - a veteran Washington lawyer who represented Bill Clinton during his impeachment.

In a phone interview, Mr. Cobb said he informed the president weeks ago that he wanted to retire. He said he planned to stay at the White House, likely through the end of the month, to help Mr. Flood transition into the new job. -NYT

"It has been an honor to serve the country in this capacity at the White House,” he said. “I wish everybody well moving forward.

Published:5/2/2018 12:51:15 PM
[Entertainment] Khloe Kardashian Living in "Hell" Amid Tristan Thompson Scandal Tristan Thompson, Birthday, Khloe KardashianKhloe Kardashian feels like she's in "hell"--and it's all Tristan Thompson's fault. The couple's relationship went up in flames three weeks ago, when the NBA...
Published:5/2/2018 12:51:15 PM
[Entertainment] J.K. Rowling Apologizes to Fans for Killing Off a Beloved Harry Potter Character J.K. Rowling, JK RowlingAfter breaking fans' hearts with the death of one incredibly beloved character all those years ago, J.K. Rowling is saying sorry. On the anniversary of the Battle of Hogwarts, the...
Published:5/2/2018 12:19:40 PM
[Entertainment] The First Official Look at Kiernan Shipka as Netflix's Sabrina Will Give You Chills Kiernan Shipka, THE CHILLING ADVENTURES OF SABRINAWelcome to the coven. Something wonderful this way comes, thanks to Netflix giving us our first official look at Kiernan Shipka in character as Sabrina in the upcoming adaptation of The...
Published:5/2/2018 11:48:53 AM
[2018 News] Boy Scouts are dropping the word ‘boy’ from the name of flagship program Boy Scouts are dropping the word ‘boy’ from the name of flagship program. Yet another institution torn down by the left. We suggest they rename them the Soy Scouts. The umbrella organization will retain its name, Boy Scouts of America or BSA. The term Cub Scouts, for kids 7-10 years old, is gender neutral and […] Published:5/2/2018 11:48:52 AM
[Markets] Black Men Arrested In Philly Starbucks Settle For "Symbolic $1 Each"

Less than  three weeks after two black men were arrested in a Philadelphia Starbucks after not ordering anything - causing uproar across the US over accusations of racial profiling - The Associated Press reports that they have settled with the city for a symbolic $1 each Wednesday and a promise from officials to set up a $200,000 program for young entrepreneurs.

The men's lawyer and Mayor Jim Kenney outlined the agreement to The Associated Press.

"I am pleased to have resolved the potential claims against the city in this productive manner," Kenney said. "This was an incident that evoked a lot of pain in our city and put us under a national spotlight for unwanted reasons."

The mayor said Nelson and Robinson approached the city about working together to "make something positive come of this." The entrepreneur program will be for Philadelphia public high school students.

"We thought long and hard about it and we feel like this is the best way to see that change that we want to see," Robinson said. "It's not a right-now thing that's good for right now, but I feel like we will see the true change over time."

As a reminder, the arrest of Rashon Nelson and Donte Robinson on April 12 touched off a furor around the U.S. over racial profiling.

They were led away in handcuffs after the manager called police, saying the men refused to buy anything or leave. After spending hours in jail, they were released and no charges were filed. The men said they were waiting for a business meeting about a potential real estate deal.

Starbucks CEO Kevin Johnson came to Philadelphia to personally apologize. He also announced Starbucks stores would close May 29 for training on bias.

I’ve spent the last few days in Philadelphia with my leadership team listening to the community, learning what we did wrong and the steps we need to take to fix it,” said Starbucks ceo Kevin Johnson in a Tuesday statement. “While this is not limited to Starbucks, we’re committed to being a part of the solution. Closing our stores for racial bias training is just one step in a journey that requires dedication from every level of our company and partnerships in our local communities.”

The sensitivity training will be developed with input from local and national experts on racial bias - including Bryan Stevenson, founder and executive director of the Equal Justice Initiative; Sherrilyn Ifill, president and director-counsel of the NAACP Legal Defense and Education Fund; Heather McGhee, president of Demos; former U.S. Attorney General Eric Holder; and Jonathan Greenblatt, ceo of the Anti-Defamation League

On Monday, Johnson met with the two men to apologize in a private meeting for what he called "reprehensible" circumstances which led to their arrest. 

"I will fix this," Johnson added in a recorded message.

For now $200,000 seems 'cheap'.

Published:5/2/2018 11:48:51 AM
[Entertainment] The Good Fight Renewed for Season 3 on CBS All Access, Which Means Diane Lockhart Isn't Going Anywhere The Good FightThe Good Fight will continue. CBS All Access has renewed the acclaimed legal drama for a third season. More brooches for everyone! "The Good Fight is a perfect example of what we...
Published:5/2/2018 11:18:46 AM
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Published:5/2/2018 10:48:39 AM
[Markets] What Lies Beyond Capitalism And Socialism?

Authored by Charles Hugh Smith via OfTwoMinds blog,

The status quo, in all its various forms, is dominated by incentives that strengthen the centralization of wealth and power.

As longtime readers know, my work aims to 1) explain why the status quo -- the socio-economic-political system we inhabit -- is unsustainable, divisive, and doomed to collapse under its own weight and 2) sketch out an alternative Mode of Production/way of living that is sustainable, consumes far less resources while providing for the needs of the human populace -- not just for our material daily bread but for positive social roles, purpose, hope, meaning and opportunity, needs that are by and large ignored or marginalized in the current system.

One cognitive/emotional roadblock I encounter is the nearly universal assumption that there are only two systems: the State (government) or the Market (free trade/ free enterprise). This divide plays out politically as the Right (capitalism, favoring markets) and the Left (socialism, favoring the state). Everything from Communism to Libertarianism can be placed on this spectrum.

But what if the State and the Market are the sources of our unsustainability?What if they are intrinsically incapable of fixing what’s broken?

The roadblock here is adherents to one camp or the other are emotionally attached to their ideological choice, to the point that these ideological attachments have a quasi-religious character.

Believers in the market as the solution to virtually any problem refuse to accept any limits on the market’s efficacy, and believers in greater state power/control refuse to accept any limits on the state’s efficacy.

I often feel like I’ve been transported back to the 30 Years War between Catholics and Protestants in the 1600s.

I’ve written numerous books that (in part) cover the inherent limits of markets and the state, so I’ll keep this brief. Markets are based on two premises: 1) profits are the key motivator of human activity and 2) whatever is scarce can be replaced by something that is abundant (for example, when we’ve wiped out all the wild Bluefin tuna, we can substitute farmed catfish.)

But what about work that creates value but isn’t profitable? This simply doesn’t compute in the market mentality. Neither does the fact that wiping out the wild fisheries disrupts an ecosystem that is essentially impossible to value in terms that markets understand: in a market, the supply and the demand in this moment set the price and thus the value of everything.

But ecosystems simply cannot be valued by the price set in the moment by current supply and demand.

As for the state, its ontological imperative is to concentrate power, and since wealth is power, this means concentrating political and financial power. Once bureaucracies have concentrated power, insiders focus on securing budgets and benefits, and limiting transparency and accountability, as these endanger the insiders’ power, security and perquisites.

Both of these systems share a single quasi-religious ideology: a belief that endless economic growth is an intrinsic good, for it is the ultimate foundation of all human prosperity. In other words, we can only prosper and become more secure if we’re consuming more of everything: resources, credit, energy, and so on.

The second shared ideological faith is that centralizing wealth and power are not just inevitable but good. In other words, Left and Right share a single quasi-religious belief that centralization is not just inevitable but positive; the only difference is in who should hold the concentrated wealth/power, private owners or the state.

This ideology assumes a winner take most structure of winners and losers,with the winnings being concentrated in the hands of a few at the top of the Winners. Thus rising inequality and divisiveness are assumed to be the natural state of any economy.

This ideology underpins the entire status quo spectrum. The "growth at any cost is good" part of the single ideology underpinning the status quo is captured by the 1960 Soviet-era film Letter Never Sent; in its haunting, surreal final scene, a character envisions a grand wilderness untouched by human hands transformed into an industrial wasteland of belching chimneys and sprawling factories. This was not a nightmare--this was the Soviet dream, and indeed, the dream of the "growth at any cost is good" West.

Simply put, the status quo of markets and states is incapable of DeGrowth, i.e. consuming less of everything, including credit, "money", profits, taxes—everything that fuels both the state and the market. As I have taken pains to explain, it doesn’t matter if a factory is owned by private owners or the state: the mandate of capital is to grow. If capital doesn’t grow, the resulting losses will sink the enterprise—including the state itself.

What lies beyond "growth at any cost" capitalism and socialism? My answer is the self-funded community economy, a system that is self-funded (i.e. no need for a central bank or Treasury) with a digital currency that is created and distributed for the sole purpose of funding work that addresses scarcities in local communities.

I outline this system in my book A Radiocally Beneficial World: Automation, Technology and Creating Jobs for All.

Rather than concentrate power in the hands of state insiders, this system distributes power to communities are participants. Rather than concentrate the power to create currency for the benefit of banks and the state, this system distributes the power to create currency for the sole benefit of those working on behalf of the community, on projects prioritized by the community.

This community economy recognizes that some work is valuable but not profitable. The profit-driven market will never do this work, and the central state is (to use Peter Drucker’s term) the wrong unit size to ascertain each community’s needs and scarcities.

Clearly, we need a socio-economic-political system that has the structure to not just grasp the necessity of DeGrowth and positive social roles (work benefiting the greater community) but to embrace these goals as its raison d’etre (reason to exist).

Human activity is largely guided by incentives, both chemical incentives in our brains and incentives presented by the society/economy we inhabit. In the current system, concentrating power and wealth in the hands of the few at the expense of the many and wasting resources / destroying ecosystems are incentivized if the activity is profitable to some enterprise or deemed necessary by the state.

In the current system, the state incentivizes protecting its wealth and power and the security/benefits of its insiders, and markets incentivize maximizing profits by any means available.

As I have explained many times in the blog and my books, we inhabit a state-cartel economy: the most profitable form of enterprise is the quasi-monopoly or cartel that limits supply and competition in order to extract the maximum profit from its customers.

Monopolies (or quasi-monopolies such as Google, which holds a majority share of global search revenues, excluding China) and cartels quickly amass profits which they then use to secure protection of their cartel from the state via lobbying, campaign contributions, etc. The elites controlling the state benefit from this arrangement, and so the system inevitably becomes a state-cartel system dominated by the state and private sector cartels and incentives that benefit the wealth and power of these institutions.

Once we understand the inevitability of this marriage of state and cartel, we understand socialism and capitalism--the State and Markets--are the yin and yang of one system. Reformers may recognize some of the inherent limits of the state and the market, but they believe these problems can be solved by tweaking policies--in systems-speak, modifying the parameters of the existing subsystems of lawmaking, the judiciary, regulatory agencies, and so on.

But as Donella Meadows explained in her classic paper, Leverage Points: Places to Intervene in a System tweaking the parameters doesn’t actually change the system. For that, we must add a new feedback loop.

The status quo, in all its various forms, is dominated by incentives that strengthen the centralization of wealth and power, increase inequality and divisiveness and the permanent expansion of consumption and credit. That this path leads to implosion / collapse does not compute because the status quo is constructed on the fundamental assumption that permanent growth/expansion of consumption, credit, wealth and state power is not just possible but necessary.

As many of us have labored to show, the financial system has been pushed to unprecedented extremes to maintain the illusion that rapid growth of consumption and credit can be maintained essentially forever.

We need an alternative system that’s built on sustainable incentives and feedback loops so we have a new blueprint to follow as the current arrangement unravels in the next decade or two.

Security and prosperity are worthy goals, but the means to achieve them, as well as the definition of security / prosperity, must be reworked from the ground up. We need to include positive social roles and meaningful work as essential components of security/prosperity.

My conception of a Third / Community Economy does not replace either the state or the free-enterprise market; rather, it does what neither of the existing structures can do. It adds opportunity, purpose, positive social roles and earned income for those left out of the state/cartel/market economy.

*  *  *

My new book Money and Work Unchained is $9.95 for the Kindle ebook and $20 for the print edition. Read the first section for free in PDF format. If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

Published:5/2/2018 10:48:39 AM
[Entertainment] Get Ready, Genoa City: Erika Girardi Is Returning to The Young and the Restless in a Major Way! Erika GirardiFarrah Dubose returns! Erika Girardi fans, get excited...because The Real Housewives of Beverly Hills star is set to return to The Young and the Restless, E! News can exclusively reveal....
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[Entertainment] Mama June's Daughter Lauryn "Pumpkin" Shannon Gets Married in Las Vegas Pumpkin, Lauryn ShannonPumpkin is a married lady! Reality star Lauryn "Pumpkin" Shannon, known to fans as one of Mama June's daughters, became a bride this week. The 18-year-old wed longtime beau...
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[Markets] WTI/RBOB Extend Losses After Big Surprise Crude, Gasoline Build

WTI/RBOB flatlined after last night's  bigger-than-expected crude build from API, but both has slipped lower since Europe opened ahead of the DOE data. Prices extended their losses after DOE confirmed a much bigger-than-expected crude build (+6.22mm vs +1.23mm exp) and surprise gasoline build.

 

API

  • Crude +3.427mm (+1.23mm exp)

  • Cushing +725k

  • Gasoline +1.602mm

  • Distillates -4.083mm

DOE

  • Crude +6.218mm (+1.23mm exp)

  • Cushing +416k

  • Gasoline +1.171mm (-500k exp)

  • Distillates -3.9mm (-1.5mm exp)

Biggest build in crude since January and a surprise build in gasoline confirmed API's data...

Bloomberg Intelligence's Energy Analyst Fernando Valle noted that wide crude price differentials are likely to be pushing refinery utilization higher in the Mid-Continent and Gulf Coast regions, slowing the pace of product-inventory draws.

 

As usual production is a key focus. Bloomberg Intelligence's Senior Energy Analyst Vince Piazza explains that growing strength in Brent prices combined with elevated U.S. crude output is widening the discount for WTI vs. seaborne blends and encouraging domestic production. And sure enough US crude production rose 33k b/d to a new record high...

 

WTI/RBOB prices did not react to API data overnight but started to fall again as Europe opened overnight, and extended losses after DOE data confirmed the surprise API builds...

However, “the geopolitical-risk forces are strong,” said Bjarne Schieldrop, chief commodities analyst at SEB AB in Oslo. “For the time being, the risk for the oil price is on the upside.”

Published:5/2/2018 9:48:48 AM
[Entertainment] Toronto Raptors Fans Troll Tristan Thompson With "Khloe" Chant Tristan Thompson, Nickelodeon Kids Choice Sports AwardsBasketball fans aren't letting Tristan Thompson get away with any foul play. Fans of the Toronto Raptors trolled the NBA star during Tuesday night's game against the Cleveland...
Published:5/2/2018 9:18:45 AM
[Entertainment] The Handmaid's Tale Renewed for Season 3 The Handmaid's TaleBlessed be a season three. Hulu has renewed its acclaimed yet horrifying dystopian drama The Handmaid's Tale for a season three, just a few episodes into season two, the streaming...
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[Markets] Ford Targeting Massive $25.5 Billion Cuts, Confirming End Of Major Automotive Cycle

The rising cost of commodities, combined with the end of a bubble in the automobile sector, are taking tolls on automobile companies and forcing drastic restructurings at major US automakers like Ford.

Ford announced this morning that it is hacking off a large portion of its business – a move that will make the company 90% reliant on its pickups, trucks, SUVs and commercial vehicles – by the year 2020. The company is targeting $25.5 billion in cost cuts by the year 2022.

Bloomberg wrote an article examining the details of the company's restructuring effort:

Ford Motor Co. is sharpening its knives to cleave another $11.5 billion from spending plans and cut several sedans, including the Fusion and Taurus, from its lineup to more quickly reach an elusive profit target.

The automaker expects to save $25.5 billion by 2022, Chief Financial Officer Bob Shanks told reporters Wednesday as Ford reported first-quarter earnings per share and revenue that beat estimates. The company now anticipates reaching an 8 percent profit margin by 2020, two years ahead of schedule.

The cuts are aimed at kick-starting a turnaround effort almost one year after Ford’s board ousted its chief executive officer. New CEO Jim Hackett has been trying to convince investors that betting on a rebound is a worthwhile wager by laying out plans to get rid of slow-selling, low-margin car models and refocusing the company around more lucrative sport utility vehicles and trucks.

It is a drastic move, as the company will be phasing out sedan models that have a long history with the company, including models like the recently revamped Ford Taurus.

For Ford, the focus is now exclusively on higher margin models, as Bloomberg wrote:

“We’re going to feed the healthy part of our business and deal decisively with areas that destroy value,” Hackett said on an earnings call Wednesday. “We aren’t just exploring partnerships; we’ve now done them. We aren’t just talking about ideas; we’ve made decisions.”

Ford finds itself on a road similar to the route Fiat Chrysler Automobiles NV followed to pass Ford in North American profitability. Fiat Chrysler CEO Sergio Marchionne now wants to eclipse General Motors Co. before his retirement in 2019.

For Ford, these higher margin vehicles mean not only canning its previous sedan efforts, but also failing to invest in new sedans for the North American market in the future. A similar fate looks like it could be on the way for Lincoln, as well:

Ford said it won’t invest in new generations of sedans for the North American market, eventually reducing its car lineup to the Mustang and an all-new Focus Active crossover coming next year. By 2020, almost 90 percent of its portfolio in the region will be pickups, SUVs and commercial vehicles.

That means the end of the road for slow-selling sedans such as the Taurus, Fusion and Fiesta in the U.S. The automaker conspicuously left the Lincoln Continental and MKZ sedans off its hit list, but since those models share mechanical foundations with Ford siblings, their futures also are in doubt.

“For Ford, doubling down on trucks and SUVs could be just what the brand needs,” Jessica Caldwell, an analyst for Edmunds.com, said in an email. “But this move isn’t without risk: Ford is willingly alienating its car owners and conceding market share.”

These types of restructurings in automobile manufacturers are generally indicative of a longer-term cycle in the industry coming to an end. Companies like Ford and General Motors often undertake these large restructurings after all other options for pushing out the boom portion of the cycle have been exhausted and it's finally time to "pay the piper".

We have recently been identifying a number of signs in subprime automobile lending that are indicative of a large bubble throughout the entire sector getting ready to burst. The smaller subprime lending shops are always the first to go, and these are the businesses that we see folding up shop right now. We wrote on April 8, 2018:

We are in the midst of watching the subprime auto lending bubble burst in its entirety. Smaller subprime auto lenders are starting to implode, and we all know what comes next: the larger companies go bust, inciting real capitulation. 

In addition to our coverage out just days ago  talking about how the subprime bubble has burst and, since then since has been crunched even further, additional reports today are showing that smaller subprime lenders are starting to simply implode after being faced with losses and defaults. In addition to losses and defaults, Bloomberg reported this morning that there have been allegations of fraud and under reporting losses, tactics that are clearly reminiscent of .

In the case of Ford, rising commodity costs were yet again assigned some of the blame:

One factor that had been contributing to investor pessimism has been commodity costs, which Ford expects will be a $1.5 billion headwind this year. About $500 million of that came in the first quarter, Shanks said. The automaker began the year flagging to investors that pricier raw materials including steel and aluminum would contribute to profit declining in 2018.

The rising cost of commodities continues to put pressure on all types of industrial businesses. We wrote yesterday about how the rising cost of lumber is causing housing prices to soar and we predicted that these rising prices will eventually result in pricing buyers out of the housing market. For the automotive sector, these costs are just another headwind coming at the worst possible time in the automotive industry cycle. 

For Ford, this "restructuring" and the resultant layoffs that'll happen come at the hands of two problems caused by monetary policy: cheap debt that caused the bubble and the boom to begin with, and inflation helping drive up the prices of commodities. 

Thanks, Fed!

Published:5/2/2018 8:48:14 AM
[Entertainment] 7 Times Celebrities Combined Religion and Fashion ESC: Fashion and Religion, Nicki Minaj What would Yeezus do? No question may be more relevant at the 2018 Met Gala. When the theme--"Heavenly Bodies: Fashion and the Catholic Imagination"--was first announced, there...
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[Entertainment] Why Miley Cyrus Retracted Her Vanity Fair Apology Miley Cyrus, Jimmy Kimmel Live!Miley Cyrus can't be tamed--nor does she want to be. Over the weekend, she retracted her apology for posing topless at age 15 in Vanity Fair. Now 25, Cyrus tweeted a cover of the New...
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[Entertainment] Ellen DeGeneres Apologizes to Jenna Dewan After Calling Her a Tatum Jenna DewanEllen DeGeneres made an embarrassing mistake on Wednesday when she accidentally called Jenna Dewan by her former last name. The mistake took place on Wednesday's episode of The Ellen...
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[Entertainment] Kylie Jenner Cuddles With Travis Scott on Birthday Beach Getaway Kylie Jenner, Travis ScottKylie Jenner can't stop spoiling birthday boy Travis Scott. The Keeping Up With the Kardashians star shared a picture of her embracing her beau during a beach getaway on Tuesday. The...
Published:5/2/2018 6:49:02 AM
[World] Stakes Rise for Trump's Meeting with Kim Jong Un as Korea Moves Toward Peace

Eric Gomez

The President Trump-Kim Jong Un summit will be an enormously consequential diplomatic event. A successful summit could pave the way for the denuclearization of North Korea and the establishment of lasting peace in Northeast Asia. However, a failed summit could prove disastrous and leave the United States alone in its approach to North Korea.

The success of the inter-Korean summit provides insight into both of these possibilities.

The text of the Moon Jae-in-Kim joint declaration suggests that denuclearization will be the primary topic of the upcoming Trump-Kim summit. Denuclearization receives very little attention relative to other objectives in the declaration. For example, the joint declaration’s section on alleviating military tensions mentions specific confidence-building measures that both South and North Korea will implement such as military-to-military talks and removing propaganda loudspeakers from the border area. By comparison, the section on denuclearization does not mention any similar short-term measures beyond recognition of Kim’s decision to close the Punggye-ri nuclear test site and stop tests of intercontinental ballistic missiles .

Therefore, the Trump administration will likely take the lead on denuclearization issues, while inter-Korean relations will focus on achieving a peace treaty to end the Korean War and increasing economic and people-to-people exchanges.

Yet denuclearization will be a difficult task for the Trump administration. North Korea developed nuclear weapons as an insurance against invasion and regime change, which means the possession of nuclear weapons is essential to Kim’s survival. It is unlikely that Kim will give up his nuclear weapons without significant U.S. concessions that produce a similar degree of insurance. Pyongyang has stayed tight-lipped about what concessions it wants, but they will most likely include significant sanctions relief and reductions or changes in U.S. military forces in South Korea.

Accepting concessions may be unpalatable if Trump goes into the summit believing that his “maximum pressure ” approach forced Kim to the table. If the United States believes that its position is stronger than North Korea’s then it may be unwilling to make big concessions unless the North takes big steps towards denuclearization first. However, Kim is probably entering the summit with a very different understanding of his position. In an April 20th plenum speech to the Workers’ Party of Korea, Kim claimed that North Korea had successfully completed a nuclear deterrent, suggesting that his charm offensive reflects confidence rather than weakness . These differing perceptions of advantage and confidence could make the Trump-Kim summit very difficult if either leader digs in their heels and is unwilling to accede to the others’ demands.

Additionally, the inter-Korean summit raised the costs of a Trump-Kim summit failure by underscoring that failure would leave the United States as the odd man out in the region. In 2017, the Trump administration was able to build a strong regional consensus for cracking down on North Korea. Japan and South Korea joined the United States in tightening unilateral sanctions on Pyongyang and the United States pushed for closer military cooperation with both countries . Washington was also able to get China’s support for U.N. Security Council sanctions, producing a very strong sanctions regime against North Korea. Getting Seoul, Tokyo, and Beijing moving in the same direction was an important feature of the Trump administration’s approach to North Korea.

A failed Trump-Kim summit would put the United States at odds with many of the other regional states that it marshaled to its position last year. Japan would stick by the United States if the Trump-Kim summit collapses, because Tokyo is skeptical of diplomacy with North Korea , but the United States would likely lose support from China and South Korea.

Beijing regards tougher sanctions as a tool to get Pyongyang back to the negotiating table, which has now happened. Moreover, the U.S.-China relationship took a serious downturn this year in large part due to Trump’s action on trade policy. China has met its primary political objective of getting North Korea to the negotiating table and has a worsening relationship with the United States. Beijing therefore faces little incentive to continue going along with the Trump administration’s “maximum pressure” approach should the Trump-Kim summit break down.

South Korea would also be hard-pressed to support further U.S. sanctions and pressure against North Korea if the Trump-Kim summit fails. President Moon made diplomacy with North Korea an important part of his political agenda and the success of the inter-Korean summit makes engagement even more attractive. Indeed, the inter-Korean summit and Moon himself are very popular among the South Korean people and Moon’s party is poised to gain influence in upcoming local elections in June . Once the two Koreas begin implementing the military confidence-building measures and people-to-people exchanges laid out in the joint declaration, it will be very difficult to reverse momentum on inter-Korean engagement.

Trump has his work cut out for him. If the inter-Korean summit truly is a success, it means that the costs of Trump’s summit ending up a failure are magnified. If Trump wants to the rest of the region to keep working with the U.S., he has to remember that the U.S. position in this negotiation isn’t as strong as he’d like it to be.

Eric Gomez is a policy analyst at the Cato Institute.
Published:5/1/2018 3:56:55 PM
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[Markets] WTI/RBOB Shrug At Bigger Than Expected Crude Build

Dollar strength sparked WTI/RBOB weakness on the day but a bigger than expected crude build reported by API did nothing for futures which, after an initial drop, popped back to practically unchanged.

 

API

  • Crude +3.427mm (+1.23mm exp)

  • Cushing +725k

  • Gasoline +1.062mm

  • Distillates -4.083mm

The crude build would be largest since early March (and biggest distillates draw since early March) if EIA data confirms it...

 

WTI/RBOB price action was minimal around the data (RBOB maybe slightly lower)...

Published:5/1/2018 3:56:53 PM
[Entertainment] What Happened in the Bunker? The 100 Sneak Peek Is Worrying The 100So much for One Kru. When Octavia (Marie Avgeropoulos) won the conclave at the end of season four of The 100, she chose to let everyone into the bunker, uniting all of the clans into one...
Published:4/30/2018 10:56:49 AM
[Markets] Bull Markets Actually Do Die Of "Old Age"

Authored by Lance Roberts via RealInvestmentAdvice.com,

David Ranson recently endeavored in a long research report to simply declare that “bull markets do not die of old age.”

“The life expectancy of bull markets can be inferred from history. Fourteen bull markets in U.S. stocks have come and gone since 1927, and their mean lifetime is 55 months. But this calculation can be taken further. From the age of one year to the age of eight years, there’s no overall tendency for life expectancy to decline as a market advance gets older. The present stock market advance, which began 105 months ago, is no more likely to end within the next twelve months than it was when it was only twelve months old. Bull markets do not die of old age.”

Think about this for a moment.

This is the equivalent of suggesting that since the average male dies at 88-years of age if he lives to be 100, he has no more chance of dying in the next 12-months than he did when he was 40-years old.

While a 100-year old male will likely expire within a relatively short time frame, it will not just “being old” that leads to death. It is the onset of some outside influence such as pneumonia, infection, organ failure, etc. that leads to the eventual death as the body is simply to weak to defend itself. While we attribute the death to “old age,” it was not just “old age” that killed the host.

This was a point that my friend David Rosenberg made in 2015 before the first rate hike:

“Equity bull markets never die simply of old age. They die of excessive Fed monetary restraint.

First, averages and medians are great for general analysis but obfuscate the variables of individual cycles. To be sure the last three business cycles (80’s, 90’s and 2000) were extremely long and supported by a massive shift in a financial engineering and credit leveraging cycle. The post-Depression recovery and WWII drove the long economic expansion in the 40’s, and the “space race” supported the 60’s.

But each of those economic expansions did indeed come to an end. The table below shows each expansion with the subsequent decline in markets.

Think about it this way.

  • At 104 months of economic expansion in 1960, no one assumed the expansion would end at 105 months.

  • At 118 months no one assumed the end of the “dot.com mania” was coming in the next month. 

  • In December of 2007, no one believed the worst recession since the “Great Depression” had already begun. 

The problem for investors, and the suggestion that “bull markets don’t die of old-age,” is that economic data is always negatively revised in arrears. The chart below shows the recession pronouncements by the National Bureau Of Economic Research (NBER) and when they actually began.

The point here is simple, by the time the economic data is revised to reveal a recession, it will be far too late to do anything about it from an investment perspective. However, the financial market has tended to “sniff” out trouble

The Infections That Kill Old Bull Markets

Infection #1: Interest Rates

As noted by David Rosenberg, with the Fed continuing to hike rates in the U.S., tightening monetary conditions, the previous 3-year time horizon is now substantially shorter. More importantly, the “average” time frame between an initial rate hike and recession was based on economic growth rates which were substantially higher than they are currently.

Furthermore, as interest rates rise, so does the cost of capital. In a heavily leveraged economy, the change in interest expense has been a good predictor of economic weakness. As recently noted by Donald Swain, CFA:

“What if marginal interest expense pressures are the true recession signal (cause of economic weakness) and the yield curve is just a correlated input to that process? If so, for the first time, the Fed is hiking into what is already the most hostile refit period in 35-years.”

The point is that in the short-term the economy and the markets (due to momentum) can SEEM TO DEFY the laws of gravity as interest rates begin to rise. However, as rates continue to rise they ultimately act as a “brake” on economic activity. Think about the all of the areas that are NEGATIVELY impacted by rising interest rates:

  1. Debt servicing requirements reduce future productive investment.

  2. The housing market. People buy payments, not houses, and rising rates mean higher payments. 

  3. Higher borrowing costs which lead to lower profit margins for corporations.

  4. Stocks are cheap based on low-interest rates. When rates rise, markets become overvalued very quickly.

  5. The economic recovery to date has been based on suppressing interest rates to spur growth.

  6. Variable rate interest payments for consumers

  7. Corporate share buyback plans, a major driver of asset prices, and dividend issuances have been done through the use of cheap debt.

  8. Corporate capital expenditures are dependent on borrowing costs.

Infection #2: Spiking Input Costs

When rate hikes are combined with a surge in oil prices, which is a double whammy to consumers, there has been a negative outcome as noted by Peter Cook, CFA last week.

“A better record of predicting recessions is achieved when Fed has hiked rates by 2.00%-2.50%, AND oil prices have at least doubled. The price of money and energy are major financial inputs to financial planning, so when they simultaneously rise sharply, consumers and businesses are forced to retrench. Based on the Fed’s well-communicated strategy, it plans to raise rates another 0.75% during 2018 on top of the previous 1.50% over the past few years. If crude oil stays above $50-60, both conditions for a recession would be met in the second half of 2018.

Yet neither the Fed, or any high-profile economist, is predicting the beginning of a recession during 2019, let alone 2018. Answering the inflation/deflation question correctly is the most important issue of the day for investment portfolios. If recession/deflation arrives before growth/inflation, a major adjustment in expectations, and capital market prices, is coming within the next year.” 

This shouldn’t be surprising.

In the past, when Americans wanted to expand their consumption beyond the constraint of incomes they turned to credit in order to leverage their consumptive purchasing power. Steadily declining interest rates, and lax lending standards, put excess credit in the hands of every American. Such is why, during the 80’s and 90’s, as the ease of credit permeated its way through the system, the standard of living seemingly rose in America even while economic growth slowed along with incomes.

As I recently discussed with Shawn Langlois at MarketWatch:

“With a deficit between the current standard of living and what incomes, savings and debt increases can support, expectations of sustained rates of stronger economic growth, beyond population growth, becomes problematic.

For investors, that poses huge risks in the market.

While accounting gimmicks, wage suppression, tax cuts and stock buybacks may support prices in the short-term, in the long-term the market is a reflection of the strength of the economy. Since the economy is 70% driven by consumption, consumer indebtedness could become problematic.”

Infection #3 – Valuations

Lastly, it isn’t an economic recession that is truly problematic for investors.

If asset prices rose equally with increases in earnings, in other words the price-to-earnings ratio remained flat, then theoretically “bull markets” would last forever.

Unfortunately, since asset prices are a reflection of investor psychology, or “greed,” it is not surprising that economic recessions reveal the mispricing between the premium investors pay for a stream of earnings versus what they are really worth.  As I noted just recently:

“Bull markets are born on pessimism, grow on skepticism, and die on euphoria.” -Sir John Templeton

Take a look at the chart below which is Robert Shiller’s monthly data back to 1871. The “yellow” triangles show periods of extreme undervaluation while the “red” triangles denote periods of excess valuation.

Not surprisingly, 1901, 1929, 1965, 1999, and 2007 were periods of extreme “euphoria” where “this time is different” was a commonly uttered phrase.

Conclusion

What the majority of mainstream analysis fails to address is the “full-cycle” of markets. While it may appear that “bull markets do not die of old age,” in reality, it is “old age that leaves the bull defenseless against infections.”

It is the impact of an exogenous event on an over-leveraged, extended and over-valued market that eventually leads to its death. Ignoring the “infections,” and opting for “hope,” has always led to emotionally driven mistakes which account for 50% of investor’s under-performance over a 20-year cycle.

With expectations rising the Fed will further tighten monetary policy, the vulnerabilities of an “aged bull market” will be an issue for investors in the future.

“In investing, the man who wins is the man who loses the least.” – Dick Russell

Published:4/30/2018 10:56:48 AM
[Entertainment] Avengers: Infinity War Has the Biggest Box Office Opening of All Time Tom Holland, Avengers: Infinity WarExcelsior! Marvel Studios' Avengers: Infinity War made history over the weekend, earning an estimated $250 million at 4,474 theaters in the U.S. and Canada--the highest domestic debut...
Published:4/30/2018 6:43:47 AM
[Markets] Move Over Chernobyl, Fukushima is Now Officially the Worst Nuclear Disaster in History

Authored by John Laforge of CounterPunch

The radiation dispersed into the environment by the three reactor meltdowns at Fukushima-Daiichi in Japan has exceeded that of the April 26, 1986 Chernobyl catastrophe, so we may stop calling it the “second worst” nuclear power disaster in history. Total atmospheric releases from Fukushima are estimated to be between 5.6 and 8.1 times that of Chernobyl, according to the 2013 World Nuclear Industry Status Report. Professor Komei Hosokawa, who wrote the report’s Fukushima section, told London’s Channel 4 News then, “Almost every day new things happen, and there is no sign that they will control the situation in the next few months or years.”

Tokyo Electric Power Co. has estimated that about 900 peta-becquerels have spewed from Fukushima, and the updated 2016 TORCH Report estimates that Chernobyl dispersed 110 peta-becquerels. [1] (A Becquerel is one atomic disintegration per second. The “peta-becquerel” is a quadrillion, or a thousand trillion Becquerels.)

Chernobyl’s reactor No. 4 in Ukraine suffered several explosions, blew apart and burned for 40 days, sending clouds of radioactive materials high into the atmosphere, and spreading fallout across the whole of the Northern Hemisphere — depositing cesium-137 in Minnesota’s milk.[2]

The likelihood of similar or worse reactor disasters was estimated by James Asselstine of the Nuclear Regulatory Commission (NRC), who testified to Congress in 1986: “We can expect to see a core meltdown accident within the next 20 years, and it … could result in off-site releases of radiation … as large as or larger than the releases … at Chernobyl. [3] Fukushima-Daiichi came 25 years later.

Contamination of soil, vegetation and water is so widespread in Japan that evacuating all the at-risk populations could collapse the economy, much as Chernobyl did to the former Soviet Union. For this reason, the Japanese government standard for decontaminating soil there is far less stringent than the standard used in Ukraine after Chernobyl.

Fukushima’s Cesium-137 Release Tops Chernobyl’s

The Korea Atomic Energy Research (KAER) Institute outside of Seoul reported in July 2014 that Fukushima-Daiichi’s three reactor meltdowns may have emitted two to four times as much cesium-137 as the reactor catastrophe at Chernobyl. [4]

To determine its estimate of the cesium-137 that was released into the environment from Fukushima, the Cesium-137 release fraction (4% to the atmosphere, 16% to the ocean) was multiplied by the cesium-137 inventory in the uranium fuel inside the three melted reactors (760 to 820 quadrillion Becquerel, or Bq), with these results:

Ocean release of cesium-137 from Fukushima (the worst ever recorded): 121.6 to 131.2 quadrillion Becquerel (16% x 760 to 820 quadrillion Bq). Atmospheric release of Cesium-137 from Fukushima: 30.4 to 32.8 quadrillion Becquerel (4% x 760 to 820 quadrillion Bq).

Total release of Cesium-137 to the environment from Fukushima: 152 to 164 quadrillion Becquerel. Total release of Cesium-137 into the environment from Chernobyl: between 70 and 110 quadrillion Bq.

The Fukushima-Daiichi reactors’ estimated inventory of 760 to 820 quadrillion Bq (petabecquerels) of Cesium-137 used by the KAER Institute is significantly lower than the US Department of Energy’s estimate of 1,300 quadrillion Bq. It is possible the Korean institute’s estimates of radioactive releases are low.

In Chernobyl, 30 years after its explosions and fire, what the Wall St. Journal last year called “the $2.45 billion shelter implementation plan” was finally completed in November 2016. A huge metal cover was moved into place over the wreckage of the reactor and its crumbling, hastily erected cement tomb. The giant new cover is 350 feet high, and engineers say it should last 100 years — far short of the 250,000-year radiation hazard underneath.

The first cover was going to work for a century too, but by 1996 was riddled with cracks and in danger of collapsing. Designers went to work then engineering a cover-for-the-cover, and after 20 years of work, the smoking radioactive waste monstrosity of Chernobyl has a new “tin chapeau.” But with extreme weather, tornadoes, earth tremors, corrosion and radiation-induced embrittlement it could need replacing about 2,500 times.

John Laforge’s field guide to the new generation of nuclear weapons is featured in the March/April 2018 issue of CounterPunch magazine.

Notes.

[1] Duluth News-Tribune & Herald, “Slight rise in radioactivity found again in state milk,” May 22, 1986; St. Paul Pioneer Press & Dispatch, “Radiation kills Chernobyl firemen,” May 17, 1986; Minneapolis StarTribune, “Low radiation dose found in area milk,” May 17, 1986.

[2] Ian Fairlie, “TORCH-2016: An independent scientific evaluation of the health-related effects of the Chernobyl nuclear disaster,” March 2016 (https://www.global2000.at/sites/global/files/GLOBAL_TORCH%202016_rz_WEB…).

[3] James K. Asselstine, Commissioner, US Nuclear Regulatory Commission, Testimony in Nuclear Reactor Safety: Hearings before the Subcommittee on Energy Conservation and Power of the Committee on Energy and Commerce, House of Representatives, May 22 and July 16, 1986, Serial No. 99-177, Washington, DC: Government Printing Office, 1987.

[4] Progress in Nuclear Energy, Vol. 74, July 2014, pp. 61-70; ENENews.org, Oct. 20, 2014.

Published:4/30/2018 12:32:52 AM
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Published:4/29/2018 10:30:45 PM
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Published:4/29/2018 9:57:46 PM
[Markets] Dysfunctional CalPERS Board Distracted By Petty Squabbling As Fund Lurches Toward Bankruptcy

California's perennially underfunded pension system is struggling with an internecine conflict among its governing board members that some observers worry could impact the fund's performance as it goes all-in on "creative" scam financials and projections that have pushed the fund further into the bubbly equities.

And what's worse, the dispute is escalating just as CalPERS is heading into its busy season: Seemingly never-ending stream of annual shareholder meetings where CalPERS makes always unwelcome activist recommendations to the companies in which it owns shares.

Brown

The conflict started when newly elected CalPERS administrative board member Margaret Brown, a SoCal school district administrator who unseated an incumbent CalPERS advisory board member during last fall's election, leaked a video to the press purporting to show that she had been locked out of her office. In the footage, she suggests that the lock-out was the work of board chairwoman Priya Mathur, who has clashed with Brown on a number of issues including allegations that she leaked sensitive information to the press. Mathur insists the lockout wasn't intentional, and was instead a glitch in the board's security system.

But that excuse did little to quiet hostilities. Brown has since leaked a story to a friendly financial blog about her conflict with Mathur, which has only further inflamed the situation.

Here's more from the Sacramento Bee.

CalPERS Board of Administration member Margaret Brown recorded herself failing to open the door, shared the video with a friendly financial blog and allowed it be posted to YouTube under a headline calling the incident an "illegal lockout." "I have a badge and I’m trying to get in my office, and, yeah, it doesn’t work. Very, very nice," she says in the video.

Her assumption that she was being "locked out" and her decision to share the video on social media are signs of escalating tension on the board that handles $350 billion in assets for 1.9 million California public employees and retirees.

Brown declined an interview request from The Sacramento Bee. She wrote in an email, "I was elected as an outsider and defeated an incumbent who had the endorsement of nearly every then-member of the board, including Mathur. So it's not surprising, though disappointing, that some of the people who opposed my candidacy have continued to make me unwelcome, to the point of interfering with my rights and privileges as a board member."

The conflict first came into view of the public when Brown theatrically declared that she feared being arrested at the next board meeting - which swiftly aroused the interest of the press.

Their rift blew into the open at a public meeting where Brown asked whether she would be arrested for showing up at the job California public employees and retirees elected her to do.

The conflict is "extraordinary," said Charles Elson, the director for the Center of Corporate Governance at the University of Delaware. "It’s unusual with a large pension fund where you have seemingly dysfunctional conflict. They’re going to have to resolve it. It’s not good for the fund."

The conflict has also aroused widespread interest since Brown ran as a reformer and upset a longtime incumbent - something that her peers on the board haven't forgiven her for, she alleges.

In some ways, the drama at CalPERS is a hangover from last fall’s election. Brown as an underdog challenger unseated union-backed incumbent Michael Bilbrey.

Brown cast herself as a watchdog for retirees and Bilbrey as an uncritical board member; Bilbrey’s campaign drew attention to four settlements one of Brown’s previous employers paid to resolve workplace retaliation claims that initially named her.

Brown declined an interview request from The Sacramento Bee. She wrote in an email, “I was elected as an outsider and defeated an incumbent who had the endorsement of nearly every then-member of the board, including Priya Mathur. So it's not surprising, though disappointing, that some of the people who opposed my candidacy have continued to make me unwelcome, to the point of interfering with my rights and privileges as a board member.”

Some board members told the Bee that Brown and Mathur's deteriorating relationship wouldn't impact the fund's performance - and added that it would likely be put to rest at the next CalPERS board meeting, where the organization is set to review procedures for how board members are disciplined.

Board member Bill Slaton said the public disagreements were not "irreversible."

"I think that any organization as large and complex as CalPERS is going to have disputes and is going to have from time to time conflict. That is all the more reason for us to put as much effort as possible into resolving disagreements in ways that advance the mission of CalPERS," he said.

New board member David Miller viewed the conflict as a learning curve for Brown and Mathur. He considered Mathur's reprimand to Brown as an "extremely judicious" message not to bring visitors into restricted areas again.

He and other board members said they'd like CalPERS to hold an open discussion on how board members are disciplined.

"The board doesn’t really have clear, systematic tools to deal with those issues," he said.

But regardless of how this dispute is resolved, the pension fund which has been described as "near insolvency" by a former board member will still need to figure out how it can right itself and return to a path of long-term sustainability, before the resources in its fund are drained by overly generous pension benefits which cannot be supported by returns or current contributions. Back in February, former board member Steve Westly made the following admission after the fund voted to increase the amount of contributions made by California's cities by making a "relatively small" ($350 billion) change to its amortization policy.

As things stand now, CalPERS, once more than 100 percent funded, now has scarcely two-thirds of what it would need to fully cover all of the pension promises to current and future retirees. And that assumes it will hit a lofty investment earnings target of 7% per year, which many authorities have criticized as too optimistic.

At some point, the board members will need to band together to make an unpopular decision (cutting benefits) that could risk all of them being thrown out by the public union employees who elect them.

But as long as this squabbling continues, the already remote likelihood of the board embracing radical change continues to shrink.

Published:4/29/2018 9:57:46 PM
[Entertainment] Kyle's Sinister Past Comes Back to Haunt Him and Megan Finally Learns His Dark Secret on The Arrangement The Arrangement 208, Megan MorrisonWhat's lost will always be found... Megan Morrison (Christine Evangelista) has made it her mission to destroy IHM on The Arrangement, and on this week's episode, she might...
Published:4/29/2018 9:30:25 PM
[Markets] JPM: CTAs Were Reponsible For The Recent Treasury Selloff; What It Means For Treasury Yields

On Saturday morning we showed that  as the yield on the 10Y US Treasury note broke above the 3.00% Maginot Line this week (for the first time since Jan 2014), spec traders (hedge fund) piled on - pushing net speculative positioning for 10Y note futures to their largest short ever. In fact, along with almost $4 trillion notional in Eurodollar shorts (betting on rising short-term interest rates), the aggregate position across the rest of the Treasury futures space has also reached a new record short, which, as the chart below shows, is equivalent to well over 1.1 million 10Y futures contracts.

However, as we have repeatedly said in the past, spec positioning, as indicated weekly by the CFTC reports, is a lagging, not leading indicator, and thus has little informational value. Furthermore, while incremental, the additions to the net short position were hardly "marginal", which likely means that the accelerated unwind in the Treasury complex in the second half of April, had little to do with another short pile up, and more to do with the closing out of long positions.

But who was selling? According to one apocryphal theory, the marginal seller was none other than Beijing, perhaps in retaliation, and as a warning signal, for the recent escalations in the ongoing trade war between the US and China. It will be impossible to confirm or deny this theory until full TIC data for April is released in two months (and even the data is price/yield adjusted) although the recent plunge in Treasuries held in custody at the Fed - the biggest since the China deval days of January 2016 - suggests that China may indeed be liquidating at least a modest portion of its TSY holdings.

Another, more actionable theory was proposed on Friday by JPM's Nikolaos Panigirtzoglou, who writes in his weekly Flows and Liquidity report that CTAs have been partly responsible for the bond market sell-off since mid-April.

The reason, as JPM notes, is that unlike the rest of the investing world which has been solidly short the Treasury complex and merely adding more incremental shorts, CTA have undergoing a sharp reversal in position, a marginal move which had the biggest impact on price. Panigirtzoglou explains:

We had argued previously that momentum-based investors such as CTAs had likely turned long duration around the end of March. Indeed, the shorter-term momentum signal turned long on March 22. When we apply both shorter- and longer-term momentum in combination our revised framework suggests that they likely cut risk and turned neutral rather than shift to outright longs as longer-term momentum continued to signal duration shorts.

This is shown in the next two chats, the first of which (Figure 6) showing the time series of the z-scores of both the shorter-term and longer-term momentum, while Figure 7 shows the position implied by JPM's two momentum signals, one based on short-term momentum only as well as a new, recently revised combined momentum signal.

JPM's conclusion:

[CTAs] had a bias to be short since mid-September, and consistently been short from mid-December to end-March. After being neutral for nearly a month, the combined signal then turned short on April 18, suggesting that CTAs have been partly responsible for the bond market sell-off since mid-April."

And what it means for prices going forward:

Given that a shift to shorts by CTAs is likely to have taken place over the past week and a half in our framework, we think that momentum traders are less likely to remain as a strong bearish force for 10y USTs going forward

If JPM is correct, and it is not China but rather momentum chasers that were responsible for the sharp selloff in the past two weeks, then expect an even sharper drop in yields in the coming days as the recent attempt to break out above 3.00% was firmly rejected and as momentum signals behind the highly volatile, temperamental and marginal price creating trend-following community reverse in the next few days.

Published:4/29/2018 8:58:33 PM
[Entertainment] Daytime Emmy Awards 2018 Red Carpet Fashion: See All the Stars in Their Glam Ensembles Mario Lopez, Courtney Lopez, 2018 Daytime Emmy AwardsRoll out the red carpet! The Daytime Emmy Awards takes place tonight at the Pasadena Civic Auditorium and will be hosted by Mario Lopez and The Talk's Sheryl Underwood. A...
Published:4/29/2018 7:57:14 PM
[Markets] Watch: Chaos Erupts As "Caravan" Of Illegals Scales US Border Fence, Cheering "Gracias Mexico"

Scores of migrants gathered at the U.S. border began scaling the San Diego "wall" while shouting "Gracias, México!" presumably to thank the Mexican government for allowing them to travel from Central America to the U.S. border in the hopes of obtaining asylum from the Trump administration. 

Some 200 migrants, many traveling with children, attempted to apply for asylum at San Diego's San Ysidro border crossing - approximately six miles inland from where the fence is being scaled - only to be told that they port of entry is at capacity.

"At this time, we have reached capacity at the San Ysidro port of entry for CBP officers to be able to bring additional persons traveling without appropriate entry documentation into the port of entry for processing," Commissioner Kevin McAleenan said in a statement. "Those individuals may need to wait in Mexico as CBP officers work to process those already within our facilities."

Or they can just go six miles West and hop the fence. 

Despite being told that the San Ysidro port was at capacity, around 200 migrants began walking towards it.

Rodulfo Figueroa, the top Mexican immigration official in Baja California state, told caravan organizers to send in an initial group of 20 migrants to see if U.S. border inspectors would entertain their request for asylum.

Figueroa said he doesn't know if they would be allowed in and had not received word from U.S. immigration officials.

Nicole Ramos, an attorney working on behalf of caravan members, expressed disbelief that U.S. authorities cannot process more asylum seekers until its backlog eases. -AP

"They have been well aware that a caravan is going to arrive at the border," she said at a news conference. "The failure to prepare and failure to get sufficient agents and resources is not the fault of the most vulnerable among us. We can build a base in Iraq in under a week. We can't process 200 refugees. I don't believe it."

As we reported yesterday, the approximately 400 migrants about to cross into San Diego have been refusing the advice of immigration attorneys, who say the asylum-seekers risk a lengthy detention, or being separated from their families, before eventual deportation back to Central America.

Kenia Elizabeth Avila, 35, appeared shaken after the volunteer attorneys told her Friday that temperatures may be cold in temporary holding cells and that she could be separated from her three children, ages 10, 9 and 4.

But she in said an interview that returning to her native El Salvador would be worse. She fled for reasons she declined to discuss. -AP

After crossing through Mexicali earlier last week, the migrants been gathering in Tijuana on Tuesday. So many reportedly showed up that the shelter they were occupying was overflowing by Wednesday. Most members of the group are from Guatemala, El Salvador or Honduras, and are fleeing their homes, they say, because of death threats from local gangs, or political persecution.

That, according to many, is worth dealing with US authorities and deportation for the small chance they might be granted asylum. 

If they’re going to separate us for a few days, that’s better than getting myself killed in my country,” said Avila.

 As Reuters pointed out on Thursday, the timing of their arrival could sabotage NAFTA talks after President Trump repeatedly threatened to scrap the deal if Mexico doesn't do more to stop Central American migrants from traveling through its territory.

Developing...

Published:4/29/2018 7:28:03 PM
[Entertainment] Tristan Thompson Breaks Social Media Silence After Cheating Rumors Tristan ThompsonSomeone's in a good mood! After weeks of getting his name dragged through the mud, NBA player Tristan Thompson, has broken his social media silence following cheating allegations that...
Published:4/29/2018 6:57:11 PM
[Markets] Foxconn Uses Loophole To Drain 7 Million Gallons Of Water Per Day From Lake Michigan

Taiwanese tech manufacturer Foxconn will siphon seven million gallons of water per day from Lake Michigan after their upcoming Mount Pleasant, Wisconsin plant was granted approval by the Wisconsin Department of Natural Resources.

The $10 billion, 20 million square foot facility expected to provide around 13,000 jobs will use around 61% of the siphoned water to manufacture LCD screens, while around 2.7 million gallons will be lost in the process each day, due primarily to evaporation. The remaining water will be treated and returned to the lake.

While that may sound like a lot of water, Wisconsin's DNR notes that the Foxconn plant will "only amount to a 0.07 percent increase in the total surface water withdrawals from Lake Michigan," however as Gizmodo notes, "For environmentalists in the region, the issue is not so much the diversion for the Foxconn factory itself but rather the precedent it will set for how the lake water can be used."

If we allow this to happen, it’s going to happen all over the basin, with other states and then it’s going to be the thirsty states and nations to come,” Jennifer Giegerich, the government affairs director for the Wisconsin League of Conservation Voters, warned during a public hearing about the diversion, according to the Wisconsin Gazette. -Gizmodo

Approximately 20% of the world's fresh water can be found in the Great Lakes, which has historically been used for public purposes such as water utilities and drinking water - and protected by the 2008 Great Lakes Compact agreement intended to preserve the resource. 

The agreement states “In general, there is a ban on new diversions of water from the Basin but limited exceptions could be allowed in communities near the Basin when rigorous standards are met.

Exceptions to the compact can be granted if permission is received from all eight governors of states which surround the great lakes

Foxconn, however, did not receive permission for the water draw - instead using a loophole which allowed the nearby town of Racine, which falls inside the Great Lakes Basin, to request the additional water and pipe it to the Foxconn factory in Mount Pleasant - a city served by the Racine water utility. 

The request from Racine was allowed because water utility serves a small percentage of residents in Mount Pleasant. That allowed the DNR to say the diversion qualified as being used for “public water supply purposes” and would not require the type of stringent review applied to other cases. The DNR did acknowledge that the diversion would “partially” include the Foxconn facility. -Gizmodo

This loophole has angered environmentalists, which executive director of the Wisconsin League of Conservation Voters, Kerry Schulmann, says is "a thinly veiled attempt to degrade the Great Lakes Compact, one of the finest conservation achievements in a generation." 

Meanwhile, the Compact Implementation Coalition - organized to ensure that the Great Lakes Compact is adhered to, slammed the decision. “The CIC feels it is unfortunate that DNR is ignoring not only the spirit, intent and plain language of the Great Lakes Compact, but also the voiced concerns of thousands of Wisconsin citizens,” said the group in a statement

Several conservation groups plan to challenge the DNR's decision and try to hold them - and Foxconn, accountable. As Gizmodo's AJ Dellinger notes, however, they have their work cut out for them. "Prior to the water diversion, the DNR also granted Foxconn permits that will allow the company to pump harmful pollutants into the air," writes Dellinger.

While Foxconn has yet to break ground on the planned fabrication plant, they just took posession of the property. Republican governor Scott Walker was able to secure Foxconn's business by handing them $3 billion in tax credits.

Published:4/29/2018 6:57:11 PM
[Markets] Gold And Silver: Sell In May And Go Away? Not Exactly

Authored by John Rubino via DollarCollapse.com,

It’s easy to dismiss seasonality in the price of a tradable asset. After all, if supply and demand fluctuate regularly you’d think the resulting arbitrage would attract enough traders to smooth out prices.

But that’s apparently not the case with gold and silver. Here’s an analysis from Casey Research on the subject with a couple of highly revealing charts.

Gold Is Seasonal: When Is The Best Month To Buy?

Many investors, especially those new to precious metals, don’t know that gold is seasonal. For a variety of reasons, notably including the wedding season in India, the price of gold fluctuates in fairly consistent ways over the course of the year.

This pattern is borne out by decades of data, and hence has obvious implications for gold investors.

Can you guess which is the best month for buying gold?

When I first entertained this question, I guessed June, thinking it would be a summer month when the price would be at its weakest. Finding I was wrong, I immediately guessed July. Wrong again, I was sure it would be August. Nope.

Cutting to the chase, here are gold’s average monthly gain and loss figures, based on almost 40 years of data:

Since 1975—the first year gold ownership in the US was made legal again—March has been, on average, the worst-performing month for gold.

This, of course, makes March the best month for buying gold.

Here’s what buying in March has meant to past investors. We measured how well gold performed by December in each period if you bought during the weak month of March.

What does this pattern means for us here at the end of April? Most likely a couple of boring months are in store, in which both upside potential and downside risk are modest. This in turn means that decisions (to stack, take profits, or add to mining share portfolios) can be considered instead of rushed, with good-until-canceled orders being allowed to sit until, in the summer doldrums, some bored trader comes along to make you a good deal.

COTs remain bad for gold, good for silver

Meanwhile the structure of the gold futures market got a little less screamingly bad, with both speculators and commercials moving back in the direction of balance.

They’re still a long way from what would normally be thought of as a bullish posture, however. Speculators are too long and commercials are extremely short, which traditionally precedes a drop in price. Maybe “sell in May and go away” will turn out to apply for gold this time.

Silver speculators closed out a lot of shorts last week, but are still closer to net short than is usual. That’s bullish, just less so than in the past couple of weeks.

In other words, nothing huge to report, just as you’d expect as precious metals enter their slow season.

Published:4/29/2018 6:26:40 PM
[Entertainment] Daytime Emmy Awards 2018 Winners: The Complete List Live With Kelly and Ryan, Kelly Ripa, Ryan SeacrestThe 2018 Daytime Emmys are finally here! On Sunday, Mario Lopez and Sheryl Underwood will co-host the annual ceremony, which honors a slew of top soap operas, talk shows and other daytime...
Published:4/29/2018 5:58:41 PM
[Markets] UK Home Secretary Amber Rudd Resigns Over Immigration Scandal

UK Home Secretary and Theresa May ally Amber Rudd has resigned following the Sunday publication by The Guardian of a private letter to May, in which Rudd sets an "ambitious but deliverable" target to deport 10% more illegal immigrants over the "next few years" - a goal she set personally.

Pressure had been building on Rudd, who previously insisted that she knew nothing about the targeting program known as the "Windrush scandal" during questioning by the Home Affairs Select Committee, but backtracked after it emerged that there were indeed localized targets.

On Saturday, The Guardian published portions of a leaked letter sent to Rudd's and several others detailing the program. In light of the new revelations, Rudd faced harsh questions from Parliament on Monday. 

Home Office sources have told the Guardian that it is “shame-faced nonsense” to claim the department had not been set specific targets in this area, or that these have not been regularly discussed at the highest levels. -The Guardian

The previously leaked memo, dated June 21, 2017 and published by The Guardian, was sent to Rudd last year by Hugh Ind - director general of Immigration Enforcement in the Home Office, which corresponds to the new policy outlined by Rudd in her memo to Theresa May.

The six-page memo, passed to the Guardian, says the department has set “a target of achieving 12,800 enforced returns in 2017-18” and boasts that “we have exceeded our target of assisted returns”.

It adds that progress has been made on a “path towards the 10% increased performance on enforced returns, which we promised the home secretary earlier this year”. -The Guardian

The Guardian also reveals that the six-page briefing was sent to at least eight of the Home Office's most senior officials, including: 

  • Marc Owen, senior director of national and international operations in Immigration Enforcement.
  • Mark Thomson, the director general of the Passport Office.
  • Tony Eastaugh, UK director of operations at Immigration Enforcement.
  • Gareth Hills, director of performance and risk at the Home Office.
  • Stephen Kershaw, a senior director in Immigration Enforcement.
  • Andrew Wren, director of performance, assurance and governance at the Home Office.

Rudd has been under pressure by the Labour party to resign following the emergence of the leaked memo. 

The shadow home secretary, Diane Abbott, said: “Amber Rudd is hanging by a thread to shield the prime minister from her responsibilities as the initial architect of this cruel and callous approach to migration, which resulted in the Windrush scandal."

She failed to read crucial documents which meant she wasn’t aware of the removal targets that have led to people’s lives being ruined. Another apology is not enough, she should take responsibility for chaos in the Home Office and resign.”

Senior members of the home affairs select committee were discussing how best to hold Rudd to account in parliament next week. They also hope to interrogate the prime minister on what she knew about the targets culture.

The SNP’s Stewart McDonald pointed to the ministerial code, which says “ministers who knowingly mislead parliament will be expected to offer their resignation”. -The Guardian

Mayday, Mayday

Meanwhile, MP Barry Gardiner wondered allowed following Rudd's departure: "If Amber Rudd has gone because of a memo to @theresa_may telling her about higher targets for enforced removals, then surely the Prime Minister also knew and should not have allowed parliament to be misled all last week."

Now that it's clear that Downing street also knew about the targeting, one wonders if May's resignation could soon follow?

Published:4/29/2018 5:27:33 PM
[Entertainment] Audrina Patridge and Ryan Cabrera Get Cozy at Stagecoach Amid Dating Rumors Audrina Patridge, Ryan Cabrera, Stagecoach 2018Former The Hills stars Audrina Patridge and Ryan Cabrera are fueling those rekindled romance rumors with a joint appearance at the 2018 Stagecoach country music festival. Cabrera posted...
Published:4/29/2018 4:56:26 PM
[Markets] Gold Leaving US Vaults: Signs Of Upcoming Currency War And Armed Conflict

Authored by Peter Korzun via The Strategic Culture Foundation,

The Turkish government has made the decision to repatriate all of its gold reserves that are currently housed in the US Federal Reserve System (FRS). Overall Turkey was storing 220 tonnes, valued at $25.3 billion, in the US, which it repossessed on April 19, 2018.

Turkey’s President Recep Tayyip Erdogan has toughened his stance against the US dollar (USD), declaring that international loans should be made in gold instead of the American currency. Ankara is seeking to reduce dependence on the US financial system. The gold’s homecoming was partly prompted by the US threats to impose sanctions if Turkey goes through with the signed deal to purchase Russian S-400 missile defense systems.

This is a dramatic move reflecting an international trend.

Venezuela repatriated its gold from the US in 2012. In 2014, the Netherlands also retrieved its 122.5 tonnes of gold that were stored in US vaults. Germany brought home 300 metric tonnes of gold stashed in the United States in 2017. It took Berlin four years to complete the transfers. Austria and Belgium have reviewed the possibility of taking similar measures.

Few people believe the US Treasury’s assurances that the 261 million ounces (roughly 8,100 tonnes) in official gold reserves that are stored in Fort Knox and other places are fully audited and accounted for. The Federal Reserve has never been fully and independently audited. The pressure for a full, independent audit of all US gold reserves has always been resisted by the government and in Congress. Nobody knows if the gold is really there. What if the vaults turn out to be empty? It’s wiser to bring your gold home while you can, rather than to just keep on wondering.

The gold bars that the US claims to hold are of low purity and do not conform to international industry standards. Even if the US has the amount of gold it claims to have, most of it would not be acceptable for trading on the international market. While other countries are pulling their gold out of the FRS banks, Russia and China are boosting their reserves, creating gold-backed currencies for themselves and thus moving the world away from the dominance of the USD.

The US dollar’s status as the global reserve currency has been called into question. It faces some tough competition. The tariffs introduced by the US administration as an instrument of coercion against other countries are failing to bolster the greenback, which may soon face headwinds. An international currency war looms as a possibility. This makes investors look for other options. Indeed, why should other countries rely on a US dollar that is not backed by gold or anything but “the good faith and credit of the American worker,” when America itself is not trusted internationally?

For instance, the Chinese yuan is going strong. Russia, Turkey, and Iran are considering the prospects for making payments in their national currencies. Iran has recently announced it is switching from the dollar to the euro as its official reporting currency. Russia and China have a currency swap agreement that avoids settlements in the USD.

The quest to reduce dependence on the dollar was provoked by the ongoing use of sanctions as a political weapon, a kind of foreign-policy tool of choice. Even America's closest allies are threatened by these restrictive measures. The recent attack on the Nord Stream 2 gas project is a good example. It’s only natural for other countries to be looking for ways to resist the US policy of twisting arms. Using alternative currencies and bringing gold home are ways to do that.

America has always opposed such efforts. Any methods would do.

Muammar Gaddafi, the Libyan leader, was toppled and killed after he came up with the idea to introduce a golden dinar to be used as an international currency in the Middle East and Africa. Iran has recently banned the use of the USD in trade. It refuses to sell its oil for the US currency. President Trump is likely to kill the Iran deal in May, provoking Tehran into reviving its nuclear program.

An armed conflict with Iran might be much closer than generally believed. The nuclear deal has been honored, to everyone’s satisfaction but to Washington’s chagrin. Iran undoubtedly has no military capability that would be a threat to the US. It has never been responsible for any terrorist acts committed abroad or things like that. But it has done something unforgivable in the eyes of the US. It has threatened the USD. That’s what Washington cannot accept, because if it does not support the dollar, there will be problems financing the US government’s huge federal debt. A war with Iran would eliminate the largest non-USD oil exporter. One thing leads to another. The gold repatriations are a precursor to a currency war and armed conflict. That’s what drives US foreign policy.

Published:4/29/2018 4:56:25 PM
[Entertainment] Bachelor's Tenley Molzahn Marries Longtime Boyfriend Taylor Leopold Tenley Molzahn, InstagramA Bachelor star is a bachelorette no more! The Bachelor: On The Wings of Love's Tenley Molzahn has tied the knot with her longtime boyfriend Taylor Leopold! The couple was wed in an...
Published:4/29/2018 4:26:27 PM
[The Blog] Did liberal women kill the White House Correspondents Dinner?

WHCD may implode all on its own.

The post Did liberal women kill the White House Correspondents Dinner? appeared first on Hot Air.

Published:4/29/2018 4:26:26 PM
[Markets] CIA Prepares To Replace Spies With Artificial Intelligence

The Central Intelligence Agency (CIA) understands that artificial intelligence (AI) is the next big thing for the secretive intelligence community. This comes at a time when the intelligence agency was all over the news later year when WikiLeaks published over 8,000 documents — apparently classified CIA files — revealing the agency’s top-secret spy tools.

In a spy versus spy scenario, CIA field officers operating abroad are expected to be followed by adversarial spies hoping to unearth their critical sources, said CNN.

But now, foreign spies often do not need to bother because technology can do it for them, said CIA’s Science and Technology division deputy director Dawn Meyerriecks.

At the 2018 GEOINT Symposium, hosted by the United States Geospatial Intelligence Foundation (USGIF), Meyerriecks delivered a powerful keynote speech over the weekend talking about the intelligence agency’s latest advancements in AI without going into the details. Meyerriecks informed the audience there are 30 countries with digital surveillance networks, including closed-circuit television (CCTV) and wireless infrastructure that have rendered physical tracking obsolete.

“Singapore’s been doing it for years,” she told CNN after her keynote speech on Sunday morning at the 2018 GEOINT Symposium. While WikiLeaks exposed the CIA’s critical hacking tools last year, that does not mean the agency is not spying back. As of six months ago, Meyerriecks said the agency has more than 140 AI projects in the pipeline.

“In one, a small team took a bunch of unclassified overhead and street view” and paired it with machine learning and artificial intelligence algorithms to create “a map of cameras in one of the big capitals that we don’t have easy access to,” Meyerriecks said.

“As Russia expels American diplomats in retaliation for a similar move by the US government against Moscow, and American sources and spies in China have ended up killed or missing, it has become necessary to elude the pervasive digital surveillance,” she added.

Meyerricks further said digital cameras are not the only challenges. Social media and digital tracking in cell phones and wearable technologies also present a considerable challenge for spies, who attempt to minimize their digital footprint.

Earlier this year, the fitness company Strava unintentionally revealed the locations of secret US military bases around the world.

“Even if you turn your phone off 10 minutes before you get to your place of employment, do you think anyone’s fooled by where you’re going?” Meyerriecks asked [not referring specifically to the Strava incident].

That is forcing CIA field officers to “live their cover” even more than before, she said - along with using technology to trick digital trackers. Meyerriecks did not fully elaborate on the spoofing techniques, but she did say faking locations through deceptive technology is a growing area of research.

Maybe the data says “you went to see a movie with your family … but maybe that’s not where you actually are,” Meyerriecks concluded. “It’ll look like your normal pattern of life.”

While WikiLeaks delivered a solid blow to America’s oldest spy agency, the transformation from human to AI spies is something the CIA has been working on for more than 30-years.

According to the declassified government documents (via TNW) from 1984, the agency describes the “AI Steering Group,” a program providing CIA officials with monthly reports on the development of the state of artificial intelligence programs.

In a declassified 1984 report to the CIA director, the supervisor of the AI Steering Group writes:

” An encouraging number of AI R&D efforts have begun through the Community. These encompass such areas as expert systems, natural language processing, intelligent data base interfaces, image understanding, signals interpretation, geographic and spatial data management, and intelligent workstation environments.”

More than three decades ago, the CIA recognized the future of AI technology:

Automation and artificial intelligence have displaced millions of workers in many occupations, from manufacturing, technology, and routine service jobs. And now, in a move that will infuriate the world's largest spy apparatus, America’s human spies are next on the chopping block, as the CIA realizes it plan of more than 30-years to operate a global spy network of robots.

Published:4/29/2018 4:26:26 PM
[Markets] Following Knife Ban, London Mayor Declares City "One Of Safest In The World"

Following the grim statistical 'fact' that London's murder rate overtook New York in March, the Metropolitan Police insisted that London "remains one of the safest cities in the world," and London's tyrannical knife-banning mayor Sadiq Khan is now echoing that line in his latest propaganda post.

While he could be forgiven for his bias in calling the capital “the best city in the world,” calling it “one of the safest” while homicide rates spike comes across as either tone-deaf or outright untrue.

Khan tweeted a promotional video aimed at reducing knife crime among young Londoners and the accompanying message:

London is the best city in the world, full of opportunity, and one of the safest. But too many of our young people are being senselessly lost to knife crime. Share our video today and help us carry a new message.”

Sadly, Khan is full of fake news as far as his claim that London is “one of the safest” cities... it’s not even in the top 10.

A 2017 report by The Economist ranked the safety of 60 cities around the world based on several factors, including personal security, digital security, health security, and infrastructure security. London came in at number 20 in the world’s overall safe cities index, being beaten by cities like Chicago, Los Angeles, Seoul and Barcelona.

A 2018 report released by Numbeo, which claims to be “the world's largest database of user contributed data about cities and countries worldwide,” complies reviews from nearly half a million netizens to rank cities in terms of consumer prices, perceived crime rates and quality of healthcare. Again, London was ranked 20th in the safety index of cities around the world.

Social media erupted as people were neither convinced nor amused by either the mayor’s pronouncement or the accompanying video clip. The video’s bottom line, delivered by teenagers, is: “London needs me alive, so I don’t carry a knife.”

Some commenters regaled Khan with harrowing tales experienced in the supposedly safe city, others accused him of spreading propaganda, while others bluntly called on the mayor to resign.

Published:4/29/2018 3:56:23 PM
[Entertainment] Katy Perry and Orlando Bloom Cozy Up for a Selfie at Colosseum in Rome Katy Perry, Orlando Bloom, Colosseum, RomeKaty Perry and her "darling" Orlando Bloom take Italy! On Saturday, after the singer and American Idol judge and the actor met Pope Francis at the Vatican during a the United to...
Published:4/29/2018 3:26:04 PM
[Markets] "My Son Made A Lot Of Money Trading Bitcoin": David Tepper Shares His Views On Cryptocurrencies And Gold

Picking up where we left off yesterday, when Appaloosa co-founder David Tepper warned a youthful audience at Carnegie Mellon's Tepper School of Business that "we may have reached the highs for the year", in the final part of his Q&A, the hedge fund billionaire (and contender to become the next owner of the Carolina Panthers) was asked about his views on the hottest tech and markets topic of 2017 - the "blockchain revolution."

Tepper admitted that he doesn't know enough about the technology - but he does have a view on the tokens themselves, and it's a relatively nuanced.

The iconic investor said he views bitcoin more like gold than a currency - a position that, coincidentally, is also the official position of the CFTC in regards to bitcoin's official asset classification (though the SEC has also ruled that crypto tokens should be registered like traditional financial securities). The problem, Tepper says, is that the market dynamics are sketchy, to say the least. And as far as he can tell, most of these coins have little to justify a market valuation higher than what it costs to mine them.

He also said the cryptocurrency that can register the fastest transaction time should be the one that ultimately prevails in the market. That despite bitcoin's continued dominance of the crypto landscape for more than a decade, and attempts to remedy its lagging transaction times and rising fees spawned bitcoin cash and almost created a existential crisis for the cryptocurrency.

"As far as cryptocurrencies are concerned, I view them more like gold in the trading of them. I don't see the value above what it costs to mine them. The value that should work with them to a certain extent is who can make the fastest transaction times.

"It's hard to justify the price movements of bitcoin to me...there is some analysis of why that stuff might go up or down but I'm not a fundamental believer in the value of those cryptocurrencies above their mining value."

Has Tepper ever made any money off of bitcoin? Why yes, he has, but not as much as his son, who reportedly pocketed a sizable profit trading bitcoin during the boom, Tepper said. Tepper's own returns were minuscule - maybe $20 or $50 - after buying a small slug of bitcoin, although he timed his purchase well: back when one coin was worth roughly $200, back in 2015, around the time  when we urged readers to take the gamble ahead of China discovering bitcoin's "wonderful" capital control-evading capabilities.

And while Tepper admits that he doesn't really love bitcoin, he also admits that he doesn't really love gold all that much either.

"I don't really love bitcoins or bitcoin trading - and I don't really love gold either by the way. Actually I do own a little bit of bitcoin because my son made a lot of money trading bitcoin, but I think I made like $200. I only put in like $50 or $20 or something - I can't remember."

In the final question, Tepper offered a surprising response to a question about how students can prepare for technology-related instability in their careers - a prospect that MBAs universally dread. Tepper must've taken a page out of the book of the first "anti-automation" candidate for higher office, because his response was strikingly similar to a remark that New York businessman Andrew Yang made when he announced that he would seek to win the 2020 Democratic nomination in a long-shot bid.

"There may be a revolution in this country before there's not a need for truck drivers...if you're just prepared and continually try to learn things wherever you go I think you'll be ready for any changes that come."

Part 3 of his full interview can be seen below, while in earlier segments of the Q&A presented here overnight, Tepper shared his expectations for stock and bond market performance for the rest of 2018, as well as a few choice anecdotes about his time trading credit at Goldman Sachs in the late 1980s and early 1990s.

Published:4/29/2018 3:26:04 PM
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[Trump Administration] Trump Proclaims April 29 through May 5, 2018, as Small Business Week [full text]

By R. Mitchell -

Donald Trump signs tax reform into law 12-22-17

President Donald Trump on Sunday proclaimed April 29 through May 5, 2018, as Small Business Week. NATIONAL SMALL BUSINESS WEEK, 2018 – – – – – – – BY THE PRESIDENT OF THE UNITED STATES OF AMERICA A PROCLAMATION During Small Business Week, we recognize the ingenuity of the American ...

Trump Proclaims April 29 through May 5, 2018, as Small Business Week [full text] is original content from Conservative Daily News - Where Americans go for news, current events and commentary they can trust.

Published:4/29/2018 10:24:54 AM
[Markets] Happy New Universe Day

Authored by Catlin Johnstone via Medium.com,

Well I’ll be damned. There's a lot of cool stuff happening all of a sudden.

After loudly denying rigging their primaries for two years, the leaders of the Democratic Party are now openly admitting to deliberately stacking primary elections to ensure the win of preselected establishment loyalists. In response to an audio recording of House Minority Whip Steny Hoyer telling a progressive congressional candidate that he'll be running in a contest rigged for his opponent by the DCCC if he doesn't drop out, House Minority Leader Nancy Pelosi came right out and told the press "I don’t see anything inappropriate in what Mr. Hoyer was engaged in — a conversation about the realities of life in the race as to who can make the general election.”

I mean, wow. She just came right out and said it. All it took was a little audio recording to transform months and months of "But Russia! Russia Russia Russia!" into "Yeah of course we do that. Duh."

And it really is that blatant and undeniable. I've gotten a few establishment loyalists in my social media notifications attempting to argue that "rigging" is too strong a word for the act of secretly stacking primary contests to ensure the election of preselected candidates, but their heart isn't really in it. After a certain point there's only so much Orwellian doublethink you can do.

Not long ago I was downright terrified that the western empire was going to provoke a dangerous military escalation in Syria, and while that still could very well happen it looks like the warmongers are going to have to do a lot of work to get there. An aggressive opposition to military interventionism and intense skepticism of the establishment narrative about an alleged chemical weapons attack in Douma arose all across the political spectrum as soon as the drums of war began beating, and after a few empty buildings were bombed under the false claim that they contained chemical weapons, the drums are much quieter.

What has replaced the sound of the war drums is the desperate shrieking of the establishment propaganda machine, which has been frantically attacking anyone who dared to express skepticism about the official western Douma narrative. One particularly shrill day saw no less than seven high-profile smear pieces published about antiwar voices toward that end. Seven. In one day.

The war propagandists exposed themselves very badly with that one, and the public is unlikely to forget it. You can only be seen screaming "You're not allowed to ask questions about that" so many times before people start wondering what you're trying to hide. The propaganda machine has never been so visible to the public, and this is all coming after the empire was caught lying about the Skripal poisoning.

After all that white knuckle Syria intensity, seeing what just happened on the Korean Peninsula was pure heart candy. There are reasons to be optimistic, there are reasons to be pessimistic. But hope is in the air, and people are excited.

And sometimes that's all it takes.

Trump's support base is highly enthused about these new developments, and who can blame them? If peace prevails on the Korean Peninsula it will be regarded a major political victory for this administration no matter how his opposition tries to spin it, and, more importantly, it will open people's minds to what is possible all over the world. If enough people in a large and influential political faction get it into their minds that the world is transforming and awakening, it can become a self-fulfilling prophecy whether it was technically true to begin with or not.

Either way, the MAGA crowd believes, and now they're talking like a bunch of patchouli-wearing hippies. Which is of course awesome.

The other day I watched some Trump supporter guy with a Youtube show called America First because he made a tweet which caught my eye. The first 43 minutes of the clip I skimmed through looked like fairly generic MAGA fare about free speech and conservative values, but then all of a sudden this clean cut, couldn't-look-more-Republican-if-he-tried guy pulls out a white board with a yin-yang symbol, a picture of someone meditating, and the words "shakti" and "kundalini" written on it. And he starts monologuing about eastern mysticism.

I'm not sure what this is, but it's definitely different. A bunch of tweets and videos by Mike CernovichScott Adams and Kanye West have been dancing in an unexpected way that has conservatives now talking about a shift in consciousness transforming the way humanity functions in the near future. Liberals and leftists are scoffing at it of course, but it's definitely a thing, and in my opinion it's downright fascinating.

The MAGA crowd has always impressed me with its ability to energetically and spontaneously unify behind a single theme as a group, like a flock of birds or school of fish changing direction together on a dime. There are certainly worse things they could pour their collaboration into than manifesting a spiritual revolution.

And who the hell am I to say they're wrong about that? It's not like we've got a choice anyway; either our species will change the way it functions or we'll wipe ourselves out via nuclear holocaust or climate catastrophe within a few decades, no matter how loudly and smugly we scoff at the guys in MAGA hats. If humanity is going to take a last-ditch, evolve-or-die leap into the unknown and unprecedented, now would surely be the time to do it. If a bunch of right-wingers get it into their heads that humanity is undergoing a spiritual transformation, that certainty could be all it takes to tip us into the shift we all know we need to make anyway.

Could something big be in the works? Something which transcends all our little echo chamber walls and ideological boundaries, which comes not from the repetitive thought loops in our minds but from our deep evolutionary drive to survive? I hope so. And call me naive and deluded if you like, but right now I'm seeing plenty of reasons to hope.

*  *  *

Internet censorship is getting pretty bad, so best way to keep seeing my daily articles is to get on the mailing list for my website, so you'll get an email notification for everything I publish. My articles and podcasts are entirely reader and listener-funded, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics on Twitter, checking out my podcast, throwing some money into my hat on Patreon or Paypalor buying my new book Woke: A Field Guide for Utopia Preppers.

Published:4/29/2018 7:53:36 AM
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Published:4/28/2018 9:21:47 PM
[Markets] Yemen War Great For US Jobs: Watch CNN's Wolf Blitzer Proclaim Civilian Deaths Are Worth It

With the still largely ignored Saudi slaughter in Yemen now in its fourth year, RT's In The Now has resurrected a forgotten clip from a 2016 CNN interview with Senator Rand Paul, which is currently going viral.

In a piece of cable news history that rivals Madeleine Albright's infamous words during a 1996 60 Minutes appearance where she calmly and coldly proclaimed of 500,000 dead Iraqi children that "the price is worth it," CNN's Wolf Blitzer railed against Senator Paul's opposition to a proposed $1.1 billion US arms sale to Saudi Arabia by arguing that slaughter of Yemeni civilians was worth it so long as it benefits US jobs and defense contractors. 

At the time of the 2016 CNN interview, Saudi Arabia with the help of its regional and Western allies — notably the U.S. and Britain — had been bombing Yemen for a year-and-a-half, and as the United Nations noted, the Saudi coalition had been responsible for the majority of the war's (at that point) 10,000 mostly civilian deaths. 

At that time the war was still in its early phases, but now multiple years into the Saudi-led bombing campaign which began in March 2015, the U.N. reports at least "5,000 children dead or hurt and 400,000 malnourished."

And now as the death toll tragically stands at many tens of thousands, and with a subsequent U.N. report from 2017 documenting in detail "the killing and maiming of children" on a mass scale, Blitzer's words are even more revealing of the role that CNN and other major American networks play in enabling and excusing U.S. and allied partners' war crimes abroad.

Senator Paul began the interview by outlining the rising civilian death toll and massive refugee crisis that the U.S. continued facilitating due to deep military assistance to the Saudis:

There are now millions of displaced people in Yemen. They're refugees. So we supply the Saudis with arms, they create havoc and refugees in Yemen. Then what's the answer? Then we're going to take the Yemeni refugees in the United States? Maybe we ought to quit arming both sides of this war.

Paul then narrowed in on the Pentagon's role in the crisis: "We are refueling the Saudi bombers that are dropping the bombs. It is said that thousands of civilians have died in Yemen because of this." 

CNN's Blitzer responded, “So for you this is a moral issue. Because you know, there’s a lot of jobs at stake. Certainly if a lot of these defense contractors stop selling war planes, other sophisticated equipment to Saudi Arabia, there’s going to be a significant loss of jobs, of revenue here in the United States. That’s secondary from your standpoint?”

Paul countered, “Well not only is it a moral question, its a constitutional question.” And noted that Obama had partnered with the Saudi attack on Yemen without Congressional approval: “Our founding fathers very directly and specifically did not give the president the power to go to war. They gave it to Congress. So Congress needs to step up and this is what I’m doing.”

* * *

For further context of what the world knew at the time the CNN interview took place, we can look no further than the United Nations and other international monitoring groups.

A year after Blitzer's statements, Foreign Policy published a bombshell report based on possession of a leaked 41-page draft UN document, which found Saudi Arabia and its partner coalition allies in Yemen (among them the United States) of being guilty of horrific war crimes, including the bombing of dozens of schools, hospitals, and civilian infrastructure. 

The U.N. study focused on child and civilian deaths during the first two years of the Saudi coalition bombing campaign - precisely the time frame during which the CNN Wolf Blitzer and Rand Paul interview took place. 

Foreign Policy reported:

“The killing and maiming of children remained the most prevalent violation” of children’s rights in Yemen, according to the 41-page draft report obtained by Foreign Policy.

The chief author of the confidential draft report, Virginia Gamba, the U.N. chief’s special representative for children abused in war time, informed top U.N. officials Monday, that she intends to recommend the Saudi-led coalition be added to a list a countries and entities that kill and maim children, according to a well-placed source.

The UN report further identified that air attacks "were the cause of over half of all child casualties, with at least 349 children killed and 333 children injured” during the designated period of time studied, and documented that, "the U.N. verified a total of 1,953 youngsters killed and injured in Yemen in 2015 — a six-fold increase compared with 2014" - with the majority of these deaths being the result of Saudi and coalition air power.

Also according AP reporting at the time: "It said nearly three-quarters of attacks on schools and hospitals — 38 of 52 — were also carried out by the coalition."

But again, Wolf Blitzer's first thought was those poor defense contractors:

...Because you know, there’s a lot of jobs at stake. Certainly if a lot of these defense contractors stop selling war planes, other sophisticated equipment to Saudi Arabia, there’s going to be a significant loss of jobs, of revenue here in the United States.

* * *

This trip down memory lane elicited suitable responses on Twitter:

And here's the full CNN interview segment from 2016: 

As Wolf Blitzer is known to pal around with Clinton's former Secretary of State Madeleine Albright, it appears he's a quick understudy:

Lesley Stahl on U.S. sanctions against Iraq: We have heard that a half million children have died. I mean, that’s more children than died in Hiroshima. And, you know, is the price worth it?

Secretary of State Madeleine Albright: I think this is a very hard choice, but the price–we think the price is worth it.

60 Minutes (5/12/96)

Published:4/28/2018 9:21:47 PM
[Markets] Early Facebook Investor And Zuckerberg Mentor: "I Feel My Baby Has Turned Out To Be Something Horrible"

Even if Facebook's stellar Q1 earnings report hadn't helped erase some of the losses that Facebook shares incurred in the aftermath of the Cambridge Analytica scandal, Facebook executives Mark Zuckerberg and Sheryl Sanderberg would still believe that the company's troubles are largely behind them and that the company had essentially repaired the damage done to its reputation.

That was the assessment delivered by early Facebook investor and one-time Zuckerberg mentor Roger McNamee, who warned during an appearance at an event organized by Quartz in Washington DC last week that the company's leaders are deeply complacent and still haven't accepted the fact that Facebook has badly mislead its users about how the company profits off their data.

Facebook

Despite Zuckerberg's warning, embedded in his opening statement to Congress earlier this month, that the company planned to make changes that could "significantly impact" profitability, McNamee believes it's likely Facebook is "going to get away" with the bad things that it has done, which is "particularly dangerous" considering the 2018 midterm elections are only months away. McNamee said he's deeply disappointed in how Zuckerberg and Sandberg have responded to the crisis by refusing to accept responsibility.

During their post-crisis media tour, both executives insisted on blaming Cambridge Analytica for "misleading" Facebook, even though Facebook never bothered to alert users whose data had been affected.

"They've done bupkis to protect us," McNamee said.

The whole affair has left McNamee - who considers his involvement with Facebook during its early days to be the "highlight of a long career" - deeply saddened.

"Every part of this has made me sadder and sadder and sadder. I feel like my baby has turned out to be something horrible, and these people I trusted and helped along have forgotten where they came from," he said in a conversation with Kevin Delaney, Quartz’s editor-in-chief.

McNamee has become an outspoken critic of the company, comparing its role in the 2016 US election to "the plot of a sci-fi novel" while at the same time admitting that he has "profited enormously" by backing Facebook early on. The organization he helped found, the Center for Humane Technology, has made it a mission to expose Facebook’s multiple flaws, and to try to fix them.

The longtime venture investor explained that he had started becoming disillusioned with Facebook long before the latest in string of scandals involving the company. During his talk, he echoed criticisms by early Facebook executive, Chamath Palihapitiya, who compared Facebook to "Internet crack" and said it's "ripping apart the social fabric of how society works."

Like Palihapitiya, McNamee believes Facebook isn't doing enough to mitigate the negative effects of social media addiction and misinformation spread on its platform. In other words, Facebook is sacrificing the well-being of its users in the name of uninterrupted growth.

It’s not just about the money, McNamee said, comparing his former protégé to a cult leader. "Zuckerberg believes he’s given the world a massive gift," he said, and the mentality at the company remains focused on becoming "the most important thing in the world."

Because of these issues, McNamee said the last 12 months have been "the most depressing of his life."

Of course, like Palihapitiya before him, McNamee's criticisms would carry a lot more heft if they were followed by action - perhaps establishing some kind of organization meant to combat social media's near-total influence over society. 

Still, McNamee is hardly alone: A recent survey revealed that nearly one-third of Americans believe Facebook has a negative impact on society. And with early indicators showing user engagement numbers starting to slip in the aftermath of the company's user-data scandal, perhaps we'll need to wait until the company's next batch of quarterly results to see how its users are responding to the latest user-data crisis.

* * *

Meanwhile, Facebook's campaign to win back the trust of its vast user base is manifesting in an advertising blitz that has already arrived in the corridors of New York City's subway system.

Published:4/28/2018 8:22:02 PM
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[The Blog] Melania Trump wows America during her very good week

Mrs. Trump comes into her own.

The post Melania Trump wows America during her very good week appeared first on Hot Air.

Published:4/28/2018 6:20:26 PM
[Markets] David Tepper: "We May Have Reached The Highs For The Year"

Billionaire investor David Tepper, who is one of the few remaining hedge fund icons who moves markets with a single word, took some time out from browbeating the owners of the Carolina Panthers to participate in a Q&A Thursday evening with students from Carnegie Mellon's Tepper School of Business (yes, you too can give a speech in a business school named after you if you donate $125 million).

During the wide-ranging discussion, the former Goldman trader turned distressed investing billionaire shared his views on a range of topical issues - from the potentially catastrophic fallout from a US-China trade war to his take on what's in store for interest rates and equities for the balance of this year - while also providing the type of career-management advice that box-checking b-school students crave.

The early part of the the discussion included several amusing anecdotes from Tepper's early-career days - most notably his time as a trader at Goldman Sachs, where he was mentored by Bob Rubin (whose arb desk spawned countless hedge funds and then went on to serve as Treasury Secretary under President Bill Clinton), and his feud with Jon Corzine (profiled extensively by NY Mag).

At the start of the Q&A, one student asked Tepper how he managed to retain his integrity and commitment to ethics during his early career on Wall Street (and especially working at Goldman). Tepper responded with a lengthy story about an incident during his time at Goldman when a senior manager ordered him to buy a bond that had been on Goldman's restricted list.

"When I was at Goldman Sachs, they set up this bankruptcy fund and the person who set up this fund. The person who set up the fund was the head of M&A - and this was back after Drexel Burnham went under. So the guy who was in charge was in charge of this fund that was buying assets. He wanted to buy this one company's bonds and he gave an order and I refused his order because the company was on the restricted list because we had information inside the firm and he had it taken off then told me to buy it the next day. So I told him 'I'm not buying it'. So it was a big thing - we went to legal. And legal said to me 'it's okay'. But I refused to buy anything for this guy. Now, this hurt me next time I was up for partner. But it hasn't really hurt me in my career. So next time somebody tells you to do something that you think isn't right - don't do it."

The conversation drifted to Tepper's feelings about President Trump and the potential fallout from a full-blown trade war with China. The hedge-fund manager made light of an incident where he called Trump a "demented narcissistic scumbag", but also admitted that, though he doesn't agree with everything Trump has done (the feud with Amazon was "insane" Tepper alleged), the Trump tax cuts as well as his push for deregulation have largely benefited the economy.

"Although I did call him a demented narcissistic scumbag - but that's beside the point - from a policy standpoint some of the regulation stuff was probably good for the economy...some of those things had to happen and I think it was holding back the economy. And the tax policies, I don't think they were all good, but I think something needed to be done. I don't know if they needed to cut some stuff for higher income people.

And while threatening to impose tariffs on effectively all Chinese goods entering the US might've been "nuts", particularly considering that Trump didn't consult his cabinet before threatening to impose tariffs on another $100 billion of Chinese imports, Trump has a point about China's theft of intellectual property.

"The tariffs - I think tariffs in general isn't the best way to go about it. Steel companies support so few jobs in the economy that I'm not sure that was the best place to start. On the other hand, if you talk to tech companies, they believe - and there has been proof - that China has taken intellectual property. The first $50 billion in tariffs I don't know if I agree with it but it was a shot across the bow and I guess that's okay - but the $100 billion in tariffs he didn't tell anybody in his cabinet so that's just nuts...they probably will get a NAFTA agreement.

That said, Tepper is sufficiently worried that Trump may take his trade war with Beijing far enough that it eventually transforms into a real, shooting war with Beijing.

...You probably don't want to take things too far with China because I can tell you the steps that it will go to and you get to the fourth step, it's a war - it's a real war. If you look at the history of tariffs, they've resulted in - a lot of times - real wars. So I get a little nervous every time you start down that path."

Asked about the importance of mentorship early in his career, Tepper offered an amusing anecdote about how scumbags mentors can sometimes let you down - even when they go on to become the Secretary of the Treasury, especially dealing with other scumbags mentors end up blowing up MF Global.

"So I had a mentor at Goldman Sachs, his name was Bob Rubin who became co-chair of the firm and eventually became Secretary of the Treasury. But there's the third time, when I didn't become a partner, it was kind of Bob Rubin's fault. He was a mentor and he liked being on the floor and he liked talking to me. At some point Bob had the role of head of fixed income before he became chairman and vice chairman. So I would talk to Bob and I was the head trader and I would go talk to him. Eventually, this guy named Jon Corzin, who eventually became the governor of New Jersey, became the head of fixed income. Now, when Corzin became the head of fixed income he came from the government side Bob Rubin came from merger arbitrage - so I was in junk bonds. Bob Rubin knew about junk bonds because they had an equity component so I would talk to him still and I wouldn't go to Corzine's office. But Bob Rubin should've said "go to Corzine's office". Because when my third shot at partner came, Corzine killed me - or so I heard. So even if you have a mentor who becomes Secretary of the Treasury, you still got to think for yourself. That was the reason I didn't get it - he didn't think I was one of his people."

But what was certainly the highlight of the Q&A (at least as far as Tepper's views on capital markets are concerned) one student asked Tepper where he anticipates bond and stock markets finishing 2018. The answer, suggesting that Tepper was reading a bit too much Morgan Stanley recently, won't please the bulls (5:20 into Part 2)

"Listen, it's tough right now. Because historically yields have been fairly low. Actually tonight I'm trying to figure out what the BOJ's doing because either this meeting or next meeting they might change their policy which would affect our Treasurys and will effect the stock market. So I think as far as the stock market is concerned I think they're okay. I don't think it's great. I think we might've reached the highs for the year.

Why the uncharacteristic (for Tepper) pessimism? Why rates, of course: here is Tepper's two cents on the topic du jour (and d'annee): where will the yield on the 10Y break equities:

And a lot of it has to do with interest rates. We're right on the cusp of breaking out on interest rates at this level around 3%. I think they closed at around 2.98% on the 10-year - actually I know because I just looked. But a lot of people don't think they're going to break higher - most people are only saying they're only going to 3.25%. And I think if they only go to 3.25% for the rest of the year then stocks might be up. But too many people are saying that. And when too many people are saying one thing that's when I start to get worried. So if we break above that, then stocks might have a problem."

Finally, another student - who we imagine is tenuously exploring the likelihood that one will be able to make a sustainable living as a sell-side or buy-side trader - asked Tepper whether he believes algorithms will soon take over Wall Street. Tepper responded that machines and trading algos - whose performance is sucking this year - are only as good as the traders writing them, which to Tepper is a great advantage in an environment such as this one where rates are rising and yet the machine programming remains the same... 

"Machines are doing shitty this year. Really bad. Not good. I'm kicking their ass. When I went to Goldman Sachs, they had a trading model on the desk and it was just wrong. That was one of the great things about being here I just knew the option prices were wrong - they were just wrong. But now when people talk about machines taking over, the machines are only as good as the people who are programing the machines. But now, when people talk about machines taking over, the people are only as good as the people programming the machines. And when you have times that are changing - like when interest rates are rising as we come out of this QE environment, sometimes you have people programming the same thing. When times change, the programs don't change unless the people programming them make them change. And when the times are changing fast."

We couldn't have put it better ourselves. Watch Parts 1 and 2 of the Tepper Q&A below, and check back tomorrow for Tepper's thoughts on Bitcoin.

h/t @dennycrane550

Published:4/28/2018 6:20:25 PM
[Markets] The Pentagon's Ray Gun Can Stall Cars, Trucks?? With Radiation Blast

The extensive use of vehicle-borne improvised explosive devices (VBIEDs) in the Middle East has resulted in a significant amount of military and civilian personnel being killed or injured. A new threat is quickly emerging in the West, as ten civilians were mowed down in a horrific van attack earlier this week in Toronto. Since 2014, Europe and North America have been inundated with terrorist led vehicle-ramming attacks against civilians.

According to Stratfor Global Intelligence, a vehicle-ramming attack is a new class of terrorism which is less lethal but could prove more challenging for officials to prevent.

Consequently, the Defense Department’s Joint Non-Lethal Weapons Directorate’s (JNLWD) top priority since the threat first appeared in the Middle East, has been to advance technologies and capabilities to non-lethally stop both cars, trucks, and even vessels.

One of these non-lethal technologies is the multifrequency Radio-Frequency (RF) Vehicle Stopper (RFVS), which uses a high-power microwave (HPM) to stop cars and trucks in their tracks without damaging the vehicle, or its occupants.

A miniature version of the ray gun to stop vehicle attacks, developed by JNLWD. (Source: Defense One 2018)

As Defense One explains, “The jammer works by targeting the car’s engine control unit causing it to reboot over and over, stalling the engine. Like an invisible hand, the microwaves hold the car in place. “Anything that has electronics on it, these high-powered microwaves will affect,” David Law, who leads JNLWD’s technology division, said in March. “As long as the [radio] is on, it holds the vehicle stopped.”

In a 2012 unclassified directed energy defense report, the inner workings of the RFVS are explained:

” The RFVS system uses high-power magnetron tubes to generate intense RF pulses that interfere with a vehicle’s electronics, rendering it temporarily inoperable. The engine cannot be restarted while the RF is on but is readily restarted once the RF is turned off. Thus, the RFVS system allows for the maintenance of a safe keep-out zone in situations that might otherwise require the use of lethal force. The defined measure of success for this system is a demonstrated, effective capability against more than 80% of the candidate target-vehicle-class list, which includes passenger cars and large vehicles.

 

As a nonlethal capability, the effects to the target vehicle are short-term and almost always reversible, so that the vehicle is not stranded, which would burden the warfighter with the task of its removal. Moreover, as with all directed-energy weapons, the RFVS system delivers energy at the speed of light. In contrast with other nonlethal vehicle stopping concepts and systems, however, RFVS does not need to be pre-emplaced and has a limitless magazine.”

Figure 1. Illustration of Candidate RFVS System Setup for Checkpoint Protection (Source: DTIC)

Figure 4. Photograph of the RFVS Brassboard System and Demonstration Setup (Source: DTIC) 

Defense One indicates RFVS’s original intent was designed for military bases, but with the latest string of vehicle-ramming attacks in Europe and North America, there is a possibility that these ray guns could be placed strategically around cities — in the not too distant future.

“The military is developing the weapon for force protection — as in protecting soldiers and bases. But it has applications for police as well. Placed strategically around cities, it could prevent attacks like the ones in Europe, Canada, the United States, and elsewhere. There are, however, some tricky legal issues involved in using electronic and radio jamming devices in the United States.”

While the military aims to have a working prototype by Fiscal Year 2019, there are concerns about directed energy weapons. Take, for example, the electricity to operate the ray gun is a massive gasoline-powered turbine that generates 300 kilowatts of power. Even though the weapon has shrunk in size, the power-hungry device still requires lots of power.

Defense One notes that JNLWP has two versions of the non-lethal directed energy weapon, one that slides into a small truck bed with a range of about 50 meters and another three times larger with a range of about 200 meters.

In the not too distant future, directed energy weapons for non-lethal applications could be coming to a downtown near you, all in an attempt to thwart terrorist driven vehicle-ramming attacks against civilians.

Published:4/28/2018 5:21:53 PM
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Published:4/28/2018 5:21:53 PM
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Published:4/28/2018 4:19:47 PM
[Entertainment] Lea Michele Is Engaged to Zandy Reich Lea Michele, Engagement RingShe said yes! Lea Michele has gotten engaged to boyfriend Zandy Reich. The former Glee star hopped on social media on Saturday to post a photo of herself with her blinging engagement ring...
Published:4/28/2018 3:49:37 PM
[Markets] A Former Russian Oligarch And Putin Nemesis Seeks To Revive "Russia Collusion" Hysteria

With the release of the House Intelligence Committee's report finding no evidence of collusion between the Trump campaign, Congressional Republicans have seemingly dealt a death blow to the "Russian collusion" narrative which was already hurtling toward irrelevance. Indeed, the special counsel himself has publicly stated that he has "pivoted" toward investigating financial crimes and allegations of obstruction of justice.

But with President Trump threatening to take a more "hands on" role at the Department of Justice, Mueller has found himself in a bind. How can he continue to justify the probe if the original premise has been found to be completely invalid?

Veselnitskaya

Fortunately, Mueller received some badly needed assistance on Friday from a major Russian opposition figure: former oligarch Mikhail Khodorkovsky. Somehow, an organization called Dossier, which was established and financed by Khodorkovsky - a former oil tycoon and longtime nemesis of Russian President Vladimir Putin who turned into one of Russia's most vocal dissidents - managed to get its hands on emails stolen from the inbox of Russian lawyer Natalia Veselnitskaya, the same lawyer who arranged the infamous June 2016 Trump Tower meeting with Donald Trump Jr. after promising through an intermediary to supply the Trump campaign with "dirt" on Trump's erstwhile rival, Hillary Clinton.

The emails reveal that Veselnitskaya worked closely with the Russian Ministry of Justice to help thwart a US Department of Justice probe into allegedly ill-gotten money being invested by corrupt Russian oligarchs in New York City real estate. And according to the New York Times, which was obtained the emails from Dossier, the communications undercut Veselnitskaya's claims of impartiality.

That said, the communications revealed in the emails took place years before Veselnitskaya set foot in Trump Tower. What's more alarming than the emails claims is the notion that Russian opposition figures are stepping up to independently assist Mueller and the Democrats in keeping the "Russia collusion" narrative alive is certainly...interesting.

Veselnitskaya acknowledged her work for the Russian government in an interview with NBC News set to air Friday.

Shown copies of the emails by Richard Engel of NBC News, Ms. Veselnitskaya acknowledged that "many things included here are from my documents, my personal documents." She told the Russian news agency Interfax on Wednesday that her email accounts were hacked this year by people determined to discredit her, and that she would report the hack to Russian authorities.

[...]

The exchanges document Mr. Chaika’s response to a Justice Department request in 2014 for help with its civil fraud case against a real estate firm, Prevezon Holdings Ltd., and its owner, Denis P. Katsyv, a well-connected Russian businessman.

Federal prosecutors say Ms. Veselnitskaya was the driving force on Mr. Katsyv’s defense team, a description she has echoed in court filings. In a declaration to the court, she identified herself as a lawyer in private practice, representing Mr. Katsyv and his firm.

The Justice Department prosecutors charged Mr. Katsyv’s firm in 2013 with using real estate purchases in New York to launder a portion of the profits from a tax scheme in Russia. They were seeking Russian bank, tax and court records, the type of documents that typically form the crux of civil money-laundering cases. The Justice Department asked the Russian government to keep the matter confidential, "except as is necessary to execute this request," according to court documents. Russia and the United States have a mutual legal assistance treaty governing law-enforcement requests.

According to the  Times, the leaked documents refute Veselnitskaya's claim that she was acting in a "private capacity" when she initiated contact with the Trump campaign, even though the activities detailed in the documents took place years earlier.

Ms. Veselnitskaya had long insisted that she met the president’s son, son-in-law and campaign chairman in a private capacity, not as a representative of the Russian government.

"I operate independently of any governmental bodies," she wrote in a November statement to the Senate Judiciary Committee. "I have no relationship with Mr. Chaika, his representatives and his institutions other than those related to my professional functions as a lawyer."

But while the Times details the contents of the documents in detail, it failed to highlight an obvious irony: that in exposing alleged machinations by the Russian government to interfere in the US election, it used the same alleged strategy pursued by shadowy Russian hackers and Wikileaks, the two biggest boogeymen in the ongoing Russian collusion saga.

This isn't the first time a Russian opposition figure has sought to aid Mueller. Earlier this year, Aleksei Navalny released videos that he said included evidence that Oleg Deripaska - who has since been targeted by US sanctions - attempted to meddle in the US political process.

And despite President Trump's insistence that everybody should "get over" the collusion narrative now that the Intel Committee report has been released, it appears his foreign enemies have other plans.

The question now is: Will Trump respond to the leaked emails, or is Trump convinced that his latest bombing raid on Syria plus the sanctions targeting "Putin ally" Oleg Deripaska will be sufficient to demonstrate to Mueller that he is not in bed with the Kremlin. A parallel question is whether this is the start of a coordinated campaign by Russian dissidents to weaken President Vladimir Putin using anti-Trump US intermediaries, and what will Putin's reaction be.

Published:4/28/2018 3:49:36 PM
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Published:4/28/2018 2:49:33 PM
[Markets] Deutsche: Is The US Headed For An Imminent Debt Crisis? Here Are The Signs

The thesis is simple and familiar: the United States is running a fiscal deficit and a current account deficit (i.e. "twin deficits") and relies on domestic and foreign investors to buy US Treasuries.

The  bigger the fiscal deficit is the more Treasuries investors - including the Federal Reserve - need to buy. At the same time, the more Treasuries that have to be sold, the highest the interest rate all else equal... until something snaps (or unless an stock market crisis forces the Fed and investors to monetize/park cash in Treasurys).

This was, in a nutshell the grim message from the IMF's latest Fiscal Monitor Report, which warned that the US would be the only country with growing debt levels over the next 5 years.

What the IMF did not elaborate on, however, is that in many countries, such twin deficits have resulted in a debt crisis. So, picking up where the IMF left off, Deutsche Bank conducted an analysis which found that "the deteriorating fiscal and external situation for the United States have increased the probability of a US debt
crisis by 7 percentage points, from a historical average below 9% to a level around 16%."
More details:

As shown in Figures 10 and 11 below, the model-implied odds of a crisis are set to tick higher over the next several years as government debt levels increase and the current account deficit grows. Indeed, the probability tends to rise to an abnormally high level outside of recessions. The pre-crisis average was around 9%; the next four years will average a bit more than 15%. This is mostly due to wider fiscal deficits, which we expect to widen to around 5.0% of GDP in each year through 2022. Fiscal expansion will boost growth this year, partially reducing the odds a crisis in the very near-term, but this effect will fade over the forecast horizon as growth slows down to its long-term trend and fiscal deficits remain large.

Deutsche bank's conclusion is troubling: "the model-implied odds of a US debt crisis in the coming years are set to surge to the highest ever non-recessionary level." And, it goes without saying, they may well hit an all time high once the next recession (or depression) hit, some time in the next 12-24 months.

To be sure there are several mitigating factors when it comes to a US debt crisis, chief among which is that the US is the world's reserve currency (for now).

As DB needlessly reminds us, "the US exclusively borrows in its own currency, while the model includes countries that have been exposed by borrowing abroad;  the US has scope to raise additional revenues (its overall tax rate of 26% of GDP in 2016 is below the OECD average of 34%); and the US dollar is the de facto global reserve currency."

This last point is significant. Figure 12 shows that almost two thirds of global official reserve assets are held in US dollars. One out of every four dollars lent to the US Treasury comes from the foreign official sector. These institutions need a safe, deep, and liquid place to park their reserves. The appeal of Treasuries is further boosted by the US’s military strength, the nation’s cultural appeal, and strong domestic institutions. There are few alternative to US Treasuries in the size and scope of a safe asset demanded by global investors.

True, but this brings up an interesting, and critical, point, one which Bank of America first raised last week, when it suggested that "The 10Y Treasury Is No Longer A "Safe Asset."

Deutsche Bank echoes this warning, and writes that whereas Treasuries tend to rally in episodes of market stress, even when US economic growth slowed sharply in 2008 or when China devalued its currency and signaled potential selling of its Treasury holdings in 2015, "this is not happening today, which is why investors need to pay attention to whether an EM-style debt crisis is about to play out."

* * *

Which brings us to Deutsche Bank's key point: is the US headed for a debt crisis and where should investors look for early signs of a debt crisis?

As DB macro strategist Quinn Brody writes, crises are usually characterized by a “sudden stop” in financing. And whereas both fiscal and current account deficits require capital inflows, declining foreign demand for Treasury securities might signal imminent pressures. Fortunately, the strategist adds, "no major signs of such stress are currently evident, but investors should continue to monitor Treasury auctions for any signs of declining external demand. This will be particularly important in 2018, since Treasury supply is set to increase sharply and several pillars of demand are likely to soften, see Figures 13 and 14."

As deficits continue to grow further in 2019, auction supply will continue to rise, surpassing $1 trillion this year, and growing substantially in coming years.

So far in 2018 the US Treasury has substantially increased the supply of T-bills - which many have speculated caused the blowout in Libor and LOIS - but later this year the supply of longer-dated government bonds will also increase.

As auctions sizes grow, two key pillars of traditional demand support are fading:

  • the Fed is shrinking its balance sheet
  • foreign purchases are falling particularly as the ECB ends QE.

These trends are evident in lower bid-to-cover ratios, which have recently reached their lowest levels since the financial crisis, as shown in Figure 16. The same trend is evident across auction tenors.

Meanwhile, the Fed will continue paring back its balance sheet reinvestments this year. At 10-year auctions over the last two years, the Fed has absorbed 7% of bond supply, on average. Steadily declining reinvestments will force Treasury to borrow more from the private sector, increasing auction sizes. Simultaneously, Deutsche Bank finds that the scale of foreigners’ debt purchases at Treasury auctions has dipped to its lowest level since the 2013 taper tantrum (chart below).

This is especially relevant for the US, since foreign purchases of Treasuries are a key avenue of current account deficit financing. Other countries, e.g. Japan, have been able to build up very large stocks of sovereign debt, but they are often financed by domestic savings.

Why is foreign demand for US paper softening? According to the biggest German bank (which itself will need some serious investor demand for its stock in the coming months), it reflects several factors.

  • Firstly, the dollar has been weakening substantially over the last 15 months. US policymakers, in a departure from tradition, have used their rhetoric to “talk down” the dollar. To some extent, this reinforces market expectations for further depreciation and makes purchasing unhedged dollar-denominated assets less attractive.
  • Secondly, US asset valuations are potentially stretched already. While Deutsche Bank equity strategists, ironically, still anticipate around 13% upside for US equities this year, the bank's credit team and global strategists acknowledge that this is just for window dressing purposes, and admit that "there will be less incremental demand from overseas investors considering valuations are more attractive in Europe and EM."
  • Thirdly, as the Fed has continued to hike rates and diverge from other major central banks, hedging costs have become more expensive for foreign investors. As shown in Figure 18, 10-year Treasuries no longer offer a yield pickup for European-based investors on a currency-hedged basis. The same dynamic is true for Japanese-based investors.

In its summary assessment, Deutsche Bank writes that more than anything, the world needs safe, liquid assets. Historically, this need has been filled by Treasuries- and it still is. Demand has thus far been inelastic despite the increase in supply.

In a testament to the towering "safety" of Treasuries, they have rallied for 30 years regardless of events in the equity world, while rates continue to slide lower as the stock of debt continues to expand. But Deutsche's ominous conclusion, one which increasingly more commentators, including Goldman Sachs...

... and the IMF, have been voicing is that "eventually this will become unsustainable."

Ok, when?

We cannot say exactly what level of debt (85% of GDP? 100%? 125%?) will prove to be the tipping point, but we do believe that the latest fiscal developments have increased the odds of a crisis.

And so, while the collapse the reserve currency empire remains open-ended, the bank's recommendation is clear: "Investors should continue to monitor Treasury auction developments and will remain alert to any indications of softening demand."

Of course, when this "tipping point" does arrive, it will be too late to make the proverbial "hedging trades." Which might explain not only the recent strength in gold prices, but why after crashing in the start of 2018, the crypto sector is once again soaring, and bitcoin is fast approaching $10,000 once again...

Published:4/28/2018 2:49:33 PM
[Entertainment] Property Brothers' Drew and Jonathan Scott Turn 40 and Clown Around in Throwback Pic Property Brothers, Drew Scott, Jonathan Scott, Birthday, 40th, Clowns, ThrowbackIt's Drew Scott and Jonathan Scott like you've probably never seen them before... The twins and stars of the hit HGTV show Property Brothers celebrated their 40th birthday on...
Published:4/28/2018 2:19:30 PM
[Markets] "There's Crack And Heroin Everywhere" - Homeless Set Up Shooting Gallery Inside SF BART Station

America's twin public-health crises of homelessness and drug dependency have been put on grotesque display in a corridor of the Civic Center BART station in San Francisco - one of the busiest stations in the Bay Area.

In a shocking report by CBS San Francisco Bay Area, the station documents a group of junkies and drug addicts who congregate in a hallway in the terminal early in the morning, where they openly inject and smoke drugs. In the videos, junkies can be seen injecting drugs into veins near their knuckles or nodding out amid piles of vomit and other bodily fluids.

BART police say they're too overwhelmed to put a stop to the daily congregations, and that they might need to enlist the help of San Francisco police to stop drug users from setting up what's essentially a roving shooting gallery in the passageways of the station. Some stations, CBS reports, are often left completely unguarded.

The rider who alerted CBS described the situation in an interview, saying there's "crack and heroin" everywhere.

Some may find the video shocking. Others may find it routine.

"Every day. Every morning. 5:30 to 6 o’clock. You can see there’s dozens of them. Needles everywhere. Crack. Heroin."

[...]

"One morning I said, 'I got to pull out the camera and show my friends this. They’re not going to believe it,'" he said.

When confronted with the footage, a spokesman for BART said the organization is just trying to do the best it can with the resources it has.

"It’s a real concern for our riders, and we appreciate that," said BART spokesman Chris Filippi. "But what we have to do is make the most of the resources, the limited resources that we have."

San Francisco Mayor Mark Farrell told CBS that the situation in the BART stations is "unacceptable."

"The situation in our BART stations is simply unacceptable," said San Francisco Mayor Mark Farrell. "Borders on disastrous."

Of course, what neither official acknowledged, is that San Francisco and other cities and towns in the Bay Area (see: Oakland) provide ample resources to undocumented immigrants, while the members of the area's burgeoning homeless population often die unaided and uncounted as officials chose a decidedly less-effective method of remedying the homelessness crisis: Deliberately doctoring statistics.

Published:4/28/2018 2:19:30 PM
[Entertainment] Kym Johnson Shares Sweet New Photo of Her and Robert Herjavec's Twins Kym Johnson, Robert Herjavec, TwinsKym Johnson's babies are "twinning" in more than one way. Earlier this week, the 41-year-old Dancing with the Stars pro gave birth to son Hudson Robert Herjavec and daughter...
Published:4/28/2018 1:49:26 PM
[Markets] Secret Trump-Russia Investigation Continues With $50 Million From Group Of Mysterious "Wealthy Donors"

The House Intelligence Committee's just-released report on Russian interference in the 2016 presidential election reveals in a footnote that an ongoing, private investigation into Trump-Russia claims is being funded with $50 million supplied by a group of 7-10 wealthy donors from California and New York.

This effort was originally revealed in February and reported on by The Federalistafter a series of leaked text messages between Senator Mark Warner (D-VA) and lobbyist Adam Waldman suggested that Daniel J. Jones - an ex-FBI investigator and former Feinstein staffer, was "intimately involved with ongoing efforts to retroactively validate a series of salacious and unverified memos published by Christopher Steele, a former British intelligence agent, and Fusion GPS."

In short, Jones is working with Fusion GPS and Christopher Steele to continue their investigation into Donald Trump, using a $50 million war chest just revealed by the House Intel Committee report.

Daniel J. Jones

In a bizarre twist Waldman, the lobbyist, notably represents Kremlin-linked Russian oligarch Oleg Deripaska, head of Russian aluminum giant Rusal and who was the target of Trump's recent sanctions, as well as Russian foreign minister Sergey Lavrov. He met with Jones on March 16, 2017 according to the Daily Caller

Jones, meanwhile, runs the Penn Quarter Group - a "research and investigative advisory" firm whose website was registered in April of 2016, days before Steele delivered his first in a series of Trump-Russia memos to Fusion GPS. Jones also began tweeting out articles suggesting illicit ties between the Trump campaign and Russia as early as 2017.

Steele's work during the 2016 election culminated in the salacious and unverified 35-page "Steele dossier" used to obtain a FISA warrant against then-President Trump (which, as we reported on Friday, former Director of National Intelligence James Clapper leaked the details to CNN's Jake Tapper prior to the seemingly coordinated publication by BuzzFeed).

The recently released House Intel Report notes that in March 2017, Jones told the FBI that he was working with Steele and Fusion GPS, with funding to the tune of $50 million.

“In late March 2017, Jones met with FBI regarding PQG, which he described as ‘exposing foreign influence in Western election,'” reads the House Intel report. “[Redacted] told FBI that PQG was being funded by 7 to 10 wealthy donors located primarily in New York and California, who provided approximately $50 million.”

“[Redacted] further stated that PQG had secured the services of Steele, his associate [redacted], and Fusion GPS to continue exposing Russian interference in the 2016 U.S. Presidential election,” reads the report, which adds that Jones “planned to share the information he obtained with policymakers…and with the press.”

As the Daily Caller's Chuck Ross notes, Jones "also offered to provide PQG's entire holdings to the FBI" according to the report, citing a "FD-302" transcript of the interview he gave to the FBI.

Of note, during Congressional testimony last year when Rep. Adam Schiff (D-CA) asked Glenn Simpson, co-founder of Fusion GPS, if he was still being paid for work related to the dossier, Simpson refused to answer. And while the dossier came under fire for "salacious and unverified" claims, a January 8 New York Times profile of Glenn Simpson confirmed that dossier-related work continues.

Sean Davis of The Federalist reported in February that Jones' name was mentioned in a list of individuals from a January 25 Congressional letter from Senators Grassley and Graham to various Democratic party leaders who were likely involved in Fusion GPS's 2016 efforts. The letter sought all communications between the Democrats and a list of 40 individuals or entities, of which Jones is one.

Some of those communications - at least according to the encrypted text messages between Warner and Waldman, (and leaked to Fox News), discuss efforts by Warner to secure a testimony from Steele.

“I spoke w Steele,” Waldman wrote on April 25, 2017. “He repeated the same position which is that he wants to be helpful but is fearful of the triumvirate of cost, time suck and reputation.”

“He asked me what your concern was about a letter first and I explained it but he would still like as a first protective step from you and [Sen. Richard] Burr asking him and his partner to assist w the investigation by answering questions,” Waldman added“He [Steele] said he will also speak w Dan Jones whom he says is talking to you.”

“I pointed out there is no privilege in that discussion although Dan [Jones] is a good guy and very trustworthy guy. I encouraged him again to engage with you for the sake of the truth and of vindication of the dossier,” he wrote.  -Adam Waldman to Mark Warner

Meanwhile, Federal disclosures required by the Foreign Agents Registration Act show that Waldman collected nearly $1.1 million from Deripaska in 2016 an2017. Some questions:

  • Why would Waldman, a Russian oligarch's foreign agent, be the official cutout for both a U.S. senator and Christopher Steele?  
  • Why would he recommend Daniel Jones - a former top Feinstein aide who worked for the FBI - as a point of contact and an information broker?

And now Jones has a $50 million war chest - from a group of mysterious "7 to 10" donors - to continue the grande Trump-Russia witch hunt with Christopher Steele and Fusion GPS - coordinated in part by a guy (Waldman) who represents Russian oligarch Oleg Deripaska and Russian foreign minister Sergey Lavrov. Seems somewhat collusive, no?

Published:4/28/2018 1:19:18 PM
[Entertainment] Kanye West Wants to Forgive Doctor Who Performed Mom's Final Surgery...With an Album Tribute Kanye West, Donda WestKanye West is ready to forgive the plastic surgeon who operated on his mother just before her sudden death...but he also wants to use his mug shot as the cover of his new album. Donda...
Published:4/28/2018 12:48:59 PM
[Entertainment] Kanye West and John Legend Dance Together at Baby Shower After Twitter Drama John Legend, Kanye West, Chrissy Teigen, Baby ShowerThey may agree to disagree over President Donald Trump, but there is nothing but love between Kanye West and John Legend. On Friday, Yeezy and wife Kim Kardashian attended a baby shower...
Published:4/28/2018 12:18:34 PM
[Featured] Watch Live: President Donald Trump holds MAGA rally in Washington, Michigan 4-28-18

By R. Mitchell -

Donald Trump rally

President Donald Trump holds a “Make America Great Again” rally at the Total Sports Park in Washington, Michigan on Saturday. Doors for the rally open at 4:00 p.m. EDT and the rally begins at 7:00 p.m. EDT. The live stream of the rally will begin at 2:30 p.m. The event ...

Watch Live: President Donald Trump holds MAGA rally in Washington, Michigan 4-28-18 is original content from Conservative Daily News - Where Americans go for news, current events and commentary they can trust.

Published:4/28/2018 12:18:34 PM
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Published:4/28/2018 11:49:38 AM
[Markets] US Bombers Fly Over South China Sea Amid Escalating Tensions Between Taiwan And Beijing

Trade tensions between the US and China appear to have abated - at least for now - as Treasury Secretary Steven Mnuchin and top Trump economic advisor Larry Kudlow prepare to head to Beijing to kickstar long-awaited "trade talks" with senior Chinese officials.

But while fears of a global trade war led by the world's two largest economies have faded into the background, the military tensions in the South China Sea - which have been ignored by the markets for years - continue to escalate, per CNN.

South China

Case in point: The US military has revealed that two US Air Force B-52 Stratofortress bombers flew a training mission over the South China Sea on Tuesday, eliciting a defiant response in the Global Times, one of the Communist Party's most widely read mouthpieces, per the South China Morning Post and Reuters

The widely-read Chinese state-run tabloid the Global Times said in an editorial on Friday that if the US bombers were meant to send a message to Beijing about Taiwan it would not work.

"The US cannot prevent the mainland exerting military pressure on Taiwan," it said.

The bombers took off from Andersen Air Force Base on the island of Guam, according to a statement from US Pacific Air Forces. The exercises also involved US F-15 Strike Eagle jets traveling near Okinawa. The mission was part of the US' "continuous bomber presence" in the region.

SouthChina

The US has been stepping up its military patrols in the South China Sea, which is claimed by China in defiance of competing claims by its neighbors and even a ruling by the International Criminal Court that recognized the Philippines' claim on some of the island territories presently dominated China. Meanwhile, using sophisticated "land-reclamation" techniques, China has been expanding rocky atolls in the area into full-fledged islands capable of supporting military infrastructure like airfields and naval bases.

US Admiral Philip Davidson, Trump's nominee to lead the US forces in the Pacific, has consistently sounded the alarm about China's intentions. Most recently, the release of a 50-page unclassified transcript on advance policy questions from Davidson detailed his view that Beijing's forces will soon be capable of "strategically overwhelming" US forces in the Pacific, largely thanks to the regime's activities in the South China Sea.

"China will be able to extend its influence thousands of miles to the south and project power deep into Oceania. The PLA will be able to use these bases to challenge U.S. presence in the region, and any forces deployed to the islands would easily overwhelm the military forces of any other South China Sea-claimants. In short, China is now capable of controlling the South China Sea in all scenarios short of war with the United States."

In an interview with CNN on Friday, Davidson again articulated his view that, by dominating the South China Sea, China will be able to keep continuous military pressure on Taiwan (the stated goal of the largest-ever live-fire military exercises in the region, which China's navy initiated earlier this month). Tensions between Taiwan and the Mainland have escalated under Tsai Ing-wen, who made a congratulatory call to President Trump in defiance of the decades-old "One China" policy, angering the Communist Party establishment on the mainland. 

As the Global Times insisted, "the US cannot prevent the mainland from exerting pressure on Taiwan."

"Mainland military aircraft will fly closer and closer to Taiwan and in the end fly above the island," the paper added. "If the Taiwan authorities openly promote the 'Taiwan independence' policy and cut off all official contacts with the mainland, the mainland will deem Taiwan a hostile regime and has endless means to deal with it."

Taiwan and the South China Sea are two major faultlines between Washington and Beijing.

Finally, all of this is happening as Taiwan is preparing its own round of military drills that are intended to simulate a Chinese invasion (one which will somehow be stopped using private drones). Also, since the beginning of the year, the US Navy has carried out at least four "freedom of navigation" - or "freeop" - operations in the South China Sea, which entails sending a US destroyer to sail up to 12 miles away from one of China's artificial islands. These mini provocations have greatly angered Beijing for years, even if China has yet to respond forcefully to US presence in the region.

Ironically, amidst all these growing geopolitical and economic tensions, President Trump and President Xi Jinping continue to insist that they share a personal friendship, and that relations between the US and China have never been better, contrary to Trump's anti-China rhetoric from the campaign.

Published:4/28/2018 11:49:38 AM
[Markets] Will Elon Musk Be the Next CEO to Face A Margin Call Death-Spiral?

Submitted by Mark B. Spiegel of Stanphyl Capital Management

In the annals of CEO margin-call history, among the most infamous are Worldcom’s Bernie Ebbers, Chesapeake’s Aubrey McLendon and Steinhoff's Christo Wiese.  Is Tesla CEO Elon Musk on the path to joining them?

Although it’s been known for years that Musk borrows hundreds of millions of dollars against his Tesla shares to support his expensive jet-setting lifestyle of spectacular homes, actresses and planes (not to mention child support), there was a new development buried in Thursday’s release of the annual Tesla proxy statement:

…directors and executive officers may pledge their Company stock…as collateral for loans and investments, provided that the maximum aggregate loan or investment amount collateralized by such pledged stock does not exceed twenty-five percent (25%) of the total value of the pledged stock.

Yes, Musk’s loans are now limited to 25% of the value of the pledged stock, a policy that seemingly did not exist when last year’s proxy was issued.

So how much money are we talking about here? The most recent figure we have for the value of Musk’s margin loans comes from the registration statement for Tesla’s March 2017 stock sale, in which on p. S-9 it notes that he (at that time) owed a total of $624.3 million to various financial institutions, with the largest amount ($344.4 million) owed to Morgan Stanley whose Tesla analyst Adam Jonas has—coincidently or not—lately been desperately conceiving of increasingly fantastical reasons to maintain a TSLA price target of $376 despite steadily slashing his estimates as one “justification” after another for that target evaporates into the realities of Tesla’s massive cash burn and technological backsliding.

So if Musk owed $624.3 million over a year ago and subsequently paid interest on that loan while drawing a minimal salary ($49,920) and continuing his aforementioned luxurious lifestyle while pouring $100 million into his latest distraction, the Boring Company, it seems reasonable to guess that his current loans total approximately $800 million, which means—according to the new proxy—they’d need to be collateralized by $3.2 billion in Tesla shares. As the proxy notes Musk has currently pledged 13,774,897 of his 37,853,041 shares to support those loans, it implies that at a share price below $232.30 (assuming a current balance of $800 million), he’d face either a margin call or the need to post additional shares as collateral. (For some perspective, earlier this month the stock dipped as low as the $244s.)

Also note that as Musk’s expensive lifestyle continues, the number of shares pledged to maintain it escalates on an annual basis, as noted in this table posted today on Seeking Alpha:

Of course, Musk does have millions more TSLA shares he can (and undoubtedly will) pledge to meet margin calls, so an outright liquidation of his stock is unlikely to occur until the price of Tesla shares dips into the $90s. However, the closer the stock gets to that figure (and considering the financial disaster Tesla is, that time may be closer than one might think), the more likely it is that the ensuing “death spiral liquidation” will be front-run (and thus accelerated) by observant market participants, perhaps at prices well into the $100s. Let’s hope that Mr. Musk—despite having the “advantage” of Autopilot—doesn’t wind up as Mr. McClendon did.

Published:4/28/2018 11:18:25 AM
[Markets] Freddie Mac Launches "3% Down" Mortgage With No Income Restrictions

It's been a while since the US made a wholesale push to get more cash and income-strapped households into the ever more unaffordable American dream of owning a house, three years to be exact, which is nationalized housing agency Freddie Mac rolled out a conventional mortgage that only required a 3% down payment for certain borrowers.

The problem is that what modest limitations the mortgage program had, meant that most Americans who needed access to it would be excluded. The program, which as we described at the time, was designed for qualified (that being the key word) low-and moderate-income borrowers - i.e., Millennials - saw limited progress over the last few years, with FHFA Director Mel Watt telling Congress last year that Freddie’s 3% down program (along with a similar one from Fannie Mae) was continuing to grow.

It just wasn't growing fast enough, because apparently putting 3% down is an increasingly greater challenge for most Americans.

So fast forward to last week, when Freddie Mac announced on Thursday it was about to supercharge its 3% down program and launch a widespread expansion of the offering: yes, Freddie Mac announced that it is rolling out a new conventional 3% down payment option for qualified first-time homebuyers, with one small difference: there are no geographic restrictions; more importantly there are no income restrictions. To wit:

In other words, whereas many Americans could not qualify for the original 3% down program because, well, they lacked virtually any income, that will no longer be a hindrance and the government will effectively backstop the lack of income as a new wave of 'income-challenged' Americans rushes in to buy houses.

Amusingly, the new program, which is called HomeOne (full brochure below), puts Freddie Mac in direct competition for mortgage business with the Federal Housing Administration, which also only requires 3% down on some mortgages.

Furthermore, according to Freddie Mac, this new offering is not replacing its Home Possible 3% down mortgages. Rather, the program is meant to complement the Home Possible program, which will still be available to low-and moderate-income borrowers.

“Freddie Mac’s HomeOne mortgage is part of the company’s ongoing efforts to support responsible lending, provide sustainable homeownership and improve access to credit,” Danny Gardner, senior vice president of single-family affordable lending and access to credit at Freddie Mac, said in a statement.

It was not quite clear how it is responsible to lend money to households which have saved only enough to put down 3% equity value, oh, and which have no income to even give the false impression their equity stake may grow in the future.

It gets better. As Housing Wire summarizes the terms of HomeOne, Freddie Mac said that the new mortgage is designed for first-time homebuyers, who currently make up nearly half of all home purchases.

According to Freddie Mac, a HomeOne mortgage must be underwritten through its Loan Product Advisor, which makes a complete risk assessment based on several factors as it relates to credit, capacity and collateral.

Additionally, the HomeOne mortgage is offered only for conforming fixed-rate mortgages that are secured by a 1-unit primary residence. And, at least one of the borrowers must be a first-time homebuyer.

There is one potential hurdle: when all the borrowers are first-time homebuyers, at least one borrower must participate in homeownership education in order to qualify for the mortgage.

Yes, one may have no income and still qualify as long as one watches a few videos explaining why having an income is critical to avoid having another housing market crash, or something.

None of that matters however, as the US government is once again clearly more interested in well and truly blowing another housing bubble, where not Countrywide or New Century, but the government itself is issuing NINJA loans.

"The HomeOne mortgage will provide our customers the flexibility they need to help borrowers anywhere in the country achieve the milestone of homeownership and overcome the common down payment resource hurdle,” Gardner continued. “HomeOne is a great solution for aspiring homebuyers to grab that first rung of the property ladder and enjoy the financial and social benefits of participating in homeownership.”

What was unsaid is that now that rates just happen to be rising, making homes even more unaffordable and resetting ARM mortgages higher, the generously funded by taxpayers HomeOne also assures another housing crisis, and even more GSEs/Fredde/FHA bailouts in the near future.

The fun beguns on July 29, 2018, when the new HomeOne mortgage will become available.  For more, check out the program detail and marketing materials from Freddie Mac.

Published:4/28/2018 10:48:10 AM
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Published:4/28/2018 8:17:30 AM
[Markets] "This Won't End Well" - Speculators Have Never Been More Short Bonds... Ever

"It's a no-brainer..."

As the yield on the 10Y US Treasury note broke above the 3.00% Maginot Line this week (for the first time since Jan 2014), traders piled on - pushing net speculative positioning for 10Y note futures to their largest short ever. In fact, along with almost $4 trillion notional in Eurodollar shorts (betting on rising short-term interest rates), the aggregate position across the rest of the Treasury futures space has also reached a new record short, which, as the chart below shows, is equivalent to well over 1.1 million 10Y futures contracts.

 

However, just as it became 'obvious' that rates were now set to rocket higher - umm growth and inflation and well stocks are awesome-er, right - yields tumbled...

And the yield curve flattened dramatically...

With both the level of the curve and its shape dropping notably on the week.

And while we are yet to see whether this record positioning will prove the crowd is always wrong again, there is one clear set of 'losers' already facing considerable losses - mom-and-pop investors in Wall Street's latest and greatest 'conservative' bond offering - 'Steepener' Securities.

As Bloomberg reports, as the yield curve flattened to the lowest in more than a decade, the fallout spread beyond the realms of high finance and central banking. It also caused the value of hundreds of millions of dollars worth of debt -- often held by retail investors -- to evaporate.

Holders of ‘‘steepener’’ securities are facing the prospect of minuscule or even zero coupons. The structured products were issued in droves in recent years by Wall Street banks including Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley. Frequently marketed by brokers, they pay a high introductory fixed rate that switches to a floating coupon linked to the gap between short- and long-term U.S. interest rates.

The complex math behind the trade has been laid bare by the flattening curve, leaving a slew of retail investors blindsided, say critics, as issuance booms.

Globally, around $2.5 billion of notes tied to constant maturity swap rates was sold last quarter -- the most since 2015 -- scores of which use the steepener structure, according to data compiled by Bloomberg.

And as the price action of the following Goldman 'steepener' security shows, it has not been a pretty picture for mom-and-pop retail investors - lured by the promise of 'low risk, bond like characteristics' and higher than normal initial yields...

The products -- to a large degree, a bullish bet on U.S. growth and inflation over the long haul -- share the same basic structure. The steeper the slope, the higher the coupon, up to a cap.

If the curve levels out -- as it has been over the past year -- or inverts, buyers can be stuck with measly coupons or even no interest payments.

A $64 million steepener note issued by Goldman in 2013 is illustrative of how the flat curve has whittled down its value.

The security has recently slumped to 64 cents on the dollar as coupons shrank to less than 1 percent a year, according to TRACE data -- a far cry from the 9.25 percent investors received at the beginning of the term, according to its prospectus. The coupon is calculated according to a formula based on the difference between the 30-year constant maturity swap rate and the five-year rate.

While banks issue the debt securities, Bloomberg notes  that they’re often marketed and sold to investors via intermediaries such as brokerages. In some cases, the latter have been censured and fined by the Financial Industry Regulatory Authority for failing to ensure the products were suitable for their clients.

No banks were named in these actions.

“They were sold as being conservative investments, which of course they’re not,” said Jeffrey Pederson, an attorney in Denver, Colorado, who has represented investors in settlements against financial institutions over whether such notes were suitable for his clients.

Issuance has hardly slowed down this quarter, with around $1.9 billion of swap-linked notes sold globally through April 26. Many of these use the steepener structure, offering a high introductory coupon which then switches to a floating rate linked to the steepness of the yield curve.

“Your average person getting these things is Joe Salesman, and they end up losing a lot of money pretty quickly” if the curve flattens, said Pederson.

So once again - the sucker at the table was retail... and one wonders just how much of the record futures positioning is driven by mom-and-pop flows from ETFs as the 'home-gamer' is battered into submission day after day that 'rising interest rates is a no brainer'... so why would you want to hold bonds, when stocks only go up in value?

Published:4/28/2018 7:47:25 AM
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Published:4/27/2018 6:15:41 PM
[Markets] Bill Gates Warns "Millions Could Die" If US Doesn't Prepare For Coming Pandemic

Should a deadly pandemic comparable to the 1918 influenza outbreak reach the US in the relatively near future, the US government would be powerless to stop it. And in all likelihood, hundreds of thousands - if not, millions - of Americans will die. That's the message from a Washington Post interview with Microsoft founder Bill Gates, which touched on many of the same subjects from a talk he gave Friday before the Massachusetts Medical Society.

Bill Gates says the U.S. government is falling short in preparing the nation and the world for the "significant probability of a large and lethal modern-day pandemic occurring in our lifetimes."

Gates discussed his efforts to convince the Trump administration to set aside more funding for the Centers for Disease Control and Prevention and to prioritize the creation of a national response plan that would govern how resources are deployed during a pandemic or biological weapons attack.

Gates

During the interview, the billionaire who appears to have gotten such a touch eccentric in his gray years, confirmed that he had raised the issue of pandemic preparedness with President Trump, and that he tried to convince the president that he has a chance to lead on the issue of global health security.

According to Gates, Trump told him to raise these issues with officials at the Health and Human Services Department, the National Institutes of Health and the Food and Drug Administration. Gates said he also met with HR McMaster, who was ousted as National Security Advisor last month, and he hopes to meet with McMaster's successor John Bolton. He is probably the only one.

That said, Gates may have a point: Even this winter's flu season - the worst in years - overwhelmed hospitals, some of which were forced to pitch tents outside the facilities and deploy other emergency accommodations.

Gates, whose Gates Foundation focuses on public health initiative, has shifted his focus in recent years to international pandemic awareness and preparation. To be sure, he's not the only one who believes the developed world is dangerously ill-prepared to beat back such a threat.

Gates and his wife, Melinda, have repeatedly warned that a pandemic is the greatest immediate threat to humanity. Experts say the risk is high, because new pathogens are constantly emerging and the world is so interconnected.

Many experts agree that the United States remains underprepared for a pandemic or a bioterrorism threat. The government’s sprawling bureaucracy, they say, is not nimble enough to deal with mutations that suddenly turn an influenza virus into a particularly virulent strain, as the 1918 influenza did in killing an estimated 50 million to 100 million people worldwide.

Even this winter’s harsh seasonal flu was enough to overwhelm some hospitals, forcing them to pitch tents outside emergency rooms to cope with the crush of patients.

If a highly contagious and lethal airborne pathogen like the 1918 influenza were to take hold today, nearly 33 million people worldwide would die in just six months, Gates noted in his prepared remarks, citing a simulation done by the Institute for Disease Modeling, a research organization in Bellevue, Wash.

So what should the US do according to Gates: the nation needs to prioritize the development of better vaccines - including a "universal" flu vaccine - and other treatments as well as new diagnostic capabilities to help doctors detect and identify a pandemic before it has the opportunity to spread, according to the Microsoft founder.

In those remarks, Gates highlighted scientific and technical advances in the development of better vaccines, drugs and diagnostics that he said could revolutionize how we prepare for and treat infectious diseases moving forward. He praised last year’s formation of a new global coalition, known as CEPI, to create new vaccines for emerging infectious diseases. He also announced a $12 million Grand Challenge in partnership with the family of Google Inc. co-founder Larry Page to accelerate the development of a universal flu vaccine.

But vaccines, he noted, take time to research, deploy and generate protective immunity.

"So we need to invest in other approaches, like antiviral drugs and antibody therapies that can be stockpiled or rapidly manufactured to stop the spread of pandemic diseases or treat people who have been exposed," he said in his speech.

Among the advances in these areas are a new influenza antiviral recently approved in Japan that Gates said "stops the virus in its tracks" by inhibiting an enzyme it needs to multiply; research on antibodies that could protect against a pandemic strain of a virus; and a diagnostic test that harnesses the powerful genetic-engineering technology known as CRISPR and has the field-use potential to check a patient’s blood, saliva or urine for evidence of multiple pathogens. That test could, for example, identify whether someone is infected with Zika or dengue virus, which have similar symptoms.

But even the most cutting-edge remedies are useless without a plan to deploy them, something Gates says the Trump administration recognizes.

Trump and senior administration officials have affirmed the importance of controlling infectious disease outbreaks. But the Centers for Disease Control and Prevention is facing a loss of emergency funding provided in the wake of the 2014 Ebola epidemic and has begun to dramatically downsize its epidemic-prevention activities in 39 out of 49 countries where disease risks are greatest.

Congress provided additional funding in last month’s spending bill. But it also directed the administration to come up with a comprehensive plan to strengthen global health security at home and abroad.

"This could be an important first step if the White House and Congress use the opportunity to articulate and embrace a leadership role for the U.S.," Gates said in the speech.

No other country, he noted, has the depth of scientific or technical expertise that the United States possesses, drawing on the resources of institutions such as NIH, CDC and the Biomedical Advanced Research and Development Authority, as well as the Defense Department's Defense Advanced Research Projects Agency.

While Gates's sense of urgency is admirable, other experts on the likelihood of a global pandemic emerging in the relatively near future make Gates look like a Walt Disney-level optimist. 

"We know that it is coming, but we have no way of stopping it," said WHO infectious disease specialist Dr. Sylvie Brand.

If you haven't already, now would probably be as good a time as any to invest in some surgical masks. Unless of course Elon Musk is correct with his own doomsday prediction, and sentient, AI-capable killer robots have already bought out the entire inventory.

Published:4/27/2018 6:15:41 PM
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[In The News] Watch: President Donald Trump issues weekly address 4/27/18 [video + transcript]

By R. Mitchell -

President Donald Trump issued his weekly address Friday during which he highlighted the nation’s opioid crisis and efforts to combat it. Transcript Hello, it’s great to be with you. I want to talk about opioid addiction which claimed an average of 116 American lives every single day in 2016. My Administration ...

Watch: President Donald Trump issues weekly address 4/27/18 [video + transcript] is original content from Conservative Daily News - Where Americans go for news, current events and commentary they can trust.

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[Markets] Chinese Smartphone Sales Collapse In "Biggest Decline Ever"

Smartphone shipments in China experienced their most significant decline ever in Q1 2018, crashing more than 21 percent annually to 91 million units, according to the Singapore-based research firm Canalys. Since 2013, Chinese smartphone shipments have far exceeded 100 million units quarterly. The last time the headline number fell below the 100 million unit benchmark was Q4 2013.

According to the report, published Thursday and which echoed a similar recent finding by the IMF, the eight-year-long smartphone bubble has come to an end in yet another warning sign of the ongoing demise of the "synchronized global growth" narrative.

Chart

To wit, eight of the top ten smartphone vendors experienced a significant decline in sales. Apple lost considerable ground in China, as it was removed from the number four vendor spot by local brand Xiaomi, which bucked the trend and saw 37 percent growth in shipments to 12 million units sold.

"Xiaomi was the only company to buck the trend, growing shipments by 37 percent to 12 million units, and overtaking Apple to take fourth place."

Huawei (including Honor) managed to remain in the top vendor spot with shipments increasing by 2 percent, while "maintaining its lead and consolidating its market share to about 24 percent by shipping over 21 million smartphones," said Canalys.

The report detailed how China’s smartphone segment is becoming increasingly dominated by four domestic vendors, including Huawei, Oppo, Vivo, and Xiaomi, which accounted for more than 73 percent of Chinese shipments in Q1 2018.

Ahead of the Apple’s earnings report on May 1, Canalys’ report about Apple’s dwindling market share in China could be a bad omen.

What's worse for the consumer-tech giant, the Canalys data corroborates a report from Bloomberg, which revealed how five of its largest device assemblers reported a sharp slowdown after peaking in the second half of 2017. Nevertheless, the peak coincides with Canalys’ report of crashing smartphone sales in China.

Meanwhile, vendors outside the top five spots, including Apple (sixth spot), saw their market share slide to 19 percent in the prior quarter, a sign that there could be some market-share consolidation in the offing, according to the report.

"The costs of marketing and channel management in a country as big as China are huge, and only vendors that have reached a certain size can cope," said Mo Jia, an analyst at Canalys.

"While Huawei, Oppo, Vivo and Xiaomi must contend with a shrinking market, they can take comfort from the fact that it will continue to consolidate," he added.

Canalys

One reason for the decline could be smartphone makers focus on the high-end market. As Canalys Research Analyst Hattie He said, "Xiaomi is the only vendor in the top-5 that is focused on the sub-RMB1,000 (about $160) price segment." Xiaomi posted double-digit growth, with sales up 37 percent, partly reflecting a lackluster performance in 2017. Xiaomi’s success is contributed to its low-cost devices.

The inventory issues that Oppo and Vivo experienced in the fourth and first quarters "are now behind them," said Jia.

"New smartphones will definitely entice people to upgrade, but vendors are more careful of avoiding oversupply in the channel," he said, adding that the smartphone market "could experince a short period of stagnancy" as vendors resort to device improvements rather than broad marketing campaigns.

To sum up, the tech sector’s importance to Asia’s economy remains paramount. Which is why collapsing smartphone sales in China could have a serious impact on the "synchronized global growth" narrative that has dominated economic analysis in recent years. At least, that was essentially the IMF's view when it pointed out that the recent peak in global smartphone sales could seriously hamper growth in Asia, where supply chains and economies have been transformed by the smartphone boom.

All of this begs the question: will falling smartphone sales be the canary in the coalmine as the "global growth" narrative downshifts into recession?

Published:4/27/2018 4:14:19 PM
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[Markets] And... Yet Another Wells Fargo Banking Scandal

Submitted by Simon Black of Sovereign Man

Is it Friday again? Must be time for another banking scandal!

Seriously– these banking scandals are happening with such regularity and predictability it would be almost comical. . . were it not for the millions of people who have had their lives turned upside down.

The latest transgression involves, once again, our old friends at Wells Fargo.

Bear in mind that the ink isn’t even dry yet on the $1 billion check that Wells Fargo wrote last week as a penalty to settle its previous scandal, where they defrauded 570,000 clients in a car insurance scam.

By the bank’s own estimates, as many as 20,000 of those clients may have had their vehicles repossessed as a result of their inability to pay for the car insurance that Wells Fargo illegally stuck them with.

And speaking of vehicle repossession, in November of last year Wells Fargo came under fire for illegally repossessing vehicles that were owned by members of the military.

In October, Wells Fargo took heat from federal regulators after it was found that the bank had deliberately recommended investment products that were “highly likely to lose value. . .” Early that month, the bank admitted that it had ‘erroneously’ charged late fees to more than 100,000 borrowers, even though the delays were the bank’s fault.

In 2016, a number of employees at various Wells Fargo branches in California were found to have sold sensitive customer information, including Social Security Numbers, to a ring of identity thieves.

And of course, in late 2016 and all throughout 2017, Wells Fargo’s notorious ‘fake account’ scandal was found to have affected millions of customers.

There’s a word for all of this: fraud.

And if you or I had committed any of these acts by even the slightest, we’d be wearing DayGlo Orange jumpsuits in a federal penitentiary.

But a grand total of ZERO executives from Wells Fargo have been sent to prison or faced any charges whatsoever.

In fact, the executive who was found to be the most culpable in the fake account scandal scored a whopping $67 million severance package when she left the company in late 2016.

And the new CEO (who took over after the fake account scandal in 2016) has been rewarded with a 35% pay increase even though both the stock price and the bank’s profits have languished.

Scandal #867,241 just hit the news yesterday afternoon: Wells Fargo is now being investigated by the United States Department of Labor. This time the bank is accused of deliberately pushing customers into more expensive, higher-fee retirement accounts– accounts that are bad for the customers, but more lucrative for the bank.

It just never stops with these people. And it’s not just Wells Fargo.

Nearly EVERY major bank in the world, from JP Morgan to Barclays, Citigroup, UBS, Bank of America, etc. has been found at some point or another over the last several years of grossly violating the public’s trust.

Yet we consumers still willingly let these criminals hold our money.

Month after month we deposit our paychecks and hold our savings in an institution that rarely misses an opportunity to prove that they cannot be trusted.

They’ve been caught manipulating asset prices, colluding to fix interest rates and exchange rates, and engaging in irresponsible lending practices that put our savings at risk for their sole benefit.

They treat customers with such contempt, scrutinizing even the most innocuous transactions as if WE are the criminals.

And when they screw it all up, gambling away our hard-earned savings on some idiotic investment fad, they go to the taxpayer with hat-in-hand claiming that they’re too important to go out of business… and then shower themselves with record bonuses.

Our reward for putting up with all of this abuse? Well, according to BankRate.com, interest rates at the biggest retail banks (Wells, Bank of America, Chase, etc.) average just 0.01%.

This banking system so pathetic.

Yet we’ve all been institutionalized, practically since birth, to believe that we HAVE to use it… that there’s no alternative.

And that used to be true several decades ago. But in 2018, there are countless alternatives.

Literally every single function of a bank can be performed better, faster, cheaper OUTSIDE of the banking system.

Rather than holding your savings in a bank, you can literally earn more than 150x as much interest with extremely short-term Treasury Bills. Or if you want, you can even hold physical cash.

For loans, there are dozens of websites where you can crowdfund a home loan or small business loan.

And for retirement accounts– the latest Wells Fargo transgression– you DEFINITELY don’t need a bank.

Retirement accounts are one of the biggest areas where banks and major financial institutions routinely bilk their customers out of useless and unnecessary fees.

Even if they’re not charging you a fee outright, they’re diverting your retirement savings into some fund that they control and taking a percentage or two away from what you should be earning.

And over a period of several decades (we’re talking about retirement after all), a single percent difference in your average investment return because of bank fees can add up to hundreds of thousands of dollars.

So it’s a pretty big deal.

The reality is there are SO many ways to properly structure your retirement in better, more robust, less expensive ways.

For example– if you qualify, a solo 401(k) is an extraordinary retirement structure that’s cheap to administer and incredibly flexible.

With a solo 401(k), you can contribute tens of thousand of dollars each year to your retirement, as well as invest in a variety of assets that are not available to traditional plans (like real estate and private equity).

And you can even borrow money directly from your retirement plan under certain circumstances.

Self-directed IRAs are also great structures with similar benefits, though they have slightly higher costs and less flexibility.

Bottom line, there are plenty of options on the table to distance yourself from this abuse.

Published:4/27/2018 3:13:42 PM
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[Markets] Letting The Chips Fall Where They May

Submitted by Dana Lyons' Tumblr

After an apparent breakout to all-time highs just 6 weeks ago, the semiconductor sector is now breaking key uptrend support.

In early March, we highlighted one of the sectors demonstrating the strongest recovery efforts following the post-January correction. The sector was the semiconductors, which was not a surprise since the group has been a leader for much of the bull market, especially in recent years. At the time of the March post, the big news was that the benchmark PHLX Semiconductor Index (SOX) had not only recovered its entire correction loss, but it was actually breaking out to new highs. Not only that, but its January highs also lay in the vicinity of its prior all-time highs, set 18 years ago in the 2000 dotcom bubble. Here is the chart highlighted in that post.

The breakout, if sustained, portended good things for the “chip” sector. It was not sustained. And that sound you hear are semiconductor investors’ “chips” being sent back across the table because, as they say, from failed moves come fast moves. Indeed, it has not been a pretty course for the chips since as they have fallen hard. So hard, in fact, that if we fast forward to today, we see that the SOX has actually broken down below its post-2016 Up trendline.

Needless to say, this is not a welcomed development for the semiconductor group. The break of the trendline undermines the sustainability of the 2-year SOX rally – or at a minimum, slows considerably the pace of advance. But how much of the potential damage is already done – or, how much potential risk do we see here still? And is there any hope for semiconductor investors of the group regaining its leadership role.

Published:4/27/2018 12:14:06 PM
[Entertainment] 'Dancing With the Stars': Everything you need to know about May's quick all-athlete season In the first episode of 'Dancing With the Stars,' two dancer pairs will be gone. That's one of the big changes in the show's shortened 26th season.
     
 
 
Published:4/27/2018 12:14:05 PM
[Entertainment] Chance the Rapper and T.I. Show Support for Kanye West After His Donald Trump Tweets Donald Trump, Kanye West, Chance the Rapper, T.I. Chance the Rapper says Kanye West is "family," while T.I. says refuses to "give up on him," days after Yeezy shocked millions of fans with a series of pro-Donald Trump...
Published:4/27/2018 11:42:23 AM
[Markets] "Canada Is In Serious Trouble" Again, And This Time It's For Real

Some time ago, Deutsche Bank's chief international economist, Torsten Slok, presented several charts which showed that  "Canada is in serious trouble" mostly as a result of its overreliance on its frothy, bubbly housing sector, but also due to the fact that unlike the US, the average Canadian household had failed to reduce its debt load.

Additionally, the German economist demonstrated that it was not just the mortgage-linked dangers from the housing market (and this was before Vancouver and Toronto got slammed with billions in "hot" Chinese capital inflows) as credit card loans and personal lines of credit had both surged, even as multifamily construction was at already record highs and surging, while the labor market had become particularly reliant on the assumption that the housing sector would keep growing indefinitely, suggesting that if and when the housing market took a turn for the worse, or even slowed down as expected, a major source of employment in recent years would shrink.

Fast forward to last summer, when the trends shown by Slok three years ago had only grown more acute, with Canada's household debt continuing to rise, its divergence with the US never been greater...

... making the debt-service ratio disturbingly sticky.

And yet despite all these concerning trends, virtually all of these red flags have been soundly ignored, mostly for one reason: the "wealth effect" in Canada courtesy of its housing market grew, and grew, and grew...

Looking at the chart above, Bloomberg recently said that:

On a real basis, Canadian housing prices experienced a much smaller, shorter decrease in prices during the financial crisis and a much larger, longer increase in prices during the recovery. When you couple this unfathomable rise in housing prices with near-record high household debt-to-income ratios, the Canadian housing bubble starts to look scary should the tide turn.

... and added:

No one knows when insanity like this will come to an end. Bubbles are like an avalanche. The longer they build up, the worse they will be when they eventually destabilize.

Well, nobody may know, but as Harley Bassman said not long ago,  one can make an educated assumption, and as he said it most likely will be the result of higher rates.

Which brings us to last July's decision by the Bank of Canada to hike its rates for only the first time since 2010, sending the Loonie to the highest level since August 2016.  But aside from the surging currency, now that Canada has set off on a rate-hiking path, it has a bigger problem, one whose absence for so many years allowed the "Canadian housing bubble" in Bloomberg's words to flourish: rising rates.

But the bigger problem is not so much rising short-term rates, but what is going on on the long end: it is here that the pain for the housing market will be most acute, because as shown in the chart below, the 10Y yield is now at the highest level it has been since the summer of 2014 and rising. Meanwhile, the yield on five-year government bonds rose to 2.18% this week, the highest in almost seven years.

Furthermore, as US homebuyers from the time period 2004-2006 remember all too vividly, there is nothing that will burst a housing - and credit - bubble faster than a spike in mortgage rates.

But while Torsten Slok's original warning that "Canada Is In Serious Trouble" in January of 2015 may have been premature, this time it appears that the threat facing Canada is all too real.

The reason: while it took banks some time to push their mortgage rates in line, they have finally "caught up" and as Bloomberg reports, Toronto-Dominion Bank has lifted its posted rate for five-year fixed mortgages by 45 bps to 5.59% as government bond yields touched their highest levels since 2011 this week.

"It’s a big move, the biggest move in years," said Rob McLister, founder of RateSpy.com, a mortgage comparison website.

"There’s a lot of reasons why that could be -- maybe they’re taking a position on rates going forward, which is not that typical; maybe they’re trying to get people to lock in and generate better spreads."

Contacted by Bloomberg, Toronto-Dominion, Canada’s second-largest lender, said it lifted its five-year closed rate on Wednesday, along with increases to its two-year, three-year, six-year and seven-year mortgage rates.

In short: it hiked rates on everything. Why would a bank do that? Because i) it needs to, in order to remain profitable on its Net Interest Margin as the BOC keeps hiking rates and ii) because it anticipates greater losses in the very near future.

Meanwhile, Canada’s housing market has already set off on a wild ride. Recently, Toronto home prices dropped sharply from last year’s dramatic spike, while prices in Vancouver have rebounded, although here too they remain on edge amid a collapse in volulmes as much of the Chinese demand has vaporized, however a lack of selling pressure has prevented an all out rout. For now. 

As for Toronto Dominion, and its decision to implement "the biggest move in years", the bank explained that "adjusting our rates is not a decision we take lightly," and added that "we look at a number of factors when determining rates including the competitive landscape, the cost of lending and managing risk."

Even with the change, rates “remain competitive and at historically low levels," the bank said.

Toronto-Dominion’s posted rate is now higher than rivals including Royal Bank of Canada, Bank of Nova Scotia and  Bank of Montreal, which each advertise posted rates of 5.14 percent. Canadian Imperial Bank of Commerce has the lowest posted rate, at 4.99 percent.

So with mortgage rates now surging amid debt-service ratios which have never been higher, it's only a matter of time before Slok is finally proven right...

Published:4/27/2018 11:42:22 AM
[The Blog] Trump claims vindication on House Intel report: “A total Witch Hunt! MUST END NOW!”

HIC Republicans: No collusion, but plenty of blame to go around.

The post Trump claims vindication on House Intel report: “A total Witch Hunt! MUST END NOW!” appeared first on Hot Air.

Published:4/27/2018 11:13:31 AM
[Markets] The Blowback Against Facebook, Google And Amazon Is Just Beginning

Authored by Charles Hugh Smith via OfTwoMinds blog

Blow-out earnings from Facebook and Amazon have cheered Wall Street, but institutional owners might want to focus not just on blow-out earnings but rising blowback against the tech superpowers (Facebook, Google and Amazon).

The blowback is social and political: people are starting to question the social and political costs of these tech darlings' dominance and the billions in profits they reap.

The typical corporation can buy political influence, but Facebook and Google are manipulating the machinery of democracy itself. That's a much more dangerous type of power than buying political influence or manipulating public opinion by openly publishing biased "news."

We all understand how Corporate Media undermines democracy: recall how every time Bernie Sanders won a Democratic primary in 2016, The New York Times and The Washington Post "reported" the news in small typeface in a sidebar, while every Hillary Clinton primary win was trumpeted in large headlines at the top of page one.

But this sort of manipulation is visible; what Google and Facebook do is invisible. I recently addressed these invisible (but oh-so profitable) mechanisms in a series of essays:

How Far Down the Big Data/'Psychographic Microtargeting' Rabbit Hole Do You Want to Go"

Is Profit-Maximizing Data-Mining Undermining Democracy?

Should Facebook, Google and Twitter Be Public Utilities"

Should Facebook and Google Pay Users When They Sell Data Collected from Users?

Here's a selection of recent articles on related topics:

Research Shows Google's Search Manipulations Tried To Rig Election For Hillary

Google's File On You Is 10 Times Bigger Than Facebook's - Here's How To View It

Don’t Fix Facebook. Replace It. (New York Times)

The Infuriating Innocence of Mark Zuckerberg (The New Yorker)

Amazon is the embodiment of numerous destructive dynamics:

1. Zero-sum cannibalism being passed off as "growth." Amazon is growing its sales by cannibalizing the retail, distribution, transport, computer services and advertising sectors. How many jobs have been lost as Amazon has consumed its victims? Shall we guess that Amazon's 560,000 employees replaced 1,000,000+ retail/distribution employees who lost their jobs?

It isn't just jobs, of course: it's local taxes, local retail stores that attracted pedestrians and other enterprises--the built environment and social spaces of our cities and towns. As those are gutted and replaced by Amazon warehouses in the boondocks, much more is being lost than retail jobs.

Amazon's "growth" is not actually "growing" the economy in any useful way; it's simply consolidating a number of sectors into one quasi-monopoly.

2. Amazon is now flexing the political power of its wealth. Anybody with cash can buy political influence. But few organizations have the billions of profits to spend on political favors and protection that Google, Amazon and Facebook have.

3. The founder of Amazon, Jeff Bezos, is now likely worth more than all his 560,000 employees combined. Divide $134 billion--Bezos' personal stake in Amazon stock-- by 560,000, and you get $239,285. How many of Amazon's employees (average pay is around $28,000 annually) have a net worth of $240,000 or more? Vanishingly few below the top layer of techies and managers.

The theory of the happy union of capitalism and democracy rests on capitalism creating secure middle-class employment for millions of citizens. Once capitalism only creates a peon-debt-serf class and a 5% technocrat / manager / financier / entrepreneur / speculator class that harvests 70% of the wealth and income, then democracy dies by the slow poison of rising inequality and ever greater asymmetries of wealth and political power.

No wonder we read that Jeff Bezos Booed By Amazon Workers.

I am sure there are thousands of well-paid tech/managerial employees of Amazon, but there are also thousands of part-time employees like the Camperforce: Meet the Camperforce, Amazon's Nomadic Retiree Army (Wired)

The blowback is just getting started, as people awaken to the dangers posed by these fast-metastasizing tech quasi-monopolies. The most dangerous dynamics in America are the erosion of the mechanics of democracy by wealth/corporate power, and the erosion of middle-class employment in favor of maximizing corporate profits by any means available.

This is how we end up with a neofeudal society that benefits the Protected Few at the expense of the powerless, exploited Many. Facebook, Google and Amazon are each accelerating this erosion not by accident, but as a direct consequence of their business model and sources of profit.

Chart

My new book Money and Work Unchained is $9.95 for the Kindle ebook and $20 for the print edition.

Read the first section for free in PDF format.

Published:4/27/2018 11:13:30 AM
[Entertainment] Louis Tomlinson Reacts to Royal Baby No. 3's Name: "I'll Take You Under My Wing, Lad" Louis TomlinsonWhat does a royal baby have in common with a One Direction member? A name! Nearly a week after welcoming their third child into the world, Duchess of Cambridge Kate Middleton and Prince...
Published:4/27/2018 10:42:04 AM
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Published:4/27/2018 10:12:01 AM
[Entertainment] ABBA Announces New Music for the First Time in More Than 35 Years AbbaMamma mia! ABBA has new music on the way--for the first time in more than three decades. The iconic Swedish pop group took to social media to end this week with the major announcement...
Published:4/27/2018 9:42:31 AM
[World] To Save Lives, Make Naloxone an Over-the-Counter Drug

Jeffrey A. Singer

This month Surgeon General Jerome Adams issued an advisory that touted the lifesaving potential of naloxone, an opioid antagonist that reverses potentially fatal overdoses. He called for wider distribution of naloxone to opioid users, their relatives, and their close associates.

While that move is commendable, the surgeon general pulled his punches. He can and should go further by pressing the Food and Drug Administration to reclassify naloxone as an over-the-counter drug.

Naloxone, approved for use since 1971, works by blocking opioid receptors. It is an effective remedy that can be safely administered by laymen wth minimal training, using either a nasal spray (sold under the brand name Narcan) or an intramuscular auto-injector (Evzio).

Adams cites research demonstrating that community-based overdose education and naloxone distribution reduce overdose deaths and notes that first responders in most states and cities are now equipped with the drug. According to the U.S. Centers for Disease Control and Prevention, at least 26,500 overdoses were reversed by individuals without medical training between 1996 and 2014.

The FDA should facilitate access to the the opioid-overdose antidote.

Since naloxone is available only by prescription, most states have developed work-arounds that make obtaining it easier for opioid users and people close to them. That usually involves authorizing pharmacists to prescribe the drug or issuing a “standing order” that lets pharmacists distribute it without a patient-specific prescription. The press often reports that such maneuvers make naloxone available “over the counter,” but that’s inaccurate, since pharmacists still serve as middlemen.

Because of the stigma associated with opioids, many users are reluctant to request naloxone from pharmacists, who in any case may be reluctant to prescribe it, believing they are “enabling” drug abusers. In six states and the District of Columbia, naloxone cannot be prescribed to third parties who know an opioid user.

Recognizing these obstacles to naloxone distribution, Australia made it available over the counter in 2016, so it as easy to purchase as cold remedies or antacids. Medical and nonmedical opioid users can discreetly make a purchase and check out at the cash register without having to answer any questions or face scrutiny from a pharmacist. The drug has been sold over the counter in Italy for more than 20 years.

Some argue that wider distribution of naloxone creates a “moral hazard” by providing opioid abusers with a safety net, reducing their incentive to quit or seek treatment. They point to a recent working paper published by the National Bureau of Economic Research (NBER) that found “broadening naloxone access led to more opioid-related emergency room visits and more opioid-related theft, with no reduction in opioid-related mortality.”

A 2017 NBER working paper, by contrast, found wider naloxone availability was associated with a reduction in opioid-related deaths of 9 to 11 percent. A study reported last year in the journal Addictive Behavior found that drug consumption generally declined among heroin users after they were trained to use naloxone.

In any case, it is unethical to endanger the lives of some opioid users by impeding access to naloxone in the hope of discouraging others. Public policy should focus on saving the lives of the individuals in distress, regardless of how that may affect other people’s behavior.

Judging from an August 2016 blog post published by the FDA, at least some officials at the agency think it is reasonable to consider reclassifying naloxone as an OTC drug. FDA Deputy Director Karen Mahoney said the agency was ready to assist manufacturers in submitting applications for reclassification. For OTC status, manufacturers must first get approval of labeling and packaging information that can be understood by the general public. The FDA even created a draft label for OTC use to facilitate petitions for rescheduling.

New labeling is arguably unnecessary, since the Narcan nasal spray and the Evzio auto-injector were specifically designed for use by the general public and have been used in the field for some time. It is even harder to understand why the FDA is waiting for manufacturers to request reclassification. FDA regulations authorize the agency’s commissioner, Scott Gottlieb, to order a rescheduling review. They also allow petitions from “any interested person,” not just drug manufacturers.

If Gottlieb is unwilling to order a review, the secretary of health and human services-or, if necessary, Congress-can make it happen. Even state legislatures or governors can formally request an FDA review.

The surgeon general’s naloxone advisory makes it obvious that he is an interested party as well. Because he thinks the antidote should be more widely deployed to reduce overdose deaths, Adams should formally ask Gottlieb to order an expedited review with the goal of making naloxone available over the counter as quickly as possible.

Jeffrey A. Singer practices general surgery in metropolitan Phoenix and is an adjunct scholar at the Cato Institute.
Published:4/27/2018 8:41:50 AM
[Entertainment] Inside Prince William and Kate Middleton's First Days With Prince Louis Kate Middleton, Prince William, Royal BabyThe bells at Westminster Abbey were primed for peeling. The royal salutes were moved into place at the Tower of London, set to be fired the following afternoon. And the 81-year-old self-appointed...
Published:4/27/2018 8:41:49 AM
[Markets] Q1 GDP Beats Despite Consumption Plunge To 5 Year Low

Q1 GDP was expected to be a big slowdown from the Q4 2017 GDP of 2.9%, mostly as a result of slowing consumption now that the front-loaded, credit-card funded euphoria from Trump's tax cust is long gone, and that's precisely what happened when moments ago the BEA reported that in the first quarter, GDP rose at a 2.3% annualized rate, which while the lowest in the past year, was better than the 2.0% consensus estimate.

The increase in real GDP reflected increases in business investment, consumer spending, exports, and inventory investment. Imports, which subtract from GDP, increased in the first quarter of 2018.

Looking at the components, the biggest cause for the drop in GDP was the sharp slowdown in Personal consumption, which rose only 1.1% in 1Q, in line with expectations, after soaring 4.0% prior quarter, this was the weakest quarter for US consumer spending since 2Q 2013.

The other components were generally also in line with expectations:

  • Fixed Investment slumped from 1.31% in Q4 to 0.76%: so much for that CapEx boost.
  • Inventories were the biggest swing factor, adding 0.43% to GDP after subtracting 0.53% in Q4
  • Exports dropped from 0.83% to 0.59%, while Imports subtracted 0.39% from GDP vs -1.99% in Q4. On net, trade contributed 0.20% to GDP, after subtracting -1.2% in Q4.
  • Finally government added 0.2% to Q1 GDP, after boosting Q4 GDP by 0.51%.

On the inflation side, the news was a little "flatter" with the GDP price index rising 2% in 1Q after rising 2.3% prior quarter, and missing expectations of a 2.2% print. That said, core PCE rose 2.5% Q/Q in 1Q after rising 1.9% prior quarter, and matched expectations.

Overall, prices of goods and services purchased by U.S. residents increased 2.8 percent in the first quarter of 2018, after increasing 2.5 percent in the fourth quarter of 2017.

  • Food prices increased 0.4 percent in the first quarter following an increase of 0.1 percent in the fourth quarter of 2017.   
  • Energy prices increased 12.4 percent in the first quarter of 2018 following an increase of 28.2 percent in the fourth quarter of 2017. 

Excluding food and energy, prices increased 2.7 percent in the first quarter of 2018, compared with an increase of 2.0 percent in the fourth quarter of 2017.

Overall, this was a solid report, certainly better than expected, and with core PCE rising at 2.5%, it provides the Fed with even more reasons to hike rates in coming meetings.

Published:4/27/2018 8:11:55 AM
[Entertainment] Go Behind the Scenes of Cole Swindell's "Break Up in the End" Music Video Cole SwindellIn the world of country music, some songs have a special way of speaking to us. Fans of Cole Swindell know that all too well thanks to his latest hit song titled "Break Up in the...
Published:4/27/2018 8:11:55 AM
[Markets] Secret Recording Reveals Democratic Party Boss Ordering Candidate To Quit Race

In the latest striking example of how the Democratic Party resorts to cronyism (and perhaps corruption) to ensure that its favored candidates beat back progressive challengers in local races, a candidate for Colorado's 6th Congressional District has leaked a recording of a conversation with Minority Leader Steny Hoyer to The Intercept which published it overnight. In it, Hoyer can be heard essentially lecturing the candidate about why he should step aside and let the Democratic Party bosses - who of course have a better idea about which candidate will prevail over a popular Republican in the general election - continue pulling the strings.

The candidate, Levi Tillemann, is hardly a party outsider. Tillemann had grandparents on both sides of his family who were elected Democratic representatives, and his family is essentially Democratic Party royalty.

Still, the party's campaign arm - the notorious Democratic Congressional Campaign Committee (better known as the DCCC, or D-trip) - refused to provide Tillemann with access to party campaign data or any of the other resources he requested.

Hoyer

Despite Tillemann's work as an advisor for Obama's Department of Energy, and his enthusiastic progressive base, the freeze-out he experienced at the hands of the D-trip just goes to show how the Democratic Party will always back the candidate who can pass the infamous "rolodex test" - where the candidate must go through their rolodex and demonstrate that they could raise at least $250,000 to run the campaign.

After Tillemann had a particularly heated phone conversation with a party apparatchik, Hoyer was dispatched to meet the restive progressive candidate at the Denver Hilton.

What follows is a recording of their conversation, in which Hoyer can be heard telling Tillemann that "a decision was made" months ago about which candidate the party would favor in the primary.

The decision to record his conversation with Hoyer came after months of being ignored by party officials, despite winning the support of grass-roots activists and other "resistance" groups in Colorado's 6th Congressional District. Tillemann had trouble booking a meeting with senior party officials despite having notified them of his intention to run. When the Party listed Tillemann's primary opponent, Jason Crow on its "Red to Blue" list - a supposed guide of Democrats who are expected to unseat incumbent Republicans in November. Mike Coffman, the incumbent in the district, has managed to hold on to his seat for several terms, despite his district voting for Clinton, and Obama before her.

Tillemann says the decision to record the conversation came after months of hints that party officials did not want him as the candidate. Though he notified the party of his intention to run, he had trouble gaining an audience with senior DCCC officials, obtaining polling data promised by the DCCC, or even gaining access to resumes of Democratic campaign staff. The party continued to promise neutrality while inviting only Crow to a candidate training seminar, Tillemann alleges.

In February of last year, Tillemann reached out over email to DCCC officials as he explored a bid and maintained contact with party staff through the launch of his campaign; he says he was continually stonewalled as he sought candidate resources. Nearly six months after the initial contact, with Tillemann’s internal complaints growing more forceful, the party committee offered some perfunctory assistance in exchange for access to details about campaign financials and organizing. The offer came after a heated exchange between Tillemann and a DCCC official at a campaign event, in which Tillemann argued that the party was more interested in boosting Crow than beating Coffman.

It wasn't long until public campaign finance data confirmed Tillemann's suspicions that he was being unfairly disadvantaged by the party.

While the DCCC still promised neutrality, publicly disclosed campaign donations confirmed Tillemann’s suspicions. In June 2017, a political action committee controlled by Luján, the DCCC chair, donated $1,000 to Crow. That month, PACs controlled by Hoyer also donated two checks for a combined total of $2,000 to Crow.

"We were put in a situation time and time again where what was communicated to us behind closed doors and what was communicated to the public was at odds," says Tillemann of his decision to tape the conversation with Hoyer. "The breach of personal decorum," Tillemann adds, "was much less important than the fundamental principle at stake in our democracy in 2018."

Mariel Saez, a spokesperson for Hoyer, said that "we do not comment on private meetings. Mr. Hoyer supports Crow and donated to him last year, but he hasn’t engaged in the race since then." Crow did not respond to a request for comment, and the DCCC declined to comment.

During Tillemann's meeting with Hoyer, the party boss made no secret about which candidate had his support.

"Yeah, I’m for Crow," Hoyer explained. "I am for Crow because a judgment was made very early on. I didn’t know Crow. I didn’t participate in the decision. But a decision was made early on by the Colorado delegation," he said, referencing the three House Democrats elected from Colorado.

[...]

"The decision, Tillemann was told, had been made long ago. It wasn’t personal, Hoyer insisted, and there was nothing uniquely unfair being done to Tillemann, he explained: This is how the party does it everywhere."

Other candidates for the sixth Congressional district who spoke with the Intercept shared similar stories of being betrayed by the organization commonly referred to as the "D-trip". Despite securing assurances that the party would remain neutral, David Aarestad, an attorney who had briefly entered the primary race but dropped out in March, described how he soon discovered the party was providing polling data and other resources to his opponent, but not to him - all despite having claimed that the party had "learned" from the 2016 presidential primary.

BUT THE DYNAMICS described in the audio tape and by Tillemann resonated with other former candidates in the district.

"The party did not give me the resources that they gave Jason Crow," says David Aarestad, an attorney who had been running for the nomination for the 6th District. Aarestad dropped out of the race in March and endorsed Crow.

"It was the D-trip. I was given extensive promises in March of last year that they would not do anything to favor one candidate over another, that they had learned from the mistakes made during the Bernie-Hillary fallout, and that they would do everything the same for all of the candidates," says Aarestad. "But, they made polling data available to Crow that they did not make available to me. They made other resources available to Crow that they did not make available to me, such as email lists for fundraising purposes."

Another former candidate from Colorado's sixth district says the party never even bothered to contact him.

Gabriel McArthur, another former candidate for the 6th District, says the DCCC never contacted him, even though he was the first candidate to enter the race. He says the party exercises influence not just over candidate selection, but how political money and media coverage operates in the state. McArthur says he had the most detailed policies on his campaign website, but could never gain serious media coverage for his race. While Crow for much of last year had no issues page on his campaign website, McArthur noted that the establishment favorite appeared to easily win endorsement after endorsement from local liberal groups and politicians along with fawning coverage from local media.

"Jason Crow has been hoisted up as the chosen candidate the entire time. The party officers say we need centrists to win against Mike Coffman, that’s just the way it is," says McArthur, a former Bernie Sanders delegate to the 2016 Democratic National Convention.

Hoyer's involvement in the scandal is hardly a surprise. A former protege of California Rep. Tony Coelho - a lawmaker who, as the head of the D-trip in the 1980s and 1990s, helped transform the organization into the big-money political machine it is today - Hoyer has been supporting the party establishment against "outsider" candidates for his entire political career. And his dedicated shilling for the party elite has paid off: As the minority leader, Hoyer is literally a heartbeat away from the speakership, a position he has coveted for his entire political career.

But the fact that the minority leader flew out to Colorado to browbeat a candidate into dropping out of a primary is also representative of an endemic sickness in the Democratic Party. Instead of embracing progressive policies that helped establish Bernie Sanders as the most popular lawmaker in the country, the party establishment has continued to favor the same bland, corporatist centrists who fit the Hillary Clinton mold.

FOR THE 2018 midterm cycle, the party has not only courted moderate Democrats and formed a renewed partnership with the conservative Blue Dog caucus for candidate recruitment, but has discouraged candidates from embracing populist ideas, such as single-payer health care.

For Tillemann, however, the party’s closeness with the corporate elite is the very reason why the DCCC continues to lose general elections.

"They squash progressive candidates. They destroy the diversity of ideas in their caucus. They keep ideas like 'Medicare for All,' free community college, or impeaching Donald Trump from having a significant role in the national conversation," says Tillemann. “The issues that resonate most with voters are not the issues that the DCCC is telling candidates to focus on.”

Is he worried that even if he is successful in his campaign, that he’s already betrayed one of the most powerful Democrats, making him an outsider as soon as he arrives in Washington?

Of course, none of this should come as a surprise to anybody who has been paying attention. After all, this is the same Democratic Party that fed Hillary Clinton's campaign questions for an upcoming CNN debate against Sanders, and whose former chair, Debbie Wasserman Schultz was forced to resign when Wikileaks reveals the full extent of DNC cronyism for Hillary and against Bernie (and which apparently is now the Russians' fault). The same party that became a tool of the Clinton campaign after the previous administration left it nearly broke and mired in dysfunction.

Apparently, despite the abundant evidence that its approach isn't working, the Democratic Party has refused to change.

With this is in mind, one wonders if it is indeed a slam dunk that Democrats will "sweep" in November, or is it just objective, impartial and unbiased polls that make that claim, the same polls that have Hillary 95% odds of winning the presidency.

Published:4/27/2018 7:41:37 AM
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Published:4/27/2018 7:41:35 AM
[Markets] "We Are Stunned" Gartman Rages After Getting Stopped Out Of Nasdaq Short

Yesterday morning, we delivered a present to tech longs when we reported that after one week sabbatical since his latest disastrous reco (to short WTI just hours before it exploded higher), Dennis Gartman told his few clients he had just gone short the Nasdaq.

NEW RECOMMENDATION: We’ve been abundantly bearish of equities for the past several weeks, but we’ve failed to put that bearishness to test “officially” in a recommendation and so we shall do so this morning, wading in to sell the NASDAQ futures anywhere above $6560 as it trades $6564 as we write and finish TGL. We’ll risk 1.5% on the trade and we look for $6000 to be taken out to the downside sooner  rather than later. Indeed, should 6400 be taken out today we’ll add to the position immediately

Unfortunately, the trade did not work out quite as intended, and just an hour later, the Nasdaq soared tripping Gartman's +1.50% stop loss limit.

This morning there is the always amusing post-mortem from the "world-renowned commodity guru."

We were bearish of shares coming into yesterday, before the ECB’s non-decision decision and before we listened to Dr. Draghi’s postmeeting press conference, but as we listened to Draghi’s comments it became painfully clear to us that we were wrong in suggesting…and then officially recommending…a net short position in equities. If the   monetary authorities are not going to err contractionarily and are, instead, going to continue their experiment with QE we shall have to adapt. We have no choice.

Hence, we were wrong in being short into yesterday’s market and fortunately we had a stop that cost us 1 ½%. We shall call that fortunate; it felt like it could not have been a worse idea, but indeed by the close it proved it could have been a great deal worse.

The "explanation":

Turning to the “action” in the last few minutes of futures trading in the NASDAQ yesterday, we are still stunned by the 100 “Big Figure” rush to the upside that took place even as the S&P, Dow and Russel futures were quietly selling off. We must believe that someone one in a position of authority “knew” about Amazon’s “blow-out” earnings report which was made officially public only moments after 4:00 p.m. There really cannot be any other explanation! [sic]

And the formal closing:

Why the NASDAQ 100 shot up 100 handles in the last five minutes of trade is open to debate… and we wrote about that above… but it did and fortunately we were stopped out a full 1% below the closing level. We are growing weary of this sort of thing, but at least we kept this to a 1 ½% loss on a single unit. At least that! ‘Tis small solace, however.

So what now? Well, it appears that the "guru" is long once again:

As for our retirement account, we made no changes and remain long of cotton, long of gold, long of the shares of a business development company and long of the shares of a primarily Australian and New Zealand short term government bond fund traded on the NYSE. We also held our short derivatives position but will be cutting that back rather materially today and will be looking about for things to buy that make “the things that if dropped on your foot shall hurt.” Trains; steel; shipping; farm equipment… things such as that; things that can be counted; things that pay dividends; things with real earnings; that sort and those sorts of things.

Published:4/27/2018 7:12:07 AM
[Markets] Nasdaq Surges Alongside The Dollar; 10Y Yield Slides Ahead Of GDP

In the aftermath of blockbuster earnings from Amazon, which is set to open at an all time high as it breathes down Apple's neck for the title of first $1 trillion market cap company, and Intel, it is hardly a surprise that Nasdaq futures are pointing sharply higher (especially with Gartman shorting the Nasdaq yesterday).

What is more surprising is the broader weakness elsewhere, with Dow futures down 90 points and even the S&P in the red, as Asian shares rose and European equities were little changed. Traders are cautious ahead of today's Q1 GDP print, which is expected to slide from 2.9% to 2.0%, especially in the aftermath of the terrible UK GDP print earlier, which sent cable, gilt yields and May rate hike odds tumbling.

Major European stock gauges were mixed, with the Stoxx 600 index little changed, and heading for its longest streak of consecutive weekly gains since October 2017. Amundi, Europe’s biggest asset manager, climbed after reporting record 1Q inflows, while Electrolux slumped after raising its projection for raw material costs in 2018. German and British benchmarks outperforming as the pound and euro fell after the U.K.’s worst growth figures since 2012, while data out of France and Spain also disappointed.  Meanwhile, investors continued to pull money out of European equity funds in the week through Wednesday, according to a BofAML, citing EPFR Global data

Asia equity markets traded mostly higher as the region got an uplift from the momentum in US where all majors extended on gains amid tech outperformance after strong Facebook results, which was later followed after-market by Amazon, Intel, Microsoft and Western Digital which all beat on earnings forecasts. As such, ASX 200 (+0.2%) and Nikkei 225 (+0.5%) traded positive although gains were relatively mild as participants also digested a flurry of data releases and earnings, while KOSPI (+0.6%) benefited from a warming of ties amid the historic inter-Korean summit. Elsewhere, Shanghai Comp. (-0.7%) and Hang Seng (+0.2%) were mixed with underperformance in the mainland following a neutral position by the PBoC in today’s open market operations, while data also showed a slowdown in the pace of Chinese Industrial Profit growth.

The most notable move overnight was, again, the dollar, as there seems to be no stopping the greenback even as Treasuries edge higher a second day, with the yield sliding below 2.97% and ever further from the 3.00% level which was crossed for the first time since 2014 just two days ago.

Meanwhile, the ominous, pre-recessionary flattening has resumed, and the 2s10s is back under 50bps this morning.

The Bloomberg Dollar Spot Index advances for the eighth day in nine amid an accelerating short squeeze, which we warned about a week ago...

... hitting a fresh three-month high as investors scale back expectations that central banks other than the Fed are confident in tightening. In fact, the dollar is headed for its best week since December 2016.


Elsewhere in FX, as noted above, U.K. GDP data misses estimates, slashing the odds of a BOE hike next month, making the pound the worst G-10 performer.  The euro slid amid disappointing data out of France, while the won climbed with Korean leaders’ summit in focus; The yen was near the bottom of a five-week spiral on concerns its yield differentials against the dollar would widen further after the Bank of Japan signaled it’s in no hurry to exit.

Overnight the BoJ concluded its latest policy meeting and kept monetary policy unchanged as expected with NIRP held at -0.10% and the 10yr JGB yield target at around 0%. The decision was made by 8-1 vote with Kataoka the dissenter again, but the biggest surprise was that the central bank removed its reference to achieving 2% CPI target around FY19. Furthermore, BoJ stated that risks to economy were balanced for FY2018 but are skewed to downside for FY2019.  BoJ Governor Kuroda said it is appropriate to continue powerful monetary easing, and said that the timeframe for a price target was a limit implying immediate policy change, adds was just a forecast, not a limit and inflation momentum to continue faster to the 2% target.

Meanwhile, the ECB’s Survey of Professional Forecasters maintains 2018 inflation at 1.5%, cuts 2019 inflation to 1.6% to 1.7%. ECB's Mersch said the path of normalization remains conditional on outlook for price stability, adds underlying strength of Euro area economy continues to support their confidence that inflation will converge to their aim.

SNB’s Jordan says there has been a reduction in significant overvaluation of CHF however the currency remains overvalued; he adds negative interest rates and market intervention remain essential as situation is still fragile.

Data include annualized GDP and U. of Michigan Consumer Sentiment Index. Charter Communications, Chevron, Colgate-Palmolive, and TransCanada are among companies reporting earnings

Overnight bulletin summary

  • Soft UK growth data leads to a weaker GBP and lifts FTSE
  • BoJ keeps monetary policy unchanged Kuroda reiterates it is appropriate to continue powerful monetary easing
  • Looking ahead, highlights include, US GDP, ECB’s Lautenschlaeger and BoE’s Carney

Market Snapshot

  • S&P 500 futures down 0.3% to 2,667.75
  • STOXX Europe 600 up 0.05% to 383.95
  • MXAP up 0.6% to 172.86
  • MXAPJ up 0.8% to 561.89
  • Nikkei up 0.7% to 22,467.87
  • Topix up 0.3% to 1,777.23
  • Hang Seng Index up 0.9% to 30,280.67
  • Shanghai Composite up 0.2% to 3,082.23
  • Sensex up 1% to 35,055.38
  • Australia S&P/ASX 200 up 0.7% to 5,953.65
  • Kospi up 0.7% to 2,492.40
  • German 10Y yield fell 2.4 bps to 0.569%
  • Euro down 0.3% to $1.2070
  • Italian 10Y yield fell 3.0 bps to 1.493%
  • Spanish 10Y yield fell 2.5 bps to 1.245%
  • Brent futures down 0.4% to $74.45/bbl
  • Gold spot up 0.1% to $1,317.85
  • U.S. Dollar Index up 0.4% to 91.88

Top Overnight News

  • North Korean leader Kim Jong Un and South Korean President Moon Jae-in agreed Friday to finally end a seven-decade war this year, and pursue the “complete denuclearization” of the Korean Peninsula
  • Economic growth in France, the euro-area’s second largest economy, cooled sharply in the first quarter, and while weather was a factor, the slowdown may heighten concerns about the broader outlook for the euro area. Data weighed on the euro, which fell for the third day reaching its lowest since mid- January vs the dollar
  • The Bank of Japan left its stimulus program unchanged on Friday, while removing language from its statement declaring that it would reach 2 percent inflation around fiscal 2019. The decision to maintain the yield-curve control program and asset purchases was forecast by all analysts surveyed by Bloomberg
  • Whipped by a global stock selloff and climbing bond yields, Norway’s $1 trillion wealth fund reported its first loss in two years in the first quarter. The sovereign wealth fund lost 171 billion kroner ($21 billion), or 1.5 percent, the investor said on Friday
  • Profit growth at Chinese industrial firms posted a sharp deceleration in March, as factory inflation moderated. Industrial profits rose 3.1 percent last month from a year earlier, the slowest gain since 2016

    Asia equity markets traded mostly higher as the region got an uplift from the momentum in US where all majors extended on gains amid tech outperformance after strong Facebook results, which was later followed after-market by Amazon, Intel, Microsoft and Western Digital which all beat on earnings forecasts. As such, ASX 200 (+0.2%) and Nikkei 225 (+0.5%) traded positive although gains were relatively mild as participants also digested a flurry of data releases and earnings, while KOSPI (+0.6%) benefited from a warming of ties amid the historic inter-Korean summit. Elsewhere, Shanghai Comp. (-0.7%) and Hang Seng (+0.2%) were mixed with underperformance in the mainland following a neutral position by the PBoC in today’s open market operations, while data also showed a slowdown in the pace of Chinese Industrial Profit growth. Finally, 10yr JGBs were marginally higher with prices underpinned at the open to track the upside in USTs and with gains then held throughout the session including after an uneventful BoJ announcement in which it kept policy unchanged but removed the wording on reaching inflation goal around FY19.

    Top Asian News

    • BOJ Maintains Stimulus While Removing Language on Timing of 2%
    • Sony’s New CEO Sets Conservative Targets as He Seeks Revival
    • Malaysia’s Prime Minister Says Markets to Decide on Currency
    • Tencent-Backed Little Red Book Is Said to Seek $200 Million
    • Hedge Fund Judah Value Jumped 46% This Year on Agritrade

    European stocks also pushed higher (Stoxx 600 +0.1%) post Thursday earnings as tech outperformance buoyed general sentiment, alongside an easing of geopolitical tensions following constructive dialog between Korea’s leaders. FTSE saw significant strengthening following uninspiring GDP data, that weakened the GBP and further reduced the possibility of tighter monetary policy. While expectations were focused on bad weather having a significant adverse impact, this was quoted to have had only a “limited effect” which pushed expectations of a rate hike in May to sub 25% from 50-50 prior.

    Top European News

    • Draghi’s ‘Moderation’ Rears Its Head in French Slowdown; Betting on Lower Euro-Area Rates Seen as the Way to Go for Now
    • Norway’s $1 Trillion Wealth Fund Posts First Loss in Two Years
    • Romanian President Calls for Premier’s Resignation
    • German Unemployment Falls as Companies Overcome Soft Patch

    In currencies, the DXY index is gathering momentum, largely at the expense of the Greenback’s currency counterparts in the basket (and beyond), and has now cleared a few more chart resistance levels, around 91.526 and from 90.702-751, with the latter entering a multi-month channel that targets 91.996 ahead of 92.000 for more obvious psychological rather than technical reasons. DXY high so far is around 91.825, and another supportive factor comes from month-end rebalancing models signalling net Dollar demand. Sterling’s dramatic turnaround from flavour of the month to one of the market’s worst enemies continues after the UK economy came to a virtual standstill in Q1 and not all because of the Beast from East, according to the ONS. BoE tightening expectations have been knocked back accordingly, with a May hike now down to circa 20% from evens pre-data and almost baked in at one stage (before misses on the labour, CPI and retail sales fronts last week). Cable is now threatening to lose the 1.3800 handle vs just over 1.4000 at the start of April/Q2 and the 1.4375 post-Brexit vote peak set only recently (on April 17). EUR/JPY/CHF: All reeling and feeling the weight of dovish/downbeat Central Bank policy pronouncements after the ECB acknowledged a slowdown in growth, the BoJ removed its timetable for inflation reaching target and the SNB maintained that the Franc is still highly valued, albeit not has strong as it has been. Eur/Usd has tumbled further from brief post-meeting peaks around 1.2210 to a low of circa 1.2065 and eyeing a 1.2050 Fib for potential support, while Usd/Jpy is consolidating gains above 109.00, but remains capped just ahead of 109.50 and the 109.65 Fib. Usd/Chf has breached 0.9900, but Eur/Chf is sub-1.2000 on the aforementioned single currency weakness.

    In commodities, As we approach week end some profit taking noted in the crude complex, that has been further compounded by FX effects, with not much specific news aside from a fire in a Wisconsin oil refinery that had little effect on the fossil fuel. In the metals scope reports were seen from the EU that conditions being set by the US to extend tariff deadlines were unacceptable, with a slight rise in aluminium seen. Gold currently at almost 5 week lows, with the yellow metal heading for its biggest weekly fall in a month.

    US Event Calendar

    • 8:30am: U.S. Employment Cost Index, 1Q, est. 0.7%, prior 0.6%
    • 8:30am: U.S. GDP Annualized QoQ, 1Q A, est. 2%, prior 2.9%; Personal Consumption, 1Q A, est. 1.1%, prior 4%
      • U.S. GDP Price Index, 1Q A, est. 2.2%, prior 2.3%
      • U.S. Core PCE QoQ, 1Q A, est. 2.5%, prior 1.9%
    • 10am: U.S. U. of Mich. Sentiment, April F, est. 98, prior 97.8;
      • Current Conditions, April F, est. 106.2, prior 115
      • Expectations, April F, no est., prior 86.8
      • 1 Yr Inflation, April F, no est., prior 2.7%
      • 5-10 Yr Inflation, April F, no est., prior 2.4%

    DB's Jim Reid concludes the overnight wrap

    What’s the best cure for a mini bond market tantrum? Perhaps to arrange a Mr Draghi press conference. It has certainly been the case in recent months that his pressers have generally been interpreted as dovish and yesterday the bond rally mostly came towards the end of his Q&A. Overall 10y Bunds closed down -4.0bps yesterday and Treasuries (-4.5bps) fell for the first time in eight days. At one stage yesterday the 10yr Bund/Treasury spread returned to 29 year wides of 239.6bp (see graph in the pdf). As recently as late 2012 this ratio was almost zero and last traded flat in February 2012. So quite a divergence in recent years.

    As DB’s Mark Wall discussed, there was a contrast between a virtually unchanged prepared press statement in which the Governing Council kept its faith in growth and inflation and the Draghi Q&A where there was a clearer sense of caution. The most important point Mark and his team took from the press conference was the fact that the Governing Council had not discussed monetary policy. Instead the Council focused on the “very important” current data. The underlying air of caution coupled with the absence of any preparation for an imminent and important policy decision means the probability of the QE announcement coming in June has declined. DB now see July as the most likely timing of the announcement that net asset purchases will cease. The forecast for the sequencing and timing of monetary withdrawal remain the same with QE ending in December 2018 after a taper in Q4 and the first 20bp deposit rate hike in June 2019.

    For credit investors, Mr Draghi played down concerns about a CSPP taper, saying that there is no specific strategy behind the slowdown while also partly blaming it on seasonality. A reminder that Michal in my team wrote a note on this sharp slowdown earlier this week suggesting there was enough evidence that buying was slowing. We’ll perhaps be able to tell more on Monday when the latest numbers are released.

    Post the ECB, the Euro finished -0.48% lower versus the Greenback with that move aiding European equity markets with the Stoxx 600 closing +0.94%. US equity markets also bounced back strongly following solid corporate results from the tech sector, with Facebook and AMD up 9.1% and 13.7% respectively. The Nasdaq (+1.64%) rose for the first time in six days while the S&P (+1.04%) and Dow (+0.99%) also advanced. After the bell, the strength in tech seems to be continuing with Amazon up c7% while Baidu and Intel are both up c6% following their quarterly results.

    This morning in Asia, markets are trading modestly higher with the Nikkei (+0.42%), Kospi (+0.64%) and Hang Seng (+0.10%) all up, while the Shanghai Comp. is down -0.74%. Datawise, Japan’s April core Tokyo CPI was below  market at 0.6% yoy (vs. 0.8% expected). March IP was above expectations at 2.2% yoy (vs. 2%), the jobless rate was in line at 2.5% while retail trade was below market (1% yoy vs. 1.5% expected). Elsewhere, China's March industrial profits grew 3.1% yoy (vs. 10.8% previous).

    With the ECB out of the way, this morning we had the BoJ meeting where members voted 8-1 to keep rates unchanged while Mr Kataoka continued to cast a dissent vote. Notably, the BOJ has removed previous wording on reaching its 2% inflation target around fiscal 2019, while it kept its 2019 & 2020 inflation forecasts of 1.8% unchanged. We shall hopefully get more info on this at Governor Kuroda's press conference just after we go to print this morning at 7:30am London time.

    Over in Asia this morning, Kim Jong Un became the first North Korean Leader to set foot in South Korea since the 1950’s Korean war as he met with South Korea’s President Moon Jae-in for meetings. Kim said he “felt a flood of  emotion” and called for “a new history of peace and prosperity” while indicating to Moon “let’s meet often”. Looking ahead, Kim is expected to meet with President Trump sometime in May or June for talks.

    Looking ahead to today, the big focus for the market this afternoon is likely to be a first look at Q1 GDP in the US. The consensus is for a +2.0% annualized qoq reading while our US economists expect +2.2%. Our colleagues have  previously noted that their index of key economic indicators continues to point to 3% plus growth so even if today’s Q1 disappoints they doubt that policymakers will rethink the near term trajectory for interest rates. They also highlight that the initial Q1 GDP print has missed the median consensus expectation in each of the last eight years—partly due to well-known issues with residual seasonality. On average, forecasters have overestimated Q1 growth by 46 basis points (bps). This has been even more acute over the last five years as the median forecast has missed by 64 bps.  This release has also been prone to substantial revision. Real GDP growth has been revised up in four of the last five years and in five of the last eight years.

    The average upward revision has been 88 bps while the average of the three downward revisions over this period (2010, 2011 and 2014) was 193 bps. So as DB’s Brett Ryan suggested, policymakers and market participants are likely to substantially discount the advance GDP figures in the first quarter, at least until the BEA issues its benchmark revision in July.

    Also out today will be the Q1 employment cost index which our US economists forecast to come in at +0.8% (consensus at +0.7%). An upside surprise to our economists forecast would boost the year over year growth rate of the ECI above its Q4 2017 post recession high of 2.7% and could cause the market to price a greater probability of an additional fourth rate hike this year (which is our house forecast). According to Bloomberg the odds of this is at 41%, but notably up from the lows of 18% earlier this month.

    Moving onto trade, ahead of the next week’s visit to China to discuss trade relations, President Trump’s economic adviser Mr Kudlow told CNBC that “it’s going to cover a broad area. All of the disputes will be discussed”. He added that “I’ve high hopes for this (trip)”, although also noted that “I’m always the optimist about this”. On the other side, Bloomberg has cited unnamed sources which suggest China’s State Council is considering plans to cut the import duty on passenger cars by half, from 25% currently to 10% or 15%. The potential cut is consistent with  President Xi’s comments in the Boao forum where he indicated a commitment to cut import tariffs on cars.

    Over in Italy, the Five Star Party Leader Luigi Di Maio said “we’re available to sit at the table to negotiate a contract” to form the next government, potentially with the Democratic Party, but “if we don’t succeed, we go back and vote” in a new election.

    Moving along, yesterday’s data in the US was a bit of a mixed bag. The April Kansas City Fed manufacturing index was above market at 26 (vs. 17 expected). In the details, the new orders index jumped to a 15-year high of +37 while the production index rose 13pts to a 7-year high of +33. The weekly initial jobless claims fell to a 49 year low (209k vs. 230k expected) while continuing claims was also lower than expectations (1,837k vs. 1,850k expected), although this was partly due to post Easter data distortions. Elsewhere, the March advance goods trade deficit narrowed to a six month low of -$68bln (vs. -$75bln), as exports of goods rose 2.5% mom while imports fell 2.1% mom. Finally, the March core durable goods orders (0% mom vs. 0.5% expected), core capital goods orders (-0.1% mom vs. 0.5% expected) and wholesale inventories (0.5% mom vs. 0.7% expected) were all weaker than expected.

    In Europe, Germany’s May GfK consumer confidence index was in line at 10.8, with households less optimistic about the economic outlook but still positive about their willingness to spend. In the UK, the April CBI retailing reported  sales index improved 6pts mom to -2 (vs. -3 expected), while the Distributive trade survey showed a net 25% of retailers were optimistic of annual sales growth in May.

    Looking at the day ahead, in Europe we'll get flash April CPI reports in France and Spain along with the advance Q1 GDP reading in the former. Germany's unemployment rate for April is also out along with the advance Q1 GDP report for the UK and April confidence indicators for the Euro area. In the US, we’ll see the first release of Q1 GDP along with the Q1 employment cost index and final April University of Michigan consumer sentiment report. Elsewhere, BOE’s Carney and Haldane will speak while Exxon Mobil and Chevron are due to report earnings.

    Published:4/27/2018 6:42:25 AM
    [Uncategorized] From ‘Avengers: Infinity War’ to ‘Iron Man’: All 19 Marvel Cinematic Universe movies, ranked
    From 'Avengers: Infinity War' to 'Iron Man': All 19 Marvel Cinematic Universe movies, ranked

    “Avengers: Infinity War,” which officially opens Friday, is the culmination of a decade-long unspooling of Marvel Cinematic Universe movies, which together represent one of Hollywood’s longest studio winning streaks ever. Yet while Marvel Studios is viewed as a pioneering success story, that doesn’t mean the individual films haven’t been marred by some creative missteps. Here’s how […]
    Published:4/27/2018 6:11:12 AM
    [Entertainment] Prince Louis: Has the Most Stylish Uncle and Future Aunt: Prince Harry and Meghan Markle Meghan Markle, Prince HarryWelcome to the world, Prince Louis! Kate Middleton and Prince William welcomed their third child, a baby boy, on Monday. He joins big brother Prince George, 4, and big sister Princess...
    Published:4/27/2018 5:41:15 AM
    [Markets] The Perpetual Business Of War

    Authored by Leonard Savin via Oriental Review,

    Shortly before its attack on Syria, the US declassified its “Report on the Legal and Policy Frameworks Guiding the United States’ Use of Military Force and Related National Security Operations.” As its name implies, this paper concerns itself with US military operations abroad. The word “war” is never officially used, as you may notice, because the procedure for declaring war is a rather complicated process.

    According to the report, “US. forces remain in Afghanistan for the purposes of stopping the reemergence of safe havens that enable terrorists to threaten the United States or its interests.” In regard to Iraq and Syria, the picture is much the same. US armed forces are deployed “to conduct operations against ISIS with indigenous ground forces.” Such evasive wording in regard to the second group suggests that this is a reference not only to terrorists, but also to Syrian government troops. This is confirmed a bit further into the document, where it states that “US Armed Forces participating in the Defeat-ISIS campaign in Syria have taken a limited number of strikes against Syrian government and pro-Syrian government forces.” As for the Kurdish divisions, only the Iraqi Peshmerga are mentioned, although in Syria the US has also provided military assistance to the Kurdish units of the SDF.

    Only a relatively small contingent of American troops have been posted to Yemen, where they are conducting operations against the local branches of al-Qaeda. In addition to taking part in combat operations, the US provides logistical assistance from Saudi Arabia against Houthi rebels.

    In Somalia, the US carries out both air strikes as well as ground operations, which includes cooperation with the African Union mission in Somalia. The US has designated al-Qaeda, ISIS, and al-Shabaab as its military targets.

    Libya has mostly been on the receiving end of air strikes that are supposedly coordinated with the Libyan Government of National Accord.

    The seventh country mentioned in the document does not often come up in any of the various news reports about the military hostilities. This is Niger, and the official reason for the presence of the US military there is to train, assist, and advise the local government in the fight against ISIS. Moreover it states that “United States and Nigerien partner forces responded with armed force in self-defense.”

    General Wesley Clark

    In 2007 General Wesley Clark claimed in a television interview that after the attack on New York in 2001, the US planned to conduct seven wars in the Middle East region over the course of five years. The Pentagon would start with Iraq and then move on to target Syria, Lebanon, Libya, Somalia, Sudan, and Iran.

    The fact is that all of these countries, with the exception of Iran, have been the subject of direct or indirect aggression and political pressure from the US and its satellites. There are US military forces that remain stationed in some of them still to this day.

    With regard to the legal framework, which is based on both local as well as international law, this document states that there has been no change that would apply to the presence and actions of the US armed forces there. Only in Yemen are certain restrictions in place. The section about the capture and detention of the citizens of various countries who are seized in conflict zones, as well as the sadly infamous Guantanamo prison, includes a similar statement. Despite the fact that this prison is actually even physically located on an illegally occupied part of Cuba at Guantanamo Bay, Washington continues to maintain that “detention operations at Guantanamo Bay are legal, safe, humane, and conducted consistent with U.S. and international law.” It reports that the detention operations at the prison will continue and new prisoners will be sent to Guantanamo.

    Long War or Perpetual War?

    To understand the US practice of warfare, one must turn to systematic studies that have been done on this subject, as this report is a logical continuation of the strategic research and development conducted by American academic and military institutions. In 2008, the RAND Corporation released a study, called “Unfolding the Future of the Long War: Motivations, Prospects, and Implications for the U.S. Army.” The document was drafted on the basis of the grimmest forecasts, i.e., the assumption that the US will be involved in conflicts against a unified Muslim world that will seek to supplant Western dominance until at least 2020, thus making it necessary to identify the ambiguities and actors in that war, as well as how it might unfold, and to come up with potential strategies to contend with that scenario.

    The authors of the report suggest that methods such as capitalizing on the Sunni-Shiite conflict be used to sway US enemies in a future long war. For example, shoring up the region’s traditional Sunni regimes is suggested as a way to contain Iran and limit its influence in the Middle East and the Persian Gulf.

    Another proposal is that the US might adapt its strategy to focus more on the long-term, relying less on forceful aggression in the Middle East. Under this option, the State Department, USAID, Peace Corps, Department of Agriculture, and Department of Justice could become the primary actors in this new American strategy.

    It is revealing that the term “long war” was not simply added to the lengthy backlist of numerous other theoretical analyses, but has instead been transformed into a concept that is part of the common parlance of the current Washington establishment. This was confirmed by the relatively recent testimony presented by Seth Jones on April 27, 2017 before the House Foreign Affairs Committee, Subcommittee on Terrorism, Nonproliferation, and Trade, titled “Managing the Long War: U.S. Policy toward Afghanistan and the Region. ”

    Given that Afghanistan is located in an important geopolitical region — between Iran and Pakistan and relatively close to the Central Asia states of the former USSR — this country is doomed to be the object of a long and perhaps even perpetual US war.

    But apparently the Pentagon is gearing up to wage an unending war on three fronts — not only in Afghanistan, but also against China and Russia. At least that’s the claim of Professor Michael Klare, who calls this evolution of events “an invitation to disaster” and cautions officials in Washington to think hard before committing to any strategies that involve the use of force.

    War is Business

    On April 16, 2018 the news broke that some US senators were drafting a new war authorization bill. Its authors are Sens. Bob Corker, R-Tenn. and Tim Kaine, D-Va. and its co-sponsors include Sens. Chris Coons, D-Del.; Jeff Flake, R-Ariz.; Bill Nelson, D-Fla., and Todd Young, R-Ind. The bill would regulate the president’s power to press the US armed forces into service. But if one bothers to scrutinize even a bit all the work done by defense contractors and the political decisions related to combat operations, one can quickly see that there is a definite connection between the two. Therefore, any such restrictions can be not only political in nature, but also aimed at business interests. Both of the US missile strikes in Syria (April 2017 and April 2018) used Tomahawk missiles, which are manufactured by the American company Raytheon. In April 2017, when the US attacked a Syrian airbase (firing 59 Tomahawk cruise missiles), Raytheon surged 3% before paring its gain by half, but closed above its 50-day moving average and a 152.68 flat-base buy point. That put the stock back in buy range. Other Pentagon contractors, such as Lockheed Martin, Northrop Grumman, and Boeing, also edged higher. Interestingly, after April 11, 2018, Raytheon shares began to creep upward, rising from $219 per share to a ceiling of $228 by April 17. And this was despite the fact that most of the Tomahawks landed wide of their target.

    The U.S. Senate

    One would have thought that this would have put the Russian company Rosoboronexport in a better position, since it supplies weapons systems to Syria (and some of those systems prevented the Tomahawks from reaching their target), but not Raytheon, whose products were virtual duds. However, on April 16, Russian companies suffered a bad day on the stock market due to the latest US sanctions, with financial analysts claiming that Rosoboronexport, along with Rusal, took the biggest beating.And that was despite the fact that military products from Russia are in high demand on the global arms market.   In other words, some other kind of mechanism exists that makes it possible to manipulate the quotes for securities and the exchange rates. And sure enough, back in 2015 Business Insider reported that Donald Trump’s investment portfolio included stock holdings in Raytheon. At the time, a number of publications suggested that Trump’s financial interests benefited from the 2017 missile strike.  If someone has administrative leverage and the assistance of brokerage firms, a military campaign could be used for personal enrichment. And the whole shebang could be branded as a “defense of national interests” or “protection of democracy.”

    The oil market also reacted to the attack on Syria. The price of crude oil jumped. Analysts explained this as a side effect of the potential danger that the conflict might escalate, thereby affecting the entire Middle East. And that could jeopardize the existing supplies. But those prices had changed before the US and Great Britain launched their missile attack. As early as April 11, Brent crude had risen to $71.96 a barrel, its highest point since December 2014. If one tracks the momentum of oil prices and the work of oil companies and traders on the global market, it’s easy to see who cashed in on this price hike.

    Given that the US political system is based on “iron triangles” — the intersecting interests of corporations, government officials, and special-interest groups — it is unlikely that any truly sensible decision will be made in the US in regard to the use of armed force that would make it possible to resolve conflicts by means of diplomacy instead. The interests of the American military-industrial complex are clearly more compelling than those of the organizations that specialize in negotiations and consultations. War (or, to use the official rhetoric: “military operations abroad”) will be long, perpetual, and lucrative for the many actors involved.

    Published:4/27/2018 4:40:57 AM
    [Markets] "Forgotten In Statistics" - UK Homeless Population 10x Larger Than Government Says

    California's Bay Area - that bastion of tech-inspired economic inequality - isn't the only place where the homeless population is being hopelessly undercounted.

    A recent study found that the number of homeless people living in the UK is almost 10 times as high as the official statistics reflect. The reason? The government hopelessly undercounts the number of families living in temporary accommodations like bed & breakfasts, according to the Independent.

    UK

    Many of these people - at least 50,000 of them - have been "forgotten in statistics" that fail to reflect anything close to the true scale of the homelessness crisis in the UK.

    The true scale of homelessness in the UK is almost 10 times worse than official figures suggest, according to a new report.

    Homeless charity Justlife warns thousands of people are being "forgotten in statistics" after it estimated that at least 51,500 people were living in B&Bs in the year to April 2016 – compared with 5,870 official B&B placements recorded by the government.

    It comes after a separate investigation found that 78 homeless people died last winter – an average of at least two a week. The report by the Bureau of Investigative Journalism revealed the fatalities included rough sleepers, people recognised as "statutory homeless" and people staying in temporary accommodation.

    The organization that conducted the study, Justlife, used data gathered from Freedom of Information requests to various government agencies.

    Christa Maciver, author of the report, said: "We can no longer ignore the tens of thousands of people stuck homeless, hidden and ignored in our cities. This report shows there is so much we don’t know and that we really need to be calculating homelessness more accurately.  

    "Very few seem to care about the vulnerable people who end up in B&Bs, hostels and guesthouses. Once they are there they are forgotten and it’s almost like we forget they are people."

    "Their mental and physical health gets worse, and many can end up dead, but because they have a roof over their head – no matter how insecure – they are not counted within homelessness, when they should be. Only if we acknowledge the problem will we really be able to start finding solutions."

    The report appears to corroborate another study commissioned by commissioned by a different nonprofit which found that 100,000 households would be living in B&Bs by 2020. One young man interviewed by the Independent offered a chilling account of his experience living in cheap nightly accommodations. 

    "I'm totally depressed living there. You can't have anything nice. Things just go missing."

    "You see, there aren't working locks on all the doors. In my room there are bare wires hanging out and I have no light. I also feel quite vulnerable because anyone can get in or is let in and it gets me down."

    Megan Lucero, director of Bureau Local, which surveyed dozens of homeless charities, trawled local press reports and pieced together figures to create a database of homeless deaths, said: "Local journalists and charities are often the only ones recording these deaths."

    In response to the study, a government minister said the UK government sets aside more than one billion pounds to help the homeless get "the support they need."

    But, as is the case in the US, the true homelessness crisis isn't playing out in the country's streets, where homeless people are difficult to ignore. It's playing out in cheap motels and bed and breakfasts, where itinerant families are struggling with a constant sense of insecurity as they bounce from establishment to establishment, never scraping together quite enough money to pay rent and a deposit on a permanent place.

    Published:4/27/2018 4:11:05 AM
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    Published:4/26/2018 8:08:56 PM
    [Markets] An Orderly Unwind Of Stock Market Leverage?

    Authored Wolf Richter via WolfStreet.com,

    That would be a first, but it might be happening. Everything in slow motion, even market declines?  

    There is nothing like a good shot of leverage to fire up the stock market. How much leverage is out there is actually a mystery, given that there are various forms of stock-market leverage that are not tracked, including leverage at the institutional level and “securities backed loans” offered by brokers to their clients (here’s an example of how these SBLs can blow up).

    But one type of stock-market leverage is measured: “margin debt” – the amount individual and institutional investors borrow from their brokers against their portfolios. Margin debt had surged by $22.9 billion in January to a new record of $665.7 billion, the last gasp of the phenomenal Trump rally that ended January 26. But in February, as the sell-off was rattling some nerves, margin debt dropped by $20.7 billion to $645.1 billion.

    By March, those worries have settled down, and margin debt ticked up a bit to $645.2 billion, but remained $20.5 billion below January, according to FINRA, which regulates member brokerage firms and exchange markets, and which has taken over margin-debt reporting from the NYSE.

    In January, days before the sell-off began, FINRA warned about the levels of margin debt. It was “concerned,” it said, “that many investors may underestimate the risks of trading on margin and misunderstand the operation of, and reason for, margin calls.” Investors might not understand that their broker can liquidates much or all of their portfolio “under unfavorable market conditions,” when prices are crashing. “These liquidations can create substantial losses for investors,” FINRA warned. And when the bounce comes, these investors, with their portfolios cleaned out, cannot participate in it.

    This is why leverage such as margin debt is the great accelerator for stocks on the way up as it creates new liquidity that goes into buying stocks. And this is also why margin debt is the great accelerator on the way down, when forced selling kicks in and liquidity just disappears.

    But this is not the scenario the markets are in at the moment. Everything is so orderly, though it’s a lot more volatile than it was during the run-up last year. And margin debt too has declined in an orderly manner:

    For the 12-month period through March, margin debt rose $67.6 billion, down by nearly half from the 12-month period ended in January, when margin debt had soared $112.2 billion, the fifth-largest 12-month gain in the history of the data series, behind only the 12-month periods ending in:

    • December 2013 ($123 billion)
    • July 2007 ($160 billion)
    • March 2000 ($133.7 billion)
    • November 1997 ($132 billion).

    Margin debt has soared since 2009, with only a few noticeable down-periods – including during the Oil Bust when the S&P 500 index dropped 19%, and the 2011 sell-off when the S&P 500 index dropped 18%. In March, it exceeded the prior peak of July 2007 ($416 billion) by 55%. But that’s down from 60% in January.

    This chart shows the longer view:

    During margin debt’s peak-to-peak surge of 60%, nominal GDP (not adjusted for inflation) rose 32% and the Consumer Price Index 20%. Historically, this disconnect has had a tendency to correct via messy panicked crashes and deleveraging. The last three spikes in margin debt are indicated in the chart above. The first two were followed by market crashes. And now?

    Clearly, this will correct again. It always does. But the manner in which it corrects may well be very different, more orderly rather than panicky, taking its goodly time, given the glacial pace of the Fed’s tightening and the large amounts of liquidity still in the market looking for a place to go. And this type of gradual unwinding of stock-market leverage would be a first, but it might be happening before our very eyes.

    The Fed’s new paradigm: everything in slow-motion. Read…  What’s Going On in the Treasury Market?

    Published:4/26/2018 8:08:56 PM
    [Entertainment]