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[Entertainment] Watch Elton John Sing "Happy Birthday" to Godson Romeo Beckham Elton John, Romeo Beckham, InstagramCan you feel the birthday love tonight? David Beckham and Victoria Beckham and their kids are vacationing in the French Riviera with Elton John, who the couple has known for more than two...
Published:8/30/2018 11:02:29 AM
[Entertainment] Lady Gaga Admits She Sometimes Feels "Insecure," "Lonely" and "Ugly" Bradley Cooper, Lady Gaga, A Star Is Born"I like to preach," Lady Gaga says, "but I don't always practice what I preach." In a Los Angeles Times profile, published today, Gaga speaks candidly about how hard...
Published:8/30/2018 10:23:42 AM
[Entertainment] Chris Pratt and Katherine Schwarzenegger Go Casual for a Dinner Date Chris Pratt, Katherine SchwarzeneggerChris Pratt and Katherine Schwarzenegger were all smiles and almost twinning again on a casual date in Los Angeles on Wednesday. The 39-year-old Guardians of the Galaxy and Jurassic World...
Published:8/30/2018 9:57:29 AM
[Markets] Is Trump Right About "Flipping"?

Authored by Jacob Hornberger via The Future of Freedom Foundation,

In the wake of the federal criminal conviction of former Trump official Paul Manafort and the guilty plea in federal court of former Trump lawyer Michael Cohen, the mainstream press is singing the praises of special prosecutor (and former FBI Director) Robert Mueller and the Justice Department.

In the process, Trump’s critics are condemning his denunciation of “flipping,” the process by which federal prosecutors offer a sweet deal to criminal defendants in return for testifying against a “higher-up” who the feds are also prosecuting. The press and the anti-Trumpsters say that such a practice is part of the “rule of law” and essential to the proper administration of justice.

Nothing could be further from the truth. Whatever else might be said about Trump, he is absolutely right on this point. The process of offering sweetheart deals to people in return for their “cooperation” to get someone else convicted has long been one of the most corrupt aspects of the federal criminal-justice system, especially as part of the federal government’s much-vaunted (and much-failed) war on drugs.

Suppose a federal criminal defendant contacts a prospective witness in a case and offers him $50,000 in return for his “cooperation” in his upcoming trial. The money will be paid as soon as the trial is over. The defendant makes it clear that he wants the witness to “tell the truth” but that his “cooperation” when he testifies at trial would be greatly appreciated.

What would happen if federal officials learned about that communication and offer? They would go ballistic. They would immediately secure an indictment for bribery and witness tampering.

What if the defendant says, “Oh, no, I wasn’t tampering with the witness. I specifically told him that I wanted him to tell the truth when he took the witness stand. I was just seeking his friendly ‘cooperation’ with my $50,000 offer to him.”?

It wouldn’t make a difference. Federal prosecutors would go after him with a vengeance on bribery and witness-tampering charges. And it is a virtual certainty that they would get a conviction.

There is good reason for that. The law recognizes that the money could serve as an inducement for the witness to lie. Even though the defendant tells him to “tell the truth,” the witness knows that the fifty grand is being paid to him to help the defendant get acquitted, especially since it is payable after the trial is over. The temptation to lie, in return for the money, becomes strong, which is why the law prohibits criminal defendants from engaging in this type of practice.

Suppose a federal prosecutor says to a witness,

“You are facing life in prison on the charges we have brought against you. But if you ‘cooperate’ with us to get John Doe, we will adjust the charges so that the most the judge can do is send you to jail for only 5 years at most. If you are really ‘cooperative,’ we will recommend that the judge give you the lowest possible sentence, perhaps even probation. Oh, one more thing, we want to make it clear that we do want you to tell the truth.”

Do you see the problem? The temptation to please the prosecutor with “cooperation” becomes tremendous. If the witness can help secure a conviction of Doe, he stands to get a much lighter sentence for his successful “cooperation.” The inducement to commit perjury oftentimes takes over, notwithstanding the prosecutor’s admonition to the witness to “tell the truth.”

Defenders of this corrupt process say that without it, prosecutors could never get convictions. That’s pure nonsense. For one thing, prosecutors can secure a conviction against the witness and then force him to testify once his case is over. That’s because a person whose case is over is unable to rely on the Fifth Amendment to avoid testifying in the case against John Doe.

Moreover, the prosecutor can give what is called “use immunity” to the witness, which then forces him to testify in the case against Doe. Use immunity is not full immunity from prosecution. It simply means that the prosecutor cannot use the witness’s testimony against Doe to convict the witness at his trial. The prosecutor must convict him with other evidence.

But even if it means that the prosecutor is unable to secure some convictions, the question has to be asked: Do we want prosecutors securing convictions in this way? After all, there is a related question that must be asked: How many innocent people are convicted by perjured testimony from a witness who is doing his best to “cooperate” with the prosecution in the hope of getting a lighter sentence?

Given all the accolades being accorded Mueller, it is a shame that he has chosen to go down the same corrupt road that all other federal prosecutors have traveled. He didn’t have to do that. He could have led the way out of this immoral morass by taking a firm and public stand against this corrupt procedure. The fact that he has chosen instead to participate in it is a shame, to say the least.

Published:8/30/2018 9:57:29 AM
[Entertainment] Aw! Watch Enrique Iglesias Make His Twins Burst Into Giggles Enrique IglesiasGet ready for cuteness overload! Enrique Iglesias took to Instagram on Wednesday to share an adorable video of him making his twins, Lucy and Nicholas, burst into giggles. The...
Published:8/30/2018 9:32:25 AM
[Entertainment] Mario Lopez and Tiffani Thiessen Feel "Old" Now That Their Kids Watch Saved by the Bell Mario Lopez, Tiffani ThiessenIt's been almost three decades since Mario Lopez and Tiffani Thiessen appeared on Saved by the Bell. But the two co-stars recently took fans on a trip down memory lane when they reunited on...
Published:8/30/2018 8:51:01 AM
[Markets] Argentine Peso Collapse Accelerates As Macri's IMF Begging Backfires

Argentina's Peso has plummeted over 11% at the open this morning (after crashing almost 8% yesterday) as Macri’s request for faster IMF disbursements has backfired, raising investor uncertainty about Argentina’s ability to repay liabilities.

The peso is now testing 38/USD!!!

This is the worst day for the peso since Dec 2015's devaluation.

Paul Greer, a money manager at Fidelity International in London, suggests that Mauricio Macri’s administration has made "crucial messaging and strategy mistakes" during the past few years, adding that communication with investors has "consistently been a problem."

Greer argues that Macri must overhaul the team managing nation’s economy and finances to restore investor confidence, but as Santander notes, unbalanced FX market and volatility in local asset prices could continue during the coming months due to structural deficit of hard currency and uncertainty with Brazil elections. Recent peso devaluation followed strong hedging demand from corporates and individuals in the context of widespread uncertainty that "were not matched by an almost non-existent supply in the last days." Santander adds that Central Bank firepower to intervene in the FX market is limited.

Published:8/30/2018 8:51:00 AM
[Entertainment] Michael Jackson's Kids Discuss His Legacy on His 60th Birthday Paris Jackson, Prince Jackson, Michael Jackson Diamond Birthday CelebrationMichael Jackson may be gone, but he's not forgotten. In celebration of what would have been the King of Pop's 60th birthday Wednesday, his son Prince Jackson, 21, and daughter...
Published:8/30/2018 7:50:04 AM
[Markets] Fed's Preferred Inflation Indicator Jumps To 6 Year Highs, Reaches Mandate

The growth rate of Americans' spending has slowed in the last three months (to +0.4% MoM as expected in July) and income growth has slowed, up just 0.3% MoM in July (below expectations of +0.4%).

However, while income growth year-over-year hovers at 3-year highs, it slowed in July, but spending growth year-over-year accelerated to near 4-year highs (highest since Oct 2014)...

Looking inside the income data, government worker wage growth accelerated as private worker wage growth slowed.

 

And the combination of faster spending and slower income gains pushed the savings rate down to 6.7% - the lowest since 2017 (remember the savings rate was revised and doubled last month)

 

But perhaps most notable is The Fed's preferred inflation indicator (Core PCE) has hit The Fed's magic number of +2.0% for the first time since April 2012...

More ammunition for continued rate hikes... despite the slow-moving trainwreck occurring in US housing markets (oh and the Emerging Markets).

Published:8/30/2018 7:50:04 AM
[Markets] Global Markets Slide As Trade War Fears Return, EM Crisis Grows

The rally that saw US stocks hit a record high for 4 consecutive sessions took a breather overnight as S&P futures and European stocks followed Asian shares lower on Thursday, as trade and geopolitical concerned re-emerged, hurting bullish sentiment.

Stock markets and major government bond yields rose in recent weeks on hopes that a global trade war could be averted, particularly with the leaders of the United States and Canada optimistic they could reach new North American Trade Agreement by Friday. Trump said earlier talks with Canada on overhauling Nafta are going well, while Canadian PM Trudeau said his government his trying to reach an agreement with the U.S. this week but won’t sacrifice its goal of getting the right deal

But with tariffs beginning to hurt the Chinese economy, Asian stocks lost some of their gains and European shares followed suit on Thursday on concerns over trade relations between the world’s two largest economies.

"In all honestly, the NAFTA situation probably reflects a desire to get the agreement over the line before elections in Mexico and the mid-term vote in the U.S.,"said OANDA analyst Craig Erlam. “It doesn’t mean the U.S. will look for a quick solution with China. There’s still a long way to run with these trade situations, and I wouldn’t be surprised if we see more tariffs on more goods before it gets better.”

Indeed, while NAFTA may be resolved as soon as Friday, the US-China trade is only set to worsen as US tariffs on another $200 billion of Chinese goods are expected to take effect next month.

Geopolitical fears also creeped back in, with the Korean Peninsula once again back in the headlines after President Trump accused  China of undermining U.S. efforts to pressure North Korea into giving up its nuclear weapons, indicating his trade war with Beijing is starting to exacerbate geopolitical tensions.

As a result, the mood turned sour in Asia first, where the MSCI index of Asia-Pacific shares ex-Japan dropped 0.3%, with broad gains across the region offset by losses in China which dropped the most in nearly 2 weeks. The Shanghai Composite Index slid 0.9%, closing at session lows and set for its biggest fall since Aug. 17, as tech shares slide and the National Team was clearly absent; The ChiNext Index of small-cap and tech stocks -1.3%, while shares in Hong Kong also fall, with Hang Seng Index -0.9%; Tencent lost 1.3% as biggest drag on the measure.

Earlier, a Reuters poll showed activity among China’s manufacturers probably slowed for the third straight month in August.

“Investors are relatively pessimistic and cautious for now amid low levels of trading volume, as there are still concerns over the development of the Sino-U.S. trade spat,” said Yan Kaiwen, an analyst with China Fortune Securities.

After a serious of aggressive interventions last week by the PBOC halted the Yuan slide, the offshore Yuan has resumed its slide in recent days. The CNH slid even though the PBOC strengthened the yuan fixing by 0.06% to 6.8113 per dollar, stronger than average estimate; central banks skips open-market operations. As Bloomberg reports, offshore yuan turnover jumped to a record in July on the CBOE global markets platform, spurred by President Trump’s attack on Chinese currency practices and the trade war

In Europe equity markets open lower and sell off further, real estate stocks lag after negative comments on the sector by Morgan Stanley; the Europe Stoxx 600 index dropped 0.4 percent on Thursday, dragging the MSCI world equity index off a five-month high. Miners led the retreat as most sectors fell on. Treasuries and most European bonds edged higher.

Today's profit taking is not unexpected: equities have rallied as August draws to a close, with an index of world stocks heading for a second weekly gain. Central-bank support in China has gone some way to stabilizing the currency and stemming a rout in Shanghai stocks, though worries remain concerning the U.S.-China trade spat and the pace of monetary tightening in the U.S. Looking at the future, sellside analysts are increasingly seeing only upside.

Back to the overnight market, Asia was also the center of some of the biggest overnight currency volatility after the Australian dollar slumped after second-quarter business investment and building approvals were much worse than expectations, while New Zealand’s currency tumbled as business confidence hit a 10-year low. Australia’s currency may fall to 71.6 U.S. cents over next few months as investment conditions in the nation deteriorate, according to Kyle Rodda, market analyst at IG Group in Melbourne

It wasn't just Asia, however, with broad risk-off sentiment emerging across all markets before tentative stabilization into the North American crossover. While there was no real catalyst cited for the moves, EM weakness was prominent again especially in currencies, as the USDZAR spiked higher through 14.50, driven partly by weakness in local stock market as MTN falls 18% due to Nigeria demanding a $8.1b refund.

The British pound extended its gains against the euro after recording its biggest gain in seven months on Wednesday. The gains came as European Union negotiator Michel Barnier signaled an more accommodative stance toward London in ongoing talks. "It is a slight change in tone from Barnier and a sign that the EU is very aware of the Brexit deadline and they don’t want a no-deal Brexit any more than we do,” said OANDA's Erlam.

The euro struggled to sustain an early advance as German regional inflation data for August showed slowing price growth in some areas compared with the previous month, as noted. German Regional CPIs y/y (National Est. 2.0%): Saxony 2.0%, Brandenburg 2.0%, Bavaria 2.2%, Baden Wuert. 2.1%, Hesse 1.7%, NRW 2.0%; additionally Saxony Core CPI 1.4% vs 1.5% prev. The common currency failed for a second day to overcome supply above $1.1700 that comes both on a take-profit basis and on fresh positioning, according to two traders in London and Europe

The dollar pared its weekly loss as month-end pressure subsided.

The Turkish Lira accelerated its drop for the 4th day, sending the USDTRY higher by 2.7% and bringing this week's decline to 9%. Today's drop was precipitated after Erdogan said that Turkey " is not without alternatives" and warning that "It’s not possible to make us back down with threats." Taking another hit at the US, Erdogan said that “some do not hesitate openly stating the fact that they are trying to drive us into a corner through the economy. There are surely structural issues in the Turkish economy. We know these issues and are working to fix them.”

Judging by the plunge in the lira, the market does not seem convinced:  the Lira closed last night -3.0% at 6.469 which is now weaker than where it was on the Friday 3 weeks ago (6.4323) when the panic spread across the market. The only softer closing level was on the following Monday (6.884) but that actually included a big intra-day rally back from the Asian wides. Yesterday was the third day in a row the Lira has weakened (post domestic holidays) while Turkey’s 5yr CDS was also +14.4bps wider and touched 500bps again (recent high was 535.0 on Aug 13).

Meanwhile, yet another emerging market currency is under scrutiny, this time Argentina’s, after the country asked the International Monetary Fund for early assistance, alarming investors and hurting the peso and the country’s bond prices. The IMF said it was studying the request from Argentina to speed up disbursement of the $50 billion loan. The Argentinian peso dropped more than 7 percent on Wednesday, its biggest one-day decline since the currency was allowed to float in December 2015. Yields on Argentina’s 100-year bond issued last year rose to its highest level yet at 9.859 percent overnight.

Elsewhere, WTI and Brent futures trade higher following the larger than expected draw in DoE crude inventories while concern looms of tightening supply by year-end. According to the WSJ, Iran’s oil exports are expected to drop from 2.7mln BPD in June to 1.5mln BPD in September ahead of US sanctions (coming into effect on November 5th). Otherwise, news flow for the complex has remained light thus far. Elsewhere, gold is lower on the day, having tested USD 1200/oz to the downside and currently close to the lower end of the range, while copper is on the backfoot amid underperformance in its largest consumer, China.

Expected data include personal income and spending, and jobless claims. Campbell Soup, Dollar General, and Lululemon are among companies reporting earnings.

Market Snapshot

  • S&P 500 futures down 0.2% to 2,909.00
  • STOXX Europe 600 down 0.4% to 384.92
  • MXAP down 0.3% to 166.05
  • MXAPJ down 0.4% to 538.60
  • Nikkei up 0.09% to 22,869.50
  • Topix down 0.03% to 1,739.14
  • Hang Seng Index down 0.9% to 28,164.05
  • Shanghai Composite down 1.1% to 2,737.74
  • Sensex down 0.2% to 38,648.80
  • Australia S&P/ASX 200 down 0.01% to 6,351.76
  • Kospi down 0.07% to 2,307.35
  • German 10Y yield fell 1.4 bps to 0.39%
  • Euro down 0.2% to $1.1681
  • Italian 10Y yield fell 6.1 bps to 2.852%
  • Spanish 10Y yield fell 1.2 bps to 1.452%
  • Brent futures up 0.4% to $77.45/bbl
  • Gold spot down 0.4% to $1,202.35
  • U.S. Dollar Index up 0.1% to 94.69

Top Overnight News

President Trump said talks with Canada to overhaul the North American Free Trade Agreement are going well, expressing optimism the two countries could reach a deal this week

Trump: “necessary and appropriate” to maintain a 25% tariff on steel imports and 10% on aluminum; allowing some product exclusions for South Korea, Argentina and Brazil

New Zealand business confidence extended its decline with sentiment about the general economy sinking to the lowest in a decade. Australian business investment unexpectedly dropped last quarter despite the broader economy showing solid growth and hiring

German Regional CPIs y/y (National Est. 2.0%): Saxony 2.0%, Brandenburg 2.0%, Bavaria 2.2%, Baden Wuert. 2.1%, Hesse 1.7%, NRW 2.0%; additionally Saxony Core CPI 1.4% vs 1.5% prev.

Euro-area economic confidence continued its slide in August as risks from trade tensions to politics weigh on momentum. The European Commission’s index of household and business sentiment fell for an eighth month to the lowest in a year

The IMF said it will consider Argentina’s request to speed up disbursements from a $50 billion credit line as the government seeks to restore investor confidence

Barclays Plc has moved its head of Asia Pacific fixed income syndicate to Hong Kong, as China gains more prominence in the region’s dollar-bond market

August has historically been a cruel month for emerging markets. A Bloomberg currency index that tracks carry-trade returns from eight emerging markets, funded by short positions in the dollar, suggests this year has been the worst on record

Sweden is increasingly under attack by forces trying to influence and disrupt the election in 10 days, Swedish Radio reported

The International Monetary Fund said it will consider Argentina’s request to speed up disbursements from a $50 billion credit line as the government seeks to restore investor confidence as peso tumbles

The U.K. government said the European Union should compromise or risk a “no deal” Brexit, as the timeline for reaching an agreement slipped back. Michel Barnier, the EU’s chief negotiator, said the EU was prepared to offer Britain an unprecedented partnership

The U.S. exempted South Korea, Brazil and Argentina from metal tariffs

Asian equity markets traded mixed as the initial impetus from Wall St where the S&P 500 and Nasdaq posted a 4th consecutive day of records and where sentiment was underpinned by better than expected US GDP data as well as NAFTA optimism, was eventually clouded by weakness in China. ASX 200 (flat) was initially led by outperformance in telecoms on confirmation of the TPG Telecom-Vodafone Hutchison M&A deal although upside in the index was capped by weakness in financials and following disappointing capex data, while Nikkei 225 (+0.1%) gapped above the 23k level at the open which it then failed to sustain. Elsewhere, Shanghai Comp. (-1.1%) and Hang Seng (-0.9%) were subdued amid continued PBoC liquidity inaction and the ongoing US-China trade dispute, while President Trump also blamed China for the difficulties related to North Korea. Finally, 10yr JGBs were lower amid the mild gains in Japan and after the 2yr JGB auction failed to spur demand despite stronger results. PBoC skipped open market operations for a net neutral daily position.

Top Asian News

  • Erdogan Says Turkey Won’t Back Down, Has Alternatives: Anadolu
  • Downloads of Chinese Ride App Didi Tank After Passenger’s Death
  • Varde, Birla Group Create $1 Billion Venture for Stressed Assets
  • Vodafone Shackled Down Under as Unprofitable Venture Joins TPG

European equities are largely on the backfoot (Eurostoxx 50 -0.7%). Germany’s DAX 30 (-1.0%) is underperforming its peers with the likes of German auto names, Deutsche Bank, Commerzbank and heavyweight Bayer pressuring the index. Sector wise, telecom names underperform despite Bouygues (+3.16%) taking a spot at the top of the Stoxx 600 following earnings, with the likes of Vodafone and Telecom Italia weighing on the sector. Material names are also a laggard, in-fitting with price action in the base metal complex, while Elekta (-8.8%) shares plummeted on disappointed figures.

Top European News

  • Panasonic Plans Post Brexit Move From London to Amsterdam
  • Astaldi Bonds Fall After Report Lenders Seeking Restructuring
  • German Unemployment Drops Further as Companies Signal Optimism
  • French Minister Calls for Patience on Impact of Macron Reforms

In Currencies, the GBP saw some loss of momentum on less positive Brexit talk from Germany’s Finance Minister who is unsure whether there will be a withdrawal agreement and doesn’t rule out a disorderly UK departure from the EU, but Sterling remains supported and not too discouraged by weaker than expected mortgage and consumer credit data. Cable is holding around the 1.3000 level vs just shy of 1.3050 at best, while Eur/Gbp has continued its retreat from close to 0.9100 peaks on Wednesday through 0.9000 and testing the 21 DMA around 0.8977. CAD - The Loonie continues to benefit from NAFTA deal prospects and a possible Friday accord along the lines of the US-Mexico agreement, while firm crude prices are also supportive as Usd/Cad trades within a 1.2935-00 range ahead of Canadian GDP data for Q2. EUR - The single currency has retreated after another rally above 1.1700 vs the Greenback on broadly benign German state CPI and Spanish inflation data, but remains underpinned at the top of a daily cloud formation between 1.1655-81. EM - Another day, but more misery for the region’s 2 whipping boys as the Lira and Rand  depreciate further – Usd/Try now over 6.6000 and Usd/Zar around 14.6500. Elsewhere, the Peso has pared some of its NAFTA-related gains to trade below 19.0000 vs the Buck, but its Argentine counterpart is sharply underperforming even though several forms of intervention were deployed on Wednesday to try and stop the rot – Usd/Ars closed almost 8% higher yesterday just under 33.8980.

In commodities, WTI and Brent futures trade higher following the larger than expected draw in DoE crude inventories while concern looms of tightening supply by year-end. According to the WSJ, Iran’s oil exports are expected to drop from 2.7mln BPD in June to 1.5mln BPD in September ahead of US sanctions (coming into effect on November 5th). Otherwise, news flow for the complex has remained light thus far. Elsewhere, gold is lower on the day, having tested USD 1200/oz to the downside and currently close to the lower end of the range, while copper is on the backfoot amid underperformance in its largest consumer, China.

Looking ahead to today we’ve got arguably the most significant data release of the week with the July personal income and spending reports. As part of that, we’ll get the core PCE reading where the market expects a +0.2% mom outturn to result in the first +2.0% yoy (+1.99% unrounded) reading since April 2012. For previously dovish-leaning policymakers such as Chicago Fed President Evans, hitting the Fed’s official inflation target would be an important milestone and add to their confidence that the Fed can continue on its gradual course of rate increases. So worth watching out for.

US Event Calendar

  • 8:30am: Personal Income, est. 0.4%, prior 0.4%; Personal Spending, est. 0.4%, prior 0.4%
    • Real Personal Spending, est. 0.2%, prior 0.3%
    • PCE Deflator MoM, est. 0.13%, prior 0.1%; PCE Deflator YoY, est. 2.3%, prior 2.2%
    • PCE Core MoM, est. 0.2%, prior 0.1%; PCE Core YoY, est. 2.0%, prior 1.9%
  • 8:30am: Initial Jobless Claims, est. 212,000, prior 210,000; Continuing Claims, est. 1.73m, prior 1.73m
  • 9:45am: Bloomberg Consumer Comfort, prior 58.6

DB's Jim Reid concludes the overnight wrap

The US equity market continues to devour all that’s put in front of it and hatching new records on a regular basis. This week it seems no news continues to be good news with the S&P 500 (+0.57%) and NASDAQ (+0.99%) climbing to fresh new highs last night and the DOW (+0.23%) cutting the gap to the all-time highs to less than 2%. It’s hard to know if this is just liquidity slowly coming back to markets post the holidays or something else completely but there’s hardly  been a plethora of newsflow for markets to feed off this week aside from the few bits and bobs we’ve touched on below. In fact the moves are coming despite a weak session for EM and specifically Turkey and Argentina with the Lira and Peso both depreciating sharply again.

Indeed the Lira closed last night -3.0% at 6.469 which is now weaker than where it was on the Friday 3 weeks ago (6.4323) when the panic spread across the market. The only softer closing level was on the following Monday (6.884 but that actually included a big intra-day rally back from the Asian wides. Yesterday was the third day in a row the Lira has weakened (post domestic holidays) while Turkey’s 5yr CDS was also +14.4bps wider and touched 500bps again (recent high was 535.0 on Aug 13). In fairness there didn’t appear to be one obvious catalyst for yesterday’s move, although the weakest economic confidence reading since 2009 didn’t help, and likewise the CBT’s move to reinstate borrowing limits on overnight transactions failed to inspire confidence.  Instead of addressing its fundamental imbalances by executing orthodox policies like conventional rate hikes and/or going to the IMF, the CBT continues to tweak its other, unconventional policy tools. The move to tighten interbank liquidity comes only two weeks after the central bank took the exact opposite step.

However, the tough day for the Lira was overshadowed by the steep depreciation in the Argentine Peso, which dropped 7.55% versus the dollar to a new all-time low of 33.97. The currency traded at 18.6 at the end of last year - a 45.3% depreciation to now. The immediate catalyst was President Macri’s request for the IMF to speed up disbursements under its current bailout program. Argentina had received $15bn in June and is due for another $3bn next month, but it is now unclear if that will be enough to stabilize the government’s finances amid persistent reserve drain. Policy interest rates are at 40.0%, but, with inflation rising to 31.2% in July, real rates are not tight enough to encourage capital inflows.  The economy is likely to contract this year, and the benchmark Merval stock index is down 27.6% since its January peak in local currency terms, and over 56% in USD terms.

This morning in Asia, equities are trading mixed after paring back earlier gains. Across the region, the Nikkei (+0.16%) and Kospi (+0.05%) are modestly up while the Hang Seng (-0.61%) and Shanghai Comp. (-0.81%) are down as we  type. Futures on the S&P and treasuries are little changed. Meanwhile the US / Canada NAFTA talks seems to be tracking relatively well, with Canadian Foreign Minister Freeland indicating she had productive discussions with US trade representative Lighthizer and there was “a lot of goodwill” from both sides. She added that officials from both sides “will be meeting until very late tonight”. Earlier on, the Canadian PM Trudeau was also cautiously upbeat as he noted “…there is a possibility of getting (a deal) by Friday”, while adding the caveat that “…it’ll hinge on whether or not there is ultimately a good deal for Canada”. As for data, Japan’s July retail sales rose for the ninth straight month and was above market at 1.5% yoy (vs. 1.2% expected).

Looking ahead to today we’ve got arguably the most significant data release of the week with the July personal income and spending reports. As part of that, we’ll get the core PCE reading where the market and our US economists expect a +0.2% mom outturn to result in the first +2.0% yoy (+1.99% unrounded) reading since April 2012. As our colleagues noted, for previously dovish-leaning policymakers such as Chicago Fed President Evans, hitting the Fed’s official inflation target would be an important milestone and add to their confidence that the Fed can continue on its gradual course of rate increases. So worth watching out for.

It would be nice if that data wakes bond markets up as we stumbled upon a fairly interesting stat yesterday about Treasuries. The 10y yield has traded in a remarkably low 21bps intraday range so far this quarter which is tracking to be the lowest for a quarter since 1965 when we only had closing level data. For some perspective the average quarterly range since 2010 is 62bps. This is slightly biased by yields being as low as they are and us only being 2/3rds of the way through the quarter but the MOVE index, which should adjust for low yields, backs up the point somewhat with the index only a few points off the YTD low at 49.9 (low was 45.3 last month in this quarter) compared to the average of 53.8 in 2018 and all-time low of 44.0 made in November last year.

To be fair, Treasuries and wider bond markets were a bit weaker yesterday. The 10y Treasury closed 0.4bps higher at 2.884% while yields in Europe – with the exception of Italy (more on that shortly) – were 2 to 3bps higher.

Coming back to Italy, the relative outperformance for BTPs (-6.2bps) and the FTSE MIB (+0.68%) yesterday appeared to be down to a flurry of headlines initially reported in Italian press La Stampa suggesting that the Italian government  was reaching out to the ECB for a new round of QE designed to defend Italy’s debt from financial speculation (according to Bloomberg) and also avoid a downgrade. The story was later downplayed by Deputy PM Di Maio although this does follow the recent Bloomberg story about Conte winning a pledge from US President Trump about also buying up Italian debt. To be fair these stories feel like a distraction and noise with the much bigger near term issue for markets being the budget proposal next month.

Elsewhere, the other relatively big mover in FX yesterday was Sterling which rallied as much as +1.39% from the lows before closing +1.19% higher. This followed comments from EU Brexit negotiator Michal Barnier that "we are ready... to propose a partnership like there has never been before with any other third country." This is consistent with the existing EU offer from March and the readout from Barnier’s meeting last week with UK Brexit Minister Raab. It isn’t new news as the EU still has red lines that haven’t changed. Nevertheless, the market took the news as a positive signal that it lowers the odds of a no-deal Brexit scenario. UK rates sold off as well, as the positive rhetoric raised the odds of further BoE action. The market moved up its pricing for the next rate hike to May from August 2019. Meanwhile the German Finance Minister Scholz seems to have maintained his conciliatory tone as he hopes “we can proceed fast” in negotiating a “manageable exit”.

Meanwhile, the main data print yesterday came in the US with the Q2 GDP revised up 0.1 pp to 4.2% qoq saar. Capital expenditures and net exports both improved slightly, more than outweighing a slight downward revision to consumer spending. This confirms the strong trend in the first half of the year, and our economists maintain their forecast for 3.1% qoq growth this quarter. Separately, pending home sales declined 0.7% mom in July and MBA mortgage applications fell last week. Both are noisy series and shouldn’t detract from the economy’s strong underlying trends.

Looking at the day ahead, apart from the aforementioned US core PCE print, we’ll also get flash August CPI for Germany at 13:00 London today (2.1% yoy expected). That will be preceded by German regional CPI data and the official August unemployment rate. At 10:00 London time, the final Eurozone consumer confidence reading for August will be released by the European Commission.

In the UK, we’ll get mortgage, money supply, and consumer credit numbers for July. Second quarter Canadian GDP growth will print later this afternoon, and is expected to show healthy growth of 3.1% qoq saar. Away from the economic data, EU foreign affairs ministers are due to meet at a conference (continuing into Friday) to discuss topics including the Middle East, trans-Atlantic relations, the Iran nuclear deal and North Korea.

 

Published:8/30/2018 6:20:45 AM
[Entertainment] Caitlyn Jenner's Rumored Girlfriend Sophia Hutchins Models Yeezy Ensemble--And Kanye West Approves Sophia HutchinsIt looks like there's a new Yeezy model in town. Caitlyn Jenner's rumored girlfriend Sophia Hutchins posted a picture of herself on Instagram striking a pose clad in Yeezy wear...
Published:8/30/2018 5:52:35 AM
[Markets] War Of Words Erupts Between Jeff Bezos And Bernie Sanders

It may be time to set aside the long-running Trump-Bezos feud: a new war of words has erupted involving the world's richest person, and this time his adversary is none other than the polar ideological opposite of President Trump - socialist Bernie Sanders.

On Wednesday, Amazon finally had enough of sitting quietly on the receiving end of a constant stream of criticisms and slammed accusations by Sen. Bernie Sanders, saying his repeated claims of poor worker conditions in its fulfillment centers are "inaccurate and misleading."

"We have been in regular contact with his office and have offered several opportunities for Senator Sanders and his team to tour one of our fulfillment centers," the company said in a blog post Wednesday. "To date he has still not seen an FC for himself."

Sanders has been dinging Amazon on Twitter and in public statements for months, although unlike Trump, he has been focusing on the working conditions for its lower-level employees, claiming the company doesn't pay them a fair wage. He recently issued a call for Amazon employees to share their experiences in a form that asks, "Have you used public assistance, such as food stamps, Medicaid or subsidized housing, in order to make ends meet?"

Amazon's public response was perplexing: the company has been largely silent amid repeated public attacks by President Donald Trump on the company and CEO Jeff Bezos, owner of the highly critical of the president, Washington Post. Trump has attacked Amazon for how the company pays taxes and its payments to the U.S. Postal Service.

Now Amazon is facing war on both fronts.

In its response, the company writes that "while Senator Sanders plays politics and makes misleading accusations, we are expending real money and effort upskilling people. No one knows what it's like to work in one of our fulfillment centers better than the skilled and dedicated people who do it every day. That's why we are encouraging all employees to take Senator Sanders up on his request and respond with their actual experience."

Undeterred, Sanders reiterated claims that Amazon workers are forced to rely on government programs. Amazon, he said in a statement to CNBC, "has been less than forthcoming with information about their employment practices."

But the real issue here may be Bezos' record wealth, usually a sensitive topic for any self-respective socialist. Sanders highlighted Bezos' bank account and shared what he said are stories from former and current Amazon workers about low wages and poor conditions.

"Bottom line: the taxpayers of this country should not have to subsidize employees at a company owned by Mr. Bezos who is worth $155 billion. That is absurd," Sanders said in the statement.

Here's Amazon's full response:

Senator Sanders continues to make inaccurate and misleading accusations against Amazon.

We have been in regular contact with his office and have offered several opportunities for Senator Sanders and his team to tour one of our fulfillment centers (FCs). To date he has still not seen an FC for himself.

Instead, Senator Sanders continues to spread misleading statements about pay and benefits. Amazon is proud to have created over 130,000 new jobs last year alone. In the U.S., the average hourly wage for a full-time associate in our fulfillment centers, including cash, stock, and incentive bonuses, is over $15/hour before overtime. We encourage anyone to compare our pay and benefits to other retailers.

Senator Sanders’ references to SNAP, which hasn’t been called “food stamps” for several years, are also misleading because they include people who only worked for Amazon for a short period of time and/or chose to work part-time — both of these groups would almost certainly qualify for SNAP.

In addition to highly competitive wages and a climate controlled, safe workplace, Amazon provides employees with a comprehensive benefit package including health insurance, disability insurance, retirement savings plans, and company stock. The company also offers up to 20 weeks of paid leave and innovative benefits such as LeaveShare and RampBack, which give new parents flexibility with their growing families. With LeaveShare, employees share their Amazon paid leave with their spouse or domestic partner if their employer does not offer paid leave. RampBack gives new moms additional control over the pace at which they return to work. Just as with Amazon’s health care plan, these benefits are egalitarian – they are the same for fulfillment center and customer service employees as they are for Amazon’s most senior executives.

While Senator Sanders plays politics and makes misleading accusations, we are expending real money and effort upskilling people with our Career Choice program. Career Choice is an innovative benefit that pre-pays 95 percent of tuition, fees and textbooks (up to $12,000) for courses related to in-demand fields, regardless of whether they’re related to skills for jobs at Amazon or not. We have over 16,000 employees who have participated in Career Choice.

No one knows what it’s like to work in one of our fulfillment centers better than the skilled and dedicated people who do it every day. That’s why we are encouraging all employees to take Senator Sanders up on his request and respond with their actual experience (Sanders’ form only asks for negative experiences — see below, but we hope he is also interested in positive ones).

Published:8/30/2018 4:49:06 AM
[Markets] Is China Losing Control? Yuan More Volatile Than Euro For First Time Ever

For the first time, FX traders are grappling with wilder swings from China than Europe.

As Bloomberg notes, the offshore yuan has been more volatile than the euro all month after first overtaking the shared currency in July, according to 30-day realized data. And while euro uncertainty remains relatively bracketed between 6 and 8 for the last two years, yuan volatility has soared from 2 to almost 9 - the highest since 2015's devaluation.

The narrow spread (lower pane) shows China is moving to a more “flexible arrangement” when it comes to managing its currency, Bank of America analysts wrote in a note, predicting the yuan will weaken more this year.

For now it appears the temporary respite from Yuan's freefall, that 'mysteriously' occurred right before the US-China trade talks, has begun to lose momentum.

But while Yuan has become increasingly volatile, the realized volatility of gold (when priced in yuan) has collapsed to record lows...

Perhaps supporting the idea that the Chinese care more about the 'stability' of the yuan relative to gold then to the arbitrary US dollar fiat money.

So is China losing control? Or is this just as they planned?

Published:8/30/2018 3:21:46 AM
[Markets] NATO Think Tank Continues Pre-Election Interference

Authored by Rick Rozoff via The Ron Paul Institute for Peace & Prosperity,

On August 24 what is in effect the social media warfare division of the Atlantic Council published an article  accusing the Russian television and print news outlet RT of running a one-sided attack against the Democratic Party and several leaders thereof ahead of this November's politically pivotal Senate and House of Representatives elections. (Thirty-five Senate seats and all 435 House seats are being contested.)

The Atlantic Council, until recently kept comparatively in the shadows for obvious reasons, is a think tank that has more than any other organization effected the transition of the North Atlantic Treaty Organization from a seeming Cold War relic with the break-up of the Warsaw Pact and the dissolution of the Soviet Union in 1991 to the world's only and history's first international military network with 70 members and partners on six continents currently. All thirteen new full member states are in Eastern and Central Europe; four of them border Russia.

Three months ago it began collaborating with Facebook to police and censor that and (presumably) soon after other social media companies which in recent decades have become the major sources of information and communication for the seven billion citizens of the planet. No modest undertaking.

This is by way of follow up to a Directive on Social Media issued four years ago by NATO's Supreme Headquarters Allied Powers Europe (SHAPE), the bloc's military command in Europe (which also oversees activities in Israel and until the activation of U.S. Africa Command ten years ago almost all of Africa).

Excerpts from that directive  include:

One key challenge is the need to keep informed regarding social media ‘discussions’ on NATO and global security matters in order to maintain situational awareness. Key vulnerabilities include security concerns and the ease by which information can be transmitted globally using social media tools.

It also addresses  use of social media for what it calls "operations," which frequently is a euphemism for bombings, missile attacks and all-out war. Witness Operation Allied Force (Yugoslavia 1999), Operation Unified Protector (Libya 2011), NATO Training Mission-Iraq (starting in 2004), International Security Assistance Force/Operation Resolute Force (Afghanistan from 2001 to the present) and Operation Atlantic Resolve (aimed at Russia since 2015).

The recent article on the website of the Atlantic Council was the creation of the think tank/planning body's Atlantic Council’s Digital Forensic Research Lab, which, employing the sort of puerile humor one has come to expect from NATOites, describes its mission under the heading of Digital Sherlocks (after the Arthur Conan Doyle detective):

The Atlantic Council’s Digital Forensic Research Lab is building the world’s leading hub of digital forensic analysts tracking events in governance, technology, security, and where each intersect as they occur.

It accuses the Russian news outlet of menacing, egregious, Cold War-era enormities like...unbalanced coverage. That animal, of course, is not known in the US corporate media.

To wit:

"This unbalanced coverage was so systematic that it appeared to constitute an editorial policy of attacking the Democrats while boosting the Republicans. While editorial bias can be seen in many commercial US outlets, RT is neither commercial, nor a US outlet."

And:

"Its one-sided midterm coverage strongly suggests that the Kremlin is still attempting to influence American elections through editorial bias in its highest-profile English language media outlet to date? - RT - which gets approximately 15,000,000 visits from American readers every month."

Indeed RT is not an American outlet. In fact all of its features on YouTube have under them the small-case letter i in a circle followed by "RT Is funded in whole or in part by the Russian government," with a Wikipedia link.

The Atlantic Council item is transparently biased itself, as RT routinely runs news critical of members of both major US political parties.

The author of the piece focuses attention on November's elections ("attempting to influence American elections through editorial bias," above), yet he bemoans allegedly less-than-kind portrayals of Hillary Clinton (whose first name is consistently spelled Hilary), who last heard is not at the moment running for public office.

To illustrate how the Atlantic Council and its loyal minions (members routinely move in and out of the State Department, Defense Department, National Security Council, White House, etc.) reverse the threat that exists in relation to Russia, see this from a recent article on its site on the occasion of the tenth anniversary of Georgia's invasion of South Ossetia and the resultant war with Russia:

Exactly ten years ago, Russian forces attacked Georgia, bringing to a violent end a nearly two-decade long advance of a Europe whole and free. In the wake of NATO’s failure to agree on how to advance the membership aspirations of Georgia and Ukraine at its Bucharest Summit months earlier, Moscow acted to block those prospects with its invasion. Moscow’s actions in Georgia ten years ago previewed its far deadlier attacks on Ukraine, which continue today.

Ten years on, the NATO Summit in Brussels July 11-12 offers the prospect of reversing the shortcomings of Bucharest and restoring momentum to NATO’s Open Door policy.

That is, bring Georgia and Ukraine into NATO as full member states and court a US-Russia war with all that would entail.

The homepage of the site features a tribute to John McCain with these words of his on the occasion of receiving its annual Freedom Award in 2011 with which he adds Belarus to the list:

I also want to pay tribute to my fellow honorees here tonight for the contribution they have made to the success of freedom – from here in Poland, to neighboring Belarus, to farther away in Egypt. These champions of liberty are the defenders, supporters, and authors of peaceful democratic revolutions - both those that have been successfully made and those, as in Belarus, that have yet to come, but surely will...

It's more than American elections that the Atlantic Council and its social media partners intend to influence.

Published:8/30/2018 2:49:19 AM
[Markets] Nazis Were Not Marxists, But They Were Socialists

Authored by Jörg Guido Hülsmann via The Mises Institute,

The abject practical failure of the Marxist revolutionaries in the post-WWI period had done much harm to their image as the vanguard of social progress.

The explanation for this failure in the writings of Mises, Max Weber, and Boris Brutzkus had led many economists to revise their views about the suitable scope of government within society. But others remained unrepentant advocates of the total state. They merely rejected the specifically egalitarian agenda of the socialists.

The uncontested leader of this group was Werner Sombart, the greatest star among the interwar economists in Germany. Sombart had started his career popularizing Marxism in academic circles with his 1896 book Sozialismus und soziale Bewegung im 19. Jahrhundert (Socialism and Social Action in the Nineteenth Century). Later editions testified to Sombart’s increasing estrangement with his initial Marxist ideals. The tenth edition, which appeared under a new title in 1924, featured an outright demolition of Marxist socialism. Sombart had turned back to the mainstream Schmollerite socialism, which advocated the total state without an egalitarian agenda.

Sombart’s intellectual qualities had gained him a place of preeminence. Where most Marxist intellectuals held dogmatically to the tenets of Marx and Engels, Sombart sought to analyze and develop their doctrines with a critical mind in quest of objectivity. This made his work the perfect target for a thorough criticism of the intellectual current of anti-Marxist socialism, and Mises provided such a criticism in an article with the title “Antimarxismus” (Anti-Marxism).

Already in his article on price controls, Mises had pointed out that the shortcomings of interventionism did not result from the egalitarian agenda that some governments pursued, but from the very nature of government intervention itself, namely, the infringement of private property rights. Socialism and interventionism were destructive economic systems whether explicitly egalitarian or not. They would be unsuitable forms of social organization even if they pursued some other ideal of distribution—even meritocracy. There might be certain superficial similarities between a free society and a non-egalitarian one controlled by a total state, but these two would still be essentially different:

On the surface the social ideal of etatism does not differ from the social order of capitalism. Etatism does not seek to overthrow the traditional legal order and formally convert all private property in production to public property... But in substance all enterprises are to become government operations. Under this practice, the owners will keep their names and trademarks on the property and the right to an “appropriate” income or one “befitting their ranks.” Every business becomes an office and every occupation a civil service. ... Prices are set by government, and government determines what is to be produced, how it is to be produced, and in what quantities. There is no speculation, no “extraordinary” profits, no losses. There is no innovation, except for that ordered by government. Government guides and supervises everything.

Mises showed that the error in the idea of the omnipotent state has nothing to do with the state’s particular agenda. The government is not omnipotent if its goal is to improve “collective life” (as opposed to that of mere aggregates of individuals). But neither is it omnipotent if it seeks to enhance the welfare of the totality of individual citizens. In both cases, government intervention is counterproductive. It follows that the time-honored and seemingly significant distinction between individualism and collectivism is of only secondary importance. The primary distinction is between policies that work and policies that do not work, which leads in turn to the distinction between a social order based on private property (which works) and those social orders that depend on infringements of private property rights (and do not work). It is therefore beside the point whether individuals or collectives run the economy—provided only that the property rights of all individual members of the collectives are preserved. It also follows that the size of the firm is of no importance. As long as private property is respected, the buying decisions of the consumers reward only those companies that offer the best products. If these companies are larger than others, so be it.

Mises emphasized this fact against the doctrines of Dietzel, Karl Pribram, and Spann, which had a great influence on interwar political thought in Germany and, after World War II, in the wider western world. Dietzel and Pribram sided with individualism, whereas Spann championed collectivism, but they all agreed that these were the ultimate categories and that all political points of view derived from them. Mises disagreed.

He argued that there was a point of view that was derived from neither individualism nor collectivism, namely, the utilitarian method of social analysis. He had already proved how successful this method was in analyzing the static and dynamic problems of social “wholes” such as language communities, and he emphasized that the analysis of such wholes is the very point of theoretical social science. It was fallacious to believe that individual action could be understood out of its wider social context, just as it was false that the proper understanding of social wholes required that the social analysis itself be holistic.

The utilitarian method alone was a truly scientific one because it traced all social phenomena back to facts of experience:

The utilitarian social doctrine does not engage in metaphysics, but takes as its point of departure the established fact that all living beings affirm their will to live and grow. The higher productivity of labor performed in division of labor, when compared with isolated action, is ever more uniting individuals to association. Society is division and association of labor.

Each person seeks to enhance his welfare, and cooperative labor is more productive than isolated labor. Therefore, insofar as the growth of a person’s welfare presupposes greater quantities of material goods, the person can best attain his ends by engaging in a division of labor. This is how society comes into being.

All elements in this economic explanation of society are ascertainable facts. In contrast, the doctrines of individualism and collectivism do not lend themselves to any such causal explanation of the origin of society because they are based on postulates rather than on analysis of fact. And Mises proceeded to show that the same criticism also applied to the Marxist theory of proletarian class struggle. He did not deny that human history featured many group conflicts and that they often had great importance for the course of events. Rather, he argued that the fashionable struggle theories—of which the Marxist theory of class struggle was but one particular instance—purported to be much more than they really were. Group conflicts were not, and could not possibly be, the basic elements of human life. The real question was how any group could come into existence in the first place. One first had to explain the formation of groups before one could explain the struggle between them. But all struggle theorists, Marx included, failed on this front.

The reason for this negligence is not difficult to detect. It is impossible to demonstrate a principle of association that exists within a collective group only, and that is inoperative beyond it. If war and strife are the driving forces of all social development, why should this be true for classes, races, and nations only, and not for war among all individuals? If we take this warfare sociology to its logical conclusion we arrive at no social doctrine at all, but at “a theory of unsociability.”

Mises pointed out that Marx’s theory of class struggle even failed to give an empirical account of its most basic concept. What is a “class” in the Marxist sense? Marx had never defined it. “And it is significant that the posthumous manuscript of the third volume of Das Kapital halts abruptly at the very place that was to deal with classes.” Mises went on:

Since his death more than forty years have passed, and the class struggle has become the cornerstone of modern German sociology. And yet we continue to await its scientific definition and delineation. No less vague are the concepts of class interests, class condition, and class war, and the ideas on the relationship between conditions, class interests, and class ideology.

Werner Sombart, along with the great majority of German sociologists of whom he was the undisputed leader, had adopted the Marxist view that proletarian class struggle was the ultimate driving force in modern societies. He was now an opponent of Marxist ideology, but his analyses still remained Marxian. He merely refrained from drawing all the practical conclusions, which Marx and the Marxists had consistently deduced, from the theory of class struggle. He did not and could not provide an alternative to the Marxist scenario of social evolution. His only objection came in the form of a postulate: things should not happen as they would happen according to the theory of class struggle, therefore government should resist such developments. Yet with this admission, Sombart and the bulk of the German sociologists had again left the realm of science and entered that of religion and ethics. Sombart in fact championed a return to medieval forms of social organization—the guilds—just as Keynes in England proposed “a return, it may be said, towards medieval conceptions of separate autonomies.” Similarly, the few theorists who had thoroughly criticized Marx’s concept of class struggle, like Othmar Spann, marveled at the alleged blessings of national socialism in the middle ages.

Mises concluded:

for every scientific thinker the objectionable point of Marxism is its theory, which seems to cause no offence to the Anti-Marxist... The Anti-Marxist merely objects to the political symptoms of the Marxian system, not to its scientific content. He regrets the harm done by Marxian policies to the German people, but is blind to the harm done to German intellectual life by the platitudes and deficiencies of Marxian problems and solutions. Above all, he fails to perceive that political and economic troubles are consequences of this intellectual calamity. He does not appreciate the importance of science for everyday living, and, under the influence of Marxism, believes that “real” power instead of ideas is shaping history.

“Anti-Marxism” caused outrage among the Marxists. What was Mises’s sin? First, he had dared criticize the great master with a penetrating analysis of the incurable shortcomings of Marx’s theory of class struggle. Second, he had again contended that from an economic point of view Marxist socialism was not essentially different from the various new brands of national socialism that had begun to spring up in the 1920s, mostly in reaction against Marxist movements. Thus a fraction of Italian socialists, who rejected the teachings of Marx and called themselves “Fascists,” rose to power under the leadership of Benito Mussolini. There was also a movement of non-Marxist “National Socialists” in Germany. The father of this movement was Friedrich Naumann who, by a strange coincidence, later came to be regarded as the godfather of twentieth-century German liberalism. The leader of the National Socialists from the 1920s until their bitter end was, of course, Adolf Hitler.

Marxist socialists vociferously object to being classified under the same heading that includes Fascist Socialists and National Socialists. But as Mises showed, all distinctions between these groups are on the surface. Economically, they are united.

*  *  *
Excerpted with minor revision from Mises: Last Knight of Liberalism 
Published:8/30/2018 1:17:44 AM
[Entertainment] Jennifer Lawrence's Nude Photo Hacker Sentenced to Prison Jennifer Lawrence, 2018 Oscars, Red Carpet FashionsGeorge Garofano, the man who hacked and leaked nude photos of Jennifer Lawrence, was sentenced to eight months in federal prison, court documents show. Additionally, Garofano will serve...
Published:8/29/2018 9:45:56 PM
[Markets] PCR: According To The New York Times, Putin Rules America

Authored by Paul Craig Roberts,

When I first read this, I thought it was a caricature of fake news. Then I realized it was a New York Times article, and being fairly certain that the arrogant presstitute organization was not taking the piss out of itself, as it is one of the main purveyors of fake news, I found the conclusion unavoidable that Julian E. Barnes and Matthew Rosenberg were so tightly bound inside The Matrix that they might actually believe the nonsense that they wrote.

Here is an overview of the fantasy that the two presstitutes have penned in the New York Times:

US intelligence (sic) had “informants close to President Vladimir V. Putin and in the Kremlin” who provided “urgent and explicit warnings about Russia’s intentions to try to tip the [2016] American presidential election.”

The NYT presstitutes do not say why nothing was done by US intelligence which had inside information from the Kremlin itself that Putin was about to steal for Trump the US election. Certainly CIA Director Brennan and FBI Director Comey, both of whom are Hillary’s allies, would not have approved of Putin stealing the election for Trump.

But there is no criticism from the NY Times’ presstitutes for this massive intelligence failure to act to prevent Putin from stealing the election from Hillary. Brennan and Comey sat on their hands and permitted Putin to steal the election for Trump. So, who is really guilty of “Russiagate?”

Obviously, this NY Times article is a hoax written by imbeciles. The claim that the Putin/Trump conspiracy was leaked to US intelligence from inside the Kremlin is an invention to help to provide a background history in an effort to boost the credibility of the Russiagate orchestation that is directed against President Trump. The presstitutes in their effort to boost Russiagate’s credibility inadvertently portrayed US intelligence as negligent in its duty.

Barnes and Rosenberg say that Putin is continuing with his dirty tricks, but the Russian traitors inside the Kremlin within Putin’s close circles “have gone silent,” depriving us of information about how the Russians are going to steal the midterm elections. The presstitutes suggest that Washington’s informers inside Putin’s government have “gone to ground” to avoid being murdered “like the poisoning in March in Britain of a former Russian intelligence officer that utilized a rare Russian-made nerve agent.”

It is difficult to know what to make of presstitutes like Barnes and Rosenberg and the NYTimes who refuse to acknowledge the fact that there has been zero evidence produced that supports the alleged attack on the Skirpals, both of whom suvived a “deadly nerve agent.” There is no evidence whatsoever that the alleged deadly nerve agent was made in Russia, and there is no explanation why the deadly nerve agent was not deadly. The only possible conclusion from the total absence of any evidence is that no such attack occurred. It is just another propaganda hoax against Russia.

More proof that there was no such attack is provided by the refusal of the British government to share its investigation, if there actually was an investigation, with anyone, not even with the accused Russians. Accusations without a shred of evidence are not a good basis for a trusting relationship with a nuclear power.

Barnes and Rosenberg suggest that the House Intelligence Committee, encouraged by President Trump, chilled intelligence collection by “outing an FBI informant,” leaving Washington in the dark about Putin’s precise intentions.

No, this is not a conspiracy story from the National Inquirer, now a more reliable newspaper than the New York Times. This utter nonsense is published in the New York Times, “the newspaper of record.” What a false record historians are going to have.

What are the NYTimes’ sources for this fantasy? The presstitute organization cannot tell us.

“American intelligence agencies have not been able to say precisely what are Mr. Putin’s intentions: He could be trying to tilt the midterm elections, simply sow chaos or generally undermine trust in the democratic process.”

But the NYTimes knows that Putin is up to something, because “senior intelligence officials, including Dan Coats, the director of national intelligence, have warned that Russians are intent on subverting American democratic institutions.”

So here we have Trump’s own appointment, Dan Coats, undermining Trump’s effort to normalize relations with Russia. Who among Trump’s advisors advised him to appoint a Russiaphobic moron like Dan Coats? If Trump had any sense, he would fire both of them.

Washington routinely subverts democratic institutions in other countries, such as Honduras, Nicaragua, Venezuela, Iran, Ukraine, Indonesia. Read Stephen Kinser’s The Brothers for a number of examples.

Washington finances opposition candidates who are bought and paid for by Washington and uses various non-governmental organizations (NGOs) financed by the National Endowment for Democracy, George Soros, the International Republican Institute, and many other front groups for subversion of countries “uncooperative with Washington” in order to install a Washington puppet. Washington even has NGOs operating in Russia where they are even permitted by the Russian government to own newspapers. All anti-Putin protests are organized by Washington using the NGOs that Washington funds.

Russia, however, has no NGOs operating in the US, and, unlike Israel, does not own the US Congress and White House. So how exactly, Director of National Intelligence (sic) Dan Coats, are the Russians going to subvert “American democratic institutions?”

Don’t expect an answer.

Try to understand the insults to Trump voters of the charge that they are puppets at the end of Putin’s string: Trump voters are portrayed as morons who are not capable of thinking for themselves. If they were, they would have voted for Hillary so that America could demonstrate its escape from misogyny and male domination by electing its First Woman President on the heels of the First Half-Black President. Instead the minds of American voters were warped by Putin. The $100,000 dollars spent by a Russian Internet company trying to attract advertisers prevailed over the multi-billion dollars spent by the Democrats and Republicans and by American economic interests focused on capturing the government for their agendas. The Russian plot is so powerful that a dollar spent by Russia is thousands of times more powerful than a dollar spent by Wall Street, the military/security compex, George Soros, Sheldon Adelson, etc., and so on.

In the official story, no American voted for Trump because his/her job was sent to Asia or Mexico by global US corporations pursuing high monetary rewards for executives and shareholders at the expense of the American work force. The “Trump Deplorables” voted for Trump because they were brainwashed by a few Russian Internet ads directed at maximizing clicks in order to attract advertisers.

No one voted for Trump because their son and daughter, on whose education the family used up its savings, acquired student loan debts and possibly a second mortgage, can only find a job as a waitress and bartender because the jobs for which they prepared at great expense are handed over to lowly paid foreigners in order that shareholders can receive large capital gains and a handful of corporate executives can receive multimillion dollar bonuses for raising profits by closing down America’s vaunted “opportunity society. Today Americans have debts and no opportunities.

Assuming you have some sense and some ability to think independently of the lies that are fed to you daily, can you possibly believe that Americans voted for Trump because Putin tricked them with Internet ads that are unlikely to have been seen by as many as one percent of voters?

Can you possibly believe that the loss of Trump voters’ jobs, their prospects, their children’s prospects, their home, their declining living standards, the insults heaped upon Americans by Hillary’s Democratic Party - “Trump deplorables,” “white male oppressors,” “Russia’s Fifth Column,” “misogynists,” “racists,” “homophobic,” “gun nuts” - had no impact on why Americans voted for Trump? How could any sentient American believe that Putin is the source of their problems?

The NY Times pressitutes report without any evidence alleged efforts of Russia to create chaos in America. I could not stop laughing. There is no Russian National Endowment for Democracy operating in the US. There is no Russian funded George Soros operating in America. There are no Russian funded Non-Governmental Organizations operating in America. Yet Russis is full of Washington-funded organizations doing everything in their power to sow chaos in Russia.

Why isn’t this most obvious of all truths reported in the NY Times?

The answer is that no truth whatsoever, not even a tiny morsel, fits the fabricated explanations in which the insouciant Western peoples live. Everywhere in the Western World people are shielded from reality by controlled explanations handed down to them by the New York Times, Washington Post, CNN, MSNBC, NPR, BBC, et. al, and the UK, EU, Canadian, and Australian newspapers, every one of which is a propagandist for American hegemony.

A few years ago a famous philosopher concluded that the world lives in a constructed virtual reality. At the time I thought he was crazy, but I have learned that he is correct. The entire world—even the Russians and the Chinese and the Iranians—live in a world shaped by American propaganda. The truth is that a country, the USA, which endorses freedom of determination, is in fact determined to control the world and smother all self-determination. Every country, whether Russia, China, Syria, Iran, India, Turkey, North Korea, Venezuela, that resists Washington’s hegemony is declared by Washington to be “a threat to the international order.”

The “international order” is Washington’s order. The “International Order” is Washinton’s hegemony over the word. Russia, China, Iran, Syria, North Korea, Venezuela, and now Turkey and India are threats to “international order” because they do not accept Washington’s hegemony.

Barnes and Rosenberg report that Coats is concerned about Russia’s effort to “weaken and divide the United States.” There is no sign of Russia doing any such thing, and there is no explanation of how Putin conducts “a broad chaos campaign to undermine faith in American democracy.” If the Director of National Intelligence is concerned about the forces of division in America, he should turn his attention to the divisive consequences of the Democratic Party’s Identity Politics, to ANTIFA, to the divisive consequences of the fabricated attack on President Trump by the military/security complex and presstitute media. Indeed, the constant drumbeat of lies from the New York Times alone has caused far move divisiveness than anything Russia is alleged to have done.

Divisiveness is what happens when the military/security complex and its media pimps turn on a President for threatening their budget by proposing peace with the enemy that they have constructed in order to justify their power and profit. It is this divisiveness that the United States is experiencing.

Published:8/29/2018 9:45:56 PM
[Entertainment] How Mel B's America's Got Talent Family Is Supporting Her Through PTSD Battle Americas Got Talent Judges, Howie Mandel, Mel B, Heidi Klum, Tyra BanksMel B's America's Got Talent family is showing their support for the singer in her time of need. Judges Howie Mandel, Heidi Klum and Simon Cowell told E! News they are all rooting...
Published:8/29/2018 8:52:53 PM
[Entertainment] Bethenny Frankel and Carole Radowitz' Fight Is Out of Control on The Real Housewives of New York Reunion The Real Housewives of New York City, RHONYCarole Radziwill was prepared to destroy Bethenny Frankel on the season 10 Real Housewives of New York reunion. Sure, Bethenny was the one who showed up with texts printed out and kept...
Published:8/29/2018 8:29:42 PM
[Markets] Trump Unleashes On "Degenerate Fool" Carl Bernstein Over "Fake News"; CNN Responds

President Trump launched a decisive attack on CNN, roasting the network along with veteran journalist Carl Bernstein for a "Fake News" report over the 2016 Trump Tower meeting. 

"CNN is being torn apart from within based on their being caught in a major lie and refusing to admit the mistake," Trump tweeted Wednesday evening. "Sloppy @carlbernstein, a man who lives in the past and thinks like a degenerate fool, making up story after story, is being laughed at all over the country! Fake News"

Bernistein, who gained notoriety with his coverage of the Watergate scandal, co-wrote an article for CNN in which he claimed that former Trump attorney Michael Cohen was willing to tell special counsel Robert Mueller that then-candidate Donald Trump approved the Trump Tower meeting between his son, Donald Trump Jr. and a Russian attorney (who hates Trump) who promised "dirt" on Hillary Clinton. 

Lanny Davis - Cohen's attorney and lifelong friend of the Clintons, began to backpedal on the claims last week - and later admitted that he was the source for CNN's story. And while the Washington Post had the good sense to back away from the narrative - CNN did not. Instead, the network hit back against Davis, throwing him under the bus and claiming that he wasn't their only source. 

"We stand by our story, which had more than one source, and are confident in our reporting of it," said a CNN spokeswoman on Tuesday. 

Most hilariously, CNN writes in its "bombshell" report: "Contacted by CNN, one of Cohen's attorneys, Lanny Davis, declined to comment" - a complete lie, considering Davis's admission that he was their source

In response to Trump's tweet, CNN's Communications department responded: "Make no mistake, Mr. President, CNN does not lie. We report the news. And we report when people in power tell lies. CNN stands by our reporting and our reporters. There may be many fools in this story but @carlbernstein is not one of them."

Later Wednesday evening, a feisty President Trump tweeted: “Lanny Davis admits being anonymous source in CNN Report.” @BretBaier  Oh well, so much for CNN saying it wasn’t Lanny. No wonder their ratings are so low, it’s FAKE NEWS!"

Nearly two hours after Trump's first tweet, Don Jr. jumped off the turnbuckle and tag-teamed CNN and Bernstein, who he called a "leftist hack" peddling "literal fake news." 

And once again: 

Published:8/29/2018 8:29:42 PM
[Markets] "Perfect Storm" Strikes Softs, But Are Coffee Specs Due For A Wake-Up Call?

With massive coffee and sugar inventories already weighing on the softs market, the reinvigorated emerging market crisis has created a “perfect storm,” encouraging local producers in countries such as Brazil and Colombia to boost sales which fetch dollars in return, said Julio Sera, risk management consultant for INTL FCStone in Miami.

In fact, the Bloomberg Softs Subindex, which measures returns for those commodities plus cotton, tumbled to a record low...

However, with speculative positioning in sugar and coffee at or near all-time record net short, the worst could be over. (the softs are a close proxy for emerging markets, but with elevated covering risks). As Bloomberg Intelligence details below:

Further declines in the softs are highly dependent on a weaker Brazilian real and sugar. The worst is likely over for sugar, down over 30% in 2018. Recovery is highly dependent on similar weakness in the real, down about 20% vs. the U.S. dollar this year. Short sugar has been the proper position, but with prices near a 10-year low at key 10-cents-a-pound support and net short positions leading all major commodities, covering risks are quite elevated.

Sugar futures' managed-money net positions are close to being the most short in the database since 2006 at 150,341. Next in line is soft companion coffee, at 104,336 as of Aug. 28. Brazil sugar supply estimates from CONAB, Brazil's food statistics agency, are the lowest since 2009. Supply is unlikely to increase until prices do.

Short has been the right position in coffee futures, but covering risks are about as elevated as they get. Prices dipping to a 12-year low in August probably reflect about the worst of the substantial increase in Brazilian supply and the currency's drop. Net managed-money short futures positions have consistently set records in 2018. Recently, their velocity has accelerated at the greatest pace on record since 2006. Net shorts have increased over 66,000 since the end of May, the most in any similar period.

New shorts are weighing on prices but are ripe for cleansing.

Pressuring prices are the real's 20% decline vs. the dollar in 2018 to Aug. 28 and the record increase in Brazil coffee production. CONAB estimates production climbing to 20% above the five-year average, the most in the database since 2001.

So is the worst really over for softs and/or EM FX? The extreme correlation of the two will need to shatter if so.

Published:8/29/2018 6:45:24 PM
[Entertainment] 6 Times Lady Gaga Wore a Crazy-Amazing Outfit During Summer '18 ESC: Lady GagaWe have a major crush on Lady Gaga's summer 2018 fashion. In honor of #WCW, we're looking back at Mother Monster's epic looks over the course of the season. Let's be...
Published:8/29/2018 6:45:24 PM
[Entertainment] Everything We Know About Ben Affleck's Latest Rehab Stay Ben AffleckIt has been a week since Ben Affleck entered rehab for a third time following his latest relapse. The star, who has battled alcohol addiction for many years, was admitted to a rehab...
Published:8/29/2018 6:20:28 PM
[Markets] "It Was All A Set-Up" - Pentagon Whistleblower Exposes Russia Probe Reality

Via SaraCarter.com,

Adam Lovinger, a former Defense Department analyst, never expected that what he stumbled on during his final months at the Pentagon would expose an integral player in the FBI’s handling of President Donald Trump’s campaign and alleged Russia collusion.

Lovinger, a whistleblower, is now battling to save his career. The Pentagon suspended his top-secret security clearance May 1, 2017, when he exposed through an internal review that Stefan Halper, who was then an emeritus Cambridge professor, had received roughly $1 million in tax-payer funded money to write Defense Department foreign policy reports, his attorney Sean Bigley said. Before Lovinger’s clearance was suspended he had taken a detail to the National Security Council as senior director for strategy. He was only there for five months before he was recalled to the Pentagon, stripped of his prestigious White House detail, and ordered to perform bureaucratic make-work in a Pentagon annex Bigley calls “the land of misfit toys.” His security clearance was eventually revoked in March 2018, despite the Pentagon “refusing to turn over a single page of its purported evidence of Lovinger’s wrongdoing,” Bigley stated. Conservative watchdog group, Judicial Watch, recently filed a federal lawsuit against the Defense Department to obtain the withheld records.

Lovinger also raised concerns about Halper’s role in conducting what appeared to be diplomatic meetings with foreigners on behalf of the U.S. government because his role as contractor forbids him from doing so, according to U.S. federal law.

An investigation by SaraACarter.com reveals that the documents and information Lovinger stumbled on and other documents obtained by this news site, raise troubling questions about Halper, who was believed to have worked with the CIA and part of the matrix of players in the bureau’s ‘CrossFire Hurricane’ investigation into Trump’s 2016 presidential campaign. Halper, who assisted the FBI in the Russia investigation, appears to also have significant ties to the Russian government, as well as sources connected directly to President Vladimir Putin.

Halper did not respond to requests for comment.

“When Mr. Lovinger raised concerns about DoD’s misuse of Stefan Halper in 2016, he did so without any political designs or knowledge of Mr. Halper’s spying activities,” Bigley told SaraACarter.com.

“Instead, Mr. Lovinger simply did what all Americans should expect of our civil servants: he reported violations of law and a gross waste of public funds to his superiors.”

And for that, Bigley said, Lovinger has paid the ultimate price in his 12-year career as a strategist in the Pentagon’s Office of Net Assessment. According to Bigley, shortly after Lovinger began reporting and asking questions about suspicious contracts given to Halper and others, including one person closely associated Chelsea Clinton, his security clearance was suspended. Later, on April 3, 2018, the DoD’s Washington Headquarters Services Director Barbara Westgate sent a letter to Lovinger indefinitely suspending him from duty and pay status after his clearance was removed in March. The letter stated, “The purpose of this memorandum is to notify you that I am proposing to indefinitely suspend you from duty and pay status in your position as a Foreign Affairs Specialist.”

Lovinger, who is married with three children and is the family’s primary breadwinner, has been living off the generosity of family members since his pay was removed.

The retaliation for whistleblowing was something Bigley expected. “So, we weren’t surprised when DoD bureaucrats moved shortly thereafter to strip Mr. Lovinger of both his security clearance and his detail to the National Security Council, where he had been Senior Director for Strategy as a by-name request of the incoming Trump Administration,” said the attorney.

“Yet, we were puzzled by the unprecedented ferocity of efforts to discredit Mr. Lovinger, including leaks from DoD of false and defamatory information to the press,” he said. “Our assumption was that the other contractor about whom Mr. Lovinger explicitly raised concerns – a close confidante of Hillary Clinton – was the reason for the sustained assault on Mr. Lovinger, and that certainly may have played a role.”

Bigley suspects it was more than the Clinton-connected contracts adding, “Mr. Lovinger unwittingly shined a spotlight on the deep state’s secret weapon – Stefan Halper – and threatened to expose the truth about the Trump-Russia collusion narrative than being plotted: that it was all a set-up.”

Halper’s Ties to Russian Officials Raise Serious Questions

Halper has had a long career and worked in government with several GOP administrations. At 73, the elusive professor spent a career developing top-level government connections–not just through academia but also through his work with members of the intelligence apparatus.

Those contacts and the information Halper collected along the way would eventually, through apparent circumstance, become utilized by the FBI against the Trump campaign. But, it was during his time hosting the Cambridge Intelligence Seminar at the University of Cambridge where Halper shifted from a professor and former government consultant to FBI informant on the Trump campaign.

In 2016, Halper was an integral part of the FBI’s investigation into short-term Trump campaign volunteer, Carter Page. Halper first made contact with Page at his seminar in July 2016. Page, who was already on the FBI’s radar, was accused of being sympathetic to Russia and sought better relations between the U.S. and Russian officials. Halper stayed in contact with Page until September 2017.

During that time, the FBI sought and obtained a warrant from the Foreign Intelligence Surveillance Court (FISC) to spy on Page and used Halper to collect information on him, according to sources. The House Intelligence Committee Russia report and documents obtained by this outlet revealed that the bulk of the warrant against Page relied heavily on an unverified dossier compiled by Former British Spy Christopher Steele and the matter is still under congressional investigation. Steele, who was a former MI6 agent, also had ties to many of the same people, like former MI6 chief Sir Richard Dearlove, who were part of the seminar.

Stefan Halper

Halper, along with Dearlove, left the Cambridge Intelligence Seminar in December 2016, saying they were concerned about Russian influence. Halper had told reporters at the time that it was due to “unacceptable Russian influence.”

Ironically, documents obtained by SaraACarter.com suggest that Halper also had invited senior Russian intelligence officials to co-teach his course on several occasions and, according to news reports, also accepted money to finance the course from a top Russian oligarch with ties to Putin.

Several course syllabi from 2012 and 2015 obtained by this outlet reveal Hapler had invited and co-taught his course on intelligence with the former Director of Russian Intelligence Gen. Vladimir I. Trubnikov.

On May 4, 2012, the course syllabus states, “Ambassador Vladimir I. Trubnikov will comment on the challenges faced while directing the Foreign Intelligence Service, his tenure as Ambassador to India, President Putin and the likely course of Russia’s relations with Britain and the U.S.”

In May 2015, Trubnikov returned to teach with Halper at his seminar in Cambridge on “current relations between the Russian Federation and the West.” Other notable intelligence experts attended the event in 2015, including Major Gen.Peter Williams, a former British commander of the mission to the Soviet Forces in Germany.

Halper’s partner in the seminar, Cambridge Professor Neil Kent has also espoused better relations with Russia and Putin in his writings and told Russia Today in a 2014 interview that “everyone is attacking and demonizing Russia.” According to Kent’s biography, he was a professor from 2002 to 2012 at Russia’s St. Petersburg State Academic Institute.

Even more interesting are reports from the British Media outlet, The Financial Times, that state Halper received funds for the Cambridge seminar from Russian billionaire Andrey Cheglakov, who has close ties to Russian President Vladimir Putin. Cheglakov also funded Veruscript in 2016, which raised the suspicion of Dearlove and those connected to the seminar. Veruscript, a publisher for a Russian academic journal, was suspected by MI6 of being a front for Russian intelligence. Kent also happened to be the editor and chief of the journal. He published the inaugural article in the journal “The Journal of Intelligence and Terrorism”  blaming the West for the Russian invasion into Crimea but the journal closed down due to their suspicions.

Dearlove was also concerned “that Russia may be seeking to use the seminar as an impeccably credentialed platform to covertly steer debate and opinion on high-level sensitive defense and security topics,” according to the Financial Times sources.

A former senior intelligence official told this news outlet, “It’s all smoke and mirrors. Halper was well aware when he was bringing in Trubnikov in 2012 that the Russian’s were already there at his invitation. The FBI uses Halper to get more information on Trump aides but it’s Halper who has the real connection to Russia.”

Lovinger raised concerns with top officials at the Pentagon in 2016 and noted that Halper went far beyond his work as a contractor after he discovered that the amount of money the professor was being paid for his research did not make sense. Lovinger stressed his concern that Halper was not just being utilized as a contractor, but that he was also conducting diplomatic work for the Pentagon “in violation of federal law,” according to Bigley.

In one email from Stephan Halper to Andrew May, the second highest ranking official in Lovinger’s office, Halper writes about a planned trip to conduct meetings in India.

“I am in Cambridge en route to India – arriving Saturday. So far 14 meetings have been scheduled with various parts of the political-military community. On Monday, a meeting is planned with the Delhi Policy Group where I will meet with Brigadier Seghal who is, apparently working with ONA (Office of Net Assessment) Can you tell me anything about him,” according to the document obtained by SaraACarter.com.

Halper and George Papadopoulos

Halper was not only spying on Page for the FBI in 2016, but he had also made contact in September 2016 with another Trump campaign volunteer, George Papadopoulos. He invited Papadopoulos to London that September, luring him with a  $3,000 paycheck to work on a research paper under contract.  By this time the young Trump campaign volunteer had already been in contact London-based professor, Josef Mifsud, who had basically informed him that the Russians had damaging material about Democratic presidential candidate Hillary Clinton. Misfud’s role has also come into question by Congress.

Eventually, Papadopoulos was swept into Robert Mueller’s Special Counsel investigation and pled guilty to one count of lying to the FBI. His wife, Simona Papadopoulos, who’s been a vocal advocate for her husband, told SaraACarter.com that essentially he was forced to plead guilty because of threats from Mueller’s team and lack of financial resources.

After testifying behind closed doors last month to the House Intelligence Committee, Simona told this outlet that she testified to Congress “as far as George is concerned, he met with individuals following the same pattern of behavior….and all of a sudden (Halper) was asking if he was doing anything with Russians…. This is the case with Halper, who is now proven to be a spy, possibly with (Australian Ambassador) Alexander Downer” who her husband met with in London.

Halper and Michael Flynn 

Before Page and Papadopolous, there was the former head of the Defense Intelligence Agency Army Lt. Gen. Michael Flynn. Flynn had been invited to Cambridge in February, 2014 for a a dinner hosted by both Dearlove and Halper.

But during that time, Flynn was already walking a fine line with the Obama Administration and battling President Obama and the CIA over his deep disagreement with the administration’s narrative that al-Qaeda and extremists groups, had been defeated or were on the run. Several months later Flynn was forced to resign early and ended his tenure as the director of the DIA.

Stefan Halper

“Flynn was pushed out by Obama and then became a thorn in the side of Obama and the Clintons when he joined the Trump campaign,” said a former senior intelligence source with knowledge of what happened. “The investigation into Trump didn’t start with Carter Page or George Papadapolous, but with Flynn. Flynn was already on the CIA and Clinton target list. Those same people sure as hell didn’t want him in the White House and they sure as hell didn’t want Trump to win.”

Flynn’s career with Trump ended as quickly as it came. He was forced to resign as Trump’s National Security Advisor 27 days after taking the job. The highly classified conversation between Flynn and former Russian Ambassador Sergey Kislyak was leaked to the Washington Post in January 2017 and he was later questioned by the FBI on that conversation. According to former FBI Director James Comey, the agents who interviewed Flynn did not believe he was lying, but in the end, Flynn pled guilty to one count of lying to Special Counsel Robert Mueller. He had already spent more than $1 million in lawyers fees and sold his home to help with the debt. According to sources, Flynn’s family was being threatened by the Mueller team.

Halper’s involvement in the bureau’s investigation started much earlier than the FBI’s opening of its Crossfire investigation into the Trump campaign on July 31, 2016. He was already providing information on Page, Papadopolous, and Flynn earlier that year.

And it was in 2016 when Halper had told the FBI that he witnessed concerning interactions between Russian academic, Svetlana Lokhova, and Flynn at the February 2014 seminar dinner. This suspicion – without any proof – was then leaked to papers in London and eventually discussed in the U.S. media.  Lokhova told the BBC in May 2017 that when she first saw the allegations raised in the media she thought it was a joke.

Numerous sources with knowledge of the allegations Halper made about Flynn, said that they were “absolutely” false and that Flynn and Lokhova only spoke for a short time at the dinner. Several email exchanges between Lokhova, Flynn and his assistant that took place after the dinner were generic in nature, as Flynn had asked her for a copy of a historical 1930s postcard she had brought to the seminar.

“But it didn’t matter that it wasn’t the truth,” said the former senior intelligence official.

“It was already out there because of Halper’s allegations and the constant leaking and lying of false stories of those to the media.”

Published:8/29/2018 6:20:27 PM
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[Markets] "Complacency Hits Epidemic Levels": Traders Have Never Been More Unhedged For Risk-Off Event

Bloomberg TV's Romaine Bostick has put together a fascinating chart that looks at speculative risk sentiment in the futures market, by summing up net spec exposure in traditional risk-off assets: gold, 10-year Treasuries and the VIX:

The chart speaks for itself, but as Bloomberg's Michael Regan explains, "the obvious takeaway is that positioning is all on one side of the boat and speculators are woefully unprepared for a major risk-off event, suggesting complacency may be reaching epidemic levels as equities break out to new highs."

As we noted previously, speculators are record net short Treasuries...

Extremely net short precious metals...

 

And VIX speculators just can't help themselves, despite losing an arm and/or leg in February...

As DoubleLine's Gundlach noted "Massive increase this week in short positions...Could cause quite a squeeze."

Published:8/29/2018 5:22:41 PM
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[Markets] Nasdaq Nears Best August Since DotCom Peak But EM, VIX, Bonds, & Macro Decouple

How Argentina feels tonight... (fwd to 2mins if you can't bear to wait)

 

Since China intervened mid-month (ahead of the US-China trade talks), the Yuan strengthened and US equities soared (until decoupling the last few days)...

 

And bond yields have fallen (QE trade!?)

 

But Emerging Market currencies have started to collapse again...

 

The Nasdaq is on course for its best August since the year 2000...Things did not end well last time (-74% in under 3 years)

 

Ramping in an echo of January's exuberance - ...Things did not end well last time

 

And we note that VIX has recently decoupled from stocks...

Buoyant appetite for call options may offer one explanation for why VIX rose in tandem with equities in recent sessions. A similar situation preceded the record spike in volatility earlier this year that abruptly ended the previous stretch of all-time highs for U.S. stocks.

 

And finally, if you think stocks are rallying on fun-durr-mentals, you're wrong!

But apart from that, BTFATH!!!

*  *  *

Chinese stocks continued to drift lower after Monday's National Team pumpathon...

 

And record highs in US stocks, because why not! From 10amET (Freeland!?) to 1130pmET (EU close), there was a clear systemic bid across the entire US equity market. Cash markets closed on a weaker tone despite 1 billion MoC to buy...

 

Everything was clam overnight but the fact that US equity markets actually opened seemed to invoke a buying panic that ended when EU closed...

Treasury yields were mixed today with most of the curve up around 1-2bps only but the long end slightly lower...

 

30Y Yields remain above 3.00% but appear to have peaked in this micro-ramp...

 

The Dollar ended the day lower, once again though shifting-trend in the middle of the day...

 

The yuan has started to slide once again...

But EM FX was ugly. The Brazilian Real managed modest gains along with the Mexican Peso but the Argentine Peso collapsed and the Turkish Lira continued its renewed weakness...

 

Turkey is tumbling back toward pre-holiday record lows...

 

But the Argentine Peso was utterly destroyed... (biggest drop since 2015's devaluation) ARS closed on its low tick, a fraction below the 34.0/USD level.

 

Cryptocurrencies were modestly lower today, legging down around the US equity open...

 

PMs managed gains amid the weaker dollar, copper slipped lower but WTI surged after inventory data...

 

WTI Crude is back up near the $70 handle once again...

 

And spot Gold is holding above $1200...

So much for the Fed balance sheet delta impacting stocks!!??

Published:8/29/2018 3:13:46 PM
[Entertainment] Teen Mom's Chelsea Houska Gives Birth to Baby No. 3 Chelsea HouskaCongratulations are in order for Teen Mom 2 star Chelsea Houska, who just gave birth to her third child! Houska and husband Cole DeBoer welcomed daughter Layne, who was born...
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Published:8/29/2018 2:13:33 PM
[Markets] Christopher Steele Worked For Sanctioned Russian Oligarch While Composing Sham Dossier: Solomon

Former MI6 agent Christopher Steele - the author of the largely unverified "Steele Dossier," worked as a subcontractor for Russian billionaire and aluminum magnate Oleg Deripaska at the same time he was pontificating that Donald Trump's alleged (and still unproven) ties to Russia amounted to treason, according to The Hill's John Solomon. 

Steele's firm, Orbis Business Intelligence, was hired by a law firm working for Deripaska in 2012, marking the beginning of a relationship which extended at least throughout 2016 according to Solomon. Steele was tasked with researching a business rival of Deripaska, however Steele's work for the Russian billionaire evolved to the point where the former British spy was interfacing with the Obama administration on his behalf. 

To that end, Steele and twice-demoted DOJ official Bruce Ohr communicated extensively about the Russian Oligarch as recently as February 2016, which included efforts to obtain a Visa for Deripaska to attend an Asia-Pacific Economic Cooperation meeting int he US. 

Deripaska is now banned from the United States as one of several Russians sanctioned in April in response to alleged 2016 election meddling. 

Ohr, meanwhile, was demoted twice after the DOJ's Inspector General discovered that he lied about his involvement with opposition research firm Fusion GPS co-founder Glenn Simpson - who employed Steele. Ohr's CIA-linked wife, Nellie, was also  employed by Fusion as part of the firm's anti-Trump efforts, and had ongoing communications with the ex-UK spy, Christopher Steele as well. 

What's more, Ohr met with Deripaska according to Solomon. 

By 2015, Steele’s work had left him friendly with one of Deripaska’s lawyers, according to my sources. And when Ohr, then the associate deputy attorney general and a longtime acquaintance of Steele, sought help getting to meet Deripaska, Steele obliged.

Deripaska, who frequently has appeared alongside Russian President Vladimir Putin at high-profile meetings, never really dealt with Steele, but he followed his lawyer’s recommendations and met with Ohr, my sources say. -The Hill

The September 2015 meeting between Ohr, Deripaska and several FBI agents in New York sought the Russian billionaire's assistance regarding organized crime investigations. That meeting was facilitated by Steele.

To recap: Bruce Ohr = the #4 official at the DOJ, met with a billionaire friend of Vladimir Putin, in a sit-down arranged by Christopher Steele. Steele and the DOJ, meanwhile, were accusing Donald Trump of collusion with Putin - while the Obama administration used Steele's dodgy dossier to obtain a FISA warrant to spy on Trump campaign aide Carter Page. 

Talk about actual collusion!

Emails in 2016 between former British spy Christopher Steele and Justice Department official Bruce Ohr suggest Steele was deeply concerned about the legal status of a Putin-linked Russian oligarch, and at times seemed to be advocating on the oligarch's behalf, in the same time period Steele worked on collecting the Russia-related allegations against Donald Trump that came to be known as the Trump dossier. The emails show Steele and Ohr were in frequent contact, that they intermingled talk about Steele's research and the oligarch's affairs, and that Glenn Simpson, head of the dirt-digging group Fusion GPS that hired Steele to compile the dossier, was also part of the ongoing conversation. -Washington Examiner

Deripaska has denied any involvement with the Steele dossier, telling The Hill's Solomon in a statement: "The latest reckless media chatter proposes that I had some unspecified involvement in the so-called dossier. Like most of the absurd fantasies and smears that ricochet across the internet, it is utterly false. I had absolutely nothing to do with this project, and I never had any knowledge of it until it was reported in the media and I certainly wasn’t involved in any activity related to it." 

We're sure Jeff Sessions is all over this...

Meanwhile, Bruce Ohr looked somewhat spooked walking into yesterday's closed-door interview with Congressional investigators. 

Published:8/29/2018 2:13:33 PM
[Entertainment] Meghan Markle Wears Mini Dress as She Joins Prince Harry at Hamilton Gala Show Meghan Markle, Prince Harry, HamiltonMeghan Markle continues to showcase her unique duchess style! The 37-year-old former actress with Prince Harry attended a special gala performance of the popular Broadway musical...
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[World] Al Roker gave me a crash course in grilling — and it wasn't a total disaster "Today" anchor Al Roker co-hosts a new cooking class on NBC subscription service Bluprint, which made this first-time griller (almost) competent at flipping patties.
     
 
 
Published:8/29/2018 12:19:05 PM
[Entertainment] 101-Year-Old Kirk Douglas Smiles at Great-Granddaughter in Adorable New Photo Kirk DouglasA picture of Kirk Douglas is capturing fans' hearts. The 101-year-old actor was recently photographed enjoying some quality time with his 8-month-old great-granddaughter, Lua Izzy....
Published:8/29/2018 12:19:04 PM
[Markets] Hero Labeled "Pedophile" By Elon Musk Poised To Sue for Libel

No sooner did Elon Musk bring the "pedo" controversy back into the mainstream this week when on Twitter, he tripled down on his statements that British cave diver and hero Vernon Unsworth may in fact be a pedophile, than BuzzFeed is out with a new report stating that Unsworth is poised to sue Musk civilly for libel.

According to the BuzzFeed report, Unsworth has retained legal counsel and is "preparing a civil complaint for libel". Unsworth reportedly sent Musk a letter early this month letting him know that a lawsuit could be possible as a result of the statement that Musk made to his over 22 million Twitter followers, referring to Unsworth as "pedo guy".

When Musk made his claim, he did so without evidence and then issued a small apology before deleting his original tweets. As a reminder, Musk had his initial meltdown in July of this year, calling Unsworth "pedo guy" on Twitter.

And just when the controversy appeared to be dying down in the media, Musk simply couldn't let it go. He appeared to revamp his claims early this week on Twitter yet again, after he suggested that Unsworth's lack of litigation on the matter was somehow validation that his original claims were accurate.

But contrary to what Musk stated, it now appears as though a lawsuit may actually happen. 

Below is the full text of the letter obtained by BuzzFeed that was sent to Musk on August 6. In it, it calls Musk's statements "false and defamatory" and points out that Musk stated, in three Tweets to 22 million followers, that Unsworth "engages in the sexual exploitation of Thai children" at the very same time "he was working to save the lives of twelve Thai children". 

When Unsworth was asked to comment by Sky News on Wednesday, he simply told the station "it’s all being dealt with, that’s all I can say," according to the BuzzFeed report.

This potential litigation is just the latest in a set of possible consequences that Musk could be lining up for himself as a result of his erratic behavior and outlandish statements on social media (such as taking Tesla private for one).

One would think that, during the middle of this month's go private circus in which Musk and the Board embarrassed  themselves, the embattled CEO would be trying to say as little as possible on Twitter. But that doesn’t seem to be the case, and the company's Board of Directors appears to be just fine with it. Which should make for an interesting remainder of 2018.

Published:8/29/2018 11:42:38 AM
[Entertainment] TV's Top Leading Lady 2018: Vote in the Final 4 Now TV's Top Leading LadyWe've made it to the final four, but it was not an easy road. The last round of TV's Top Leading Lady was the closest yet, with all but one game finishing with less than 3%...
Published:8/29/2018 11:11:34 AM
[Entertainment] Remembering Michael Jackson's Very Complicated, Immeasurably Influential Life Michael Jackson How does one go about distilling the memory of a man once he's no longer here? We eulogize, we mythologize, we grasp at ways to neatly and succinctly sum up a person's existence;...
Published:8/29/2018 10:51:54 AM
[Entertainment] Taylor Swift Honors Aretha Franklin With a Moment of Silence at Detroit Concert Taylor Swift, Reputation TourTaylor Swift honored Aretha Franklin on Tuesday by holding a moment of silence for the late Queen of Soul during her concert in Detroit. Before the tribute, Swift paused her Reputation...
Published:8/29/2018 10:14:24 AM
[Markets] "A Senator Masquerading As A Gas Station"

Authored by Dmitry Orlov via Club Orlov blog,

John McCain is dead, and many people are celebrating whereas they should be sad. He wasn’t a friend of mankind - he was its enemy, but a really bad one. But with such grossly incompetent enemies - who needs friends?

McCain did a great deal to destroy America. He devoted his entire lifetime to American destruction. To start with, he was quite effective as a protester against America’s genocidal war on the people of Vietnam. Other Americans just marched around ineffectually, waving banners and shouting antiwar slogans, but not McCain! His own father had a lot to do with starting that war, but McCain made up for that by destroying 26 American war planes. That’s quite something! If every American flyer crashed as many planes, countless innocent lives would have been saved.

Of course, he could have done even better - and he did try. He almost managed to destroy the US aircraft carrier Forrestal by setting it ablaze. To top off his illustrious military career, he surrendered to the enemy and spent five years in a Vietnamese prison. This made him a hero - in Americans’ eyes only, while the rest of the world saw in him a murderer of Vietnamese children.

His “martyrdom” as a POW helped pave his way to a political career, first in Congress, then in the Senate. During his obscenely long career in national politics, McCain did what he could to make American “democracy” look like a complete joke and to hasten America’s collapse. This, by the way, wasn’t a tall order: American “democracy” had long been a cesspool—a playground for lobbyists and political technologists based on a fully gerrymandered system of fake elections. But he did his thing, and is therefore twice the hero.

Defecating into the cesspool of American politics doesn’t alter its chemistry much, but McCain pushed the limits here as well. If only he and the native genius that is Sara Palin had won the Presidency! This surely would have hastened American collapse by quite a substantial amount, bringing his life’s work to fruition. This was perhaps his greatest failing: he turned out to be a traitor to his own friends and a faithful servant to his political enemies. He shut down his electoral campaign two weeks before the election. Then he did whatever he could to kiss up to Obama and helped wreck the repeal of Obamacare. McCain deserves to have a gigantic sausage-shaped obelisk erected in his honor, made of the same lumpy, brown material that he was so full of throughout his political career.

Internationally, McCain was a stellar performer when it came to meddling in the affairs of other nations, often in ways that helped undermine America’s standing in the world. Whenever he visited a foreign country, the likelihood of civil war breaking out there went up by a notch, sometimes by two. He always had a warm place in his heart for terrorists—be they Ukrainian neo-Nazis or the homicidal maniacs of the Islamic Caliphate (a.k.a. ISIS). He managed to perform in spite of not being very smart: in 2013 he published an article on the website Pravda.ru, thinking that it was Russia’s main newspaper (which was at that point two decades defunct).

He was one of the prime architects of the Ukrainian government’s “anti-terrorist operation” against its own citizens in the east of the country. His actions helped assure American defeat and Syrian victory in Syria and set the Ukrainian government he had helped install in 2014 on a course for self-destruction. Russia owes him a debt of gratitude for its reunification with Crimea after its two lost decades in the Ukrainian wilderness. He was also a champion of America’s own self-destruction through national bankruptcy, always being in favor of its profligate, fantastically corrupt and otherwise ineffectual defense spending.

His crowning achievement was his successful push for anti-Russian sanctions. They made it very difficult for Russian government officials to appear serious and resist the urge to say “May we have some more sanctions, please?” Thanks to these sanctions, Russia has moved rapidly toward achieving food security and has become one of the world’s major agricultural exporters; it has achieved or will soon achieve complete self-sufficiency in defense and in many other industrial sectors; and it is quite far along in making itself independent of the US dollar and of Western finance.

The effect of the sanctions in simultaneously driving down both the ruble and the Russian stock market has allowed the Russian government to sell dollars high and to buy up Russian industrial stocks low, effectively re-nationalizing Russian industry at bargain-basement prices, shifting the share of its government ownership from around 16% to at least 65% while squeezing out Western financial interests. The profits that would have otherwise been pocketed by Western investors are now flooding into the Russian treasury, to be spent on health, education, housing, roads and bridges and so on. McCain, you socialist you!

McCain also had a wonderful talent for being not just wrong but exactly wrong, as in the exact opposite of right. He called Russia “a gas station masquerading as a country.” That was great for Russia, because Russia was at the time a country masquerading as a gas station, to buy itself the time it needed to rebuild and rearm. Now that it has done so, the mask can come off, and Russia is most grateful to McCain for having given it plenty of cover just at the time when it most needed it.

It is a sad moment now that McCain’s untimely demise has sent him off to an eternity in Hell, because he didn’t get to finish his life’s work: destroying the United States. Nevertheless, we should call it a job well done, for the course on which he helped set the country is now unalterable. Even if he is replaced in his Senate seat by someone actually competent and able to act in his nation’s interest, this won’t alter its course by much, and certainly will not reverse it. Let us now observe a minute of silence in honor of John McCain, for upon his passing the American Collapse Party has lost a true leader.

Published:8/29/2018 10:14:24 AM
[Entertainment] Katharine McPhee Tells David Foster's Daughter "Mommy and Daddy Need Alone Time" Katharine McPhee, David FosterKatharine McPhee is having some fun with her new family dynamic. The Waitress star got engaged to record producer David Foster back in July. With many years between the soon-to-be...
Published:8/29/2018 9:54:52 AM
[Markets] Pending Home Sales Slump For 7th Straight Month As "Overheated Real Estate Markets" Start To Drop

Amid its "broadest slowdown in years" the US housing market faces prices for starter homes at the highest they have been since 2008, just prior to the collapse of the housing market, and August is confirming that prices are indeed becoming an issue.

Following the drop in Existing- and New-home sales (as well as another drop in mortgage apps), Pending-home sales missed expectations dramatically, dropping 0.7% MoM in July (+0.3% exp).

This is the seventh straight month of annual declines in pending home sales...

Lawrence Yun, NAR chief economist, says the housing market’s summer slowdown continued in July.

“Contract signings inched backward once again last month, as declines in the South and West weighed down on overall activity,” he said.

It’s evident in recent months that many of the most overheated real estate markets – especially those out West – are starting to see a slight decline in home sales and slower price growth.

Yun blames affordability (and supply)...

“The reason sales are falling off last year’s pace is that multiple years of inadequate supply in markets with strong job growth have finally driven up home prices to a point where an increasing number of prospective buyers are unable to afford it.”

The US housing data just keeps getting worse...

Again as we noted previously, none of this should come as a huge surprise since

Sentiment for Home-Buying Conditions are the worst since Lehman...

With The Fed set on its automaton hiking trajectory, we suspect home sales will continue to lag.

Published:8/29/2018 9:13:45 AM
[Entertainment] Kylie Jenner Says Her Abs Are "Making a Comeback" After Giving Birth Stormi Webster, Kylie JennerKylie Jenner is on her fitness grind--and seeing results. In the wake of giving birth to her first child, daughter Stormi, in February, the reality star decided to get into the gym to...
Published:8/29/2018 9:00:54 AM
[Markets] Brien Lundin: Why The Gold Market Looks Poised For Reversal

Authored by Adam Taggart via PeakProsperity.com,

Extreme conditions are aligning in a way we've seen before...

This week, we welcome back to the podcast Brien Lundin, publisher of Gold Newsletter and producer of the New Orleans Investment Conference (Nov 1-4, 2018). FYI: both Chris and I will be speaking there again this year.

Brien predicts that the brutal period for precious metals may soon be over. In fact, he now seeing a bullish alignment of factors he's seen before, which precursored a sharp move upwards in the prices of gold and silver:

The paper-gold market is divided by the Commodity Futures Trading Commission into four or five large groups. The big players are, on one side, the large speculators. On the other side the large commercials.

The large commercials historically have been the people involved in the market and the agricultural commodities -- a good example being the big farmers and farming cooperatives. In the metals industry typically it's the jewelers and people who use metals in their everyday business, so they have to hedge the price.

However, a lot of these people in the metals business have turned to the big bullion banks like JP Morgan, etc, to do their hedging for them. So now you have these big bullion banks on the commercial side, who also have proprietary trading desks. So the picture gets a little fuzzy. It gets a little murky in that the large commercials are not just the industry companies -- the groups that are involved in the business that need precious metals as a part of the fashioning of their products, etc -- but also these big, bullion banks that have trading desks.

On the other side, you have large speculators -- hedge funds, institutions and the like that get involved in trading the metals, basically just placing bets one way or the other.

What we find over time is that the large speculators typically get the direction of the market wrong. It's the commercials, whether because they're smarter or because they can manipulate the market to their wishes, are typically right on the direction of the market.

We've seen the large speculators, over time, get very long in which case the commercials dump shorts on the market and swamp the large speculators on that end of the market. Or we see the large speculators get much less long, or even short, and, at that point, the commercials come in, they buy, and they send the gold price up. When that happens, large speculators have to cover their shorts desperately. And when that happens, you see really steep, very aggressive moves upward in the precious metals, particularly gold and silver.

So you want to look at the extremes when the large speculators are historically long or when they're historically short -- which has happened very recently. Today we see the large speculators, for the first time since 2001, have actually gone net short.

And that's important because in 2001, the last time this happened, we saw the gold market turn around and embark on a multi-year bull run that made absolute fortunes for people who were positioned not only in the metals, but in the right mining stocks.

I can tell you that, during that period, there were companies that we recommended in Gold Newsletter that went up four, five, ten, even twenty and more times in value. It was just an incredible time to make money. And, if past form holds true, we may be seeing the market turning toward that kind of a long run once again.

Click the play button below to listen to Chris' interview with Brien Lundin (44m:40s).

Published:8/29/2018 9:00:54 AM
[Markets] 'Addicted' Americans Are Now Harming Their Pets To Get Opioids

In a recent statement by FDA Commissioner Scott Gottlieb, M.D., he said the opioid epidemic and the misuse and abuse of these drugs remains his highest priority. As the crisis evolves, he said it is vital that the agency take an in-depth look at all the access points where these medications can be purchased.

Gottlieb raised the alarm about one-way people might access opioids: their pets. It seems as people are now stealing pain medication intended for man’s best friend.

“We recognize that opioids and other pain medications have a legitimate and important role in treating pain in animals – just as they do for people. But just like the opioid medications used in humans, these drugs have potentially serious risks, not just for the animal patients, but also because of their potential to lead to addiction, abuse and overdose in humans who may divert them for their own use,” Gottlieb said in the statement.

Gottlieb said there had been limited information for responsible opioid prescribing for veterinary professionals, and so the FDA has just developed a comprehensive checklist on what veterinarians need to look out for in this new wave of opioid fraud.

“The resource includes information on state and federal regulations, alternatives to opioids and how to properly safeguard and store opioids, as well as how to identify if a client or employee may be abusing opioids and take action with a safety plan.

While each state creates its own regulations for the practice of veterinary medicine within its borders, including regulations about secure storage of controlled substances like opioids, veterinarians should also follow professional standards set by the American Veterinary Medical Association (AVMA) in prescribing these products to ensure those who are working with these powerful medications understand the risks and their role in combatting this epidemic.

Veterinarians are also required to be licensed by the Drug Enforcement Agency (DEA) to prescribe opioids to animal patients, as are all healthcare providers when prescribing for use in humans.

These measures are in place to help ensure the critical balance between making sure animals can be humanely treated for their pain, while also addressing the realities of the epidemic of misuse, abuse and overdose when these drugs are diverted and used illegally by humans,” Gottlieb said.

According to the Courier-Journal, a dangerous trend is developing in the heartland of dying America, one where pet owners are harming their animals to get opioid prescriptions.

In one case, a Kentucky woman cut her retriever, Alice, with razors on multiple occasions in the attempt to get an opioid prescription. Heather Pereira, Alice’s owner, of Elizabethtown, tried to acquire a prescription for Tramadol. Veterinarians quickly caught onto the scheme and called law enforcement officers when they noticed Alice’s injuries appeared to be intentional.

Elizabethtown resident Heather Pereira remains on probation for intentionally cutting her golden retriever with a razor blade in order to get narcotics from a vet. The dog renamed Alice, has been removed from her care (Source/ Elizabethtown Police)

DEA Special Agent, Scott Brink, warned more than 200 Kentucky doctors — including dozens of veterinarians — during an August conference in Louisville to be extra vigilant for people hurting their animals in the attempt to acquire opioids, as it now seems man’s best friend is among the victims of the nation’s worst drug crisis.

A new study from the Colorado School of Public Health at the University of Colorado Anschutz Medical Campus showed that 62 percent of veterinarians surveyed felt they had a significant role in preventing opioid abuse.

Senior instructor Liliana Tenney, who co-authored the report, said:

This is significant for two reasons. These providers want to ensure the treatment of pets. If this is truly the case and pet owners are intentionally harming animals, that’s an animal rights issue.”

If opioids are being prescribed and aren’t getting to the pets that need them because these drugs are being diverted, that’s a public health issue.

The third wave of the opioid epidemic is here. America is dying from within. 

Published:8/29/2018 7:44:53 AM
[Entertainment] Kanye West Argues Wearing Small Sandals Is the "Japanese Way" Kim Kardashian, Kanye WestAfter his footwear made headlines at 2 Chainz's wedding, Kanye West took to Twitter to explain his shoe style. The "Gold Digger" rapper and his wife, Kim Kardashian, attended...
Published:8/29/2018 7:14:21 AM
[Markets] Turkish Lira Tumbles As Central Bank Intervention Fails

The Turkey’s lira tumbled as much as 3% against the dollar, making it the worst performing currency in the world, and extending its slump to a third day after the central bank announced it double banks' borrowing limit for overnight transactions at the interbank money market - effectively tightening liquidity by ending the unrestricted funding it has offered since Aug. 13 - failed to bolster investor sentiment.

"Banks’ borrowing limits for overnight transactions at the Interbank Money Market established within the CBRT would be twice the limits applicable before Aug. 13", The Turkish central bank said.

However, like many of the measures introduced in recent weeks to contain a slide of more than 40 percent in the lira this year, this one also failed as investors do not see the bank's approach to market pressure as a sustainable way to tackle double-digit inflation and a widening current-account deficit, when what the bank should be doing it raising rates and making the country more attractive for foreign investors.

"It’s yet more smoke and mirrors from the central bank," said Nigel Rendell, an analyst at Medley Global Advisors LLC in London. "The change in banks’ overnight borrowing limits is aimed at trying to ease pressures on the banking system, rather than tackling Turkey’s underlying problem, which remains persistently high inflation."

The lira plunged 3.0% lower, dropping as much as 6.4786 per dollar. Together with the Argentine peso, it’s the worst-performing emerging-market currency this year. As the selling resume, the yield on 10-year bonds climbed 19 bps to 21.95%, and fast approaching the record set earlier this month.

Separately, on Wednesday the Turkish economic confidence fell to the lowest level since 2009 in August, while the country’s trade deficit widened in July from the previous month.

Commenting on today's failed intervention, Rendell said that the central bank got “zero bang for its buck” in Wednesday’s move, given the renewed lira selling. The bank is set to meet on Sept 13 for its next policy decision.

"The downward currency trend will continue until monetary policy is significantly tighter,” he said. “If the bank really wants to stop the rout and is serious about tackling ever-higher inflation, it needs to raise interest rates by at least 500 basis points."

That, however, may never happen as long as Erdogan is president.

Published:8/29/2018 6:10:31 AM
[Markets] As Land Confiscations Loom, South Africa Rules 300,000 Gun-Owners Turn Over Their Weapons

Authored by Jose Nino via GunPowderMagazine.com,

South Africa is opening the door for tyranny.

The Constitutional Court of South Africa recently ruled that 300,000 gun owners must turn in their firearms.

This judgement came in response to the North Gauteng High Court’s ruling in 2017 which said Section 24 and Section 28 of the Firearm’s Control Act were unconstitutional.

A report from The Citizen explains what Section 24 and Section 28 entail:

“Section 24 of the Act requires that any person who seeks to renew a licence must do so 90 days before its expiry date Section 28 stipulates that if a firearm licence has been cancelled‚ the firearm must be disposed of or forfeited to the state. A 60-day time frame was placed on its disposal, which was to be done through a dealer.”

Now that the High Court’s initial ruling has been overturned, gun owners who failed to renew their firearms licenses must hand in their firearms to the nearest police station, where authorities will then proceed to destroy them.

Many naïve political observers will paint this event as a casual gun control scheme, but any astute student of politics will recognize that the floodgates are now open for further encroachments – not only on the gun rights of South Africans, but also on others facets of theirs lives.

A look at South Africa’s current political climate will give us an idea of the potential ramifications of this gun control scheme.

Political Trouble Brewing in South Africa?

Though South Africa witnessed rising levels of economic freedom shortly after Apartheid ended in 1994, the country has taken a more interventionist path to economic development in recent years.

This situation is becoming more pronounced with the South African National Assembly recently voting 241-83 to amend the South African constitution to allow for land expropriation without compensation.

The socialist-leaning African National Congress (ANC) and the Economic Freedom Fighters (EFF) parties are leading the charge for expropriation under the banner of fixing racial disparities that have supposedly remained intact since Apartheid’s conclusion.

While land confiscation has not been officially finalized, South Africans should worry about the direction their country is going.

And how does gun control fit into this equation?

Gun Control: A Tool for Tyranny

No matter how socialist apologists rationalize it, the redistributionist agenda the South African government is pursuing will not be implemented passively. Ultimately, it must be carried out by force.

The kind of force socialists seek is a monopolized kind, which extreme forms of gun control like gun confiscation help facilitate.

The history of gun confiscation is one of repeated cases of tyranny.

From countries such as Cuba to the Soviet Union, aspiring demagogues have used gun confiscation to disarm the populace. Logically, an unarmed populace will put up little resistance against their tyrannical acts.

In South Africa’s case, farmers and their workers are already suffering ongoing attacks against their property. One could only imagine what it would be like for these persecuted farmers once they are stripped of their right to self-defense.

For many Americans who have enjoyed historically unprecedented gun rights, South Africa’s gun control experience may seem distant and strange.

But make no mistake about it, South Africa’s latest flirtation with gun control is not based on good intentions, especially when considering the political climate the country is enduring.

South Africa should serve as a fair warning to Americans of the dangerous consequences gun control poses.

Published:8/29/2018 5:19:57 AM
[Entertainment] Meghan Markle's Makeup Artist Reveals His Go-To 15-Minute Routine ESC: Meghan MarkleJust in: It's actually easy to look like a princess. In fact, you only need 15 minutes to recreate Meghan Markle's signature look. "It's about finding your inner beauty...
Published:8/29/2018 5:19:56 AM
[Markets] Zurich's "Drive-In" Sex-Boxes Branded 'Success'

Although prostitution has been legal in neutral Switzerland since the 40s, the city of Zurich decided to put an end to the inconveniences the sex industry had caused the residents of the riverfront neighborhoods, where the hookers used to work, in 2012.

Then more than 50% of locals voted for the initiative to build sex facilities, which cost $2 million; they opened a year later in August 2013.

And now, as Sputnik News reports, Zurich city council has told the Swiss news agency SDA that the goals of sex boxes have been fulfilled.

The measure was especially effective for preventing violence against sex workers and human trafficking, as since 2013, not a single case of severe violence has been registered.  

The so-called sex-boxes are one-car garages where prostitutes and clients can meet.

Since their introduction, the drive-ins have been working with a precision of a Swiss clock and even seen some bicycle-friendly improvements lately.

As Sputnik explains, from 20 to 25 women work daily at the facility, which resembles a row of one-car wooden garages. The drive-in has established working hours, according to the information on the web-site of the city council: customers can buy sex there from 7 pm till 3 am from Sunday till Wednesday. Hours of operation from Thursday till Saturday is two hours longer, up to 5 am. 

Apart from car garages, standing boxes can be used now at the facility.

Published:8/29/2018 3:38:47 AM
[Markets] Is Tunisia The Next Emerging Market To Implode?

Authored by John Rubino via DollarCollapse.com,

Seems like every few days a new developing country discovers that it can’t pay back the dollars and/or euros it borrowed back when “external foreign currency debt” seemed like a good thing. Next up: Tunisia, apparently. From today’s Wall Street Journal:

Nation That Sparked Arab Spring Finds Itself a Springboard for Illegal Migration

AL ATAYA, Tunisia - More than seven years after Tunisians overthrew their country’s dictatorship in a revolution that spawned the Arab Spring, the country’s economy is in crisis and thousands of people are sneaking into Europe, as part of a new wave of clandestine migration from what had been a North African success story.

The recent Tunisian exodus began in 2017 as economic pressures mounted on the country’s working and middle classes. Tunisians have enjoyed greater political freedoms since the Arab Spring uprising and Mr. Ben Ali’s fall, but a series of post-revolutionary governments have failed to revive the economy and create jobs. Today, more than 35% of Tunisian young people are unemployed, and many don’t see a future in their own country.

“The state isn’t giving us anything,” a 24-year-old mechanic in Al Ataya said, adding he had considered leaving on a smuggler’s boat until a shipwreck killed more than 100 people offshore in June.

In recent years, Tunisia’s government has tried to correct course. The government chose to cut budgets at the urging of the International Monetary Fund, which extended Tunisia a $2.9 billion loan in 2016.

But the IMF-led overhaul has failed to trigger a turnaround. The economy is currently growing at 2.8%, a slower rate than in 2010 before the uprising. Tunisia’s currency, the dinar, shed 21% of its value against the euro in 2017. When the cuts the IMF had urged took effect in January, a wave of protests shook the country, raising questions about the future of its democratic transition.

A series of terrorist attacks in 2015 also devastated Tunisia’s tourism industry. The country is also still righting itself after the economic shock of the 2010-2011 uprising.

The lack of new jobs has driven a powerful undercurrent of pessimism among young Tunisians. Young people on this island who fail to make a living in fishing often while away their days in cafes. Others join the smugglers.

Sounds pretty grim, especially the part about IMF-imposed austerity. Let’s see if the numbers paint the same picture. First, government debt should be souring — and it is:


source: tradingeconomics.com

And external debt - that is, debt denominated in other currencies that becomes harder to manage as the dinar falls against those other currencies - should be rising. And it is. Since 2008 it’s risen from less than 50% of GDP to more than 80%.

80% of GDP is high enough to be potentially destabilizing if the dinar keeps falling. European banks who lent money to the former French colony now wish they hadn’t and will soon be lining up for an ECB bail-out that, when combined with those of all the other emerging market creditor banks, might break the trillion-euro mark.

Meanwhile, the ease with which Tunisians cross over into Europe will add to the social crisis of mass immigration, with all the attendant costs and political disruptions. Italy’s new populist government, for instance, will absolutely not take a million Tunisians, which will will put it at odds with the EU, which might spark a euro crisis, and so on.

Is this systemically threatening? Maybe. In any event it certainly deserves to be on the list of straws waiting to break the camel’s back.

Published:8/29/2018 2:41:36 AM
[Markets] The Other Side Of John McCain

Authored by Max Blumenthal via Consortium News,

If the paeans to McCain by diverse political climbers seems detached from reality, it’s because they reflect the elite view of U.S. military interventions as a chess game, with the millions killed by unprovoked aggression mere statistics.

As the Cold War entered its final act in 1985, journalist Helena Cobban participated in an academic conference at an upscale resort near Tucson, Arizona, on U.S.-Soviet interactions in the Middle East. When she attended what was listed as the “Gala Dinner with keynote speech”, she quickly learned that the virtual theme of the evening was, “Adopt a Muj.”

“I remember mingling with all of these wealthy Republican women from the Phoenix suburbs and being asked, ‘Have you adopted a muj?” Cobban told me. “Each one had pledged money to sponsor a member of the Afghan mujahedin in the name of beating the communists. Some were even seated at the event next to their personal ‘muj.’”

The keynote speaker of the evening, according to Cobban, was a hard-charging freshman member of Congress named John McCain.

During the Vietnam war, McCain had been captured by the North Vietnamese Army after being shot down on his way to bomb a civilian lightbulb factory. He spent two years in solitary confinement and underwent torture that left him with crippling injuries. McCain returned from the war with a deep, abiding loathing of his former captors, remarking as late as 2000, “I hate the gooks. I will hate them as long as I live.” After he was criticized for the racist remark, McCain refused to apologize. “I was referring to my prison guards,” he said, “and I will continue to refer to them in language that might offend some people because of the beating and torture of my friends.”

‘Hanoi Hilton’ prison where McCain was tortured. (Wikimedia Commons)

McCain’s visceral resentment informed his vocal support for the mujahedin as well as the right-wing contra death squads in Central America — any proxy group sworn to the destruction of communist governments.

So committed was McCain to the anti-communist cause that in the mid-1980s he had joinedthe advisory board of the United States Council for World Freedom, the American affiliate of the World Anti-Communist League (WACL). Geoffrey Stewart-Smith, a former leader of WACL’s British chapter who had turned against the group in 1974, described the organization as “a collection of Nazis, fascists, anti-Semites, sellers of forgeries, vicious racialists, and corrupt self-seekers. It has evolved into an anti-Semitic international.”

Joining McCain in the organization were notables such as Jaroslav Stetsko, the Croatian Nazi collaborator who helped oversee the extermination of 7,000 Jews in 1941; the brutal Argentinian former dictator Jorge Rafael Videla; and Guatemalan death squad leader Mario Sandoval Alarcon. Then-President Ronald Reagan honored the group for playing“a leadership role in drawing attention to the gallant struggle now being waged by the true freedom fighters of our day.”

Being Lauded as a Hero

On the occasion of his death, McCain is being honored in much the same way — as a patriotic hero and freedom fighter for democracy. A stream of hagiographies is pouring forth from the Beltway press corps that he described as his true political base. Among McCain’s most enthusiastic groupies is CNN’s Jake Tapper, whom he chose as his personal stenographer for a 2000 trip to Vietnam. When the former CNN host Howard Kurtz asked Tapper in February, 2000, “When you’re on the [campaign] bus, do you make a conscious effort not to fall under the magical McCain spell?”

“Oh, you can’t. You become like Patty Hearst when the SLA took her,” Tapper joked in reply.

Ocasio-Cortez: Called McCain ‘an unparalleled example of human decency.’

But the late senator has also been treated to gratuitous tributes from an array of prominent liberals, from George Soros to his soft power-pushing client, Ken Roth, along with three fellow directors of Human Rights Watch and “democratic socialist” celebrity Alexandra Ocasio-Cortez, who hailed McCain as “an unparalleled example of human decency.” Rep. John Lewis, the favorite civil rights symbol of the Beltway political class, weighed in as well to memorialize McCain as a “warrior for peace.”

If the paeans to McCain by this diverse cast of political climbers and Davos denizens seemed detached from reality, that’s because they perfectly reflected the elite view of American military interventions as akin to a game of chess, and the millions of dead left in the wake of the West’s unprovoked aggression as mere statistics.

There were few figures in recent American life who dedicated themselves so personally to the perpetuation of war and empire as McCain. But in Washington, the most defining aspect of his career was studiously overlooked, or waved away as the trivial idiosyncrasy of a noble servant who nonetheless deserved everyone’s reverence.

McCain did not simply thunder for every major intervention of the post-Cold War era from the Senate floor, while pushing for sanctions and assorted campaigns of subterfuge on the side. He was uniquely ruthless when it came to advancing imperial goals, barnstorming from one conflict zones to another to personally recruit far-right fanatics as American proxies.

In Libya and Syria, he cultivated affiliates of Al Qaeda as allies, and in Ukraine, McCain courted actual, sig-heiling neo-Nazis.

While McCain’s Senate office functioned as a clubhouse for arms industry lobbyists and neocon operatives, his fascistic allies waged a campaign of human devastation that will continue until long after the flowers dry up on his grave.

American media may have sought to bury this legacy with the senator’s body, but it is what much of the outside world will remember him for.

‘They are Not al-Qaeda’

McCain with Abdelhakim Belhaj, leader of the Libyan Islamic Fighting Group, a former Al Qaeda affiliate.

When a violent insurgency swept through Libya in 2011, McCain parachuted into the country to meet with leaders of the main insurgent outfit, the Libyan Islamic Fighting Group (LIFG), battling the government of Moamar Gaddafi. His goal was to make kosher this band of hardline Islamists in the eyes of the Obama administration, which was considering a military intervention at the time.

What happened next is well documented, though it is scarcely discussed by a Washington political class that depended on the Benghazi charade to deflect from the real scandal of Libya’s societal destruction. Gaddafi’s motorcade was attacked by NATO jets, enabling a band of LIFG fighters to capture him, sodomize him with a bayonet, then murder him and leave his body to rot in a butcher shop in Misrata while rebel fanboys snapped cellphone selfies of his fetid corpse.

slaughter of Black citizens of Libya by the racist sectarian militias recruited by McCain immediately followed the killing of the pan-African leader. ISIS took over Gaddafi’s hometown of Sirte while Belhaj’s militia took control of Tripoli, and a war of the warlords began. Just as Gaddafi had warned, the ruined country became a staging ground for migrant smugglers on the Mediterranean, fueling the rise of the far-right across Europe and enabling the return of slavery to Africa.

Many might describe Libya as a failed state, but it also represents a successful realization of the vision McCain and his allies have advanced on the global stage.

Following the NATO-orchestrated murder of Libya’s leader, McCain tweeted, “Qaddafi on his way out, Bashar al Assad is next.”

McCain’s Syrian Boondoggle

Like Libya, Syria had resisted aligning with the West and was suddenly confronted with a Salafi-jihadi insurgency armed by the CIA. Once again, McCain made it his personal duty to market Islamist insurgents to America as a cross between the Minutemen and the Freedom Riders of the civil rights era. To do so, he took under his wing a youthful DC-based Syria-American operative named Mouaz Moustafa who had been a consultant to the Libyan Transitional Council during the run-up to the NATO invasion.

In May 2013, Moustafa convinced McCain to take an illegal trip across the Syrian border and meet some freedom fighters. An Israeli millionaire named Moti Kahana who coordinated efforts between the Syrian opposition and the Israeli military through his NGO, Amaliah, claimed to have “financed the opposition group which took senator John McCain to visit war-torn Syria.”

“This could be like his Benghazi moment,” Moustafa remarked excitedly in a scene from a documentary, “Red Lines,” that depicted his efforts for regime change. “[McCain] went to Benghazi, he came back, we bombed.”

During his brief excursion into Syria, McCain met with a group of CIA-backed insurgents and blessed their struggle. “The senator wanted to assure the Free Syrian Army that the American people support their cry for freedom, support their revolution,” Moustafa said in an interview with CNN. McCain’s office promptly released a photo showing the senatorposing beside a beaming Moustafa and two grim-looking gunmen.

Days later, the men were named by the Lebanese Daily Star as Mohammad Nour and Abu Ibrahim. Both had been implicated in the kidnapping a year prior of 11 Shia pilgrims, and were identified by one of the survivors. McCain and Moustafa returned to the U.S. the targets of mockery from Daily Show host John Stewart and the subject of harshly critical reports from across the media spectrum. At a town hall in Arizona, McCain was berated by constituents, including Jumana Hadid, a Syrian Christian woman who warned that the sectarian militants he had cozied up to threatened her community with genocide.

McCain with then-FSA commander Salam Idriss, an insurgent later exposed for kidnapping Shia pilgrims.

But McCain pressed ahead anyway. On Capitol Hill, he introduced another shady young operative into his interventionist theater. Named Elizabeth O’Bagy, she was a fellow at the Institute for the Study of War, an arms industry-funded think tank directed by Kimberly Kagan of the neoconservative Kagan clan. Behind the scenes, O’Bagy was consulting for Moustafa at his Syrian Emergency Task Force, a clear conflict of interest that her top Senate patron was well aware of. Before the Senate, McCain cited a Wall Street Journal editorial by O’Bagy to support his assessment of the Syrian rebels as predominately “moderate,” and potentially Western-friendly.

Days later, O’Bagy was exposed for faking her PhD in Arabic studies. As soon as the humiliated Kagan fired O’Bagy, the academic fraudster took another pass through the Beltway’s revolving door, striding into the halls of Congress as McCain’s newest foreign policy aide.

McCain ultimately failed to see the Islamist “revolutionaries” he glad handled take control of Damascus. Syria’s government held on thanks to help from his mortal enemies in Tehran and Moscow, but not before a billion dollar CIA arm-and-equip operation helped spawn one of the worst refugee crises in post-war history. Luckily for McCain, there were other intrigues seeking his attention, and new bands of fanatical rogues in need of his blessing. Months after his Syrian boondoggle, the ornery militarist turned his attention to Ukraine, then in the throes of an upheaval stimulated by U.S. and EU-funded soft power NGO’s.

Coddling the Neo-Nazis of Ukraine

On December 14, 2013, McCain materialized in Kiev for a meeting with Oleh Tyanhbok, an unreconstructed fascist who had emerged as a top opposition leader. Tyanhbok had co-founded the fascist Social-National Party, a far-right political outfit that touted itself as the “last hope of the white race, of humankind as such.” No fan of Jews, he had complained that a “Muscovite-Jewish mafia” had taken control of his country, and had been photographed throwing up a sieg heil Nazi salute during a speech.

None of this apparently mattered to McCain. Nor did the scene of Right Sector neo-Nazis filling up Kiev’s Maidan Square while he appeared on stage to egg them on.

“Ukraine will make Europe better and Europe will make Ukraine better!” McCain proclaimed to cheering throngs while Tyanhbok stood by his side. The only issue that mattered to him at the time was the refusal of Ukraine’s elected president to sign a European Union austerity plan, opting instead for an economic deal with Moscow.

McCain met with Social-National Party co-founder Oleh Tyanhbok.

McCain was so committed to replacing an independent-minded government with a NATO vassal that he even mulled a military assault on Kiev. “I do not see a military option and that is tragic,” McCain lamented in an interview about the crisis. Fortunately for him, regime change arrived soon after his appearance on the Maidan, and Tyanhbok’s allies rushed in to fill the void.

By the end of the year, the Ukrainian military had become bogged down in a bloody trench war with pro-Russian, anti-coup separatists in the country’s east. A militia affiliated with the new government in Kiev called Dnipro-1 was accused by Amnesty International observers of blocking humanitarian aid into a separatist-held area, including food and clothing for the war torn population.

Six months later, McCain appeared at Dnipro-1’s training base alongside Sen.’s Tom Cotton and John Barasso. “The people of my country are proud of your fight and your courage,” McCain told an assembly of soldiers from the militia. When he completed his remarks, the fighters belted out a World War II-era salute made famous by Ukrainian Nazi collaborators: “Glory to Ukraine!”

Today, far-right nationalists occupy key posts in Ukraine’s pro-Western government. The speaker of its parliament isAndriy Parubiy, a co-founder with Tyanhbok of the Social-National Party and leader of the movement to honor World World Two-era Nazi collaborators like Stepan Bandera. On the cover of his 1998 manifesto, “View From The Right,” Parubiy appeared in a Nazi-style brown shirt with a pistol strapped to his waist. In June 2017, McCain and Republican Speaker of the House Paul Ryan welcomed Parubiy on Capitol Hill for what McCain called a “good meeting.” It was a shot in the arm for the fascist forces sweeping across Ukraine.

McCain with Dnipro-1 militants on June 20, 2015

The past months in Ukraine have seen a state sponsored neo-Nazi militia called C14 carrying out a pogromist rampage against Ukraine’s Roma population, the country’s parliament erecting an exhibition honoring Nazi collaborators, and the Ukrainian military formally approving the pro-Nazi “Glory to Ukraine” greeting as its own official salute.

Ukraine is now the sick man of Europe, a perpetual aid case bogged down in an endless war in its east. In a testament to the country’s demise since its so-called “Revolution of Dignity,” the deeply unpopular President Petro Poroshenko has promised White House National Security Advisor John Bolton that his country — once a plentiful source of coal on par with Pennsylvania — will now purchase coal from the U.S. Once again, a regime change operation that generated a failing, fascistic state stands as one of McCain’s greatest triumphs.

McCain’s history conjures up memory of one of the most inflammatory statements by Sarah Palin, another cretinous fanatic he foisted onto the world stage. During a characteristically rambling stump speech in October 2008, Palin accusedBarack Obama of “palling around with terrorists.” The line was dismissed as ridiculous and borderline slander, as it should have been. But looking back at McCain’s career, the accusation seems richly ironic.

By any objective standard, it was McCain who had palled around with terrorists, and who wrested as much resources as he could from the American taxpayer to maximize their mayhem. Here’s hoping that the societies shattered by McCain’s proxies will someday rest in peace.

Published:8/29/2018 1:09:04 AM
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Published:8/28/2018 9:56:34 PM
[Markets] The Death Of Hope And Why It Is Crucial For An American Awakening

Authored by Elizabeth Lea Vos, via Disobedient Media,

The death of hope can push us into a very dark place, but that darkness is the birth canal of real change...

The Dream 

For some people, hope came in the form of a red hat, with stenciled letters embracing their foreheads promising to Make America Great Again. My hopes were pinned instead on Bernie Sanders: my idealistic, naive trust was uniquely attached to the blue and white of the Bernie sticker I placed on the bumper of my car. Words can't adequately describe the innocent hope I attached to those colors. As Jared Beck writes in his book, What Happened To Bernie Sanders:

"In 2016, the dream was shared by over twelve million Democratic primary voters, as well as nearly 2.5 million campaign donors, that for the first time in forty-four years, a genuinely progressive candidate might run for President of the United States as a major party candidate... In seeking the explanation for how the dreams of millions of Americans came to be shattered in this manner, I have found it necessary to come to terms with the potential demise of my own dreamscape - one that has propelled my life path since my middle school days in a small suburban community outside Albany, New York."

Jared Beck and his wife Elizabeth Lee Beck are attorneys for the plaintiffs in the DNC Fraud lawsuit. What Happened To Bernie Sanders diagrams the reasoning behind Beck's disillusionment with the efficacy of both the legal system and the Democratic Party. Ultimately, Beck concludes that the DNC is beyond saving and has successfully engineered the nomination process to such an extent that, in his opinion, there is no way in which an anti-establishment progressive could hope to be nominated as a Democratic Party Presidential candidate. He concludes that the only way for progressive ideals to germinate lies outside the DNC.

Like many others, I believed that Bernie Sanders intended to create a grassroots movement that served all of us, in contrast with Hillary Clinton's overtly self-centered "I'm with her" campaign slogan. I thought Sanders would spearhead a challenge to the corrupt political establishment. This was the Sanders that inspired me. When he spoke about a movement that was made up of the people, not centered on the person who led it, I believed him.

In September 2015, my week was made infinitely better when a fellow Bernie supporter left the above note anonymously on my windshield. For me, this was an example of a fellowship among those who supported Sanders: one based on positivity, inclusiveness and genuine hope.

Such goodwill was epitomized by the famous incident in spring 2016 when a small bird landed on Sanders's podium as he spoke to a packed rally in Oregon. The event inspired viral memes and articles almost instantaneously. Like so many others, my emotions and hopes were tied up in what I felt Sanders's campaign represented: a movement driven by all of us, and that together we could make changes that were beautiful and real. The finch-on-the-podium embodied that emotion.

The near-biblical overtone of the finch landing on Sanders' podium did not go unnoticed. Local press at the time reported Sanders's remarks: "I think there’s some symbolism here, I know it may not look like it, but that bird is really a dove asking us for world peace.” There is nothing like a little divine intervention to inspire the emotions of a crowd, and that is exactly what the bird-on-the-podium moment did.

The Death Of The Dream

Faith keeps many of us in situations we might otherwise walk away from, whether in our personal lives, our professional spheres or on a national level. As a small-scale example, hope and a treasured ideal in relationship allows a person to ignore the cheating or violence of their partner, in hopes that next time they really mean it when they say they love you, and that they are telling the truth when they claim that whatever variety of betrayal won't happen again. The death of that dream - the realization that the relationship will never change and that there is no hope for a different future with that person - is what finally frees one to leave the situation.

As Caitlin Johnstone puts it:

In a larger sense, the only way we can begin to tangibly change an unacceptable national reality is to begin by facing it head on: hope allows us to continue to live in unacceptable conditions. To run from the death of dreams, then, is to run from the death of an illusion that prevents change.

As a Sanders supporter, the dream didn't die when he was cheated out of the Democratic nomination in the spring of 2016. It finally burned out only when Sanders refused to confront the rigging of the election by the DNC, and again when he endorsed the neo-Mccarthyist agenda engineered to deflect from the election rigging that stole the nomination from him. This represented a betrayal of the millions of people who spent their food and rent money to raise more than $200 million in support of his campaign.

Sanders didn't stop at quietly allowing lies to circulate, he actively participated in perpetuating and endorsing them. Even as Clintonite trolls and hack jobs continued to blame him and his supporters for Clinton's loss, spewing hatred at the same people they rigged an election to cheat, Sanders did not stand up for those who voted for him. Instead, he validated the lies used to silence them.

In an interview with CNN's Anderson Cooper, Sanders said: 

"We have a major government, the Russian government, led by Mr. Putin, actively interfering in our elections, determining, trying to do everything that they could to make sure that Mr. Trump won the election," Sanders said. "Now, there may not yet be any evidence of direct collusion between the Russian government and the Trump campaign... Perhaps today we do not know, but clearly, this is an issue of enormous consequence."

In response to the farcical Mueller indictments, USA Today reported Sanders's sentiments: 

"It has been clear to everyone (except Donald Trump) that Russia was deeply involved in the 2016 election and intends to be involved in 2018... It is the American people who should be deciding the political future of our country, not Mr. Putin and the Russian oligarchs... It is absolutely imperative that the Mueller investigation be allowed to go forward without obstruction from the Trump administration or Congress.” 

Again: Sanders had the gall to state that it is the American people who should be deciding the political future of our country, while duplicitously ignoring the interference in that process that robbed his supporters of their democratic voice and ensured a Trump victory.

Sanders' stance was not a simple betrayal of some abstract concept we label truth or justice. It represents a deep stab in the back of every person who donated to his cause, who believed in him and reflected that trust in their contribution and vote. It was a validation of the very corrupt forces Sanders spent his entire campaign railing against.

His 180-degree turn was one that ran so deeply counter to the courage of the Sanders I supported in 2015 and early 2016, that there was no possible way to reconcile the two. It was at this moment that the dream inspired by his campaign had to die, because it wasn't based on reality.

No matter how painful, this is the challenge facing all of us as we move forward - or refuse to - in a world that is continually lying to us and hooking into our emotions to do so. This is the case, whether in terms of Sanders, Trump, Qanon, Alexandria Ocasio-Cortez, or anyone else who promises to buck the establishment while fully endorsing its harmful narratives.

The focus on Sanders in this article is entirely based on the fact that his campaign and his response to it being undermined by the DNC served as the specific impetus for this writer's current understanding of the dangerous nature of misplaced hope. However, the basic premise is the same no matter who your savior is.

Unfortunately, the more intensely we feel we cannot survive without the dreams we hold dearest, the more likely we are to refuse to let such hopes go when they fail to conform with reality as it is. The deeper the suffering we seek to hold at bay with misplaced hopes, the more cognitive dissonance is provoked when evidence challenges such dreams.

The incomparable Caitlin Johnstone has written eloquently about the way in which manipulators have harnessed our most cherished dreams in order to abuse us. As Johnstone points out, we must recognize that our ability to feel is viewed by the sociopathic and psychopathic among us as a weakness to be harnessed and exploited.

As the plutocracy tightens its grip on the throat of the US public, demanding that people work themselves to death while barely able to avoid homelessness and hungerjustified misery will result in escalating desperation to find hope whether in an 8chan-based-persona or in opioid addiction. Hope that things aren't as bad as they seem. Hope that if we wait a little longer, the 'storm will come' and the corrupt unelected power structure will be swept away. Hope that even for a short time we can escape reality.

This article is not intended to demean anyone who feels this way: much of it is focused on my experience as a Sanders supporter to emphasize that this is something I've experienced, and is not meant to 'look down on' anyone.

The collective pain driving the need for respite from reality among the American working-class is near-unimaginable, with suicide rates increasing drastically across the country between 1999 and 2016. The Huffington Post reports that the experience of the United States's working-poor is 'pure hell.'

As Chris Hedges recently wrote: 

"We live in a new feudalism. We have been stripped of political power. Workers are trapped in menial jobs, forced into crippling debt and paid stagnant or declining wages. Chronic poverty and exploitative working conditions in many parts of the world, and increasingly in the United States, replicate the hell endured by industrial workers at the end of the 19th century. The complete capture of ruling institutions by corporations and their oligarchic elites, including the two dominant political parties, the courts and the press, means there is no mechanism left by which we can reform the system or protect ourselves from mounting abuse."

The deeper we sink into such unfathomable misery, the more desperate the public will be to believe in the promises of false saviors, no matter how obvious the sham is. The establishment is fully aware in that the more devastated we are by striving to make end meets, the more vulnerable we are to manipulation and the less likely we are to fight back against them.

Thus the betrayal by Bernie Sanders of the same public who he sold the dream of grassroots-change is doubly poisonous.

Moving Forward

This opinion is not a call for nihilism. It is intended to advocate that each of us realize our own power rather than handing it over to others. You, the reader - yes I am referring specifically to you as a unique individual - are the only one that can change a single thing about the world around you. You are powerful, and your choices have meaning and impact.

This is the same exhortation I've expressed multiple times during the Unity4J online vigils. You the reader are the ones who must act; you cannot merely watch a vigil, read an article, vote for a candidate or read Qanon posts and hope that reality will change thanks to someone else's action.Fully realizing your own power is the ultimate goal and outcome of letting go of hollow dreams.

When we stop using false hopes to beat back the all-consuming darkness we sense around us, we are empowered to respond in a tangible way to the pain and suffering that exists. Only when we face reality as it is, is it possible for real change to start to unfold. It does not grow on its own - it is reliant on each of our individual choices.

Intentionally dousing a proverbial false light - no matter how reassuring - might seem ludicrous. Everything in our bodies screams at us that if we lose this source of comfort, we will be alone in the wilderness: however, it is only when we extinguish the flame, that our eyes can adjust enough to see what is actually around us. Our sincere, dearly-held hopes and misplaced dreams figuratively blinded us to our real surroundings.

Once we let go of the symbolic fire that we believed crucial to our survival, our adjusted vision enables us to become truly empowered as opposed to pacified. To find our own direction instead of interpreting the shadows on the wall thrown by the flame, to reference Plato's cave allegory.

As in the prior comparison between the death of a dream and the birth of tangible change, after the cessation of a misleading light we are enveloped by pitch-black starless night for a moment, the space of a breath, as our eyes adjust.

In summation: it is only when we let go of our heroes that we can begin to save ourselves.

*  *  *

Support Elizabeth Vos's independent journalism on Patreon!

Published:8/28/2018 9:43:23 PM
[Markets] US Pushing The Gambit In Syria: Something Big Is Coming As Officials Ramp Up Threats

We warned previously that something big is coming in Syria as the final showdown for al-Qaeda held Idlib looms with the Syrian Army and Russian aerial and naval forces taking position. 

Pentagon and US officials continue pushing the gambit, setting the stage to play the "Assad is gassing his own people" card should so much as an inkling of a White Helmets allegation emerge, in an unprecedented level of telegraphing intentions for leverage on the battlefield. 

And right on cue CNN has ramped up its coverage over the past of week of the "last rebel-held stronghold" in Syria, sending a hijab-covered reporter into the territory under rebel permission to interview civilians which CNN says Assad seeks to wipe out, possibly through sarin or other chemical attack

Image source: AFP via Getty images

Except the "rebel" coalition in control of this major "final holdout" is but the latest incarnation of al-Qaeda, calling itself Hay'at Tahrir al-Sham (HTS) and has held the province, the capital city of which is Idlib city, since a successful Western and Gulf ally sponsored attack on the area in 2015.

From National Security Advisor John Bolton's statements last week to Secretary of State Mike Pompeo's "warning" to his Russian counterpart to Tuesday's State Department press briefing, where spokeswoman Heather Nauert reiterated reiterated to reporters the United States "will respond to any verified chemical weapons use in Idlib or elsewhere in Syria ... in a swift and appropriate manner"... 

It now appears the US stands ready to respond militarily to even the most unlikely and flimsiest of accusations.

And why wouldn't Hay'at Tahrir al-Sham militants, now surrounded by Syrian and Russian forces and facing imminent defeat, redeem what's essentially the US offer to "call in the Air Force" against Assad's army? All they have to do is utter the words "chemical weapons attack!" to their friends in the Western media.

The Idlib campaign is predicted to be the bloodiest and longest grinding final battle of the war, and what should by now be obvious to all is this: Assad, on the verge of total victory has absolutely no incentive whatsoever to commit the one act that would ensure his own demise after arguably barely surviving seven years of war.

And at the same time the HTS/AQ "rebels" have every incentive to bring to fruition what US officials have this week so clearly laid out for them

After all, it's happened before in Idlib, with not so much as an on-the-ground investigation to collect evidence to back the claim (usually the minimal investigative threshold for the UN and OPCW), as occurred in the April 2017 Khan Sheikhoun claimed "sarin attack" incident, which resulted in the first time President Trump ordered airstrikes on Syria. To this day the international chemical investigative body and watchdog, the OPCW, has yet to visit the site due to its being controlled by al-Qaeda forces

Nauert said further on Tuesday that senior U.S. officials have engaged with their Russian counterparts "to make this point very clear to Damascus" — that chemical weapons "will not be tolerated" — and could meet with massive military response. She also repeated that Assad would be held responsible.

Meanwhile Russia it has cited its own intelligence saying that Syrian armed groups in Idlib are preparing for a staged chemical provocation, which Moscow says the West will use to justify a strike against Syrian government forces.

Speaking to Newsweek on Monday, Syria analyst Joshua Landis said that there is every reason to doubt the veracity of past rebel claims regarding government chemical weapons usage a surprising admission given his prominence as speaking from within the heart of the media foreign policy establishment. 

Landis said, "I don't know what to make of the U.S. and Russian war of words over the potential use of chemical weapons in Idlib. The final reports on the use of chemical weapons in Ghouta were not definitive. There was no evidence found for the use of nerve agents, but controversy over the use of chlorine gas. The rebels had reason to carry out a false flag operation, as the regime and Russians suggested, but the regime refused to let U.N. inspectors in to test for chemical weapons until after a lengthy delay, which was suspicious."

Published:8/28/2018 9:08:17 PM
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Published:8/28/2018 8:43:45 PM
[Markets] Pentagon Warns Saudi Arabia It May Cut Support Over Yemen Civilian Casualties

Apparently the Pentagon "talks tough" to its allies concerning war crimes and human rights issues only after a mass civilian casualty event makes world headlines.

Such is the case after a Saudi coalition airstrike took out a school bus in northern Yemen earlier this month, killing 40 children and wounding many more, which momentarily drew the attention of Congressional leaders and celebrities alike to what's long been dubbed "the forgotten war". 

CNN reports late in the day Monday that the Pentagon has delivered an official warning to Saudi Arabia, saying the US is poised to withdraw intelligence, military, and logistical support for the coalition war against Houthi rebels in Yemen:

The Pentagon has issued a warning to Saudi Arabia that it is prepared to reduce military and intelligence support for its campaign against rebels in neighboring Yemen if the Saudis don't demonstrate they are attempting to limit civilian deaths in airstrikes following a strike on a school bus that killed 40 children earlier this month, CNN has learned.

And just how outraged are Pentagon officials over the confirmed deaths of 40 children and prior bombings of hospitals and funeral gatherings?

Apparently US officials are merely "concerned" and say that "frustration is rising".

CNN continues:

Two officials directly familiar with the Pentagon's thinking tell CNN frustration is rising. Defense Secretary James Mattis and General Joseph Votel, head of US military operations in the Middle East, are particularly concerned that the US is supporting a Saudi-led campaign of airstrikes that have killed large numbers of civilians.

This mere "concern" comes after it's long been known that the Pentagon provides direct targeting and intelligence support to Saudi coalition operations in Yemen since 2015. 

Perhaps the central irony to CNN's reporting is that it acknowledges the Pentagon's direct role in the war as a lead part of the coalition while simultaneously pretending the US magically becomes a mere passive observer the moment American-made jets use American-supplied laser guided bombs to obliterate a school bus full of kids

The below is CNN's actual commentary (and not The Onion):

But after a series of recent strikes in which large numbers of civilians were killed, the Pentagon, as well as the State Department, have now delivered direct messages to the Saudis about limiting civilian casualties. "At what point is enough enough?" one official remarked to CNN.

The Saudis must be shaking their boots over such determined and hard-nosed "warnings" from the very officials sharing the trenches with Saudi and UAE commanders executing the war

Secretary of Defense Mattis reportedly sent a top general meet with the Saudis after the August 9 attack on the school bus. Lt Cmdr Rebecca Rebarich, a DOD spokeswoman told CNN of that visit: "Recent events dictated to US military leaders that the situation required special mention and official emphasis during his visit."

And Rebarich added, "Lt. Gen. Garrett delivered a message of concern regarding the recent civilian casualty incident, and on behalf of the US government continued to urge for a thorough and expedited investigation as well as continued emphasis on the reduction of civilian casualties in the Yemeni campaign."

And CNN comments further: "That message of concern raised the possibility that assistance could be cut."

Meanwhile during a Tuesday Pentagon briefing, Mattis told reporters that the US still supports Saudi Arabia in Yemen but is working with the coalition to probe civilian casualties. When challenged by a reporter, Mattis said "We didn't start the war" and underscored that the US support to Saudi and UAE air war is conditioned on Riyadh doing "everything humanly possible to support the innocent loss of life."

The Pentagon has long tried to present its role in the conflict as attempting to stave off humanitarian catastrophe in Yemen, yet as even NPR confirmed while reporting from inside the country earlier this year, the US military "has provided targeting information, equipment and aircraft refueling to the Saudi air campaign, which has been widely criticized for being indiscriminate and killing civilians in places like hospitals, funerals and homes."

But as Bruce Riedel, a 30-year CIA officer and senior fellow at the Brookings Institute, once told a conference audience“If the United States and the United Kingdom, tonight, told King Salman [of Saudi Arabia] ‘this war has to end,’ it would end tomorrow. The Royal Saudi Air Force cannot operate without American and British support.”

Thus the idea that the Pentagon and US officials are now "getting tough" with Saudis is just propaganda fare meant to deflect blame for continuing civilian atrocities in Yemen.

Sadly, there will likely be many more US-Saudi coalition bombings of civilians to come. 

Published:8/28/2018 8:43:45 PM
[Entertainment] See Jordin Sparks' Birth Plan Take a Dramatic Turn in Upcoming Lifetime Special Jordin SparksShe may have walked the red carpet just days after giving birth, but Jordin Sparks' road to motherhood was a bumpy one. Cameras rolled as the singer prepared to give birth to her and...
Published:8/28/2018 7:43:49 PM
[Markets] Chicago CFO's Stupendously Bad Timing On Her Last Pension Obligation Bond

Authored by Mark Glennon via WirePoints.com,

A March 2009 Bloomberg article told the story beautifully:

The Chicago Transit Authority retirement plan had a $1.5 billion hole in its stash of assets in 2007. At the height of a four-year bull market, it didn’t have enough cash on hand to pay its retirees through 2013, meaning it was underfunded to the tune of 62 percent.

Then the authority found an answer.

“We’ve identified the problem and a solution,” said CTA Chairman Carole Brown on April 16, 2007. The agency decided to raise money from a bond sale.

Carole Brown, Chicago’s Chief Financial Officer and Former Chicago Transit Authority Chairman.

Carole Brown is now Chicago’s Chief Financial Officer and leading the charge for the city to issue a similar pension obligation bond for a whopping $10 billion. The concept is simple: Borrow money and invest it in the stock market.

The CTA bonds were sold and $1.1 billion was deposited into the CTA pension on August 6, 2008.

Yes, August 2008. Good times. Remember? The S&P 500 proceeded to drop 45% over the next eight months.

The S&P 500, August 6, 2008 to March 1, 2009. Source: Yahoo Finance

Mercifully, because the market had already destabilized when the bonds were sold, the CTA didn’t initially put the money in the stock market. Nor did the bond sale go as planned. The CTA ended up paying bondholders more than it expected — 6.8%. In other words, the whole plan went wrong and losses ensued, as Bloomberg explained in that 2009 article:

The proceeds of the bond sale, held in a money market fund, earned 2 percent - 70 percent less than what the fund was paying for the loan….

“There is negative arbitrage,” Brown says. “It’s better than having dumped the money into the equity market.”

The stock market did come roaring back after March 2009 - the beginning of a bull market that roughly quadrupled stock prices. Whether the CTA was able to capture those returns and salvage the pension bond proceeds isn’t entirely clear, but it appears that didn’t happen. The proceeds of the bond were commingled with other assets, the pension presumably got back into the market slowly after being in cash and many other factors have been at work.

But we know for sure that neither the pension bond nor the stock market run stabilized the pension. It deteriorated badly after receiving the bond proceeds, through the bull market. At the end of 2008, after it received the bond proceeds, the pension had an unfunded liability of $636 million and was 76% funded. Today, that unfunded liability is $1.6 billion and it is 53% funded.

So, the real lesson isn’t really about market timing, though CTA’s was clearly awful. Instead, it’s that you just don’t know how pension obligation bonds will turn out. In CTA’s case, Mr. Market obliterated both its hopes on the stock market and its interest cost on the bond. Nothing worked out as expected. Smaller market disruptions can do the same on a smaller scale.

Most importantly the CTA experience tells us how dishonest it is to be making the case for pension obligation bonds through a simple comparison of expected bond rates to hoped-for stock market returns. Brown has been making that case for Chicago’s proposed bonds quite brazenly:

“We should do this because we can do it at 5.5 percent,’ then I just saved the city 2 percent. … It would change the unfunded liability and change how much more [in] future payments the city would have to make. We would be paying that debt at a rate of 5 or 6 percent versus 7.5 percent,” she says.

Ralph Martire of the public union supported Center for Tax and Budget Accountability made the same, deceitful case, pretending it’s a simple matter of comparing the interest rate on one credit card to another.

The truth probably is that the city’s real motivation for a pension obligation isn’t to get the two percent Brown claims. That would come to just $200 million per year, which would be nice, but wouldn’t really move the needle much on the pensions or on Chicago’s $8 billion budget. Instead, the bonds would be a huge gift from taxpayers to public unions, and Chicago is in the middle of a major round of new contracts negotiations with its unions.

More about Chicago’s likely real motivation’s are in out separate story linked here.

Published:8/28/2018 7:43:49 PM
[Entertainment] Chris Pratt and Anna Faris Reunite 1 Year After Announcing Split Chris Pratt, Anna FarisWe spy a pair of friendly exes! It's been more than a year since Chris Pratt and Anna Faris surprised fans when they announced their separation after eight years of...
Published:8/28/2018 7:13:35 PM
[Entertainment] Inside Ed Sheeran and Cherry Seaborn's Private Romance Ed Sheeran, Cherry Seaborn Ed Sheeran puts lots of love and emotion in his music, but there's one topic he isn't thinking out loud about: marriage. Sheeran and his fiancée Cherry Seaborn got engaged...
Published:8/28/2018 6:41:12 PM
[Markets] Russia's "Nuclear Combat" War Games Largest In Nearly 40 Years

Russia's upcoming joint military exercise with China and Mongolia, set for September 11 - 15, will be the largest Russian drill in nearly 40 years according to Russian Defense Minister Sergei Shoigu, who said they will be larger than the Soviet military's 1981 Zapad-81 (West-81) exercises. 

"In some ways they will repeat aspects of Zapad-81, but in other ways the scale will be bigger," Shoigu told reporters from the Russian region of Khakassia. 

The exercise, Vostok-2018 (East-2018), will occur in central and eastern Russian military districts, and will involve nearly 300,000 troops, over 1,000 military aircraft, two of Russia's naval fleets, and their entire airborne forces, Shoigu said in a Tuesday statement. 

"Imagine 36,000 armored vehicles — tanks, armored personnel carriers and armored infantry vehicles — moving and working simultaneously, and that all this, naturally, is being tested in conditions as close as possible to military ones," said Shoigu. 

Also included in the drills, as we mentioned Friday, will be the inclusion of simulated nuclear weapons attacks

And according to the South China Morning Post (SCMP) the People's Liberation Army (PLA) will participate by sending about 3,200 elite forces troops, along with 30 fix-wing aircraft and helicopters to the Russian-hosted exercises. 

Japanese Prime Minister Shinzo Abe is scheduled to attend a forum in the Russian city of Vladivostok during the exercises, according to Reuters, while a Japanese Foreign Minister official said on Tuesday that Tokyo is monitoring developments between Beijing and Moscow. 

The war games, which will take place from Sept. 11-15, are likely to worry Japan, which has already complained about a Russian military build-up in the Far East, something Moscow has linked to Tokyo’s roll-out of the Aegis U.S. missile system. -Reuters

The SCMP cites one Beijing based military expert, Zhou Chenming, to explain that the PLA is seeking to gain greater military experience as its last major combat theater stretches all the way back to the Vietnam War. 

Additionally, Zhou told the SCMP“China also wants to show its support for Russian President Vladimir Putin, who is facing various diplomatic challenges, especially criticism from the US Secretary of State [Mike Pompeo] over Moscow’s annexation of Crimea.” The Chinese military expert further cited that the games' site location was chosen carefully and deliberately with this in mind. 

Putin wants to use the Russian military’s war games with the PLA to show its military muscle, but he doesn’t want to irritate the United States too much and raise the possibility of a misjudgment by the Trump administration, so he chose the less sensitive Trans-Baikal region in the Far East, far from US allies in Europe,” Zhou said.

In response to the impending Vostok-18 games Pentagon spokesman Eric Pahon said"We urge Russia to take steps to share information regarding its exercises and operations in Europe to clearly convey its intentions and minimize and potential misunderstanding."

NATO spokesman Dylan White said that Russia had briefed the alliance on the planned exercise in May and that NATO would monitor it. Russia had invited military attaches from NATO countries based in Moscow to observe the war games, an offer he said was under consideration.

“All nations have the right to exercise their armed forces, but it is essential that this is done in a transparent and predictable manner,” White said in an emailed statement. -Reuters

“Vostok demonstrates Russia’s focus on exercising large-scale conflict. It fits into a pattern we have seen over some time: a more assertive Russia, significantly increasing its defense budget and its military presence.”

NATO and its allies, meanwhile, began two weeks of drills in Latvia last Monday and which are scheduled to run through September 2. 

“After four years of intensive preparations, this will be the largest military training exercise since the restoration of Latvia’s independence in which we will test the armed forces’ readiness to defend Latvia from any threats,” said Latvian Chief of Defense, Lieutenant General Leonids Kalnins.

“This exercise is the opportunity to train not only the National Armed Forces but also Latvia’s overall defense capabilities as our partners are involved in the drills as well,” he continued.

Apart from the Latvian Armed Forces, National Guard, law enforcement and volunteers, the drills would also involve troops from more than a dozen of other NATO states, including the US, Canada, Spain, Italy and Poland as well as other Baltic States. The total number of troops participating in the drills amounts to 10,000, local media reported.

The Latvian army released a promo video for the drills last Monday.

Published:8/28/2018 6:41:12 PM
[Entertainment] Ariana Grande joins lineup for Aretha Franklin's funeral: Everything you need to know Aretha Franklin, the Queen of Soul, died of pancreatic cancer at age 76. Here's what we know about her funeral services.
     
 
 
Published:8/28/2018 5:36:17 PM
[In The News] ICE arrests 100 illegal aliens in North Texas

By R. Mitchell -

SUMNER, Texas — Special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) executed criminal search warrants at a North Texas trailer-manufacturing business during which more than 100 company employees were arrested on federal immigration violations after it was discovered that they were illegally working inside the ...

ICE arrests 100 illegal aliens in North Texas is original content from Conservative Daily News - Where Americans go for news, current events and commentary they can trust.

Published:8/28/2018 5:36:17 PM
[Entertainment] Salma Hayek's Husband Surprises Her With Vow Renewal On Island Getaway Salma Hayek, François-Henri Pinault, 2018 Oscars, CouplesSalma Hayek is one lucky woman. The Mexican actress revealed the sweet and romantic surprise her husband organized for her while on vacation by the beach. In a series of photos shared on...
Published:8/28/2018 5:17:39 PM
[Entertainment] Jennifer Lopez and Alex Rodriguez Avoid Run-In With Casper Smart Jennifer Lopez, Alex RodriguezIt's a small world after all! When Jennifer Lopez and Alex Rodriguez found themselves in Los Angeles Monday evening, the pair decided to enjoy a date night at Craig's in West...
Published:8/28/2018 4:45:39 PM
[Markets] CNN Throws Lanny Davis Under The Bus, "Stands By" Its Cohen Story

The clowns just keep piling out of the little car as CNN has published what can best be described as a hit-piece on Michael Cohen attorney Lanny Davis, who "repeatedly changed his account of what Cohen knew about President Donald Trump's involvement" in a June 2016 meeting at Trump Tower between Donald Trump Jr. and a Russian associate of opposition research firm Fusion GPS, along with several others in attendance. 

Cohen is President Trump's former longtime attorney and self-described "fixer" who retained Davis - a lifelong friend of Hillary Clinton - to represent him in his ongoing legal matters related to the 2016 presidential election, including hush money payments made to two women who claim to have had affairs with Trump over a decade ago. 

Davis backpedaled on "confident assertions" that Cohen would share information with investigators that President Trump knew of Russian efforts to undermine Democratic nominee Hillary Clinton - forcing the Washington Post and others to correct their reporting. 

Davis told The Washington Post that he cannot confirm media reports that Cohen is prepared to tell special counsel Robert S. Mueller III that Trump had advance knowledge of the 2016 Trump Tower meeting -WaPo

“I should have been more clear — including with you — that I could not independently confirm what happened,” Davis told the Post, adding perhaps the most difficult four words for an attorney to utter: "I regret my error."

CNN, meanwhile, is standing by their version of the Cohen story - even after Davis admitted to BuzzFeed News he was CNN's source"We stand by our story, which had more than one source, and are confident in our reporting of it," said a CNN spokeswoman on Tuesday. 

The CNN story noted, based on sources, that Cohen did not have corroborating evidence to back up his claim. CNN did not report whether Trump knew about the meeting before it happened -- only that Cohen was making that claim while hoping for a deal from prosecutors.

Davis acknowledged over the weekend that he confirmed CNN's story to other news organizations.

He now says that he also was one of the sources for CNN's story.

For more than three weeks, Davis did not raise any issues to CNN about its reporting. -CNN

So Cohen's attorney has retracted a claim that his client would tell Mueller of Trump's foreknowledge of the infamous Trump Tower meeting, while CNN claims that some other anonymous source, not Lanny Davis, said the same thing. 

Was Cohen himself another CNN source? If not, they're sure implying it.  

On Sunday, CNN's Brian Stelter tweeted "We stand by our story, and are confident in our reporting of it." 

Davis' role in the CNN story also offers a window into the kind of anonymous sourcing common across newsrooms, as Buzzfeed concluded. Some news outlets have a policy to not let sources speak "on background" — that is, as a “person familiar with the matter” or some other unnamed moniker — and also be allowed to decline to comment on the record.

“We should address Lanny Davis’s comments in our reporting and be more transparent with our readers about our reporting,” one CNN staffer told BuzzFeed News.

We can't wait for the next act in this comedy of errors. 

Published:8/28/2018 4:45:39 PM
[Entertainment] Married at First Sight's Ashley Petta and Anthony D'Amico Expecting First Child Together Ashley Petta, Anthony D'Amico, Married at First SightParty of three! Ashley Petta and Anthony D'Amico are having a baby! The Married at First Sight couple announced on Tuesday that they're expecting their first child together....
Published:8/28/2018 3:50:46 PM
[Markets] Puerto Rico Raises Hurricane Maria Death Toll From 64 To 2,975

A study commissioned by Puerto Rico's governor Ricardo Rossello and released on Tuesday, raised the death toll as a result of Hurricane Maria last year from 64 to nearly 3,000.

The report, by researchers at George Washington University estimated there were 2,975 excess deaths in Puerto Rico stemming from the hurricane from September 2017 through February 2018. The total is vastly greater than the official fatality count of 64, and is more than double some of the estimates from previous studies by academic researchers and media organizations, according to the WSJ.

For the past year, Puerto Rico’s government faced criticism that it had drastically undercounted the number of fatalities caused by Maria.

Then, earlier this month, it  acknowledged in a document filed to Congress that the death toll from Maria was much higher than the official total. But Gov. Rossello’s administration said it would await the results of the George Washington University study, which it commissioned in December, to update the official count.

The release of the George Washington University study comes as the one-year anniversary of Hurricane Maria approaches on Sept. 20, and Congress considers the island government’s request for federal aid to rebuild from the storm.

But where did the massive revision come from, and how were the nearly three thousand people missed the first time around? In one word, statistics.

The George Washington University researchers estimated the number of excess deaths by analyzing death certificates and other mortality data, and comparing the number of deaths during the designated period to past mortality patterns. They calculated the total number of deaths in the period was 22% higher than the number of fatalities that would have been expected, the researchers said.

Researchers also pointed to several problems in the death-certification process that contributed to the island government’s undercounting of fatalities. Among them were a lack of training for physicians on how to certify deaths after a natural disaster and the government’s lack of communication about proper death-certificate reporting prior to the 2017 hurricane season.

One can even all it "non-GAAP" deaths, or determinations revised well after the event, with the appropriate nudge here or there:

Researchers’ interviews with people in Puerto Rico involved in the death-certification process revealed “confusion about the guidelines” and “reluctance to relate deaths to hurricanes due to concern about the subjectivity of this determination,” according to the study.

The report even blamed the government's poor communication skills and the lack of personnel training for being able to, wait for it, determine if a death was a death.

The report’s authors also cited concerns about how the Puerto Rican government discussed the matter with the public. Agencies lacked sufficient personnel trained in emergency communications and formal protocols for mortality reporting involving the Department of Public Safety and the Department of Health, researchers said.

“This contributed to delayed information availability, gaps in information and the dissemination of inconsistent information to the public,” according to the study.

Of course, fake news was also referenced:

The government also failed to explain the death-certification process and to address rumors in news outlets and social media, researchers said. Efforts by outside groups to fill the information void added to the confusion, with conflicting mortality reports, they said.

But no matter how it was revised, the better question may be why, and here the answer appears to be simple: money.

As the WSJ reports, in the document that Puerto Rico’s government filed to Congress that conceded the death toll likely surpassed the official count, island officials detailed an ambitious range of proposed reconstruction projects. The 531-page plan included requests for $139 billion worth of projects, including housing initiatives and energy investments.

The price tag far exceeds the amounts that federal agencies and lawmakers have designated thus far.

And what better way to grease a few palms than by boosting the death toll some 46 times...

Published:8/28/2018 3:50:46 PM
[Entertainment] BBMAK Reunites After 15 Years--and the Boy Band Is Going on Tour BBMAKBBMAK is back. The boy band is making their official return to the concert stage after their split 15-years-ago. In an interview with People, singers Mark Barry, Christian Burns and...
Published:8/28/2018 3:13:35 PM
[Markets] Stocks Flat, VIX Up As Emerging Market Rout Returns

Record-er and Record-er...

China stocks limped lower overnight but ended unch thanks to a late surge...

 

But US equities could not hold a solid momo ignition no matter what...

 

With cash equities sliding into the red near the close... (Nasdaq was the day's leader, and Trannies the laggard)

 

VIX has decoupled from stocks in the last two days...

 

Things are not getting any better for Elon...

 

Bonds and Stocks remain decoupled also...

 

Treasury yields continued their rise...

 

With 30Y back above 3.00%...

 

The Dollar Index rebounded into the green this afternoon

 

EM FX was ugly...

 

LatAm currencies were clubbed today (less so Asia and Eastern Europe)...

 

But The Turkish Lira, disappointed after the Germany bailout headlines turned into nothing, tumbled...

 

Yuan and stocks have decoupled...

 

Cryptos are rallying strongly today...

 

With Bitcoin up for the 4th straight day, back about $7,000...

 

In commodity-land, things went a little pear-shaped as the dollar rebounded today...

 

*CME HOG FUTURES FOR OCTOBER TUMBLE 5.3%, HEAD FOR RECORD DROP

 

Gold tested down to $1200 today...

 

Still, while US Stocks went nowhere, maybe 'active' investors should consider Venezuela (IBVC +30,000% YTD!)

And yes we know its all FX

Published:8/28/2018 3:13:34 PM
[Markets] Can The US Bring Iranian Oil Exports To Zero?

Authored by Gregory Brew via Oilprice.com,

The U.S. wants Iran’s oil exports to drop to zero, according to a recent statement by National Security Advisor John Bolton.

The question is: can the U.S. pull it off?

The pressure has been on Iran’s customers since May, to cut their purchases of Iranian oil and freeze out the oil producer, OPEC’s third largest, from the world oil market. The U.S. is re-imposing sanctions on Iran following the U.S. withdrawal from the 2015 nuclear deal, and has threatened secondary sanctions on any country that continues to buy oil from Iran.

The campaign has proven effective thus far. In the first half of August, Iran’s oil exports fell by 600,000 bpd, plunging from 2.32 million bpd to 1.68 million bpd. Iran’s exports have been falling all year, and reached their lowest level in four months by July, before taking a real plunge in August.

Major customers, including South Korea, have suspended imports. China, despite some defiant posturing in the face of U.S. challenges, scaled back its purchases. While China has given no sign that it will comply with the U.S. directive, reports indicate that it is willing to at least halt any increase in Iranian purchases after sanctions are re-imposed on November 4.

But the big cuts were by India, Iran’s second-largest importer, which reduced its purchases from Iran from 706,452 bpd to 203,938 bpd during the August 1-16 period.

India has been trying to keep a middle-ground between the U.S. and Iran, as it navigates the new sanctions regime while still preserving access to cheap Iranian oil and gas imports. India imports 80 percent of its energy and Iran is its third-largest supplier. Trade links between Tehran and New Delhi have strengthened in the last several years, but now India faces considerable pressure to cut its ties with Iran as the U.S. seeks to reduce Iranian oil exports to zero. Iran has offered cargo insurance and freedom to use Iranian tankers to India as a way of enticing it to keep buying.

If India were to comply with U.S. sanctions, Iran’s oil exports would fall to around 1.5 million bpd. Reports indicate India doesn’t want to cut its purchases completely, and that like China it will continue buying Iranian oil. But India may pivot towards new sources of supply, including American crude, to make up the difference. India imports from the U.S. have been steadily increasing, reaching 264,000 bpd in May 2018 according to EIA data.

Where China has some geopolitical reasons to oppose the U.S., including its on-going trade and tariff war with the Trump Administration, India needs to maintain ties to the U.S. financial system and can’t risk isolating itself. Facing a shortfall in imports due to the collapse in Venezuelan production, India will be hard-pressed to replace all of its Iranian supply, and could seek a waiver if it reduces Iranian imports by 50 percent.

Turkey, another major importer of Iranian crude, reduced its purchases in a big way last June: imports from Iran fell from 262,225 bpd to 81,075 bpd between May and June. It’s made up the difference by importing from Iraq and Russia.

Turkey was expected to follow the U.S. lead, but a recent diplomatic rift with the Trump Administration and a faltering economy may encourage Ankara to maintain access to Iranian oil, which it can import cheaply. Iran is a major source for Turkey, which like India relies heavily on energy imports: in the first six months of 2018 Iran supplied 49% of Turkish oil imports.

During the August 1-16 period, Iran’s flow to Europe increased from 465,450 bpd to 631,814 bpd. Reports had indicated that European purchases would plummet this summer, as importers shied away from Iran in order to avoid U.S. secondary sanctions. Along with India, Europe has contributed the most to Iran’s resurgent oil exports after sanctions were lifted in January 2016. Purchases fell to about 415,000 bpd earlier this year, before jumping back in August.

The EU has shown an unwillingness to go along with the Trump Administration’s policy. It has attempted to keep the July 2015 nuclear deal alive and hopes to retain commercial tieswith Iran even as U.S. sanctions go into effect.

But while European governments have resisted the U.S. campaign to isolate Iran, European refiners began to wind down purchases earlier this summer. European energy companies like Total SA have walked away from investing in Iran, and while European cooperation with the sanctions regime won’t be on the same level as 2012-2015 (when both the EU and the U.S. supported imposing sanctions), it will likely prove strong enough to cut into European purchases of Iranian supply.

Again, the question is: will the U.S. succeed in pushing Iran’s exports to “zero?” Probably not, though it will come pretty close. If Chinese imports hold steady, India and Turkey reduce to 50 percent of the pre-sanctions level and Europe cuts about the same, Iran’s exports will fall to less than 1 million bpd. Production will be diverted to floating storage, as it was in 2012-2015, but Iranian earnings from oil exports will be significantly depressed. Rising prices may mitigate some of the damage, but the impact on Iran’s already-shaky economic system will be severe.

Published:8/28/2018 2:41:48 PM
[Entertainment] Abby Huntsman Officially Joins The View: 5 Things to Know About the New Co-Host Abby Huntsman, The View, Whoopi Goldberg, Meghan McCain, Joy Behar, Sunny HostinNew season, new face! Just days before The View kicks off a brand-new season, ABC officially announced that Abby Huntsman will be a new co-host. The former anchor and host of Fox...
Published:8/28/2018 2:14:34 PM
[Entertainment] The Internet Can't Stop Staring at Kim Kardashian and Chrissy Teigen's Wild Body Modifications Chrissy Teigen, A. HumanWhat in the world are they wearing?! That's the question pop culture fans are asking after stars like Kim Kardashian, Chrissy Teigen and Tan France took to Instagram this week and...
Published:8/28/2018 1:44:50 PM
[Entertainment] This New American Horror Story: Apocalypse Photo of Emma Roberts Is Instantly Iconic American Horror Story, AHS: CovenNot even death could keep Emma Roberts' Madison Montgomery down. American Horror Story co-creator Ryan Murphy and Roberts both took to Instagram to share a behind-the-scenes photo of Roberts...
Published:8/28/2018 1:04:36 PM
[Entertainment] Mel B Addresses Rumors After Announcing Plan to Enter Rehab Mel B, America's Got TalentAfter announcing plans to seek professional treatment, Mel B is clearing up some confusion. The Spice Girls alum clarified her plans to enter a therapy program in her native Britain...
Published:8/28/2018 12:48:22 PM
[Markets] Here's How We Ended Up With Predatory, Parasitic Elites

Authored by Charles Hugh Smith via OfTwoMinds blog,

Combine financialization, neoliberalism and moral bankruptcy, and you end up with predatory, parasitic elites.

How did our financial and political elites become predatory parasites? Some will answer that elites have always been predatory parasites; as tempting as it may be to offer a blanket denunciation of elites, this overlooks the eras in which elites rose to meet existential crises.

Following in Ancient Rome's Footsteps: Moral Decay, Rising Wealth Inequality(September 30, 2015)

As historian Peter Turchin explained in his book War and Peace and War: The Rise and Fall of Empires, the value of sacrifice was a core characteristic of the early Republic's elite:

"Unlike the selfish elites of the later periods, the aristocracy of the early Republic did not spare its blood or treasure in the service of the common interest. When 50,000 Romans, a staggering one fifth of Rome’s total manpower, perished in the battle of Cannae, as mentioned previously, the senate lost almost one third of its membership. This suggests that the senatorial aristocracy was more likely to be killed in wars than the average citizen….

The wealthy classes were also the first to volunteer extra taxes when they were needed… A graduated scale was used in which the senators paid the most, followed by the knights, and then other citizens. In addition, officers and centurions (but not common soldiers!) served without pay, saving the state 20 percent of the legion’s payroll.

The richest 1 percent of the Romans during the early Republic was only 10 to 20 times as wealthy as an average Roman citizen."

Now compare that to the situation in Late Antiquity Rome when

"an average Roman noble of senatorial class had property valued in the neighborhood of 20,000 Roman pounds of gold. There was no “middle class” comparable to the small landholders of the third century B.C.; the huge majority of the population was made up of landless peasants working land that belonged to nobles. These peasants had hardly any property at all, but if we estimate it (very generously) at one tenth of a pound of gold, the wealth differential would be 200,000! Inequality grew both as a result of the rich getting richer (late imperial senators were 100 times wealthier than their Republican predecessors) and those of the middling wealth becoming poor."

Do you see any similarities with the present-day realities depicted in these charts?

Correspondent Jim B. summarized historian Arnold Toynbee's study of the rise and fall of civilizations: "Civilizations fail when their elites change from an admired dynamic creative class to a despised Establishment of corrupt rentiers, an entrenched governing class unfit to govern."

I would trace the slide into self-serving parasites to three dynamics: financialization, neoliberalism and moral bankruptcy. While definitions of financialization vary, mine is:

Financialization is the mass commodification of debt and debt-based financial instruments collaterized by previously low-risk assets, a pyramiding of risk and speculative gains that is only possible in a massive expansion of low-cost credit and leverage.

Another way to describe the same dynamics is: financialization results when leverage and information asymmetry replace innovation and productive investment as the source of wealth creation.

Neoliberalism is the belief that the social order is defined and created by markets: if markets are free, participants, society and the political order are also free.

This conceptual framework is the perfect enabler for the dominance of credit-based, leveraged capital, i.e. Neofeudalism. In a "free market," those with access to nearly-free money can outbid everyone who must rely on savings from earned income to finance borrowing. In a "free market" where those with access to leverage and unlimited credit are more equal than everyone else, the ability of wage earners to acquire rentier assets such as rental housing, farmland and timberland is intrinsically limited by the financial system that makes credit and leverage scarce for the many and abundant for the few.

The moral bankruptcy of our financial and political elites is self-evident.Combine financialization, neoliberalism and moral bankruptcy, and you end up with predatory, parasitic elites.

*  *  *

Back to School Book Sale: 57% off the Kindle edition and 25% off the print edition of The Nearly Free University and the Emerging Economy ($2.99 Kindle, $15 print) My new book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 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:8/28/2018 12:48:21 PM
[Entertainment] Aretha Franklin Fans Remember Queen of Soul at Public Viewing Aretha FranklinThousands of fans are paying their respects to Aretha Franklin at a public viewing in Detroit. Beginning today at 9 a.m. local time, music lovers arrived at the Charles H. Wright Museum...
Published:8/28/2018 12:20:19 PM
[Entertainment] 'Star Wars': Oscar Isaac says Carrie Fisher's still 'with us' filming 'Episode IX' The late Carrie Fisher is still in the heart and mind of "Star Wars" star Oscar Isaac filming "Episode IX," which wraps up the Skywalker saga.
     
 
 
Published:8/28/2018 12:20:19 PM
[Entertainment] Lauryn Hill Clears Up All the Rumors You've Heard About Her Lauryn HilLauryn Hill has spoken. In a candid interview for 97.9 The Box in Houston, award-winning pianist Robert Glasper called out the 8-time Grammy winner with controversial claims about her...
Published:8/28/2018 11:39:55 AM
[Entertainment] Kesha legal battle: Katy Perry says Dr. Luke didn't rape her, unsealed documents show Perry's deposition in the Dr. Luke/Kesha legal case was released Monday, showing Perry unequivocally denying that Luke raped her.
     
 
 
Published:8/28/2018 11:39:55 AM
[Entertainment] Kylie Jenner Evokes Barbie in New Photos for Cosmetic Collaboration With Jordyn Woods Kylie Jenner, 2018 MTV Video Music Awards, VMAsKylie Jenner took to Instagram on Monday to promote her cosmetics collaboration with BFF Jordyn Woods and debuted a new look any Barbie fan would love. The Keeping Up With the Kardashians...
Published:8/28/2018 10:39:15 AM
[Markets] Buchanan Asks "Are The Interventionists Now Leaderless?"

Authored by Pat Buchanan via Buchanan.org,

“McCain’s Death Leaves Void” ran The Wall Street Journal headline over a front-page story that began:

“The death of John McCain will leave Congress without perhaps its loudest voice in support of the robust internationalism that has defined the country’s security relations since World War II.”

Certainly, the passing of the senator whose life story will dominate the news until he is buried at his alma mater, the Naval Academy, on Sunday, leaves America’s interventionists without their greatest champion.

No one around has the prestige or media following of McCain.

And the cause he championed, compulsive intervention in foreign quarrels to face down dictators and bring democrats to power, appears to be a cause whose time has passed.

When 9/11 occurred, America was united in crushing the al-Qaida terrorists who perpetrated the atrocities. John McCain then backed President Bush’s decision to invade Iraq in 2003, which had no role in the attacks.

During Barack Obama’s presidency, he slipped into northern Syria to cheer rebels who had arisen to overthrow President Bashar Assad, an insurgency that led to a seven-year civil war and one of the great humanitarian disasters of our time.

McCain supported the expansion of NATO into Eastern Europe and the Baltic, right up to Russia’s border.

When Georgia invaded South Ossetia in 2008, and was expelled by the Russian army, McCain roared, “We are all Georgians now!”

He urged intervention. But Bush, his approval rating scraping bottom, had had enough of the neocon crusades for democracy.

McCain’s contempt for Vladimir Putin was unconstrained. When crowds gathered in Maidan Square in Kiev to overthrow an elected pro-Russian president, McCain was there, cheering them on.

He supported sending arms to the Ukrainian army to fight pro-Russian rebels in the Donbass. He backed U.S. support for Saudi intervention in Yemen. And this war, too, proved to be a humanitarian disaster.

John McCain was a war hawk, and proud of it. But by 2006, the wars he had championed had cost the Republican Party both houses of Congress.

In 2008, when he was on the ballot, those wars helped cost him the presidency.

By 2016, the Republican majority would turn its back on McCain and his protege, Sen. Lindsey Graham, and nominate Donald Trump, who said he would seek to get along with Russia and extricate America from the wars into which McCain had helped plunge the country.

Yet, while interventionism now has no great champion and has proven unable to rally an American majority, it retains a residual momentum. This compulsion is pushing us to continue backing the Saudi war in Yemen and to seek regime change in Iran.

Yet if either of these enterprises holds any prospect of bringing about a more peaceful and prosperous Middle East, no one has made the case.

While the foreign policy that won the Cold War, containment, was articulated by George Kennan and pursued by presidents from Truman to Bush I, no grand strategy for the post-Cold War era has ever been embraced by a majority of Americans.

Bush I’s “New World Order” was rejected by Ross Perot’s economic patriots and Bill Clinton’s baby boomers who wanted to spend America’s peace dividend from our Cold War victory on America’s homefront.

As for the Bush II crusades for democracy “to end tyranny in our world,” the fruits of that Wilsonian idealism turned into ashes in our mouths.

But if the foreign policy agendas of Bush I and Bush II, along with McCain’s interventionism, have been tried and found wanting, what is America’s grand strategy?

What are the great goals of U.S. foreign policy? What are the vital interests for which all, or almost all Americans, believe we should fight?

“Take away this pudding; it has no theme,” said Churchill. Britain has lost an empire, but not yet found a role, was the crushing comment of Dean Acheson in 1962.

Both statements appear to apply to U.S. foreign policy in 2018.

We are bombing and fighting in Afghanistan, Iraq, Syria, Libya and Yemen, partly John McCain’s legacy. Secretary of State Mike Pompeo has sent a virtual ultimatum to Iran. We have told North Korea, a nuclear power with the world’s fourth-largest army, either to denuclearize or the U.S. may use its military might to get the job done.

We are challenging Beijing in its claimed territorial waters of the South China Sea. From South Korea to Estonia, we are committed by solemn treaty to go to war if any one of dozens of nations is attacked.

Now one hears talk of an “Arab NATO” to confront the ayatollah’s Iran and its Shiite allies. Lest we forget, ISIS and al-Qaida are Sunni.

With all these war guarantees, the odds are excellent that one day we are going to be dragged in yet another war that the American people will sour upon soon after it begins.

Where is the American Kennan of the new century?

Published:8/28/2018 10:12:36 AM
[Entertainment] The Weird and Unexplainable Success of ABC's The Proposal: Which Couples Are Actually Still Together? Jesse Palmer, The ProposalFile this one under: "Things no one saw coming." Since it premiered on June 18, ABC's The Proposal has made headlines for its ridiculous premise: it's a soul mate...
Published:8/28/2018 10:12:36 AM
[Markets] South Africa Exempts Zulu Lands From Confiscation Scheme

While headlines were initially confusing, South Africa's controversial land confiscation reform, in which some white-owned land could be expropriated without compensation, is still going ahead through its constitutional change but authorities have confirmed that Zulu lands will not be impacted.

The following Bloomberg headline triggered buying in the rand...

  • *S. AFRICA EXPRORIATION BILL WITHDRAWN AMID CONSTITUTION REVIEW

While the market's kneejerk response has been positive, with the rand jumping on the news...

...but as details came out, this should be seen as a head-fake, as it is merely exempting Zulu land from the government's confiscation plan.

As Bloomberg reports, plans to expropriate land without compensation won’t transgress on communal areas, Magashule told reporters Tuesday in Johannesburg a day after after party executives met with traditional leaders.

The government is considering legislation to repeal a trust that holds all the land that belongs to the Zulu nation and of which King Goodwill Zwelithini is the sole trustee.

“We affirmed our view that the kings and chiefs are the rightful custodians of communal land for and on behalf of the people and communities in the traditional areas,” Magashule said.

“The ANC will never be part of any attempt that seeks to tamper with authority of traditional leadership over the land of their ancestors including traditional communities.”

This decision comes after King Goodwill Zwelithini sounded a warning in July about potential clashes if the government dissolves the Ingonyama Trust, which accounts for a large part of the KwaZulu-Natal province, a region larger than Hungary.

The parliamentary committee tasked with land reform on Section 25 of the constitution is not expected to decide until September 27.

Furthermore, recall that as we reported yesterday, South Africa's "Black Hitler", Julius Malema said that he is prepared to die if it means South Africa will achieve land expropriation without compensation.

Additionally, Malema has accused President Ramaphosa and the Democratic Alliance (DA) of colluding with AfriForum to sabotage plans to expropriate land without compensation. A decade ago few people had heard of Malema. Now he commands millions and grows more powerful each day.

*  *  *

The bottom line is simple - white farmers are still f**ked, but Zulu leaders are safe.

Published:8/28/2018 9:31:48 AM
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Published:8/28/2018 9:11:49 AM
[Entertainment] The Crown Season 3's Prince Philip Revealed: See Tobias Menzies in Character Tobias Menzies, Prince Phillip"Ambition." With that simple word Netflix revealed the first look at The Crown's new Prince Philip for season three and four. Emmy nominee Matt Smith is out, Outlander star and Golden...
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[Entertainment] Katy Perry Denies Dr. Luke Raped Her in Unsealed Deposition Katy Perry, Dr. Luke, Kesha Katy Perry has denied that music producer Dr. Luke raped her. In a partially unsealed deposition obtained by E! News, Perry said she and Dr. Luke (whose real name is Lucasz Gottwald)...
Published:8/28/2018 7:48:48 AM
[Markets] China May Scrap Two-Child Policy, Ending 40 Years Of Limits

Chins is getting desperate about its demographic slide.

One week after we reported that China floated a proposal to tax all working adults aged under 40 with the money going to a "maternity fund" to reward families who have more than one child, Beijing appears poised to scrap the limit on the number of children couples can have, with a state-run newspaper Monday citing a draft civil code that would end decades of controversial family planning policies. The wide-ranging code would get rid of a policy that has been enforced through fines but was also notorious for cases of forced abortions and sterilization in the world's most populous country.

According to AFP, the Procuratorate Daily said the code omits any reference to "family planning" -- the current policy which limits couples to having no more than two children. The draft code would go to a vote at the rubber-stamp legislature, the National People's Congress, in 2020.

In China, couples can now have two children - up from just one as recently as two years ago - but the birth rate is falling despite the new policy.

The Communist Party began enforcing a one-child policy in 1979 to slow population growth. The limit was raised to two children in 2016 as the nation scrambled to rejuvenate its greying population of some 1.4 billion.

Concerns continue to mount that an ageing and shrinking workforce could slow down its economy, while gender imbalances could lead to social problems. Childbirths have not increased as much as forecast since the two-child policy came into force, and there has been rising speculation the government will further ease restrictions.

Meanwhile, the working-age population has peaked (just as much of the western world has also)

And here is why that is a major, if not existential problem for Xi - as China attempts to transition from a pure debt-driven 'production' economy to a 'consumption' economy, the core consumer base of the nation is collapsing.

The draft code was discussed at a meeting of the Standing Committee of the National People's Congress, a powerful body of lawmakers headed by President Xi Jinping, that will run till Friday. Other proposed changes include a one-month cooling off period before a divorce, during which either party can withdraw their application.

News of the proposed changes lit up social media.

"So they want us to have more babies and less divorces?" wrote one user on the Twitter-like Weibo platform.

Speculation about a change grew this month after a government-issued postage stamp for the Year of the Pig in 2019 showed a porcine family complete with three piglets.

Previously, under the one-child restrictions those with multiple children were heavily fined. Some women were forced to undergo abortions while others were subjected to forced sterilisations. Exemptions were given to ethnic minorities like Uighurs and Tibetans and those living in rural areas if their first child was a girl. Couples who themselves were only children could apply to have additional children.

But couples have been in no rush to start larger families since the policy was loosened, with 17.9 million babies born in 2016, just 1.3 million more than in the previous year and half of what was expected, according to the National Bureau of Statistics.

At the same time, births in 2017 even slipped to 17.23 million, far below the official forecast of over 20 million.

Of course, the bigger question in all of this is whether Japan is providing a glimpse of all our futures? Many of the shifts there are occurring in other advanced nations, too.

Across urban Asia, Europe and America, people are marrying later or not at all, birth rates are falling, single-occupant households are on the rise and, in countries where economic recession is worst, young people are living at home...

Published:8/28/2018 7:06:32 AM
[Markets] S&P Above 2,900, Global Stocks Hit 6 Month High As Dollar Slide Accelerates

US index futures rose higher into record territory rising above 2,900, as European stocks pared muted gains after the EURUSD rose above 1.17, pressuring exporters, while Asian shares were broadly higher with the exception of China; but the key theme of the session was another day of USD weakness.

World stocks rose to a six-month high on Tuesday, lifted by optimism that the U.S.-Mexico deal to replace the North American Free Trade Agreement will help with averting a global trade war. Investors expect Canada will agree to join the three-nation pact, while Trump and Merkel spoke by telephone and the two leaders “strongly supported ongoing discussions” on trade, according to the White House.

European and Asian shares followed Wall Street’s Monday lead, inching to multi-month highs after the S&P 500 and Nasdaq indexes surged to fresh records on Monday led by gains in technology stocks.

The Bloomberg Dollar index extended its recent slump, sliding to the lowest level in 4 weeks and implied volatility across currencies and equity markets also eased amid bullish risk sentiment and stabilization in the Chinese Yuan.

The ongoing slump in the dollar ever since China re-introduced the countercyclical factor has helped boost emerging market currencies, although the clear outlier overnight was the Turkish lira which slumped 1.4% and was back down to 6.21 vs the USD.

Optimism around the U.S.-Mexico deal has been key in helping shift market sentiment and the news agenda in the wake of Trump’s legal woes last week, while the Federal Reserve’s "gradualist" outlook has also boosted sentiment. Gains for risk assets remain fragile, however, as hopes for a similar trade breakthrough between American and China fade and a host of threats remain, from U.S. relations with Russia and North Korea, to Chinese growth prospects.

For now, the US remains immune to global trade woes, with the daily record highs in US stocks persisting even as the US economy appears to have hit a downward inflection point, with US economic surprises underperforming the world over the past three months.

The Euro Stoxx 50 was unchanged with gains in mining shares offset by a drop in banks and telecoms, while E-mini futures looked to extend on the 0.8% Monday gain, with the S&P500 set to open above 2,900 in cash trading after the U.S. and Mexico moved closer to a deal on trade. Italian stocks and bonds fell, while Treasuries and German bunds were steady.

Stocks in Japan extended a recent increase as the yen round-tripped an early decline, while China A-shares underperformed amid concerns that a Mexico trade deal made a similar deal with China less likely. JPMorgan and other analysts said the trade deal was not necessarily positive for the outcome of talks with China, though they said risks of a generalized global trade war had abated somewhat. "Despite this, Asia-Pacific equities including HK/China should benefit from the weaker U.S. dollar and risk-on moves."

The Chinese yuan edged higher Chinese central bank strengthened the daily fixing against the greenback by the most in more than 14 months, even as President Donald Trump said it’s not the right time for trade negotiations with China.

Speaking to reporters during his announcement Monday of the new Mexico accord, Trump said he is rejecting overtures from China to negotiate as he tries to achieve a less "one-sided" trade policy. "They want to talk but it’s just not the right time to talk right now, to be honest" Trump said. As Bloomberg notes, Trump’s remarks are his latest in recent weeks to suggest he doesn’t see a quick end to trade tensions with China, stoking concerns in Beijing that his actions are part of a wider plan to contain the nation’s rise. Fears are growing that the spat between the world’s biggest economies may spill over into geopolitical flash points, from North Korea to Taiwan.

The Mexico breakthrough will embolden Trump’s trade hawks to double down on demands for concessions from China, according Rob Carnell and Prakash Sakpal, economists at ING Bank NV in Singapore.

"So as far as China and Asia are concerned, this new Mexico deal solves nothing," they wrote in a note. "It strengthens the U.S. position to play hard-ball with China. This doesn’t look good for the region."

Elsewhere, the Mexican peso fell after initially rallying on the deal news as investors clamored for details and clarity on where it leaves Canada. "It could be because a dose of reality is sinking in after the initial euphoria," said TD Securities EM strategist Mitul Kotecha. "There is still some way to go before the deal is concluded, including political hurdles in both the the U.S. and Mexico and the question of how Canada will be added to a broader deal."

U.K. stocks rose in sympathy, catching-up rally as traders returned from a holiday, while the pound steadied as Prime Minister Theresa May said a no-deal break with Europe wouldn’t be the end of the world.

"On a broad sense, if markets were worried about trade tensions and trade talks escalating into full-blown wars at least this is one sign that there is a cooling off period and that some parts of the global trade space will still be connected and as free markets would hope,” said JPM global market strategist Nandini Ramakrishnan. "Another good example: European discussions this summer came down to a very conciliatory, almost non-issue."

Elsewhere, South Africa’s rand has pulled off two-year lows hit earlier this month while the Australian dollar, often used as a liquid hedge for global growth, is well above recent 1-1/2 year troughs. Reversing the EM trend this morning was the Turkish lira which fell another 1.5% against the dollar, adding to Monday’s 2% fall as concerns have not abated about Turkey’s rift with Washington and its monetary policies.

The yield on 10-year Treasuries was unchanged at 2.85%, the highest in more than a week. Germany 10-year yield dropped 1 bp to 0.37%.

WTI oil hovered around $69 a barrel. Bitcoin climbed for the fourth successive weekday, breaking above its 50-day moving average.

Italian BTPs initially underperformed as supply concession is priced in, later futures spike higher as block trade crosses. Earlier, Italian interest rates rose to three-month highs after Deputy Prime Minister Luigi Di Maio said the country’s public deficit could exceed the European Union’s ceiling of 3% of gross domestic product next year.

In commodities, gold increased 0.1 percent to $1,213.19 an ounce, the highest in almost three weeks. Brent crude advanced 0.6 percent to $76.66 a barrel, the highest in seven weeks. LME copper gained 0.5 percent to $6,136.00 per metric ton, the highest in more than two weeks.

U.S. economic data - with consumer confidence figures due later in the day and the latest estimate for second-quarter gross domestic product expected on Wednesday - could determine the dollar’s further moves. Best Buy and Tiffany are among companies reporting earnings.

Market Snapshot

  • S&P 500 futures little changed at 2,899.50
  • STOXX Europe 600 up 0.2% to 386.28
  • MXAP up 0.4% to 166.45
  • MXAPJ up 0.5% to 540.13
  • Nikkei up 0.06% to 22,813.47
  • Topix up 0.2% to 1,731.63
  • Hang Seng Index up 0.3% to 28,351.62
  • Shanghai Composite down 0.1% to 2,777.98
  • Sensex up 0.5% to 38,878.05
  • Australia S&P/ASX 200 up 0.6% to 6,304.65
  • Kospi up 0.2% to 2,303.12
  • German 10Y yield fell 0.9 bps to 0.367%
  • Euro up 0.1% to $1.1690
  • Italian 10Y yield rose 0.4 bps to 2.882%
  • Spanish 10Y yield rose 0.7 bps to 1.417%
  • Brent futures up 0.6% to $76.70/bbl
  • Gold spot up 0.1% to $1,213.07
  • U.S. Dollar Index down 0.1% to 94.70

Top Overnight News from Bloomberg

  • President Donald Trump said it’s not the right time for trade negotiations with China, denting expectations for a near term deal after a breakthrough agreement between the U.S. and Mexico
  • President Donald Trump said the U.S. is pursuing a new trade accord with Mexico to replace the North American Free Trade Agreement and called on Canada to join the deal soon or risk being left out. Trump, Trudeau agree to continue ‘productive’ trade talks
  • The earliest indicators for China’s economy show that the pace of expansion slowed for a fourth month in August, highlighting the pressure for the government to push through pro-growth policies
  • The French government will prepare contingency plans in case the European Union and the U.K. fail to agree on terms of their divorce
  • The Federal Reserve Bank of San Francisco has bad news for those declaring an inverted yield curve is no longer a recession predictor. Adjusting for the compensation investors demand to hold longer-dated bonds doesn’t invalidate the curve’s prognosis powers, according to a new research post published Monday

Asian equity markets traded mostly higher as the region got a tailwind from US where the S&P 500 and Nasdaq extended on record highs with sentiment supported after US and Mexico reached a trade agreement. This lifted the ASX 200 (+0.7%) back above the 6300 level with gains led by outperformance in financials, while Nikkei 225 (+0.4%) was underpinned by a weaker currency but with upside capped by resistance around 23000. Shanghai Comp. (Unch) and Hang Seng (+0.3%) both initially conformed to the positive tone although the mainland then failed to sustain gains amid ongoing US-China trade uncertainty and as focus shifts to earnings with 3 of China’s big 4 banks to announce results today. Finally, 10yr JGBs traded subdued with demand sapped as focus centred on riskier assets and following weaker demand at the enhanced liquidity auction for longer dated JGBs.

Top Asian News

  • The $4.4 Billion Hong Kong Residential Enclave That Cost $41,000
  • Early Indicators Show China’s Economy Weakening Again in August
  • Ex-Temasek Executive Warns Debt Deal Won’t Fix Noble Group
  • Lira Extends Slide as Investors See Policy Concerns Unaddressed
  • Aramco’s IPO Delay Brings Silver Lining for Saudi Stocks

European equities trade mixed (Eurostoxx 50 +0.02%) with underperformance in Italy’s FTSE MIB with Italian banks plumbing the depths while UK’s FTSE 100 outperforms as it plays catch-up following a public holiday on Monday. In terms of sectors, material names outperform on the back of firmer base metal prices while telecom names underperform. For stock specifics, Faurecia (+4.4%) climbed to the top if the Stoxx 600 following an upgrade at Kepler Cheuvreux while Sybank (-9.8%) and Baloise (-3.4%) share fell amid disappointing earnings

Top European News

  • Italy May Breach Deficit Limit for Income Support Tool: Fatto
  • Italian Bonds Fall as Budget Concerns Continue to Hit Investors
  • French Energy Minister Hulot Resigns in Clash With Macron
  • Swedish Retail Sales Plunge Raises Doubts on Economic Momentum
  • Altice Is Said to Mandate Lazard on SFR Network Finance: Figaro

In FX, the Dollar has lost more ground vs most G10/major rivals, but remains mixed vs EMs, as the Try continues to weaken in contrast to the Cny (and Cnh in response) that saw the strongest fixing in more than a year overnight. Hence, the index has been drifting down further below 95.000 within a new 94.920-665 range, with nearest supports seen at early August lows (circa  94.610 and 94.491). CHF - The Franc is benefiting most from the weaker Greenback and trading above 0.9800, though not really outperforming in cross terms as Eur/Chf holds firmly above 1.1400. GBP - Mixed fortunes for the Pound as Cable revisits 1.2900 by virtue of the aforementioned broad Usd downturn, but Eur/Gbp climbs towards 0.9075 on heightened prospects of a no deal Brexit. AUD/JPY - Narrowly mixed vs the Usd around 0.7350 and 111.00 respectively, with the Aud undermined by the ongoing US-China import tariff stand-off, but Jpy gleaning some support due to its safe-haven status, the Dollar’s demise and key chart levels/supply (unlike Eur/Jpy that touched 130.00 earlier amidst macro, leverage and fast money buying).

Commodities are benefitting from the pullback of the dollar with Brent futures marginally higher while WTI futures test the USD 69/bbl level to the upside. Saudi Energy Adviser stated the current US sanctions are unlikely to completely stop Iranian exports, ahead of oil-related sanctions are to come into effect in November. News flow has be relatively light, traders will be keeping an eye on the API crude inventories released after-market today; the Street expects crude stocks to draw by 500k bbls in the week, distillates are seen building by 1.4mln, and gasoline is expected to build by 400k bbls; according to a Reuters poll. Traders are also citing reports on Monday that showed OPEC+ compliance fell, though output still remains below target.  Elsewhere, gold has gained a firmer footing above USD 1200/oz, attributed to the ongoing dollar weaker.

Looking ahead to today’s calendar, we'll get the July advance goods trade balance, preliminary July wholesale inventories report, the August Richmond Fed manufacturing index print and the August Conference Board consumer confidence survey. Away from the data we'll also hear from ECB board member Peter Praet when he speaks around lunchtime in Germany. European Commissioner Gunther Oettinger will also discuss the EU budget at a conference in Brussels. Finally the UK’s Secretary of State for international trade Mr Fox will address the British Chamber of Commerce in Singapore.

US Event Calendar

  • 8:30am: Advance Goods Trade Balance, est. $69.0b deficit, prior $68.3b deficit, revised $67.9b deficit
  • 8:30am: Wholesale Inventories MoM, est. 0.2%, prior 0.1%; Retail Inventories MoM, prior 0.0%, revised 0.1%
  • 9am: Case Shiller 20-City MoM SA, est. 0.2%, prior 0.2%; CS 20-City YoY NSA, est. 6.4%, prior 6.51%
  • 10am: Richmond Fed Manufact. Index, est. 17, prior 20
  • 10am: Conf. Board Consumer Confidence, est. 126.6, prior 127.4; Present Situation, prior 165.9; Expectations, prior 101.7

DB's Jim Reid concludes the overnight wrap

The sun was well and truly shining out on global equities yesterday albeit in thin trading volumes with London on holiday. The Shanghai Composite (+1.89%) started the gains early on, while the Euro Stoxx 600 advanced +0.52%. In the US, the S&P 500 (+0.77%), NASDAQ (+0.91%), and Russell 2000 (+0.16%) all reached new all-time highs while the Dow gained +1.01% but still remains just below its January peak. Cyclical sectors led gains on both sides of the Atlantic, with materials, car makers, financials, and IT outperforming. The dollar index shed -0.39%, supporting commodity prices, with Brent crude oil up +0.22%. The risk on tone weighed on bonds with treasury yields higher across the curve. 10-year  yields were up +3.6bps while Bunds also weakened (+3.2bp), in part as a firmer than expected IFO reading added to the upbeat mood (more below).

The real outperformers yesterday, however, were in Latin America and Asia. In LatAm, sentiment was boosted by the announcement that the US had reached a new NAFTA agreement with Mexico. Any deal would need Congressional approval in the US but it was encouraging to the market that some of these trade disputes can be resolved. Bloomberg reported that the Canadian Foreign Minister and chief negotiator Chrystia Freeland will travel to the US today to join the discussions, while the Mexican President Nieto was “quite hopeful” that Canada would soon join in the revised agreement. The Mexican Peso gained 0.77% versus the dollar and Mexico’s benchmark index, the S&P/BMV index, rallied +1.58% to reach its highest level since February. Elsewhere the MSCI EM index jumped +1.81% while most EM currencies also advanced, although the Turkish Lira fell -1.96% as trading resumed post last week’s holidays. This morning in Asia, markets are consolidating on Monday’s gains with the Nikkei (+0.41%), Kospi (+0.19%) and Hang Seng (+0.24%) all modestly up while Chinese bourses are broadly flat following stronger gains yesterday. Elsewhere the Yuan is little changed while futures on the S&P are also pointing to a firmer start.

Back to yesterday, given the U.K. holiday its worth expanding on the Asia equity advance. The Nikkei, Hang Seng, and CSI 300 gaining +0.88%, +2.17%, and +2.44%, respectively. It was the first trading day since last Friday’s news that  the PBoC would reintroduce the “counter-cyclical buffer” in its daily formulation of the Yuan’s exchange rate fixing. The buffer allows the central bank to use more discretion when setting currency policy, potentially leaning against prevailing trends to moderate FX swings. The offshore Yuan had gained 1.30% versus the dollar on Friday, its biggest gain since January 2017 and its third best day since offshore trading began in 2010. The apparent effort by policymakers to arrest  the currency’s decline may signal a potential concession to US policymakers amid the ongoing trade dispute between the two countries, which, if realised, would also prove to be positive for risk assets.

Staying with the trade theme, DB’s Quinn Brody and Torsten Slok have looked at the five popular myths around US trade, including: i) that China's large imbalances take advantage of the system, ii) trade imbalances are driven by tariffs, iii) the US has broadly lower tariffs on goods imports than its partners, iv) US services trade is more open than the rest of the world, and v) the US has fewer non-tariff barriers than competitors. Amongst other findings, they conclude that the US is generally as open to trade as other DM countries and that tariffs or nontariffs barriers, are actually not the main source of the US trade deficit. Refer to their note for details.

Meanwhile in Europe yesterday, yields on 10y Italian BTPs slightly outperformed (+0.5bp), though they remain within 1bp off their year-to-date highs. Italian politicians seems to have continued to escalate their rhetoric regarding potential budget conflict with the European Union. Deputy Prime Minister Di Maio, leader of the Five Star Movement, said that Italy has no intention of withdrawing from the union or the currency zone, but that “we will look at all measures in discussions regarding the European budget and will block what doesn’t work for us.” The other Deputy Prime Minister, from the Northern League, Matteo Salvini, echoed Di Maio’s sentiments, saying “it’s time to cut financing to a useless entity.” The principle point of contention is immigration policy, with Italian leaders arguing that the rest of Europe needs to do more to assist Italy with their influx of migrants. This issue is likely to remain a big topic for markets as we go into autumn/fall although judging from the weather we’ve gone straight to winter in the U.K.

Elsewhere for those interested in empirical research on the yield curve. The latest research from the San Francisco Fed concluded the yield curve has been a reliable predictor of recessions and that the best summary measure is the spread between the 10y and 3m yields. That said, the authors Mr Bauer and Mr Mertens added that “the flattening yield curve provides no sign of an impending recession”, in part as long term rates, while falling remains above short term rates (3m-10y spread of c75bp).

Yesterday’s economic calendar was light, but the data was mostly positive. Germany’s August IFO business survey printed at 103.8, its first monthly increase since last November and its highest level since February. Improvements were concentrated in the forward-looking expectations subsection, boding well for H2 growth. The strong reading may have been driven by the weaker euro or by stronger domestic demand. In the US, the July Chicago Fed National Activity Index printed at 0.13 (a positive value signals above average growth) while the August Dallas Fed manufacturing activity survey came in at 30.9. Both of the US indexes were lower than last month, but they remain near the cyclical highs.

Looking ahead to today’s calendar, we'll get August consumer confidence data for France and July M3 money supply data for the Euro area. Data in the US will include the July advance goods trade balance, preliminary July wholesale inventories report, the August Richmond Fed manufacturing index print and the August Conference Board consumer confidence survey. Away from the data we'll also hear from ECB board member Peter Praet when he speaks around lunchtime in Germany. European Commissioner Gunther Oettinger will also discuss the EU budget at a conference in Brussels. Finally the UK’s Secretary of State for international trade Mr Fox will address the British Chamber of Commerce in Singapore.

Published:8/28/2018 6:12:54 AM
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[Entertainment] Pumpkin Spice Lattes Arrive at Starbucks! All the Other Ways to Get Your Flavor Fix Pumpkin Spice Latte, PSL, StarbucksMove over summer! Pumpkin spice season has officially arrived. Even though some kids have yet to head back to school, businesses are already gearing up for fall by welcoming a very...
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[Markets] China Hacked Clinton's Private Email Server: Daily Caller

A Chinese-owned firm with operations in Washington D.C. hacked Hillary Clinton's private server "throughout her term as secretary of state and obtained nearly all her emails," reports the Daily Caller's Richard Pollock. 

The Chinese firm obtained Clinton’s emails in real time as she sent and received communications and documents through her personal server, according to the sources, who said the hacking was conducted as part of an intelligence operation.

The Chinese wrote code that was embedded in the server, which was kept in Clinton’s residence in upstate New York. The code generated an instant “courtesy copy” for nearly all of her emails and forwarded them to the Chinese company, according to the sources. -Daily Caller

During a July 12 House Committee on the Judiciary hearing, Texas Rep. Louie Gohmert (R) disclosed that the Intelligence Community Inspector General (ICIG) found that virtually all of Clinton's emails from her homebrew server were funneled to a "foreign entity." Gohmert did not reveal the entity's identity - however he said it wasn't Russia. 

A government staff official briefed on the ICIG's findings told the Daily Caller that the Chinese firm which hacked Clinton's emails operates in Washington's northern Virginia suburbs, and that it was not a technology firm - but a "front group" for the Chinese government. 

Warnings ignored

Two ICIG officials, investigator Frank Ruckner and attorney Janette McMillan, repeatedly warned FBI officials of the Chinese intrusion during several meetings, according to the Daily Caller, citing a "former intelligence officer with expertise in cybersecurity issues who was briefed on the matter." 

Among the FBI officials warned was Peter Strzok - who was fired earlier this month from the agency over anti-Trump text messages he sent while spearheading an investigation of Trump's 2016 campaign. Strzok did not act on the ICIG's warning according to Gohmert - who added that Strzok and three other top FBI officials knew about an "anomaly" on Clinton's server

In other words; Strzok, while investigating Clinton's email server, completely ignored the fact that most of Clinton's emails were sent to a foreign entity - while IG Horowitz simply didn't want to know about it. 

The Intelligence Community Inspector General (ICIG) found an “anomaly on Hillary Clinton’s emails going through their private server, and when they had done the forensic analysis, they found that her emails, every single one except four, over 30,000, were going to an address that was not on the distribution list,” Republican Rep. Louie Gohmert of Texas said during a hearing with FBI official Peter Strzok. -Daily Caller

Gohmert: “It was going to an unauthorized source that was a foreign entity unrelated to Russia.

Strzok admitted to meeting with Ruckner but said he couldn't remember the "specific" content of their discussion. 

“The forensic examination was done by the ICIG and they can document that,” Gohmert said, “but you were given that information and you did nothing with it.”

Meanwhile, four separate attempts were also made to notify DOJ Inspector General Michael Horowitz to brief him on the massive security breach, however Horowitz "never returned the call."

Internal Pushback 

In November of 2017, IG McCullough - an Obama appointee - revealed to Fox News that he received pushback when he tried to tell former DNI James Clapper about the foreign entity which had Clinton's emails and other anomalies. 

Instead of being embraced for trying to expose an illegal act, seven senators including Dianne Feinstein (D-Ca) wrote a letter accusing him of politicizing the issue. 

"It's absolutely irrelevant whether something is marked classified, it is the character of the information," he said.

McCullough said that from that point forward, he received only criticism and an "adversarial posture" from Congress when he tried to rectify the situation.

"I expected to be embraced and protected," he said, adding that a Hill staffer "chided" him for failing to consider the "political consequences" of the information he was blowing the whistle on. -Fox News

Published:8/28/2018 4:39:09 AM
[Markets] Kremlin Cocaine? Two Tons Of Blow Seized In Belgium Bearing Logo Of Russia's Ruling Party

Nearly two tons of Brazilian cocaine bearing the logo of Russia's ruling party was intercepted in three containers at the Belgian port of Ghent, according to Belgian police and confirmed by the federal prosecutor's office to local media. With a street value of around € 100 million ($116 million USD), the bust is the largest in the port's history. 

The cocaine was tightly wrapped into more than 1,900 packages and "professionally hidden" among tiles shipped from Brazil, said the Belgian federal prosecutor. The tricolor polar bear logo of Russia's ruling party, "United Russia," can be seen on several of the packages. 

United Russia ranking party official Evgeny Revenko thought the whole thing was hilarious, posting on Facebook "Now, this is fame!” adding "Or, maybe, they simply liked the flag with our bear. In any case, this made my day, and [I had] a good laugh."

Meanwhile, in July a large cocaine shipment marked with photos of Brazilian football superstar Neymer was discovered in Guatemala. 

And in February, Russian and Argentinian authorities worked together to bust a cocaine smuggling operation out of their Buenos Aires embassy following a year-long sting which enlisted the assistance of a shadowy Russian spy chief. 

Authorities discovered the plot in December 2016 after Russian ambassador Viktor Koronelli stumbled across 860 lbs. (389 kilos) of cocaine zipped inside 12 suitcases in a storage facility belonging to the diplomatic mission. Koronelli immediately informed Argentine authorities - who decided to keep the discovery secret while they set up an elaborate year-long sting.

After removing the cocaine worth roughly $61 million USD, and replacing it with flour, authorities placed tracking devices on the cases and conducted a joint monitoring operation with Russian authorities. 

The courier in the stigng was in fact a high level KGB agent named Nikolai Patrushev - the former head of the FSB who is believed to have authorizedthe 2006 London assassination of a FSB defector Alexander Litvinenko - who died after being poisoned with a lethal dose of polonium-210. Patrushev paid a visit to the Russian embassy in Buenos Aires in December 2017 under the auspices of a visit to Argentine president Mauricio Macri, where the two signed memorandums of understanding in the Casa Rosada executive mansion.

Six people were arrested in the scheme. 

Published:8/28/2018 3:30:30 AM
[Markets] In English Town, 31 Muslims Charged With Sex Crimes Against Kids As Young As 12

Authored by Jon Hall via Free Market Shooter blog,

Thirty men and one woman have been charged with sexual crimes in Huddersfield, England – including the trafficking and rape of girls as young as 12-years-old, along with the facilitating of sexual abuse.

Detectives detailed that the alleged offenses took place in the town from 2005 and 2012 against five girls, who were aged between 12 and 18 at the time.

All of the accused are between the ages of 29 and 42 – with twelve of them unable to be named for “legal reasons”, according to the Huddersfield Daily Examiner.

In a statement, West Yorkshire Police said:

Authorities in Kirklees have charged 31 people with numerous offences including rape and trafficking with intent to engage in sexual exploitation... The offenses were committed against them as children in the Huddersfield area... The 30 men and one woman will appear at Kirklees Magistrates Court on 5 and 6 September 2018.

In their statement, Yorkshire Police also name the defendants being charged – and looking through the horrifying, obscene details, there is a re-occurring theme regarding those accused…

  • Banaras Hussain of Shipley, is charged with one count of rape of a female over 16.

  • Banaris Hussain of Huddersfield, is charged with one count of rape of a girl aged 13 – 15.

  • Mohammed Suhail Arif of Huddersfield, is charged with rape of a girl aged 13-15.

  • Iftikar Ali of Huddersfield, is charged with attempted rape of girl aged 13-15 and three counts of rape of a girl aged 13-15.

  • Mohammed Sajjad of Huddersfield, is charged with four counts of rape of a female age 13-15, one rape of a girl under 13 and facilitating the commission of a child sex offence.

  • Fehreen Rafiq of Huddersfield, she is charged with two counts of facilitating the commission of a child sex offence.

  • Umar Zaman of Huddersfield, is charged with two counts of rape of a female aged 13-15.

  • Basharat Hussain of Huddersfield, is charged with two counts of rape of a female aged 13-15.

  • Amin Ali Choli of Huddersfield, is charged with two counts of rape of a female over 16-years-old.

  • Shaqeel Hussain of Dewsbury, is charged with rape of a female aged 13-15 and two counts of trafficking.

  • Mubasher Hussain of Huddersfield, is charged with rape of a female aged 13-15 and sexual assault.

  • Abdul Majid of Huddersfield, is charged with two counts of rape of female aged 13-15.

  • Mohammed Dogar of Huddersfield, is charged with two counts of facilitating the commission of child sex offence.

  • Usman Ali of Huddersfield, is charged with two counts of rape of a female aged 13-15.

  • Mohammed Waqas Anwar of Huddersfield, is charged with five counts of rape of a female aged 13-15.

  • Gul Riaz of Huddersfield, is charged with rape of a female aged 13-15.

  • Mohammed Akram of Huddersfield, is charged with two counts of trafficking with a view to sexual exploitation of a female and rape of a female aged 14-15.

  • Manzoor Akhtar of Huddersfield, is charged with trafficking and three counts of rape of a female aged 13-15.

  • Samuel Fikru of Camden, has been charged with two counts of rape of female aged 13-15.

It is not politically incorrect or bigoted to observe that the brunt of those accused are of Muslim-descent. Barring the 12 that remain unnamed, every single man accused of raping and grooming underage girls in Huddersfield is Islamic. 

Sadly, a precedent has already been set in regards to Islamic rape gangs sprouting up across the U.K.

Back in March of this year, the cases against 20 child sex groomers were dropped in Telford. After potentially as many as 1,000 children suffered, the accused were set free after the chief of police reportedly thought convicting all of the men would be “too much trouble”.

In the case of Telford, the Islamic rape gang operated since the 1980’s totally unobstructed. How many more of these gangs will slowly come to light? Telford was abhorrent enough but now there is Huddersfield with five underage girls sexually abused for seven years.

The saddest part regarding the rape gangs being ousted from the shadows across England is that there is indeed a trend – yet no one wants to recognize it.

When the children and youth of your communities are being abused and violated for years – even decades – extreme reaction is needed to rectify such disgusting incidents.

Instead – in the case of Telford, and what’s likely to become the case of Huddersfield – authorities shrugged their shoulders and allowed the warping and degradation of society to continue by turning a blind eye to the true scope of the sexual abuse, with just seven charged and imprisoned in 2012.

With scores of unprosecuted suspects disregarded, the police have given them the ability to continue to perpetuate such a soulless, inexcusable practice all across England – ignoring the worst suffering imaginable for the children of their country. 

Published:8/28/2018 3:00:51 AM
[Entertainment] Bachelor Winter Games Couple Lily McManus and Courtney Dober Break Up Courtney Dober, Lily McmanusIt's the end of the road for Bachelor Winter Games fan favorites Lily McManus and Courtney Dober. Both McManus and Dober announced their breakup in respective videos and lengthy posts...
Published:8/28/2018 1:27:38 AM
[Markets] Meadows: "We've Learned NEW Information" Suggesting FBI/DOJ Leaked To Press, Used Articles To Obtain FISA Warrants

Freedom Caucus Chairman Mark Meadows (R-NC) dropped a late-night bombshell on Monday suggesting there's evidence that the FBI and DOJ rigged their own FISA spy warrants by leaking information to the press, then using the resultant articles to obtain court authorization to surveil targets. 

"We've learned NEW information suggesting our suspicions are true: FBI/DOJ have previously leaked info to the press, and then used those same press stories as a separate source to justify FISA's," tweeted Meadows. 

Until now, we've known that the creator of the so-called Steele Dossier, former UK spy Christopher Steele, leaked information directly to Yahoo! News journalist Michael Isikoff - whose article became a supporting piece of evidence in the FBI's FISA warrant application and subsequent renewals for Trump adviser Carter Page. 

So while we've known that Steele seeded Isikoff with information from his dubious dossier, and that the FBI then used both Steele's dossier and Isikoff's Steele-inspired article to game the FISA system, Rep. Mark Meadows now says that the FBI/DOJ directly leaked information to the press, which they then used for the same type of FISA scheme.

Strong evidence was discovered in January suggesting that former FBI employee Lisa Page leaked privileged information to Devlin Barrett, formerly of the Wall Street Journal and now with the Washington Post. Whether any of Barrett's reporting was subsequently used to obtain a FISA warrant is unknown. 

Meanwhile, Rep. Meadows's Monday night tweet comes hours before twice-demoted DOJ employee Bruce Ohr is set to give closed-door testimony to the House Oversight Committee. Ohr was caught lying about his involvement with opposition research firm Fusion GPS co-founder Glenn Simpson - who employed Steele. Ohr's CIA-linked wife, Nellie, was also  employed by Fusion as part of the firm's anti-Trump efforts, and had ongoing communications with the ex-UK spy, Christopher Steele as well. 

Based on new emails recently turned over to Congressional investigators, Ohr was revealed to have been feeding information to the FBI from Steele, long after the FBI had officially cut Steele off for inappropriate leaks to the press. 

Ohr’s role as a conduit between Steele and the FBI continued for months and resulted in 12 separate FBI interviews, including several after Trump’s inauguration. According to Ohr’s then-supervisor, Deputy Attorney General Rod Rosenstein, Ohr worked on the Russia probe without his permission and without his knowledge. -The Federalist

House Oversight and Government Reform Committee Chairman Trey Gowdy vowed that Tuesday's Ohr testimony would "get to the bottom of what he did, why he did it, who he did it in concert with, whether he had the permission of the supervisors at the Department of Justice." 

Last week, President Trump called for Attorney General Jeff Sessions to fire Ohr after his and Nellie's relationship with Simpson emerged. Trump tweeted: "Will Bruce Ohr, whose family received big money for helping to create the phony, dirty and discredited Dossier, ever be fired from the Jeff Sessions  'Justice' Department? A total joke!"

Earlier in August, Trump called Ohr a "disgrace," and warned that he may be pulling his security clearance "very quickly." 

Trump's threat came one day after two tweets about Ohr, noting a connection to former FBI agent Peter Strzok, as well as a text sent by Ohr after former FBI Director James Comey was fired in which Ohr says "afraid they will be exposed." 

More Ohr questions remain. For example, why did Nellie Ohr obtain a Ham Radio license right in May, 2016? As Ham enthusiast George Parry wondered in The Federalist in March, was it to avoid detection while working on the anti-Trump effort? 

So, was Nellie Ohr’s late-in-life foray into ham radio an effort to evade the Rogers-led NSA detecting her participation in compiling the Russian-sourced Steele dossier? Just as her husband’s omissions on his DOJ ethics forms raise an inference of improper motive, any competent prosecutor could use the circumstantial evidence of her taking up ham radio while digging for dirt on Trump to prove her consciousness of guilt and intention to conceal illegal activities. -The Federalist

And since none of this apparently justifies the appointment of a second special counsel by the DOJ, perhaps Bruce can offer up some answers during Tuesday's session? Of course, we'll never know what he said unless someone leaks.

Published:8/27/2018 11:59:33 PM
[Markets] "Exuberance Is Back:" Investing In Ferraris Better Bet Than Stocks

As US stocks hit record highs, a 1962 Ferrari 250 GTO offered by RM Sotheby's sold in Monterey, California on Saturday for a record $48.4 million - the highest price ever fetched at auction, and 25% higher than the previous record set in 2014 when a 1963 model sold for $38.1 million (a 1963 250 GTO reportedly sold in October 2013 for $52 million in a private transaction, however). 

The seller, early Microsoft employee Greg Whitten, bought the car in 2000 when similar Ferraris were selling for around $10 million, according to Bloomberg. Whitten made out like a bandit. 

Photos: Sotheby's

And while markets are hitting record highs after a decade of taxpayer-fueled economic recovery, investors with the means and wherewithal to sink their money into Ferraris instead of the S&P 500 did far better, according to the Hagerty Ferrari price index which reveals that the majority of gains occurred between 2013 and 2015. 

Even with dividends reinvested, Ferraris commanded a faster increase in value than listed U.S. companies since the end of 2009. Gains on the iconic car, though, have largely petered out over the last three years and U.S. stocks have outperformed. -Bloomberg

Making the case that high-end buyers are still willing to pony up in a frothy market, Bloomberg highlights the December 2017 sale of a Leonardo Da Vinci painting for $450 million (bought by Saudi crown prince Mohammed bin Salman, as it turns out), the most ever for a piece of fine art. 

Their takeaway? Watch out: 

It all shows market watchers should probably be getting worried, says Shane Oliver, a Sydney-based investment strategist at AMP Capital Investors Ltd., who wrote his PhD thesis on efficiency in markets and asset bubbles. -Bloomberg

"Exuberance is back in a big way," Oliver said. "The fact that people are paying record amounts for Ferraris and paintings and share markets are at record highs causes me to be a little bit more cautious

Since most people can't exactly afford to invest in a $48.4 million Ferrari, much less insure it and god forbid even drive it - here are some more pictures of the recent sale via RM Sotheby's

And just in case Ferraris aren't your thing, there's always a gold lambo!

Published:8/27/2018 10:27:21 PM
[Markets] Barclays Is First Bank To Sell Commercial Paper Linked To Libor Alternative

One month after Fannie Mae became the first issuer to sell debt linked to the Libor alternative, Barclays became the first commercial bank to issue commercial paper tied to the benchmark which regulators hope will replace the scandal-plagued London Interbank Offered Rate, the so-called secured overnight financing rate, or SOFR.

According to Bloomberg, on Friday the British bank sold $525 million of the short-term debt, linked to SOFR, Bloomberg reported and added that the borrowings took place via its flagship asset-backed commercial paper conduit, Sheffield Receivables Corp.

"Investor response was immediate, and fairly broad across different types of investors," Joe Muscari, head of securitized portfolio management at Barclays, said about the bank’s commercial paper deal. "Our support of SOFR with these issuances is just a recognition that this is the direction the industry is headed."

Commenting on the new bond issues, Barclays managing directors Chris Conetta told Bloomberg that "you should expect to see additional SOFR-linked deals across a broad spectrum of issuers. These will likely include bank issuers as well as other types of borrowers in the short-term debt markets. Both issuers and investors have a vested interest in seeing SOFR become an established and liquid market."

SOFR, which was launched in April by the New York Fed as a dollar-market alternative to LIBOR, has gained traction recently with financial institutions. In addition to Fannie and Barclays, Credit Suisse and the World Bank have all sold other types of SOFR-linked debt, Bloomberg reports. In this case, the SOFR-linked debt was commercial paper, which typically matures in 270 days or less and is used to fund everyday activities such as rent and salaries.

SOFR was set at 1.95% for Friday, up 1bp from the previous day, and up 15bps from its inaugural rate of 1.80% set in early April. It overnight dollar Libor peer for the same day was 1.91888%.

The main difference between the two rates is that whereas Libor is derived from a once daily survey of several large banks that estimate how much it would cost to borrow unsecured from each other without putting up collateral - a process which it emerged had been rigged and manipulated by a cartel of traders for years - SOFR is calculated based on overnight loans collateralized by U.S. government debt, and is therefore virtually impossible to manipulate.

Published:8/27/2018 9:56:36 PM
[Entertainment] Rose McGowan Reveals Involvement in Asia Argento Sexual Assault Case Asia ArgentoRose McGowan is speaking out about the sexual assault claims made against Asia Argento. In a lengthy statement explaining her involvement in the case, McGowan asserts, "Many people...
Published:8/27/2018 8:58:18 PM
[Markets] Lanny Davis Refutes Lanny Davis, Admits Being Source For CNN Trump Tower "Bombshell" Fake News

The plot thickens...

On July 26th, CNN unleashed a "bombshell" report that Michael Cohen was claiming that candidate Trump knew in advance about the infamous 2016 Trump Tower meeting.

Then, last week, amid the deafening euphoria of the 'anti-Trump'-ers, Davis told Anderson Cooper:

“I think the reporting of the story got mixed up in the course of a criminal investigation. We were not the source of the story.

Davis increasingly backed away from the story in recent days, telling the Washington Post that he is not certain if the claim is accurate, and that he could not independently corroborate it.

Destroying CNN's "bombshell" story, crushing the hopes of millions of 'not my president'-ers.

As Buzzfeed notes, after Davis publicly backtracked from the claims, the New York Post and the Washington Post outed him as their confirming source and published apologies from Davis

But, of course, CNN was giving up such a great story so easily (whether it's true or fake news), and followed up anxiously by none other than Brian Stelter who gushed over Twitter in the face of Davis' refutation of their entire story that:

" Re: CNN's July 27 story about Cohen claiming that Trump knew in advance about the Trump Tower meeting: "We stand by our story, and are confident in our reporting of it.""

All of which brings up to date, safe in the knowledge that despite Davis' denial that CNN's story ever occurred, CNN has "a source" that confirmed it and that's good enough for them.

BUT...

Now, after all that pre-amble, double-talk, and utterly bullshit fake news reporting, Lanny Davis - who we perhaps need to remind readers once again is an extremely well-paid f**king lawyer and communications expert - has  told Buzzfeed that he was the anonymous source in a July CNN story

Tonight, Davis told BuzzFeed News that he regrets both his role as an anonymous source and his subsequent denial of his own involvement.

Davis told BuzzFeed News that he did, in fact, speak anonymously to CNN for its story, which cited “sources with knowledge” — meaning more than one person.

“I made a mistake,” Davis said.

Regarding his comments about a month later to Cooper, he added, “I did not mean to be cute.”

As Buzzfeed concludes, Davis' role in the CNN story also offers a window into the kind of anonymous sourcing common across newsrooms. Some news outlets have a policy to not let sources speak "on background" — that is, as a “person familiar with the matter” or some other unnamed moniker — and also be allowed to decline to comment on the record.

“We should address Lanny Davis’s comments in our reporting and be more transparent with our readers about our reporting,” one CNN staffer told BuzzFeed News.

And while Davis looks bad, it is CNN whose credibility is getting crushed (admittedly from record lows).

Indeed - but what will be more fun is CNN's official response to this, Brain Stelter's squirming, and President Trump's tweet.

And here's the TL;DR version...

Published:8/27/2018 8:58:17 PM
[Entertainment] Dwayne Johnson Honors Fan Killed in Car Crash With Touching Video Dwayne JohnsonDwayne Johnson took to Twitter this weekend to offer his condolences to a follower whose mother and sister were tragically killed in a recent car crash. Aileen Pizarro and her daughter...
Published:8/27/2018 8:27:04 PM
[Entertainment] Blake Lively Spills Delicious Secrets About Her 31st Birthday Celebration Blake LivelyBlake Lively celebrated her 31st birthday over the weekend! Ahead of her special day, the actress and her A Simple Favor co-star Anna Kendrick sat down for an interview with E! News,...
Published:8/27/2018 7:27:02 PM
[Markets] Remember When Obama And His Supporters Hated And Mocked John McCain?

Submitted by Rusty of The Political Insider,

While the left has spent the last few days shedding tears over the passing of Arizona Senator John McCain, it's important to remember that their admiration for him hasn't always been so prevalent.

In fact, Barack Obama and his supporters in 2008, when McCain dared to challenge the first African-American candidate for the presidency, offered far less adoration than you'll see today.

For his part, the former President issued a statement raving about his longtime adversary, even lauding his tragic war experiences as a test that showed McCain's courage.

"Few of us have been tested the way John once was or required to show the kind of courage that he did," Obama said in a statement. "But all of us can aspire to the courage to put the greater good above our own."

It is a far cry from those years in which supporters of Obama belittled McCain's war record, mocked him for the injuries he suffered, scoffed at his age, and even compared him to a Nazi.

If you're watching media coverage of the Republican 'maverick' today, you'd be skeptical. But yes, all of those things happened just a decade ago.

General Wesley Clark, an ardent defender of Obama who was once considered for the role of Vice President, scoffed at McCain's war record, or the 'test' that Barack referenced.

"I don’t think getting in a fighter plane and getting shot down is a qualification to become president," he said during a 'Face the Nation' interview.

Former Obama adviser Rand Beers attacked McCain saying his "isolation" during much of the Vietnam War (being a POW and tortured), meant that his national security experience was "sadly limited."

Liberal blogger John Aravosis added to the reprehensible attacks saying, "getting shot down, tortured, and then doing propaganda for the enemy is not command experience."

Aravosis was referring to a false confession drawn out of McCain after being tortured for multiple days and having his ribs broken in a North Vietnamese prison.

In a later blog post, Aravosis claimed Obama's people asked him to do "all the dirty work" for the campaign.

What is now a test of courage and a sign of McCain's strength was once a source of mockery for his political opponents. A political ad released by the campaign even mocked the Republican's old age and inability to use email, a result of injuries sustained during his years in captivity.

"McCain's severe war injuries prevent him from combing his hair, typing on a keyboard, or tying his shoes," Mary Leonard wrote in the Boston Globe in 2000.

Rep. John Lewis painted McCain as comparable to George Wallace, a man fostering "an atmosphere of hate" and "hostility" in 2008. Two days ago he called the 'hostile' McCain a "warrior for peace."

Then there was the far-left Hollywood crowd who adored Obama and remarkably compared McCain to Nazis and Adolf Hitler, paving the way for Trump supporters years later to not give a rip about the disparaging comparisons.

The animated comedy 'Family Guy' featured a scene in which characters were transported back to Nazi Germany and tried to blend in wearing uniforms, one of which had a McCain/Palin button.

Madonna, who this go around declared her fantasy was to blow up the White House because a Republican resides there, used a video montage during one of her concerts in 2008 that showed images of McCain alongside photos of Hitler and brutal Zimbabwean President Robert Mugabe.

Not very many offered an ardent defense of McCain at the time. Certainly not the media, and certainly not soon-to-be President Obama and former President George W. Bush.

Yet both men have been invited to deliver a eulogy at the Senator's funeral services at the National Cathedral.

By contrast, "Mr. McCain quietly declared before his death that he did not want Mr. Trump to take part in his funeral," the New York Times reported.

How quickly they have forgotten that Obama and his supporters said the very same things Trump did during the heat of a political battle.

One side has been forgiven. The other has not.

Published:8/27/2018 6:54:51 PM
[Entertainment] Sara Foster Weighs In on Future Stepmom Katharine McPhee Katharine McPhee, Sara FosterSara Foster is smiling for her famous dad and his future wife. With David Foster newly engaged to Katharine McPhee, his 37-year-old daughter is just happy to see her dad happy....
Published:8/27/2018 5:29:09 PM
[Markets] Damning UN Report Calls For Myanmar Generals To Be Prosecuted For Genocide

Authored by Jessica Corbett via CommonDreams.org,

Following a United Nations Human Rights Council fact-finding mission in Myanmar, a damning U.N. report published Monday concludes that the nation’s military leaders, including its top commander, should be further investigated and prosecuted for genocide, crimes against humanity, and war crimes committed against Rohingya Muslims in the wake of a violent crackdown last August that forced more than half a million refugees to flee to neighboring Bangladesh.

“The gross human rights violations and abuses committed in Kachin, Rakhine, and Shan states,” which “stem from deep fractures in society and structural problems that have been apparent and unaddressed for decades,” the report asserts, “undoubtedly amount to the gravest crimes under international law.”

The report (pdf) comes from a yearlong investigation conducted by a three-member panel, which relied on 875 in-depth interviews with victims and eyewitnesses, satellite images, and verified documents, photographs, and videos. It documents crimes including murder, enforced disappearance, enslavement, imprisonment, torture, rape, and sexual slavery.

While the report determines that six leaders of the Myanmar military, or Tatmadaw—most notably Commander-in-Chief Senior-General Min Aung Hlaing—bear the greatest responsibility for such crimes, it also charges that State Counsellor Daw Aung San Suu Kyi, a Nobel Peace Prize laureate, “has not used her de facto position as head of government, nor her moral authority, to stem or prevent the unfolding events in Rakhine State.”

Among the report’s key recommendations, it declares, “The international community, through the United Nations, should use all diplomatic, humanitarian, and other peaceful means to assist Myanmar in meeting its responsibility to protect its people from genocide, crimes against humanity, and war crimes.”

It also urges the U.N. Security Council to “ensure accountability for crimes under international law committed in Myanmar, preferably by referring the situation to the International Criminal Court or alternatively by creating an ad hoc international criminal tribunal,” as well as to “adopt targeted individual sanctions, including travel bans and asset freezes, against those who appear most responsible for serious crimes under international law” and to “impose an arms embargo on Myanmar.”

Human rights advocates responded to the findings, which bolster previous reportsfrom U.N. officials and international news agencies, with immediate calls for actions.

Brad Adams, Asia director at Human Rights Watch, said that the “powerful report and clear recommendations demonstrate the obvious need for concrete steps to advance criminal justice for atrocious crimes, instead of more hollow condemnations and expressions of concern,” especially considering that “so far, condemnations without action by U.N. member states have only emboldened a culture of violence and oppression in Myanmar.”

Tirana Hassan, director of crisis response at Amnesty International, said the report makes “clear that the Myanmar authorities are incapable of bringing to justice those responsible,” which means that “the international community has the responsibility to act to ensure justice and accountability. Failing to do so sends a dangerous message that Myanmar’s military will not only enjoy impunity but is free to commit such atrocities again.”

The report will “have a big impact internationally, coming from the main U.N.-mandated body investigating the violence against the Rohingya, and also covering armed conflict in Shan, and Kachin states,” Richard Horsey, a former U.N. diplomat in Myanmar and longtime Yangon-based analyst, told the Washington Post. “Its specific finding that there is sufficient grounds for investigation and prosecution of military commanders for genocide is likely to have particularly serious diplomatic, not only legal, consequences.”

After the report’s release, Facebook - according to a company blog post - removed “18 Facebook accounts, one Instagram account, and 52 Facebook Pages, followed by almost 12 million people,” specifically banning  20 individuals and organizations, including the commander-in-chief and the military’s Myawady television network, “to prevent the spread of hate and misinformation.” Reuters noted that the “action means an essential blackout of the military’s main channel of public communication.”

Published:8/27/2018 5:29:09 PM
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Published:8/27/2018 5:29:09 PM
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Published:8/27/2018 3:36:20 PM
[Markets] South Africa Civil War Looms As White Farmers, 'Black Hitler' "Willing To Die" Over Property Confiscation

As South African President Ramaphosa's 'land reform' plans begin to confiscate white farmer-owned lands with no compensation, the rhetoric on both sides of the policy are beginning to signal little hope of avoiding direct inter-racial conflict, or another civil war.

Ramaphosa insists:

This is no land grab. Nor is it an assault on the private ownership of property... Land reform in South Africa is a moral, social and economic imperative.

“By bringing more land into productive use, by giving more South Africans assets and opportunities, the country is creating conditions for greater, more inclusive and more meaningful growth”

But a number of black South Africans appear to see things a little differently to their president: “Let us kill the white man, the white man must die”

Echoing Economic Freedom Fighters (EFF) leader Julius Malema says they're prepared to die if it means South Africa will achieve land expropriation without compensation.

In June, Simon Black warned that Malema, the so-called 'Hitler of South Africa', was busy telling white people in his country that he’s not going wage genocide against them. Yet.

But now, as EWN reports, the party has claimed that it's aware of white extremists who are opposed to the policy and are training as snipers in Pretoria to kill them.

Malema was addressing the media on Thursday at the party's headquarters in Braamfontein.

“They will kill us for that. There’s a group of white right-wingers who are being trained by Jews in Pretoria to be snipers…”

Additionally, Malema has accused President Ramaphosa and the Democratic Alliance (DA) of colluding with AfriForum to sabotage plans to expropriate land without compensation.

A decade ago few people had heard of Malema. Now he commands millions and grows more powerful each day.

So, the president says there's nothing going on; the people are being incited by leaders like Malema into extreme violence; and the white farming community is dying and pleading for the international community to pay attention:

And the following white farmer, set to become the first to officially have his USD15 million game reserve seized says South Africa’s land grab policy is theft and warned:

"I have the right to defend my property by force. And I will."

As The Daily Mail reports, Johan Steenkamp who co-owns a game farm in Limpopo province, has been ordered to hand over his land, following a ten-year battle to stop the government buying it for a tenth of its value.

Mr Steenkamp says President Cyril Ramaphosa's plans of redistribution of white-owned land to South Africa's black poor is just a cover so that the government can get their hands on valuable coal deposits found under his farm land.

The 67-year-old farmer said he is ready to defend his property by force if the government tries to take his land, saying:

"If it comes to a fight so be it, I am not going to leave the country and I am not going to leave my farm."

Mr Steenkamp said that if the land claims court rules that he must accept a fraction of the value of the land then they are 'up for a fight'. He said:

"I am not going to leave the country and I am not going to leave my farm. I am going nowhere. I will defend my farm and if it comes to a fight so be it.

"I will do whatever it takes to defend my farm. I don't want confrontation but the the Constitution says that I have the right to defend my property and my family and that is what I will be doing if anyone comes for my farm.

"I will not be initiating force but my gates will be locked and I will have security here. If there is any force it will not be initiated by me.

"If others use force and it starts to get out of hand then I will defend myself."

"This attempted seizure of our farm is not about a noble attempt to redistribute the land to the poor of Africa but it is all about the government getting their hands on the minerals."

Finally, here is Lauren Southern's controversial 'Farmlands' documentary, investigating the 'white genocide': "not only are the farm murders real, the genuine numbers are far higher than anyone imagined."

The latest data suggests things are getting worse...

Published:8/27/2018 1:57:42 PM
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Published:8/27/2018 1:22:33 PM
[Markets] As The Credit Cycle Turns

Authored by EconomicPrism's MN Gordon, annotated by Acting-Man's Pater Tenebrarum,

Financial Potemkin Village

A rising stock market has the illusory effect of masking the economy’s warts and blemishes.  Who cares if incomes are stagnant when everyone’s getting rich off stocks?  Certainly, winning wealth via the stock market beats working for it.

Learning from history, 2018 style [PT]

Without question, the pleasure that comes when opening an inflated quarterly brokerage statement is much more satisfying than a lackluster biweekly paycheck.  But not only does paper wealth grow when the stock market rises, implied intelligence grows too.  The quarterly statements, with growth lines moving up and to the right, prove it.

Why grumble over a labor participation rate that’s at a 40 year low when Netflix is up over 6,000 percent?  The abundance of cheap, frivolous, and on demand content, more than makes up for the lack of well-paying jobs.  Indeed, there has never been a better time in the history of the world to be a couch potato – particularly when 75 inch flat screen televisions can be bought on credit.

On Wednesday, with much celebration, a generally meaningless milestone was notched. U.S. stocks, as measured by the S&P 500, marked their longest bull market run in history.  They have gone 3,453 days without a 20 percent decline…  though there have been several close calls (i.e., mini bear markets) along the way.

Those who profited most over the course of this bull market, were those who ignored the many potential disaster scenarios that presented themselves, and blindly bought an S&P 500 Index Fund or shares of Facebook and Amazon.  Buy and hold.  Dollar cost average.  Buy the dip.  These were the strategies that delivered big over this bull market. What to make of it?

Winners and losers… it was a one-way street for a very long time. We know it is hard to believe, but that is going to change. [PT]

One of the higher callings to aspire to in life is that of finding meaning in the meaningless.  Hence, we’ll take the stock market’s historic, yet meaningless, achievement and use it as a source for meditation and reflection.

“The bigger they come, the harder they fall one and all,” observed Jimmy Cliff during the bear market of the early 1970s.  Taking this simple insight, what follows is a scratch for perspective on one of the suspicious cornerstones of this bull market.

Promise of the Gospel

The zealous belief in the tea leaves of data have confidently driven trading decisions via the rear view mirror over the course of this bull market. The rationale of the ardent promoters seems to be that with a long enough time series of data and a well-tested rules-based algorithm, tomorrow’s trading decisions can be made today.  The answers to tomorrow’s trading questions, according to these data models, were already uttered in the past.

Young economists, with much more data and much less understanding than 19th  century homesteaders holding a dog-eared copy of the Old Farmer’s Almanac, operate with remarkable confidence.  They believe they know the answers to tomorrow’s questions while their feet are firmly planted in today and their eyeballs are glued towards yesterday. Massive data sets are plotted and projected out with the promise of delivering the gospel.

The models have found a definitive answer to successful investing! For the very first time in history stock market strategists are able to come up with truly profound insights such as the one above, thanks to technological progress and the general increase in intelligence and market acumen imparted by rising stock prices. A new era has undeniably arrived. If you want to gain greater understanding of the situation, try to picture a permanently high plateau… [PT]

These statistical prophets dial in their cutting-edge computing power, place their faith in automated decision making, and pre-program future trades that will, no doubt, make them rich. With enough data, and enough regression analysis modeling, there is not a fraction of a dip that cannot be exploited for high frequency trading profits.  What could possibly go wrong?

One of the potential hazards of being über-smart is that it puts one at greater risk of being über-stoopid.  Just ask Nobel Prize economists Myron Scholes and Robert Merton.  In 1998, Scholes and Merton – and their investors – learned an expensive and humbling lesson about the limits of data modeling.

Evidently, LTCM should have used the much cheaper and more effective Dilbert model, which is supported by 87 studies. [PT]

In just four months, their hedge fund, Long Term Capital Management, hemorrhaged $4.6 billion.  Before the bloodbath was over, financial intervention  by the Federal Reserve was required to prevent a panic of mass liquidation.

Apparently, the Nobel Prize-holding duo’s quantitative models failed to predict the 1997 Asian financial crisis and 1998 Russian financial crisis.  In short order, Long Term Capital Management’s highly leveraged interest rate convergence trades did what was held to be statistically impossible – they diverged.

At that precise moment, the reputations of Mr. Scholes and Mr. Merton also diverged from their previous path.

As the Credit Cycle Turns

The experience over the last nine years – and also over the last 35 years – presented by the stock market, is one of near uninterrupted upward progress.  The experience over the last 35 years presented by the debt market is one of ever declining interest rates.

We suspect the next 35 years will look quite different from the preceding 35 years.  Yesterday’s market data will no longer be a good predictor of tomorrow’s market movements. Rather, it will be a source of trouble for quantitative analysis.

Presently, the risks of a financial crisis are also increasing.  After a decade of cheap money policies, which resulted in a flood of credit from American and European investment funds to emerging market borrowers, the credit cycle has turned.  The Federal Reserve, albeit slowly, is shrinking the Fed’s balance sheet and tightening the federal funds rate.

Brewing storm 101: total assets held by the Fed continue to decrease, while the FF rate keeps marching higher. Emerging markets were the first to feel the pinch, but it is eventually going to migrate to the center. [PT]

As the dollar’s value increases, emerging market borrowers are finding it more and more difficult to repay their debts with income in their depreciating national currencies. Turkey’s been the latest emerging market to feel this pinch.  Tomorrow it will be South Africa or Brazil or Russia or Mexico.

The consequences of an emerging market debt and currency crisis show up in the most unexpected places. The 1997 Asian financial crisis and 1998 Russian financial crisis resulted in the blowup of Long Term Capital Management. The 1994 Mexican peso crisis resulted in the bankruptcy filing of Orange County.

Given the length and breadth of credit that has been extended over the last decade, and the ever-more risky search for yield, it seems likely the next blowup will find its way into a wide range of unsuspecting American investment portfolios.

Published:8/27/2018 1:22:33 PM
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Published:8/27/2018 11:56:31 AM
[Markets] Saudi King Shelved Aramco IPO To Teach Son, Prince Bin Salman A Lesson

Less than a year after Saudi Arabia's unprecedented monetary shakedown of wealthy princes and other Saudi oligarchs in November 2017, which among others ensnared Prince Alwaleed bin Talal who was an involuntary "guest" at the Riyadh Ritz-Carlton for months - until he emerged a free man after an undisclosed settlement - and also eliminated potential threats to the ruling family including close family members, Reuters is out with a fascinating report according to which new splinters may be appearing inside Saudi society, in this case involving a schism between the Saudi King Salman, and his 32 year old son and de facto ruler, Crown Prince Mohammed bin Salman.

As was first reported in early 2016, for the past two years Saudi Arabia had been preparing to place up to 5% of its national oil company, Saudi Aramco, on the stock market. Officials talked up the Aramco initial public offering with international exchanges, global banks and President Donald Trump.

The planned listing was supposed to be the cornerstone of the kingdom’s promised economic overhaul and, at a targeted $100 billion, the biggest IPO ever. More importantly, it was the brainchild of 32-year-old Crown Prince Mohammed bin Salman, heir apparent of the world's largest oil exporter and the effective head of OPEC.

However, after months of setbacks, the deal came to a crashing halt after the international and domestic legs of the IPO were pulled earlier this month.

The reason, according to Reuters: King Salman - the prince's father - stepped in to shelve it.

The decision came after the king met with family members, bankers, and senior oil executives, including a former Aramco CEO, said one of the sources, who requested anonymity. Those consultations took place during Ramadan, which ended in the middle of June.

Having been seemingly asleep for the prior two years, The king's interlocutors told him that the IPO, far from helping the kingdom, would undermine it. Their main concern was that an IPO would bring full public disclosure of Aramco's financial details, something we knew from prior reports on why the IPO was problematic.

Then, in late June, the king sent a message to his administrative office, demanding that the IPO be called off: the king's decision is final, a Reuters source said.

"Whenever he says 'no', there is no budging," the source said, although it wasn't clear just what the King was so afraid would be discovered as part of the IPO due diligence.

Unwilling to telegraph the confusion, if not chaos, between the two top Saudis, Energy Minister Khalid al-Falih said the government was still committed to conducting the IPO at an unspecified date in the future. A senior Saudi official referred Reuters to that statement and repeated that the government, Aramco’s shareholder, was working towards an IPO when conditions were right.

"We are surprised that despite this statement, that the Government continues actively to plan for the IPO, Reuters persists in asking questions alleging that plans are halted."

"Aramco’s shareholder is the Government of Saudi Arabia. His majesty, King Salman, has delegated management of the IPO to His Royal Highness the Crown Prince, and a Committee which includes the Ministers for Energy, Finance and Economy. Therefore, decisions around the nature and timing of the IPO, will be decided by the Committee for the Government’s approval," the official said.

Logistics aside, the unspoken message here is the implicit criticism by the King of his son's decision: the shelving of the Aramco IPO is a major blow to the prince's Vision 2030 reform programme, which aims to fundamentally transform Saudi Arabia's oil-dependent, state-driven economy.

And the punchline: the king's unilateral decision to pull the Aramco IPO suggests the king is keeping the new unilateral power of the young prince - accrued soon after his father's accession to the throne in January 2015 - in check, i.e. teaching him a lesson who is in charge.

To be sure, King Salman initially delegated enough power to his son that to many international community, MBS was the effective rulers of Saudi Arabia:

While King Salman has the final say on policy, he has given great authority to his son, who is known as MbS. After assuming powers as defence minister and chief of the royal court in January 2015, MbS launched a war in Yemen, adopted a more assertive stance towards arch-rival Iran, and implemented a diplomatic and trade boycott of Qatar.

Taking the reins of a powerful new economic council, he set out to tighten state spending, grow the private sector and win foreign investment.

The king also allowed him to push through high-profile social reforms including ending a ban on women driving and opening cinemas in the deeply conservative Muslim country.

MbS entered the line of succession in April 2015, replacing an uncle as deputy crown prince. Two years later, he was elevated to crown prince in a palace coup that removed his cousin Prince Mohammed bin Nayef, the interior minister.

That said, MBS has made prior mistakes, most notably vis-a-vis Saudi entanglement with the Trump administration. When the young prince gave the impression last year that Riyadh endorsed the Trump administration’s still nebulous Middle East peace plan, including U.S. recognition of Jerusalem as Israel’s capital, the king made a public correction.

At the Arab League summit in April, he reaffirmed Riyadh's commitment to the Arab and Muslim identity of Jerusalem following an uproar in the Islamic world. "The king is obsessed with the idea of how history will judge him. Will he be the king who sold Aramco, who sold Palestine?" the second source said

Meanwhile, Saudi interest in the Aramco IPO started to wane, and by April, Aramco stopped paying some of the banks working on the deal their retainer fee, Reuters reports.

Then, while the king was deliberating, in mid-June, the banks, including JP Morgan and Morgan Stanley, were invited to pitch for something different. As we reported last month, banks were were instead asked to present proposals for Aramco's acquisition of a stake in petrochemicals giant SABIC from the sovereign wealth fund PIF.

That was an initial sign that plans for the listing were stalling and that Riyadh was looking to raise funds elsewhere, the banking sources said.

The King's shelving of the Aramco IPO has various consequences, not the least of which is that a major source of new capital is now gone. And while Saudi Arabia can still generate cash from other sources and move ahead with reforms, MbS had promised the listing would help create a "culture of openness in the secretive kingdom."

Not anymore.

In addition to raising concerns about that commitment to transparency, the shelved IPO added to the sense of unpredictability after scores of top royals, ministers and businessmen were rounded up in an anti-corruption campaign last November.

But the biggest question is whether the Aramco IPO fiasco is an indication of a fallout between the Alzheimerish King and the man most had - until now - considered the true Saudi leader.

According to Reuters source, the answer is, at least for now, no: the sources said that even though the king's decision was a blow to the prince's agenda, he is still the favorite son and heir with a major influence on policy. Rather, they say, it suggests the king wants to show that he will be the deciding voice for the foreseeable future.

"I’m not sure that I would see it as an undermining of the rule of the crown prince. It’s much more likely ensuring that he doesn’t go off the deep end," said James Dorsey, a senior fellow at Singapore's S. Rajaratnam School of International Studies.

Of course, as last November's events showed, when it comes to family ties in Saudi Arabia, which along with its oil deposits is legendary for its extended, constantly shifting intra-family feuds, the King's affectation with MbS could turn on a dime following another flawed decision.

Published:8/27/2018 11:56:31 AM
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[Markets] Stocks Just Wanna Go Up; Trader Suggests "Avoid Discussing Why, How Far, Or Whether It's Right"

It’s quickly coming to the end of summer, the U.K. is shuttered for a bank holiday and volumes are reportedly pitiful.

It would be difficult to take anyone to task for writing today off as just another day to get through. And then we’ll see where things adjust. It doesn’t bolster the 'get in there and trade up a storm' camp, that a week from today it’s the turn of U.S. markets to enjoy a long weekend.

But, as former fund manager and FX trader, Richard Breslow notes, at the risk of making more of things than they deserve, there are still things to be learned by this price action. Such as it is.

Via Bloomberg,

Equities simply want to go up. If you want to trade them, try to avoid getting into debates about why, how far, or is it right. It’s just proven too difficult to sort out the conflicting fundamentals. Someone said to me on Friday that it all boils down to supply and demand. And that struck me as a very good way of thinking about it. It’s become a technical trade and should be treated as such. Pick your levels and go from there.

Shares aren’t ignoring troubling news. It would seem that traders need to figure a way to get in. Benchmarks remain as cruel a set of competitors as they have been the entire ride up. Here we sit at all-time highs in the S&P 500, and it trades like people are short. It’s been so much easier to navigate this market without an opinion. Just a chart. This past February really shook people up, but it was after we revisited those lows in early April that many never recovered.

On the flip-side, the dollar acts like traders remain long. The pluses and minuses ledger is long and valid on both sides. But the hard facts, as we know them, are keeping investors stubbornly bullish. And analysts, with their forecasts, steadfastly bearish. That’s a recipe for making no one satisfied. Which is why we keep lurching back into the range.

It’s often easiest to understand a day’s price action, by looking at the mirror image from the day before. Check out last Thursday and Friday before concluding the Fed Chairman Powell broke new ground at Jackson Hole.

Currency traders like to debate what is a safe haven and why. It’s been a tough answer to come by and then monetize. Primarily because we have serially had very different, and often rapidly changing, sources of worry. One medicine doesn’t cure all afflictions and in some cases is adamantly contra-indicated.

The German Ifo report may be enough to make groggy traders forget Italian politics for the day. But that doesn’t forgive not keeping an eye on the Turkish lira.

Have you ever experienced another time with so many moving parts? Or when news, such as tariffs and sanctions, can be simultaneously positive and negative for the dollar? How can such a deadly dull market, be so captivating?

Published:8/27/2018 11:19:44 AM
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Published:8/27/2018 10:34:35 AM
[Markets] To Understand America's Neofeudal Economy, Start With Extortion

Authored by Charles Hugh Smith via OfTwoMinds blog,

Here is the result of America's neofeudalism: soaring wealth and income inequality.

Let's spin the time machine back to the late Middle Ages, at the height of feudalism, and imagine we're trying to get a boatload of goods to the nearest city to sell. As we drift down the river, we're constantly being stopped and charged a fee for transiting one small fiefdom after another. When we finally reach the city, there's an entry fee for bringing our goods to market.

Note that none of these fees were payments for improvements to transport or for services rendered; they were simply extortion. This was the economic structure of feudalism: petty fiefdoms levied extortionate fees that funded the lifestyles of nobility.

This is why I have long called America's economy neofeudal: we pay ever higher fees for services that are degrading, not improving. This is the essence of extortion: we don't get any improvement in goods and services for the extra money we're forced to pay.

Consider higher education: costs are soaring while the value of the "product"--a college diploma--declines. What extra value are students receiving for the doubling of tuition and fees? The short answer is "none." College diplomas are in over-supply, and studies have found that a majority of students learn remarkably little of value in college.

As I explain in my book The Nearly Free University and the Emerging Economy, the solution is to accredit the student, not the institution. If the student learned very little, he/she doesn't get credentialed.

Were students to have access to the best classroom lectures online (nearly free), and on-the-job apprenticeships in the workplace, (nearly free or perhaps even paid), learning would be significantly improved and costs reduced by 80% to 90%.

In this structure, there's no need for costly campuses or administration; the entire structure of higher education could be largely automated with software, except for the workplace apprenticeships which focus on case studies and real-world projects that are creating value in the here and now.

Consider healthcare: has the quality of healthcare doubled along with costs?Are Americans significantly healthier as the costs of healthcare have tripled? The aggregate health of Americans has arguably declined, while the stresses placed on frontline care providers by the ever-heavier burdens of compliance and paperwork have increased.

What about the $200 hammers and $300 million F-35 aircraft of the defense industry? Once again, as costs have soared, the quality and effectiveness of the products being supplied has arguable declined.

How about state and local government services? Are they improving as taxes and junk fees rise? Once again, government services are often declining in quality as taxes and fees increase by leaps and bounds.

In sector after sector, the quality of the goods and services has declined while costs have soared. This is the acme of neofeudalism: insiders and the New Nobility are skimming fortunes as prices skyrocket and the quality of the goods and services provided plummet.

Look at the cost increases in higher education, healthcare and childcare and ask yourself if the quality of those services have risen in lockstep with price increases.

This is nothing but neofeudal extortion. The cartels raise prices and we're forced to pay them, just as feudal commoners were forced to pay.

Here is the result of America's neofeudalism: soaring wealth and income inequality. 

Insiders and the New Nobility are getting richer while debt-serfs are getting poorer.

*  *  *

Back to School Book Sale: 57% off the Kindle edition and 25% off the print edition of The Nearly Free University and the Emerging Economy ($2.99 Kindle, $15 print). My new book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 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:8/27/2018 9:49:05 AM
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[Markets] Martin Armstrong Dashes "Global-Warming Fanatics" Fears: The 'Hunger Stones' Have Appeared

Authored by Martin Armstrong via ArmstrongEconomics.com,

While the Global Warming fanatics are out in force saying “see” the heat in Europe is caused by humans driving their cars around, they continue to ignore history...The extreme heat in Europe this year is part of a cycle.

The swings from extreme heat to extreme cold are also not unheard of. Another piece of historical evidence they ignore is known as the Hunger Stones.

Pictured above is a Hunger Stone from 1616 which has been exposed by the low level of water in the Elbe River.

This is at Decin, in the Czech Republic. Throughout the centuries, there have been these cycles of extreme heat followed by extreme cold. Such events have been recorded when drought has resulted in the low level of water in the Elbe river.

This year’s drought in Europe has exposed once again the Hunger Stones that have been used for centuries to commemorate historic droughts which warn of their consequences when you see these stones again. The Hunger Stones are visible in the Elbe River once again. This is a major river which begins in the Czech Republic and flows through Germany. There are more than a dozen Hunger Stones that serve as records of previous droughts establishing that the extreme heat and drought of this year is by no means unique to history.

The various Hunger Stones record droughts that resulted in famine and soaring prices for food. The droughts that have been recorded on the stones date to 1417, 1616, 1707, 1746, 1790, 1800, 1811, 1830, 1842, 1868, 1892, and 1893, which covers a period of 476 years. This produces an average of 39.6 years. Just applying that average would bring you to 2012. However, we have to look closer. Note that two years 1892 and 1893 are back-to-back. This does not reflect two separate droughts, but the peak in intensity. Instead of there being TWO separate droughts, it is the same even just extended. That means there were really 11 events within this 476-year span of history and low and behold this alters the average to 43.27 years. This actually conforms to our Economic Confidence Model frequency of 8.6 years /2 = 4.3.

In fact, additional evidence that is being ignored by the Global Warming crowd who seem intent upon leading society to its doom by ignoring the past entirely. Extensive research has also been done on tree-rings in north-central Europe. This study has discovered that there has been a pattern of “megadroughts” in the 15th through 19th centuries. They classified 1893 as the “Great Drought of 1893” where rainfall decline between 30 to 90% throughout various regions in Europe. They also found that the Irish famine of 1740–1741 was the result of a cooling period they pointed out resulted in unusually low winter and spring temperatures in 1740 that produced in crop failures and a massive subsequent famine. They point out that there were five major “megadrought” that took place in 1540, 1590, 1616, 1718, and 1719. Once again, we see back-to-back events in 1718 and 1719 which in our analysis reflect a build up in intensity rather than two separate events. Reducing this to 4 evens once again gives us an average of 44.75 years which is very close to the Pi frequency. If we plot this serious out, we arrive at 2020.

It appears that instead of a back-to-back event in 2019, this can become the worst period of intensity and produce three years of drought into 2020. The greater the number of volcanos erupting can also produce an increase in intensity for this period. What we must be concerned about is volcanic activity appearing in the West Indies, which includes Soufriere on St. Vincent. It is the stratovolcano type event that can change the weather. These are volcanoes that are known as a composite volcano, which is a conical volcano built up by many layers (strata) of hardened lava, tephra, pumice, and ash. When they erupt, this sends a tremendous amount of material into the atmosphere which reduces sunlight and cools the temperatures.

When we ran the drought data through our models, not only did it correlate with the ECM, it also coordinated with the first historical eruption of the volcano which took place during 1718 and a subsequent eruption 1812. Now, look at the drought records of megadroughts – 1718/1719. When we ran the model, out comes the year 1816 which s known as the Year Without a Summer. The climate turned extremely cold and it was snowing in July in New York City. This resulted in major food shortages across the Northern Hemisphere. Note that the second eruption was 1812.

When we correlated this entire period, what emerged was a dramatic increase in volcanic activity which also correlated with the decline in the energy output of the sun. Our model warned that volcanic activity would rise beginning here in 2018 correlated with a decline in the energy output of the sun which should have begun in 2015.  Note that the Hunger Stones also mark the year 1811. While this is one year prior to the eruption in the West Indies in 1812, there is what has been called the 1808/1809 Mystery Volcanic Eruption which seems to have set in motion a Mini Ice Age during the early 1800s. This was a monumental volcanic eruption in the VEI 6 range which appears to have taken place in late 1808. This event preceded the 1815 eruption of Mount Tambora (VEI 7) which produced the Year Without a Summer in 1816.

There was the period climatologists called the Little Ice Age they believed took place starting around 1650. This was the result of primarily the decline in the energy output of the sun reflected in the drastic decline in sunspot activity. What we are looking at here is a drastic correction in market-terminology which took place during the early 1800s. A study of Greenland and Antarctic ice cores in the 1990s revealed evidence that pointed to a massive volcanic eruption that had occurred in early 1809. The problem that everyone face was there were not human records of such an event. This meant that it must have been in a region where humans did not record the event. Additional research revealed from tree-ring data that there was also a major eruption in 1808. Now two independent sources were pointing to a mystery eruption – but where?

The mystery was simply that such a catastrophic eruption of that magnitude should have been noticed by someone. They began to scour the records around the world hoping that someone somewhere recorded the event. Finally, in 2014 a Ph.D. student Alvaro Guevara-Murua and Dr. Caroline Williams of the University of Bristol discovered an account of atmospheric events consistent with such an event by Colombian scientist Francisco José de Caldas who recorded a massive transparent cloud that obstructed the sunlight at Bogotá, Columbia in early 1809. The further investigation revealed that the cloud was first been observed by him on December 11th, 1808. De Caldas reported conditions consistent with a volcanic cloud that altered the weather turning it unusually cold, with even bitter frosts in Columbia.

Further investigations to the south in Peru produced another observation by a physician named Hipólito Unanue of Lima. Combining these two observations led to the conclusion that the window of the eruption was sometime within 14 days of December 4th, 1808. The only area in the tropics to the west of Colombia and Peru with possible volcanoes was also located in the South Western Pacific Ocean between Indonesia and Tonga. At the time, there was hardly any reporting coming from this region lacking European settlements. The Rabaul area has had such major VEI 6+ eruptions but records only date back to the mid-1800s.

However, this one catastrophic VEI6+ eruption is NOT the only volcano that erupted. This is why we have warned that the cyclical period for volcano eruptions turned upo with 2018. In 1808 there were major additional eruptions in Urzelina, the Azores during May (1st to 4th), as well as the Taal Volcano, in the Philippines during March that year.  There was also the Chilean Putana volcano which had a major eruption during of 1808-1810 (records are not precise) This period is then followed by the truly massive 1815 eruption of Mount Tambora in the Dutch East Indies. This one is attributed with creating the Year without a Summer because it was the largest eruption in at least 1,300 years that has been recorded. This event was followed by the 1814 eruption of Mayon in the Philippines, which appears to have contributed to the weather changes of cooling creating an accumulative event.

Our models have pinpointed yet another such period that perhaps sent human civilization into the Dark Ages. There was a similar period with volcanos and extreme weather events of 535–536. Researchers from Los Alamos Laboratory published a thesis (LA-UR 004608) in this study these researchers developed a model recreating a volcanic eruption of such proportion that it staggers the human mind. This eruption is known as the Proto-Krakatau eruption. It occurred in the year 536 AD in the present day country of Indonesia. This predecessor or the 18 15 AD eruption of Krakatau of the same name and place was many times greater. The evidence these scientists present is that this resulting blast of this super volcano with its caldera (magma chamber) collapsing beneath it formed the Strait of Sunda between the islands of Sumatra and Java. Before this explosive eruption, these two islands were one land mass. The bathymetry data indicates this caldera is about 40 to 60 km in diameter. Michael the Syrian: “The Sun became dark and its darkness has lasted eighteen months. Each day it shone for about four hours, and still, this light was only a feeble shadow the fruits did not ripen, and the wine tasted like sour grapes.”

This appears to be the eruption of the volcano Krakatoa is located on Rakata, in the Pacific between Java and Sumatra, Indonesia. We know the name from the major eruption on August 26th, 1883 which was one of the most catastrophic ever witnessed in recorded in modern history. Previously, we knew of a more moderate eruption that took place back in 1680. Contemporary historians recorded events. Procopius wrote in 536AD: “during this year a most dread portent took place. For the sun gave forth its light without brightness … and it seemed exceedingly like the sun in eclipse, for the beams it shed were not clear.” John the Lydian, or John Lydus, was a 6th-century Byzantine administrator and a historian who wrote also in 536AD: “The sun became dim … for nearly the whole year … so that the fruits were killed at an unseasonable time.”

In Mesopotamia, a source quoted by Michael the Syrian (ca. 1166-1 199 AD) and Bar-Hebraeus1246-1286 records that: “In the year 848 of the Greeks [536 A.D.]. the Sun was dark and its darkness lasted for eighteen months, each day it shone for about 4 hours, and still, this light was only a feeble shadow,. , the fruits did not ripen and wine tasted like sour grapes”

Flavius Magnus Aurelius Cassiodorus Senator (c. 485 – c. 585),  was a Roman statesman and a historian. He wrote of this period: “The sun … seems to have lost its wonted light, and appears of a bluish color. We marvel to see no shadows of our bodies at noon, to feel the mighty vigor of the sun’s heat wasted into feebleness, and the phenomena which accompany an eclipse prolonged through almost a whole year. We have had … a summer without heat … the crops have been chilled by north winds … the rain is denied …”

The ice core samples clearly show actually two very large sulfate peaks that occur with volcanos. The first took place during 537AD and the second follows in 541—542AD. Therefore, once again we may be dealing with multiple volcanic eruptions. Both peaks are approximately the same size. It is the first event that has been recorded as the catastrophe. Contemporary historians mention above have provided contemporary accounts of this dramatic decrease in the Sun’s brightness during 536 and 537 AD. We have yet another contemporary account of a historian from Constantinople (Hamilton and Brooks, 1899, p. 267), believed to be Zacharius of Mytilene, who describes: ‘”In the year 14 [536 AD], the Sun began to be darkened by day and the Moon by night… from the 24th of March in this year until the 24th of June in the following year 15.” Because the dimming was less severe and shorter in duration, it is generally assumed that the atmosphere was filled with fine volcanic ash or dust from this event. (Rigby et al., 2004; Larsen et al., 2008), There is no question that SO2 emissions from volcanos produce a cooling trend in weather. However, it has also been shown that there is a time lag between 6 and 18 months that will vary depending upon how far up the ash is thrust into the atmosphere. Thus, there can be a delayed effect from when the eruption actually takes place.

Yet there is still another theory that strangely comes into play this October/November. The argument is that we pass through a particularly dense section of the Taurid Meteor path around every 2500 years and this has contributed to legends and climate change. Every year there are as South Taurid Meteor shower which will peak overnight on Oct. 9-10 for the Southern Hemisphere and then in the Northern Hemisphere, the North Taurid Meteor shower peaks Nov. 11-12.

This has provided the foundation for love stories and wishing upon a shooting star. However, there have been intense Meteor storms that led to legends of dragons fighting in the sky breathing fireballs at each other. Chinese historical records from 540AD describe: “Dragons fought in the pond of the K’uho, They went westward … in the places they passed, all trees were broken.” Ice core sample also contain extraterrestrial dust from this period as well. It is argued that a larger meteor struck the Earth about this time and this is what is described as dragons fighting in the sky.

The one major known meteor even is that of Tunguska which was a large explosion that occurred in Russia, on the morning of June 30th, 1908. The explosion flattened 770 square miles (2,000 square kilometers) of the forest. The explosion is classified as an impact event, even though no impact crater has been found. The meteor is believed to have exploded above ground and thereby disintegrated at an altitude of 3 to 6 miles before it actually struck the ground.  This is the largest impact event on Earth in recorded history, not geological history.

Meteorite impacts are by far perhaps among the most destructive forces in the solar system. It is believed that such events have resulted in mass extinctions. However, there are others who suggest that they may have also delivered the seeds of life soon after Earth was born. The oldest impact crater on Earth is also the largest and it is located in South Africa. It is known as the Vredefort Crater for it was originally 185 miles in diameter which struck some 2.02 billion years ago (pictured here). There is another major impact known as the  Chicxulub crater located in the Yucatan peninsula of Mexico which is 93 miles in diameter that some argue may have wiped out the dinosaurs with a blast that was equal to the estimated energy of 10 billion Hiroshima A-bombs which took place about 66 million years ago.

Sodom and Gomorrah which are most likely located at the Dead Sea may have been destroyed by debris from a comet, startling new archaeological and astronomical research suggests. The Dead Sea is famous for is extreme salinity (34% salt, or almost 10 times as salty as the ocean), and for having the lowest elevation on Earth, at 1,407 feet (429 meters) below sea level. The argument remains that there was a simultaneous fall of the Old Kingdom of ancient Egypt, the Sumerian civilization in Mesopotamia and the Harrapin Civilisation of the Indus Valley. In total, some 40 cities are thought to have disappeared, in a series of catastrophes. Many astronomers believe that the Earth was bombarded by a particular dense storm of meteorites over a couple of centuries every 2,500 years. The last two occurrences were around 2200-2000BC and 400-600AD. Part of the evidence is that three Middle Eastern regions all contain a calcite material found only in meteorites. They argue that the Biblical account found in Genesis describes how “the Lord rained upon Sodom and upon Gomorrah brimstone and fire from the Lord out of Heaven” which is a description of a meteorite storm.

When all is said and done, we may be as insignificant as a pebble lying at the bottom of the ocean with no understand what lies above our heads.

Published:8/27/2018 8:31:19 AM
[In The News] Cohen Attorney Backtracks On Claim That Trump Had Advance Knowledge Of Russian Hacking

By DCNF -

Lanny Davis, an attorney for Michael Cohen, is backtracking from his stunning claim that President Donald Trump had advance knowledge of Russian hacking efforts.

Cohen Attorney Backtracks On Claim That Trump Had Advance Knowledge Of Russian Hacking is original content from Conservative Daily News - Where Americans go for news, current events and commentary they can trust.

Published:8/27/2018 8:31:19 AM
[Entertainment] HBO Reveals Game of Thrones Season 8, Big Little Lies Season 2 Footage Emilia Clarke, GOT, Game of ThronesThe first footage of Game of Thrones season eight, the final season, is here. And...well, it's here. That's what matters. HBO released a "Coming Soon" video during the...
Published:8/27/2018 8:31:19 AM
[Politics] Daily Presidential Tracking Poll

The Rasmussen Reports daily Presidential Tracking Poll for Monday shows that 46% of Likely U.S. Voters approve of President Trump’s job performance. Fifty-four percent (54%) disapprove. 

The latest figures include 31% who Strongly Approve of the way Trump is performing and 43% who Strongly Disapprove. This gives him a Presidential Approval Index rating of -12. (see trends).

Regular updates are posted Monday through Friday at 9:30 a.m. Eastern (sign up for free daily email update).

Rasmussen Reports invites you to be a part of our first-ever Citizen-Sourced National Midterm Election Polling Project. Learn more about how you can contribute.

Now that Gallup has quit the field, Rasmussen Reports is the only nationally recognized public opinion firm that still tracks President Trump's job approval ratings on a daily basis. If your organization is interested in a weekly or longer sponsorship of Rasmussen Reports' Daily Presidential Tracking Poll, please send e-mail to  beth@rasmussenreports.com .

Published:8/27/2018 8:31:19 AM
[Entertainment] 2018 Best of Summer Tournament: And the Winner Is... Best of Summer Final RoundAfter weeks of fierce competition the day has finally come...it's time to announce our winner of this month's tournament! Five competitors entered the ring last week including,...
Published:8/27/2018 8:03:20 AM
[Entertainment] Sacha Baron Cohen Tries to Get O.J. Simpson to Confess to Murder on Who Is America? Sacha Baron Cohen, OJ SimpsonOJ Simpson is the latest public figure to be targeted by Sacha Baron Cohen for the show Who Is America?. The Borat star tried to get Simpson to open up about the murder of his ex-wife...
Published:8/27/2018 7:21:15 AM
[Markets] Tesla Tumbles After Musk Pulls Going Private Deal

After Musk's surprising Friday night announcement to pull the Tesla deal, investors were not sure whether the stock would tumble (after Musk appeared to sabotage his own deal as we discussed last night), or rise as the bulls suggested, with upside no longer "capped" by the $420 take out price.

The answer was the letter, with RBC analyst Joseph Spak writing that Musk's latest reversal on plans to go private - less than three weeks after he disclosed his intention to take the company private - was a hit to the carmaker’s credibility, while leaving the company open to "potential ramifications from an SEC investigation and shareholder lawsuits." 

As a result, Tesla stock tumbled as much as 5% in pre-market trading, dropping from the mid-$320 to just above $300 which has emerged as a key support level for the stock. If the stock dips below $300, watch out below.

According to RBC, the announcement that Tesla will remain public may embolden both bulls and bears on the stock, although sentiment that the “whole episode was not planned or fully thought out” leaves the bears better positioned on near-term trading, and the stock is currently reflecting just this outcome.

Spak also cautioned that potential legal concerns could become another weight on the company’s weak balance sheet and cash position.

The RBC analyst, who has a $315 price target on TSLA, sees investors demanding improved governance, and could push for a second-in-command with a strong operational background to help Musk moves from ideas to execution.

Then again, with Musk recently vowing that changing the way he works is "not an option", even the smallest changes in the company's operational profile will likely be an uphill battle.

Published:8/27/2018 6:47:43 AM
[Markets] S&P To Open At New All Time High Amid Easing Trade War Tensions, Stable Yuan

It has been a quiet overnight session as UK markets are closed for holiday, with last Friday's post-Jackson Hole surge that sent the S&P to a new all time high pushed risk momentum higher, and sent world stock markets to their highest level in more than two weeks on Monday as reassuring comments from Fed chief Powell, an easing in trade war jitters and a bid by China’s central bank to stabilize the yuan lifted risk appetite.

Still, the yuan failed to hold onto gains as the market took into account the possibility of an escalation in the U.S.-China trade war, while the peso rose as the U.S. and Mexico are said to be close to resolving their Nafta differences. President Trump tweeted that a trade deal with Mexico could be reached soon, while there were separate reports which noted that US and Mexico were said to be poised for an agreement on NAFTA as soon as this Monday. In addition, there were comments from Mexico Economy Minister Guajardo that sides were practically in the final hours of negotiations. Conversely, Mexico Foreign Minister Videgaray said work on NAFTA with US has not finished and there had been source reports on Friday that Mexican President Elect Lopez Obrador’s stance on oil was said to be keeping US and Mexico from securing a NAFTA deal.

Comments from Powell at the Jackson Hole symposium on Friday affirming that the U.S. central bank was sticking with its strategy of gradual rate hikes to protect economic growth sparked a rally in stocks that gathered pace as a new week swung into gear. Helping to brighten the mood, U.S. and Mexican trade negotiators were reprotedly on the verge of reaching a deal in bilateral trade agreement as part of NAFTA, with Mexican Economy Minister Ildefonso Guajardo saying on Sunday talks have “continued to make progress”. The talks will resume on Monday and a positive outcome is expected to ease concerns about an escalation in global trade tensions.

"The (NAFTA) talks add to the sense that while the U.S. is still bogged down in its trade conflict with China, it is perhaps more willing to compromise elsewhere such as with Mexico and the EU," said Ulrich Leuchtmann, head of FX and emerging market research at Commerzbank in Frankfurt. “It’s decreasing the risk of a global trade war.”

U.S. futures were set to open at a new all time high, with European equities rising across the board following big gains for most Asian gauges. A British holiday overshadowed the European session, and trading activity was depressed.

Europe's Stoxx 600 Index climbed as almost every industry sector advanced, despite abysmal volumes were about one-third of the 30-day average. A stronger-than-expected German business sentiment survey added to the upbeat mood in Europe, with stock markets in Paris and Frankfurt up 0.4 percent each. Britain is closed for a public holiday.

Germany's Ifo business index rebounded back to 103.8, far stronger than the 101.8 expected. A surprisingly strong Ifo index suggesting that concerns about a global trade war among company executives in Europe’s largest economy have eased, and implying substantial upside potential to German GDP. "The growth party is all set to continue," ING says. The euro pared an earlier drop after the Ifo report.

"We have low volumes today, but the biggest risks the market were discounting were trade wars, so any reduction in trade war risk such as NAFTA talks or even Trump trying to find bilateral deals with everyone, has pushed U.S. shares to new records and will support markets,” said Angelo Meda, head of equities and a portfolio manager at Banor SIM in Italy. "The global economy is on track, there’s less trade war risk, the only cloud on the horizon is Italy,” Meda added, referring to upcoming budget talks in the weeks ahead.

The biggest movers on Monday were in Asia, with shares in Hong Kong, China and Japan all surging after recent efforts by the Chinese central bank to shore up the yuan culminated with Friday's announcement by the PBOC that the Yuan "counter-cyclical factor" will be revived in its daily fixing to support the currency. MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.1 percent and Japan's blue-chip Nikkei closed at a 10-week. That left the MSCI All-Country World index at its highest level since Aug. 9.

A strengthening in the Chinese yuan, one causality of heightened trade tensions, also boosted sentiment in world markets. The onshore yuan hovered near the strongest level in more than two weeks after China said Friday a change in the daily fixing process has been reintroduced this month, lending support to the currency. The onshore yuan was little changed at 6.8206 per dollar at 4:57pm in Shanghai, after rising as much as 0.19% earlier. The PBOC strengthened the daily reference rate by 0.29% to 6.8508, far stronger than the average estimate of 6.8563. The offshore, CNH, dropped 0.04% to 6.8083 per dollar after rising 1.3% Friday, most since January 2017.

“China just seems to be stabilizing its currency and we’re getting used to that fact now, so we’re not looking at an ever-weaker CNY, which could raise issues,” said Robert Carnell, chief economist and head of research, Asia-Pacific at ING, adding that “it reduces the scope for outflows”.

In currency markets, the dollar steadied against its peers: the Bloomberg Dollar Spot Index initially fell as Powell said Friday that the “gradual process of normalization remains appropriate” given the pace of U.S. expansion. He added there were no clear signs of inflation accelerating above 2%.

"It looks like the dollar bulls were a bit disappointed, even more so given that positioning was slightly long USD heading into Powell’s speech,” said Stephen Innes, Singapore-based head of trading for Asia Pacific at Oanda Corp. “It’s not like he was dovish, he just wasn’t hawkish enough to move the Fed rate hike dial. This sitting Fed is not about to overreact to cyclical strength in the economy."  And sure enough, after some early weakness, the BBDXY rebounded, erasing all losses, and was mostly unchanged as of 6am ET.

The Yen rose, with the USDJPY flirting with 111.00, after Japan Chief Cabinet Secretary Yoshihide Suga was asked at his regular press conference about comments he made last week in Hokkaido on Japan’s expensive mobile phone bills. Suga said there’s a need to swiftly consider and implement solutions on mobile bills given the various issues surounding them; he said that steps are needed to provide an easy-to- understand, acceptable service for users, through promoting competition among providers. The comment sent Japanese telecom stocks sharply lower, with shares in Docomo, KDDI and SoftBank tumbling after the remarks with KDDI falling as much as 1.5%.

The Euro was initially weaker, after Italy's Prime Minister Giuseppe Conte said his nation can’t adhere to EU budget rules amid the clash with European partners over migration. He said that the government will start the process of blocking the next EU budget. Turkey’s lira dropped with volatility rebounding, ending a week of relative calm as Turkish markets opened after public holidays.

Elsewhere, bund futures sold-off aggressively after the far stronger than expected German IFO report, with curve bear steepening, while US Tsys were mixed in low volume trading.

Commodities felt the pressure from a strengthening dollar, WTI (-0.4%) and Brent (-0.4%) continue to retreat from Friday’s advances. Gold is subdued following the largest percentage gain in 15-months on Friday. Elsewhere, Shanghai base metal prices rose, while zinc rose for a sixth consecutive day as Chinese inventories languish at their lowest in a decade. The threat of tariffs in US crude is said to have spurred some buyers in China to purchase more crude from Libya, according to Platts.

It's a quiet Monday session, with the only expected data the Dallas Fed. American Woodmark and Heico are among companies reporting earnings.

Market Snapshot

  • S&P 500 futures up 0.2% at 2,882.75
  • STOXX Europe 600 up 0.2% to 384.31
  • MXAP up 1.1% to 165.46
  • MXAPJ up 1.1% to 535.91
  • Nikkei up 0.9% to 22,799.64
  • Topix up 1.2% to 1,728.95
  • Hang Seng Index up 2.2% to 28,271.27
  • Shanghai Composite up 1.9% to 2,780.90
  • Sensex up 1.2% to 38,695.31
  • Australia S&P/ASX 200 up 0.3% to 6,268.87
  • Kospi up 0.3% to 2,299.30
  • German 10Y yield rose 1.1 bps to 0.356%
  • Euro down 0.04% to $1.1617
  • Italian 10Y yield rose 6.2 bps to 2.878%
  • Spanish 10Y yield unchanged at 1.394%
  • Brent futures down 0.3% at $75.61/bbl
  • Gold spot down 0.1% at $1,204.02
  • U.S. Dollar Index up 0.04% at 95.19

Top Overnight News from Bloomberg

  • Federal Reserve Chairman Jerome Powell said the strength of the U.S. economic expansion justifies gradually raising interest rates, paving the way for a hike in September and possibly another this year
  • The U.S. and Mexico are poised to resolve their bilateral Nafta differences as soon as Monday, creating an opening for Canada to rejoin talks covering $1.2 trillion in annual trade
  • German business confidence rose for the first time in nine months as companies’ concerns about rising trade tensions seem to have bottomed out
  • The U.S.’s trade war with China is about to get uglier. After a long, hot summer spent weighing risks and firing warning shots, the hawks in President Donald Trump’s administration have gained the upper hand -- and they’re set to unleash a fall offensive
  • Italy will start the process of opposing the EU’s next budget after the bloc’s member states failed to follow through on a deal reached in June for handling the flood of migrants, Deputy Prime Minister Luigi Di Maio said
  • The greenback’s decline may disappoint speculators, who boosted net long positions to the highest since January 2017 in the week ended Aug. 21, the latest data from the Commodity Futures Trading Commission show
  • Prime Minister Shinzo Abe launched his bid for a historic third-straight term as ruling party president, attempting to put months of scandal behind him and become Japan’s longest-serving premier
  • Indonesia’s central bank, faced with a deepening currency rout, won’t let an upcoming presidential election prevent it from raising interest rates if necessary

Asian equity markets began the week positive across the board following the record closes for the S&P 500 and Nasdaq Comp on Friday in US, where Fed Chair Powell reiterated a gradual approach at the Jackson Hole symposium and with sentiment also underpinned by hopes of a looming NAFTA-related agreement between US & Mexico. ASX 200 (+0.4%) and Nikkei 225 (+0.9%) were positive from early trade although gains in Australia were capped as financials lagged, while Tokyo stocks coattailed on early currency moves to reclaim the 22800 level where it eventually peaked. Elsewhere, Hang Seng (+2.2%) and Shanghai Comp. (+1.9%) led the broad heightened-risk appetite after the PBoC’s currency stability efforts and with the Hong Kong benchmark the outperformer as nearly all its constituents traded in the green. Finally. 10yr JGBs were flat with demand kept subdued amid gains in riskier assets and with a lack of Rinban operations by the BoJ.

Top Asian News

  • China’s Top Regulator Has Its Eye on Share Pledges, Online Loans
  • Noble Group’s Shareholders Vote in Favor of Restructuring at SGM
  • ZTE Leads Telecom Rally After Report on 5G Spectrum Distribution
  • Mahathir Bans Foreigners From $100 Billion Property Project

European equities are mostly higher (Eurostoxx 50 +0.2%) with the exception of the FTSE MIB (-0.4%) weighed on by domestic financial names. UK is away on bank holiday while German and French equities are performing well with the DAX supported by German auto names. Over in France, heavyweight Kering (+2.1%) lifts the index. All sectors are currently in the green while consumer discretionary outperforms on auto strength. Volkswagen (+1.7%) was reportedly one of the investors Tesla’s bankers had lined up in the event Tesla went private. Elsewhere, Bayer (+0.3%) shares shrugged off reports that its (and J&J’s) drug Xarelto did not meet its main goal.

Top European News

  • Italy Vows to Veto EU Budget After Nations Ignore Migrants’ Deal
  • Merkel’s Call for Assertive Europe Sets Up Busy EU September
  • Metro Edges Closer to Takeover as Investors Build Stake
  • Brilliance Jumps as Bernstein Fuels BMW Venture Optimism

Currencies:

  • EUR - The single currency has rebounded from sub-1.1600/129.00 lows vs the Usd and Jpy respectively, while cementing gains above 0.9035 vs the Gbp in wake of Germany’s August Ifo survey that beat consensus on all counts and was accompanied by upbeat comments from the institute’s economist. However, the Eur still looks top heavy around chart resistance levels, like the 55DMA at 1.1615 and with big option expiry interest at 1.1625 (2.4 bn) also capping the upside.
  • TRY - Little respite for the Lira after the Turkish holidays as a fleeting glance above 6.0000 vs the Usd only seemed to give sellers additional psychological volition to flog the currency anew. Indeed, Usd/Try rallied to just shy of 6.2000 before the CBRT ‘intervened’ via its daily FX depo to stem the tide, as investors re-establish bearish positions on all the well documented and still prescient negative factors.
  • JPY - Also relatively constrained, albeit back under 111.00 vs the Usd and hemmed in by the 55 DMA (circa 111.01) and offers ahead of 111.50.
  • MXN - The EM outperformer as NAFTA talks are said to be nearing a conclusion and deal could be announced as soon as later today, Peso just off peaks vs its US counterpart around 18.7625.

Commodities are feeling the pressure from a strengthening dollar, WTI (-0.4%) and Brent (-0.4%) continue to retreat from Friday’s advances. Gold is subdued following the largest percentage gain in 15-months on Friday. Elsewhere, Shanghai base metal prices rose, while zinc rose for a sixth consecutive day as Chinese inventories languish at their lowest in a decade.

US Event Calendar

  • 8:30am: Chicago Fed Nat Activity Index, est. 0.5, prior 0.4
  • 10:30am: Dallas Fed Manf. Activity, est. 30, prior 32.3
Published:8/27/2018 6:24:08 AM
[Entertainment] Ashlee Simpson-Ross and Evan Ross Reveal New Music and Another Baby Are ''Definitely'' in the Plan for Next Year Ashlee Simpson, Evan RossEvan Ross is officially 30! In fact, August 26 marked the Star actor's milestone birthday. And, from what we've heard, Diana Ross' son already has big plans for his 30th...
Published:8/27/2018 6:24:08 AM
[Entertainment] The Surreal Side of Meghan Markle's Fairy Tale: Inside Her First 100 Days of Royalty Meghan MarkleWhat isn't unusual, be it good or bad, about Meghan Markle's life these days? We can go on about how relatable she is, with her perfectly tousled updos and her initial reluctance...
Published:8/27/2018 5:14:27 AM
[Markets] Russian Grand Strategy Revisited

Authored by Andrei Martyanov via Unz.com,

We live in the world of models, all kinds of them. Some models are simple, others - very complex. The main task of those models is to predict how things, those models describe, will behave depending on the circumstances. Some of those models work brilliantly, others fail miserably. Worst models in terms of reliability are those dealing with geopolitics. A record of dismal failures of Western in general, and American in particular, geopolitical models to predict anything right is widely available for everyone to see. Time after time those models and predictions turned out to be wrong. In terms of “predicting” anything in regards to Russia, those predictions were not only wrong, they were downright dangerous.

No better demonstration exists of a complete breakdown in the process of predicting anything than evolution of Russian military and economic power. As late as 2016, claims that Russia remained nothing more than, in the words of John McCain, a gas station masquerading as a country continued to pour in by all kinds of “experts”, who, despite a huge collection of facts to the contrary, continued to believe that these are only Russia’s nuclear forces which keep Russia as some secondary factor in the international relations. There are even some Russian experts who shared this point of view. Their models and predictions turned out to be wrong. They lacked the most important predictor of them all.

Fast forward to March 1 this year to Putin’s speech to Federal Assembly - the loud echo from this speech is still being heard today, half-a-year later. It is still loud. In fact, the volume increases. It was the day majority of models of international relations and balance of power, all those matrices, differential equations, arrays of information became completely irrelevant, because military power and full ability to wage both nuclear and, what is most important, conventional war, and win in it, not some abstract financial or cooked military “rankings” data, is what defines geopolitical status of the nation. Any serious military analyst knew already in 2014 that neither US, nor NATO as a whole, could defeat Russia in conventional war near Russia’s borders.

On March 1 it became clear that Russia can strike any targets, including within the US, conventionally with US not being able to do anything about it. Today Russia can also sink any NATO navy, or combination thereof, without nuclear weapons and the list of what is possible is long. In what seemed to a layman as one day (in reality it was 10 years in the making) Russia not only obtained a full right to speak at the formation of the new world order, Russia became a main driver behind this new order of things globally. Cutting edge military power translates into geopolitical benefits extremely well. Real military power, assessed within proper strategic, operational and technological framework, was and is this predictor. In other words—only world-class, superpower, economies are capable of producing the state-of-the-art weaponry or, in general, military power. Russia fits this definition today perfectly. I will quote myself:

Military power in humanity’s conflict-ridden history mattered, matters and will continue to matter as one of the main, if not themain, pillars on which national power rests. It remains the case that, in the modern world, first rate military power is a function of a first rate nation-state which possesses the wherewithal to have such military power. Great military power by definition is a continuation of a greatly developed, economically strong nation-state.

Fast forward to today. Next state of Russia’s existence, yet again lost in all those modelling and prognosticating methodologies. Russian GosKomStat (main statistics agency) reports that industry, specifically manufacturing and processing, grew in 7 months of 2018 an impressive 4.1%, the consumption of energy—one of the main indicators of real economy growth—grew 1.9%. These are stunning numbers for the country which lives under sanctions non-stop since 2014, in reality much longer than that. One is forced to ask the question—how is this growth even possible, despite some undeniable Russia’s structural economic problems?

The answer is in Russia’s grand strategy which was formulated more than hundred years ago by a man, who played one of the crucial roles in unleashing revolutionary processes in Russia, namely Tsar Nicholas II former prime-minister of Russia Pyotr Stolypin.

His strategic dictum was simple to grasp:

“Give Russia 20 years of internal and external peace and quiet and it will change beyond recognition.” Vladimir Putin and his team follow this dictum to the letter.

Obviously, many in Western world immediately tried to assign to Putin, who quoted Stolypin not for once, all features of a “liberal” without, as always, paying any attention to a gigantic difference of Stolypin’s and Putin’s Russia. Stolypin wanted to change Russia’s peasantry and its centuries’ old commune by means of his namesake reforms, and through it, Russia herself. He tried to do so in most brutal manner. He was assassinated. Putin needs to stop “liberal” economic experimentation in Russia and, unlike Stolypin 100 years before him, he has an overwhelming support of his nation to do so. He has still massive industrial, technological and scientific heritage left from the Soviet Union. He is also doing this in evolutionary manner.

This combined Putin (by this I mean him and people who support him in the top echelons of political power) is trying to achieve precisely Stolypin’s goal of 20 or even more years of internal and external peace and quiet but he knows that the only way to provide these conditions are through strength and in Russian geopolitical, cultural, historic conditions this means a completely new quality of strength. This is the quality which requires rejection of the liberal economic dogma. And it is being done.

As influential Russian economist and journalist Alexander Rogers states in his latest piece (in Russian) titled The State Will Get Everything Back the second, since 2014, wave of re-nationalization of Russia’s strategic assets and Rogers is spot on in his analysis. Apart from returning Russian State where overwhelming majority of Russians want it to be, in charge of Russia’s real national treasure and wealth—national resources and strategic industries—this transformation also requires new professional elites. Those are being prepared as I type this. But why such a long introduction?

The answer to this introduction is really very simple: to explain to very many real and fake Western (I will omit here Russian ones) supporters of Russia WHY Russia doesn’t act in a kneejerk manner each time combined West does something ultimately stupid and self-defeating against her. Russia plays a very long game whose main objective is to provide Russia with those Stolypin’s, now Putin’s, 20 or more, years of peaceful development. Under these conditions, Russia, as our very own Anon from Tennessee, succinctly observed in one of the discussion threads, will “negotiate with the devil himself if need be”. This is what Russia is doing while continuing to demonstrate her increasing military and economic clout. Russia is playing for time, for a relatively peaceful time that is, because today in Russia time means growth.

The correctness of this approach has been proven today by the overwhelming empirical evidence of mounting achievements in many spheres among which real economy, not some virtual financial markets, is most important. Today, when one reviews industrial projects Russia is implementing domestically and abroad, one cannot fail to be struck by a massive scale of those, be that development in Arctic, aerospace, radio-electronics, shipbuilding or transport infrastructure. Russia is building her own independent internet through massive Sfera (Sphere) Project, which in itself is a massive space exploration project. In parallel, increasingly fast de-dollarization is taking place.

Thus the warranted, in fact irresistible, question must be asked - would Russia of August 2018 be possible should Russia of March 2014 have followed all kneejerk advices on part of all those “supporters”, “patriots” and “experts” (many of whom are not experts at all, nor are real patriots) who every day, since the return of Crimea home, never relented on, in their opinion for a good reason, accusing Russia of being weak, cowardly, not tough enough, timid, not hitting back… you can easily add to this list. Yet, here we are in August 2018 with Russia not only not collapsing but every single day she defies grim, doom spelling forecasts. There are still many of those around.

It is obvious today that should have Russia involved herself in Ukraine in 2014 by means of full blown invasion, everything positive what today increasingly manifests itself would have failed to materialize because Russia, no matter how good it would have made some of her so called “patriots” (and ignorant “experts”) feel for a moment, would have lost time–the most important strategic asset, which Russia used for the last 5 years impressively well to prepare the country for a breakthrough the beginning of which we all observe today, some with joy, others with hateful desperation. The list of Russia’s accomplishments in the last 5 years is, indeed, for the lack of better word, stunning.

Most important of those achievements is Russia’s increasing independence from the West in some of the most crucial scientific and technological fields and, of course, her military-technological transformation which changed the balance of power globally. And here is the main point for those who still think that Russia should launch an all out war on the combined West which continues to insult, attack and accuse Russia of most despicable things–they desperately want Russia to respond emotionally and, hopefully for them, irrationally. Truly powerful and confident nations do not behave themselves in a kneejerk, instant gratification manner.

Russia will not do that precisely for the reasons of Russia being militarily, and increasingly economically, secure. So who is really a weak party in this setup? Certainly, not Russia but hysterical and self-defeating West which sees its geopolitical designs collapse in front of its very own eyes. The fact that West, or at least some very influential people here, begin to understand this dynamics made even US mainstream media news when on July 3 Republican Senator from Alabama, a chair of an immensely powerful Senate Appropriations Committee, Richard Shelby was explicit in summarizing new 2018 geopolitical reality in his impromptu interview to the media on the stairs of Russia’s Foreign Ministry building:

"US Must View Russia as Superpower"

This is the place where those proverbial “experts” should start reacting as the devil would react to a spray of a holy water. This, or maybe spend some time learning about Russia, but I wouldn’t hold my breath. But for those who want to really learn - you want to know what the real economic might and geopolitical weight of the nation are, look no further than what its military can do realistically, not in CGI animation. This is the most reliable predictor of them all in the last 100 years. Always was, always will be and that is why dogs always bark but caravan passes on.

Published:8/27/2018 1:15:21 AM
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[Markets] US Inmates Demand 'Living Wage' Amid Largest Prison Strike In History

On Tuesday, inmates across the United States began a 19-day campaign to protest the dehumanizing conditions of the American prison system, one of the potentially largest prison strikes in American history.

As Statista's Sarah Feldman notes, the organized dissent is planned to take the form of hunger strikes, sit-ins, boycotts of prison payment streams like collect calls, along with slow to no labor by the 2.3 million people currently serving time in the United States.

The prisoners have a series of demands: improve prison conditions, end to life without parole and solitary confinement, increase funding for rehabilitation services, and grant voting rights for people convicted of a felony.

One of the biggest demands for the strikers is an immediate end to compulsory and imposed labor for little to no pay.

Infographic: Little to No Pay for Prisoners in the U.S. | Statista

You will find more infographics at Statista

Able bodied imprisoned people are put to work in correctional facilities doing cooking, cleaning, and grounds keeping along with possible labor outside of prisons, which is often dangerous, like in the case of prisoners fighting wildfires in California.

Currently around 800,000 prisoners work daily for meager wages that are often docked for court-assessed fines, family support, and discharge money.

States like Arkansas, Georgia, and Texas offer no compensation for work performed while in prison. Even for the highest paying states, the low end of compensation only outperforms states like Texas by around two quarters and a dime.

Published:8/26/2018 10:33:29 PM
[Markets] NOAA Issues Geomagnetic Storm Warning: "A Crack Opened In Earth's Magnetic Field & Plasma Started Pouring In"

According to NOAA Space Weather forecasters, a powerful G3-class geomagnetic storm is in progress on August 26th as Earth passes through the wake of a coronal mass ejection (CME) that arrived with little notice approximately 24 hours ago. Strong magnetic fields in the CME’s wake have cracked into Earth’s magnetosphere, allowing solar wind to enter. So far auroras have been sighted in Scandinavia, Canada, and northern-tier US states such as Michigan and New York.

“The geomagnetic field is expected to be at active to G3 (Strong) geomagnetic storm levels on day one (26 Aug) due to continued influence from the 20 Aug CME. Quiet to active conditions, with a slight chance for G1 (Minor) storm conditions, are likely on day two (27 Aug) with quiet to unsettled levels likely on day three (28 Aug) as CME effects gradually wane,” said the U.S. Dept. of Commerce, NOAA, Space Weather Prediction Center.

Steven Herman, the White House bureau chief of Voice of America (VOA News), reported the strong geomagnetic storm on earlier Sunday morning. He shared a note listing the potential impacts of the storm, which included power systems, spacecraft, satellite communication networks, and even radio disruptions.

The K-index, a chart that measures the earth’s magnetic field with an integer in the range 0–9 with 1 being calm and 5 or more indicating a geomagnetic storm, hit the 4 threshold was reached at 21:43 UTC on August 25, followed by K-index of 5 (G1 Minor) at 01:54 UTC on August 26, K-index of 6 (G2 Moderate) at 02:57 and K-index of 7 (G3 Strong) at 05:59 and 07:38 UTC.

G3 Strong geomagnetic storm potential impacts:

Area of impact primarily poleward of 50 degrees Geomagnetic Latitude.

Induced Currents – Power system voltage irregularities possible, false alarms may be triggered on some protection devices.

Spacecraft – Systems may experience surface charging; increased drag on low Earth-orbit satellites and orientation problems may occur.

Navigation – Intermittent satellite navigation (GPS) problems, including loss-of-lock and increased range error may occur.

Radio – HF (high frequency) radio may be intermittent. Aurora – Aurora may be seen as low as Pennsylvania to Iowa to Oregon.

Dr. Tamitha Skov, a space weather forecaster, warned “this solar storm may have a predictable magnetic field, so for emergency responders to Hurricane Lane, I offer this worst case. We will likely reach solar storm conditions (Kp5-Kp6) for the next 6-8 hours at least. Expect mid-latitude aurora, & poor ham radio!”

What did people around the world see? 

Taken by John McKinnon on August 26, 2018 @ Four Mile Lake, Alberta, Canada (Source/ SpaceWeather.com)

The light from the full moon didn’t stop the aurora from being seen in Southern New Hampshire (the “marshmallow field” in Rollinsford) but those clouds were a real heartbreaker on August 26, 2018  (Source/ @RobWrightImage) 

Full moon G3 Aurora captured over the Range Lighthouse where the #SaugeenRiver meets LakeHuron in Southampton Ontario Canada August 26, 2018 (Source/ @scottrockphoto) 

The aurora was out early this morning over Decker, Montana. A green band was faintly visible for hours despite the smoke and bright moonlight (Source/ @krp234)

“A Crack Opened In Earth’s Magnetic Field And Plasma Started Pouring in last night,” said Ben Davidson, the founder of Mobile Observatory Project, ObservatoryProject.com.

He also said, “over the next 24-hours, we are in an elevated cardiac and psychological risk, and will be looking for large disruption into electronics, especially in large-scale power, communications, and transportation industries.”

*  *  *

Ben Davidson warned early Sunday about significant power system failures because of the geomagnetic storm. Moments ago, New York metro train number 7 had just lost power (unconfirmed).

While everyone was blaming the Russians last year about US power grid failures, we pointed out that a geomagnetic stormcould have been the reason why power disruption in San Fransisco, New York, and Los Angeles occurred all at once.

Published:8/26/2018 9:43:36 PM
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Published:8/26/2018 9:14:32 PM
[Markets] How Elon Musk Sabotaged His Own Going Private Transaction

The soap opera over Tesla's going private deal may be over, but the autopsy of just what happened, how and why the "deal" collapsed in well under a month from its "funding secured" announcement lingers.  And, as it turns out, Elon Musk has nobody but himself to blame for what may otherwise have been a possible deal, despite the staggering odds.

Recall that as part of Musk's "funding secured" assurance, the most widely mentioned name was that of the Saudi sovereign wealth fund (PIF): after all, few other institutions had the capacity - and eccentricity - to pull off such a feat. However, as we discussed several days after Musk's fateful Aug.7 tweet, Saudi Arabia would likely get cold feet - in similar fashion to its withdrawal of the Aramco IPO - as the world's attention focused on its strategic planning and its dwindling finances - the fund is currently engaging in a back door funding deal involving Sabic as well as grandiose plans that include a massive new city in the desert - just days after it had already acquired a minority, 5% stake. There was also the issue of SoftBank granting the Saudi fund permission to engage in a transaction of this magnitude. 

Well, as we now know, after the Tesla CEO abruptly called the deal off just before Midnight Eastern Time on Friday, and just days after Goldman and Morgan Stanley were retained, Musk was "sorely mistaken" - as Bloomberg politely puts it - when he tweeted “funding secured” and later told the world “investor support is confirmed,” based on his belief that Saudi Arabia’s Public Investment Fund was eager to back his venture.

Two things to note here:

First, following Musk's seemingly manipulative, potentially fraudulent tweet, the SEC is now investigating his tweets and blog posts, which triggered the stock gyrations throughout August. It's always why investors now must brace for another bout of volatility when trading in the stock - which really trades like an option on the credibility of the Musk narrative - opens Monday morning, "while regulators and lawyers autopsy what happened to a deal potentially valued at $82 billion and Tesla’s board is left with a brilliant but exhausted and erratic CEO."

Second, and far more important, is the realization that as we suggested two weeks ago, Musk appears to have sabotaged his own deal. Bloomberg explains:

Musk’s vocal ambitions stirred unease among Saudi officials about the publicity surrounding their potential role, according to people familiar with the matter who asked not to be identified. The Saudis were unhappy about Musk detailing his talks with the Kingdom’s sovereign wealth fund in an Aug. 13 blog post, where the CEO justified his earlier tweet about “funding secured” on their interest, the people said. On top of that, there were concerns about potential fallout from shareholder lawsuits and the SEC investigation, the people said.

Worse, it was Musk's eagerness to "burn the shorts" without delay, that soured the Saudi interest: as Bloomberg adds, "Musk and the Saudis hadn’t yet reached an agreement on the terms or structure of their participation before he pulled the plug." That, in addition to the PIF's interest Tesla competitor, aspiring U.S. electric-car maker, Lucid Motors Inc., is what appears to have crushed any hope of the Saudis becoming an anchor investor in any Tesla going private deal, even though there may well have been some hope before Musk decided to spill the beans on twitter and on the Tesla blog.

The WSJ confirms as much in a Sunday night article:

Musk cited Saudi Arabia’s sovereign-wealth fund as the source of his secured funding: “Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction.”

That rankled some senior officials in the kingdom, according to people familiar with the matter. Prince Mohammed bin Salman has big ideas to turn his petrostate into a technology and solar-power hub as part of his plans to develop its economy. And he was interested enough in Tesla to consider being part of a take-private transaction; the Saudis had already bought a near 5% stake in Tesla in the public market. But the Saudis never made a formal proposal. A Saudi government official and an adviser familiar with the talks said the country’s senior leadership was divided.

Mr. Musk’s tweets and the blog post didn’t help. The government official said his behavior worried some officials about his health as well as the role he would play in the company.

All of this left Tesla's advisors including Goldman, Morgan Stanley and Silver Lake scratching their collective heads what was going on:

... discussions about how a deal might proceed were still at a very early stage when [Musk] decided to call off the plan, according to people familiar with the matter. Banks had at most just a couple of weeks to assess the situation, after being brought in to advise only after Musk’s initial tweet, said the people, who asked not to be identified as the details aren’t public.

It's not even clear if Tesla's retainer to Goldman and MS had cleared: the banks may want to check if the company - whose liquidity remains precarious - didn't put a stop payment on it now that Musk has grown bored with the whole affair.

But wait, there's more, because according to the WSJ, Musk actually did manage to line up the money thanks to his banks, and while we doubt this particular narrative, this is what allegedly happened last week:

On Monday and Tuesday, advisers from Goldman and Silver Lake plowed ahead on a deal that might work. By Wednesday evening, they had a presentation for Mr. Musk, proposing a roster of deep-pocketed investors, including Volkswagen and Silver Lake itself, that had agreed to contribute as much as $30 billion, people familiar with the matter said.

However, these weren’t the kind of investors Musk had in mind, who appeared hung up on the Saudi being the anchor investor. He was, in the WSJ's words, also deeply suspicious of rival car companies, believing they wanted to piggyback on what he called the “Tesla halo.” He also was lamenting a loss of small investors, who had been his most vocal champions.

Finally, the deal team advised him, the money would likely come with strings attached: The new investors would want a lot of say in the company, and each would likely want to hammer out terms of their own.

The following day, Thursday, the board meeting convened at the Tesla factory conference room, where Musk had told some board members earlier in the day that he had doubts about the proposal.

The advisers said they were confident it could be done, and then left.

Then Mr. Musk spoke. Based on the latest information I have, he said, I’m withdrawing the proposal.

“Woohoo,” one board member let out.

What happens next is unclear. Musk’s decision to scrap his plan leaves even more questions open about where he and the electric-car maker go from here. As Bloomberg points out, leaving ownership as is puts the scrutiny back on Musk’s all-consuming work style, the company’s tricky cash position, its ability to meet mass-market production goals, and the independence and oversight of Tesla’s board.

The next measure of how Tesla bounces back may come in early October, when it will report third-quarter production and deliveries. The company has said it expects to make 50,000 to 55,000 Model 3s in the quarter, which averages to roughly 4,200 vehicles a week at the higher end of the guidance

This may be a major problem, because as some independent observers have noticed, there suddenly appears to be a "significant production problem at Fremont", perhaps the true catalyst behind Musk's catastrophic approach to disclosing his going private intentions.

Even perpetual Tesla cheerleader Gene Munster appeared concerned: "Eventually this will blow over, but it’s going to take at least six months. This is not a situation where we can just forget about it. It’s created a new layer of questions for investors. And now Tesla needs to get back to basics, which is ramping Model 3 production and profitability."

But perhaps the biggest risk factor of all, is also the reason why Tesla's stock price is as high as it is (if not for much longer): Musk himself:

The SEC investigation and investor lawsuits related to the whipsawing stock will at minimum continue to divert management’s time from operations, Joel Levington, a senior credit analyst with Bloomberg Intelligence, said in a note Saturday. Musk’s exhaustion, which the CEO described in a New York Times interview, is the “most critical near-term concern."

And while Musk's creative talent and visionary brilliance are widely recognized, the CEO will soon be able to add one more notch to his list of firsts: a Harvard case study of how to spectacularly blow up a going private transaction in less than three weeks, while putting yourself at risk of incarceration.

Published:8/26/2018 9:14:32 PM
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[Markets] In Stunning Reversal, Michael Cohen's Attorney Backpedals On Trump-Russia Claims

Lanny Davis - the attorney for Michael Cohen, has massively backpedaled on "confident assertions" that Cohen would share information with investigators that President Trump knew of Russian efforts to undermine Democratic nominee Hillary Clinton - a lifelong friend of Davis'. 

The Washington Post reported on Sunday that Davis said in an interview that he is "no longer certain about claims he made to reporters on background and on the record in recent weeks about what Cohen knows about Trump's awareness of the Russian efforts.

Davis told The Washington Post that he cannot confirm media reports that Cohen is prepared to tell special counsel Robert S. Mueller III that Trump had advance knowledge of the 2016 Trump Tower meeting -WaPo

CNN reported in July that Cohen claimed to have witnessed Trump approving the meeting between Trump Jr. and Russian attorney Natalia Veselnitskaya, arranged by an associate of opposition research firm Fusion GPS. 

The day after CNN's report, the Washington Post - using an "anonymous source" they now admit was Davis, peddled the same story that "Cohen had told associates that he witnessed an exchange in which Trump Jr. told his father about an upcoming gathering in which he expected to get information about Clinton," however the Post didn't say Trump Jr. told Sr. it was the Russians.

“I should have been more clear — including with you — that I could not independently confirm what happened,” Davis said, adding perhaps the most difficult four words for an attorney to utter: "I regret my error."

In the past week, when asked directly by CNN’s Anderson Cooper whether there was information that Trump knew about his son’s meeting with Russian lawyer Natalia Veselnitskaya beforehand, Davis said, “No, there’s not.”

In a statement Saturday, a CNN spokeswoman said, “We stand by our story, and are confident in our reporting of it.” -WaPo

The Post also notes that people familiar with Cohen's Congressional testimony said that despite being "interviewed extensively," Cohen never said anything to suggest that Trump had advanced knowledge of the meeting, while "Sens. Richard Burr (R-N.C.) and Mark R. Warner (D-Va.), leaders of the Senate committee, said in recent days that Cohen had sent word to the committee that he had no desire to amend that testimony." 

On Saturday, President Trump tweeted about Davis's stunning 180 on the Cohen claims, writing: "Michaels Cohen’s attorney clarified the record, saying his client does not know if President Trump knew about the Trump Tower meeting (out of which came nothing!). The answer is that I did NOT know about the meeting. Just another phony story by the Fake News Media!"

Backpedaling on hacking

Davis also walked back an idea he widely circulated after Cohen's guilty plea that Trump knew about Russian hacking of Democratic emails in advance - which he has mentioned numerous times in recent interviews, "repeatedly touting his client's potential value to Mueller." 

"I believe that Mr. Cohen has direct knowledge that would be of interest to Mr. Mueller that suggests — I’m not sure it proves — that Mr. Trump was aware of Russian government agents hacking illegally, committing computer crimes, to the detriment of the candidate who he was running against, Hillary Clinton," Davis said in a Wednesday interview with PBS NewsHour

Four days later and Davis is taking it all back.

asked Saturday how confident he was that Trump knew about the hacking before it became public, Davis said: “I am not sure. There’s a possibility that is the case. But I am not sure.”

Davis said that in discussing the hacking allegations last week, he should have emphasized his lack of certainty. He said he raised the idea that Cohen might have information about Trump’s knowledge because he had a strong feeling that might be the case. -WaPo

"I was giving an instinct that he might have something to say of interest to the special counsel” about hacking, Davis said. In retrospect, he said, “I am just not sure." 

We wonder how many people donated to Cohen's "GoFundMe" campaign assuming he had the goods? 

We wonder if Podesta ever let Davis crisis manage Hillary Clinton's email scandal? 

Published:8/26/2018 7:11:22 PM
[Markets] Gold Price Framework: The Energy Side Of The Equation Suggests "Explosive Upside Correction"

Authored by Stefan Wieler via GoldMoney.com,

In the third part of this report we are putting our gold price framework to use. Having identified longer-dated energy prices and real-interest rate expectations as the main drivers for gold prices, we conclude that both drivers are near the bottom of their respective cycles, implying little downside risk to gold while the outlook for prices is increasingly skewed to the upside. On one hand, longer-dated energy prices have finally broken out of their range and we believe there is a further 30% upside from here. On the other hand, it is becoming increasingly clear that Fed rate hikes are having very little impact on real-interest rate expectations, as most of them are already priced in. This explains why gold has been trending up since the hikes started. The recent sell-off in gold prices on the back of the strengthening dollar is not supported by fundamentals in our view and could result in an explosive upside correction going forward.

*  *  *

In the first part of this report we reviewed the gold pricing model we introduced last year and developed it further. We highly recommend reading it here to get a better understanding of the findings presented in this report. Using econometric tools, we showed that changes in energy prices – more specifically longer-dated oil prices – are a major driver for changes in the USD/gold price (with changes in real interest rates being the other main driver).

In the second part of this report, we did a comprehensive bottom-up analysis of the true energy exposure of the gold mining industry. We found that gold miners are not just exposed to significant direct energy costs such as fuels and power; their indirect energy exposure is even larger. The bottom up analysis shows that ~50% of production costs of the average gold miner are closely linked to energy prices, which is in line with the findings of part I of our gold price framework which showed that a 1% change in longer-dated energy prices impacts gold prices by about 0.5%.

The third part of this report is putting all these findings to use in the current environment: We analyze where we stand in the cycle of the three major price drivers we identified in our price framework and we give an outlook where we think gold prices are heading from here. We find that the recent drop in gold prices in USD is not supported by fundamentals. In fact, current prices are 10%% below where our model predicts, one of the largest deviations over the past 25 years. Historically such deviations have been followed by strong price rallies. Moreover, analyzing where we stand in the cycle of the underlying price drivers, the outlook for gold prices becomes even more skewed to the upside.

*  *  *

The long-term outlook for prices

We described our gold price framework at length in the first part of this report. In a nutshell, we found that gold prices are largely driven by just three main drivers: Central bank policy, changes in central bank gold holdings and changes in longer dated energy prices. Before we dive into a more detailed discussion where we believe these drivers are heading, we quickly recapitulate why these are the main drivers. For a more detailed analysis, we recommend reading the first part of this report here.

Central bank policy comprises of two things; Real-interest rate expectations and unconventional monetary policies such as Quantitative Easing (QE). Real-interest rates are nominal rates minus inflation. Real-interest expectations are the markets expectation of real-interest rates. In the US, TIPS yields are a good way to measure real-interest expectations over the next 10 years. We find that gold prices and real-interest rate expectations are inversely correlated, meaning that lower real-interest expectations lead to higher gold prices. Historically, central banks have tried to lower real-interest rate expectations by cutting nominal rates to counter economic downturns. When nominal interest rate hit the zero boundary in 2008, the Fed and other central banks were – successfully – trying to push real-interest rates lower through unconditional monetary policy. The FED’s quantitative easing program had a huge effect on both nominal and real-interest rates and in turn on real-interest rate expectations, which pushed gold prices higher. However, we also found that QE has an impact on the price of gold that far exceeds the impact it has on real-interest rates.

The other main driver for gold prices is longer-dated energy prices. Our model shows that longer-term oil prices – we use the 5-year forward price for Brent crude oil – are significant. This comes as no surprise to us as energy is the dominant production cost for gold. Our bottom up analysis in part two of our gold price framework shows that ~50% of production costs of the average gold miner are closely linked to energy prices. This is in line with the findings of part one of our gold price framework which showed that a 1% change in longer-dated energy prices impacts gold prices by about 0.5%

The last driver is changes in central bank gold holdings. Central bank purchases do have an impact on the price of gold, but less so than private portfolio demand. Of all the parameters we identified that drive gold, net sales by central banks was statistically by far the weakest. Central banks were net sellers of gold until around 2008. These sales came predominantly from developed nations. Since 2008, central banks have been net buyers of gold as developing countries began to accumulate gold while developed countries stopped selling.
 

Outlook for central bank policy and real-interest rate expectations

We have long argued that USD real-interest rate expectations have little room to the upside even as the Fed keeps raising rates. 10-year TIPS yields averaged 0.45% in 2014-2015 before the first rate hike. Seven hikes later and with the Federal Funds rate 1.75% higher, 10-year TIPS yields are still only at 0.75%. It appears the market priced in the entire Fed hike cycle long before it began. More specifically, 10-year TIPS yields troughed at -0.9% in 2012, three years before the first rate hike.

We don’t think further rate hikes will have a much more meaningful impact on real-interest rate expectations either. Despite the fact that the Fed so far has raised rates more than its critics have predicted, the members of the Open Market Committee are forecasting terminal rates at a mere 3.375% by 2020 (slightly up from an initial 3%). We have also shown in a previous report (see: Gold is breaking free from Fed rate expectations, March 20, 2017) that 10-year Treasury yields tend to undershoot short term rates when nominal rates peak. Hence, even if the Fed can continue to hike as it plans, long term rates will likely be below 3.5% at the end of the hiking cycle. In the same report, we have also shown that the Fed uses a different inflation measure (PCE) than what is imbedded in TIPS yields and that inflation as measured by the FED tends to undershoot CPI by up to 1%. Because the Fed will not raise rates unless its 2% inflation target is met (which means CPI inflation will likely be higher by up to 1%), there is little reason to believe that real-interest rate expectations as measured by TIPS yields should go much higher from here. Could nominal rates go higher than the Fed’s own terminal rate forecast? Absolutely. But we think that only happens if inflation accelerates above the Fed’s inflation target. In that case, real-interest rate expectations might actually go down.

Importantly, we are now just 10 months shy of being in the longest-ever period of economic expansion in the US. Over the past one hundred years, an economic expansion lasted on average 4.1 years. In comparison, the current expansion started over 9 years ago. The problem is that when the next recession arrives, rates will be nowhere near normal levels (5-6%), regardless whether the Fed is able to hike rats to their terminal target or not. Historically, the Fed has tried to mitigate an economic contraction by slashing Fed funds rates by about 5.5% on average (see Exhibit 2). But with rates – in the best case - at 3.375%, that means Federal Funds rates would have to fall into negative territory. Unlike other central banks, the Fed has so far been able to avoid this. And because there is a very limited impact once rates drop below zero, we would expect that the Fed would be forced to deploy more unconventional monetary policy (QE). In such a scenario, we expect real-interest rate expectations to make new lows. On net, this means that – at best – real interest rates have very limited upside as long as the Fed is able to keep raising rates, and a lot of downside once the economic expansion inevitably ends.

As for our second driver, longer-dated energy prices, we have recently published a comprehensive report (Crude Oil – The Next 5 Years, May 14, 2018) where we make the case that longer-dated energy prices will have to move significantly higher from here (~30%) in order to encourage investment in new projects. In our view, absent a major economic slowdown, similar to the one in 2008-2009, we don’t see much downside for longer dated energy prices. And if we do get another global recession, we would expect real-interest rate expectations to crash, outdoing any negative impact from lower energy prices on gold.

Last but not least, changes in central bank gold holdings are expected to remain favorable on trend. Nobody can say with certainty how central banks are going to manage their gold holdings in the future. But we know that eastern central banks stopped selling gold years ago and Emerging Markets central banks have steadily added gold to their reserves. Given that gold remains a very small share of foreign reserves of large emerging market countries including China, India and Brazil, we don’t see a reason why these countries should reverse course anytime soon. It’s also important to know that changes in central bank gold reserves is the weakest driver of gold prices.

Hence, of the two main price drivers for gold – longer-dated energy prices and real-interest rate expectations – one is pointing up while the other one implies very limited downside for gold near term and a lot of upside longer term. Table 1 shows how our model predicts gold should perform in various scenarios.



Gold is oversold short-term

Gold prices have sold off sharply over the past couple of months. Prices traded between USD1320/ozt – USD1350/ozt between January and April this year, before dropping sharply to currently USD1200/ozt (see Exhibit 3). As at the time of writing, prices are down almost 10% year-to-date and 9% year-over-year. So, what has changed since April?

From a fundamental perspective, not much. Real-interest rate expectations, as measured by 10-year TIPS yields, are at the higher end of the range they have been trading in since 2011. But they were higher in April, when gold prices were almost US150/ozt higher (see Exhibit 4). At the same time, longer-dated energy prices, as measured by 5-year forward Brent, have finally broken out of the very narrow band of USD55-60/bbl they have been trading in for the past few years and are currently at USD63/bbl (see Exhibit 5). And central bank gold holdings – even though we lack real time data – have been steadily increasing over the past years and there is no evidence that this trend has reversed over the past months. (Russia has accelerated its pace of gold reserve accumulation in recent months.)

So why did gold sell off? We believe there are two main reasons. First, prices were high relative to where our model predicted them from February to April. Given the move up in real-interest rate expectations, we would have expected that prices should have dropped somewhat earlier. More specifically, between February and April, gold prices were on average close to 6% above what our price model would have predicted. Hence, the recent sell-off could partly be attributed to a delayed reaction to the spike in real-interest rates. However, current prices are now 10% below where the model predicts them to be.

Second, the sell-off in prices has coincided with the general strengthening of the USD (see Exhibit 6). This seems intuitive at first because prices are measured in USD after all, and if the USD becomes stronger, so the argument goes, shouldn’t gold prices go down? It depends on why the USD becomes stronger. If the USD becomes stronger against other currencies because the underlying fundamentals (real-interest rate expectation) become stronger, then there is indeed a reason for gold prices in USD to go down. But if the USD becomes stronger against other currencies because the fundamentals of these other currencies are weakening, then gold prices should remain unaffected. In fact, if the fundamentals of both the USD and other currencies weaken, but the fundamentals of the USD simply weaken relatively less, then gold prices should go up in all currencies.

Given the Federal Reserve’s seven hikes since 2015, it appears that USD fundamentals have indeed strengthened slightly in recent years. However, as we have highlighted before, despite all these hikes, and despite the rise in both short-term and long-term interest rates, real-interest rate expectations are still at the same levels as before the hike cycle started in 2015 (see Exhibit 7). This is because inflation expectations are also rising (see Exhibit 8).

The USD has strengthened about 6.5% on a trade weighted basis since April. Was that because underlying fundamentals strengthened? No, because – as we have said before - real-interest rate expectations have remained unchanged over this time period, and have actually moved lower again in recent days. Over the same time-frame, speculators sold a massive amount of gold in the futures market. Managed money futures positions reached an all-time record net short last week (see Exhibit 9). Exhibit 910shows that this futures selling came clearly on the back of the rally in the trade weighted USD. However, in our view, gold prices have completely dislocated from the underlying fundamentals.

For fundamentals to align with prices again, either prices move up, or it would require that either inflation expectations come down again, or, that 10-year yields rise significantly without a rise in inflation expectations. But the gold market is the only market that exhibits this forward view. In other words, the gold market is currently pricing in a forward view that is not shared in other asset classes such as bonds. We believe this leaves the gold market vulnerable for explosive upward correction once the dust settles.

 

*  *  *

View the Entire Research Piece as a PDF here.

Published:8/26/2018 6:12:03 PM
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[Markets] Head Of Islamic State In Afghanistan Killed After Spate Of Terror Attacks

A surge in suicide bombings, brazen terror attacks on Kabul, and mass kidnappings in recent weeks in Afghanistan has indicated a significant and growing resurgence of both the Taliban and 'Islamic State' in the country after multiple failed attempts of the NATO-backed central government to strike ceasefire deals with the Taliban. 

Most recently, Afghan President Ashraf Ghani survived what appeared to be an assassination attempt on August 21st, when a hail of shoulder-fired missiles landed near the presidential palace and in Kabul's 'green zone', interrupting his televised speech.

But it appears Afghan government forces and their US and NATO advisory partners are in the process of clamping down on the insurgency while delivering pay-back, as Reuters reports the head of Islamic State in Afghanistan has been killed in an airstrike on Saturday

Islamic State 'Khorasan Province' media via BBC

According to Reuters:

The head of Islamic State in Afghanistan, Abu Saad Erhabi, was killed in a strike on the group’s hideouts in Nangarhar province on Saturday night, authorities said on Sunday.

Ten other members of the militant group were also killed in a joint ground and air operation by Afghan and foreign forces, the National Directorate of Security in Kabul said in a statement.

Afghan state officials further say this was the fourth Islamic State leader in Afghanistan to be killed since July 2017.

During separate raids on the terrorists' positions, large quantities of heavy and light weapons were recovered.

The Islamic State currently has a stronghold in Nangarhar, on Afghanistan's eastern border with Pakistan, which is a notoriously porous border region. 

The group has been active in Afghanistan since the start of 2015, after ISIS leaders in Iraq and Syria reportedly planned to fund the terror group's expansion into south and central Asia. 

According to LawFare Blog, the group started out as a tiny cell, but quickly co-opted other Islamist groups and gained visibility from there: In January 2015, the Islamic State formally announced the establishment of what it called “Wilayat Khorasan,” or Khorasan Province, in Afghanistan and Pakistan. Over the next several months, the Islamic State focused on co-opting local militants and expanding its networks in Afghanistan and Pakistan.

Though their total numbers remain difficult to assess, the Pentagon estimates that there are upwards of 2,000 Islamic State militants currently in Afghanistan. 

A year ago President Trump authorized sending 4,000 more American troops to Afghanistan in a train and assist capacity as the third president to attempt to stabilize what's been dubbed "the endless war" and over the past two weeks Trump's foreign policy cabinet members have been in discussion concerning a possible new direction for US policy regarding the seventeen-year long war. 

Published:8/26/2018 4:42:36 PM
[Markets] Illinois Budget Out Of Balance Again. Solution - More Junk Bonds

Authored by Mike Shedlock via MishTalk,

An Illinois "Road Show" touts more junk bonds as a solution to a perpetual budget crisis. What a bunch of garbage.

The State of Illinois Confirms, New Budget Out of Balance by $1.2 Billion.

In the preliminary official statement to potential bond buyers dated Aug. 16, the Governor’s Office of Management and Budget, or GOMB, notes the fiscal year 2019 budget is out of balance by $1.2 billion. Furthermore, the report states, “The State provides no assurances as to how, when or in what form this structural deficit might be addressed.” The statement was released as part of the state’s plan to sell over $920 million in new general obligation bonds.

The Illinois Policy Institute projected the General Assembly’s spending plan was out of balance by as much as $1.5 billion shortly after the bill was made public.

Lawmakers also took no action to address the two primary factors leading to the state’s near-junk credit rating: a massive backlog of unpaid bills, which stands at nearly $8 billion as of Aug. 20, and roughly $130 billion in unfunded pension liabilities.

To make the budget appear balanced on paper, lawmakers relied on a number of common but deceptive budget gimmicks, including:

  • Ignoring a potential $412 million in automatic raises for government union workers resulting from a contract dispute between Gov. Bruce Rauner and the state’s largest employee union, the American Federation of State, County and Municipal Employees

  • Counting on $300 million in revenue from divesting the James R. Thompson Center – planned for the third year in a row – despite no concrete signs of progress in selling the building

  • Sweeping and borrowing $800 million from other state funds, in violation of good budgeting practices

  • Using accounting methods that mask the true size of deficits

  • Counting on around $422 million in pension savings that are entirely speculative

Solution: Still More Junk

An "Illinois Municipal Bond Road Show" offers still more Junk masquerading as bonds just above junk.

?

Bond Grades

  • ?Baa3 is Moody's lowest investment grade bond, one step above junk.

  • BBB- is S&P's lowest investment grade bond, one step above junk.

  • Fitch is a bigger rating whore than the other two, placing the offering at BBB.

To win placement deals with the state, Fitch rates deals one notch higher than the other rating agencies.

Update on Accounts Payable

Here's an interesting chart on money the state owes vendors.

?

To pay down what the state owes vendors, Illinois issued bonds and it also transferred money from one bucket to another.

The state brags that "As of June 30, the backlog was $6.8 billion, $900 million less than the projected backlog of $7.7 billion."

Curiously, roadshow page 6 states "As of August 1, the bill backlog was approximately $7.4 billion."

GO Debt Service?

?

How Illinois Spent the Money

Note that over half of existing bonds have nothing to do with capital investment improvements.

Of the $29.7 billion in existing bonds, $9.9 billion was used to shore up pensions, and $6.0 billion to pay vendors money owed.

The state still owed vendors $7.4 billion as of August 1.

Hmm. Let's do a quick check on that amount via the Illinois Backlog Voucher Report by state comptroller Susana Mendoza.

?

Backlog Recap

  • Illinois owed vendors $6.8 billion on June 30.

  • Illinois owed vendors $7.4 billion on August 1.

  • Illinois owed vendors $7.9 billion on August 25.

  • In less than two months, debt owed to 99,577 vendors increased by $1.1 billion!

Pension Funding

And what about that $9.9 billion in pension bonds? Did it shore up the pension plan?

I am glad you asked. The road show explains.

?

Funding Synopsis

  • 39.8% Funded FY 2017
  • Fair Value Under-Funding: $129 billion!

Where precisely is Illinois supposed to get $129 billion?

Orwellian Comment

Meanwhile, Rauner’s Director of Capital Markets says “Illinois has a conservative debt structure”.

Published:8/26/2018 4:12:29 PM
[Entertainment] Matthew Broderick, Mark Hamill and other celebs pay tribute to writing legend Neil Simon Hollywood and theater stars shared personal stories about Neil Simon, who helped shape many of their careers. The playwright died Sunday morning.
     
 
 
Published:8/26/2018 3:40:56 PM
[Markets] "Terrorist Attack" Manual Targeting Atlanta Hospital Found At New Mexico Jihad Compound

A handwritten document titled "Phases of a Terrorist Attack" was found at a New Mexico encampment where the son of a famous New York Imam ritualistically murdered his three-year-old son and trained several children to commit acts of terrorism, reports CNN

The handwritten document contained "instructions for 'The one-time terrorist,' instructions on the use of a 'choke point,' a location 'called the ideal attack site,' the 'ability to defend the safe haven,' the 'ability to escape-perimeter rings,' and 'sniper position detection procedure,'" according to the court filing.

Some of the children at the compound told police that Morten allegedly "stated he wished to die in Jihad, as a martyr," prosecutors said in the motion.

"At times, Jany Leveille would laugh and joke about dying in Jihad as would Subhanna Wahhaj," according to the court document. -CNN

Prosecutors have asked judge Sarah Backus to reconsider an order granting bond to five adults arrested at the compound - citing "not only the death of three-year-old Abdul Ghani Wahhaj at the remote site, but also plans by the defendants to attack law enforcement and "specific targets such as teachers, schools, banks and other "corrupt" institutions." 

The defense, meanwhile, has asked Backus to dismiss the charges

Despite authorities finding a dead child's remains on the compound, and an alleged letter sent from one suspect to his brother inviting him to come to New Mexico and die as a martyr, Backus ruled that the state failed to meet the burden of showing the suspects were a danger to the community after several hours of testimony. She ordered the suspects - Siraj Ibn Wahhaj, 40, Lucas Morton, 40, Jany Leveille, 35, Hujrah Wahhaj, 37, and Subhannah Wahhaj, 35 - released on $20,000 signature bond, meaning they didn't have to pay. 

Backus drew harsh rebuke from prosecutors, law enforcement and New Mexico Governor Susana Martinez, who said she "strongly disagreed" with the decision to release the suspects on signature bail. "Unfortunately, it highlights how extreme the New Mexico Supreme Court has been in dictating pretrial release for all kinds of dangerous criminals." 

Children from the compound told police that Jany Leveille, 35 - the partner of the dead boy's father, Siraj Wahhaj, 40, "intended to confront 'corrupt' institutions or individuals, such as the military, big businesses, CIA, teachers/schools and reveal the 'truth' to these corrupt institutions or individuals." 

In particular, the Jihadis were targeting Grady Memorial Hospital in Atlanta - after Leveille in a journal "expressed her displeasure with Grady Hospital ... due to the treatment she and her mother received there," according to the document. 

The dead boy's father, Siraj Wahhaj, 40, and his partner, Jany Leveille, 35, have been charged with abuse of a child resulting in death, a first-degree felony with a penalty of up to life in prison, according to court documents. They were also charged with conspiracy to commit child abuse, also a first-degree felony.

The couple and three other adults -- Wahhaj's sisters, Hujrah Wahhaj and Subhannah Wahhaj; and Lucas Morten -- were previously charged with 11 felony counts of child abuse. -CNN

Weapons Stash in Tunnel

CNN also reports that based on court filings, Siraj Wahhaj had "ordered the group to defend the compound with weapons in the event of a nighttime police raid."

The children from the compound told investigators in recent interviews that a tunnel found on the property was to be used as an "escape route" if police found the compound. 

"The guns located at the exit of the tunnel were stored there ... so that as the group exited the tunnel, the group could arm themselves with weapons and ammunition," the document said.

Authorities have said the property included a makeshift shooting range. Police said they recovered an AR-15 rifle, loaded 30-round magazines, four loaded pistols and many rounds of ammunition.

The court document said two children told an FBI agent that they had been trained in "advanced firearms handling and had been instructed to shoot law enforcement personnel when the time came and that they would be instructed in the future to attack specific targets such as teachers, schools, banks and other 'corrupt institutions.'" -CNN

Meanwhile, according to dashcam video and lapel audio obtained by CNN, the couple who owns the land, Tanya and Jason Badger, told a responding officer that the suspects had set up the compound - and had called authorities to report a possible missing child. The officer told the Badgers that one of the men living on the compound was on a "terror watch list," yet local authorities declined to respond to calls over the missing child due to an ongoing FBI investigation. 

"We've gotten multiple calls on this child but, at the same time, our hands are tied because the FBI has whatever they got going on up there with them,'" Officer Bryan Donis said in the recording.

"All I know is that he's on the terrorist watch list," Donis is heard saying.

"I know this boy is missing from Georgia and that this guy is on the terrorist watch list and that there is a group of people they're (FBI) keeping an eye on for whatever reason."

In mid-August, New Mexico authorities executed a court order to destroy the encampment

NBC News reported that police seized an RV where eleven children and five adults lived in what was described as squalor, while also bulldozing the entrance to an underground tunnel where authorities found the decomposing body of three-year-old Abdul-ghani Wahha - placed there by the suspects in the hopes that he would resurrect as Jesus and use his psychic powers to help the group target "corrupt institutions and people" with "violent actions."

Ammo and a bulletproof vest were discovered at the scene after the camp was broken down. 

Taos County Sheriff Jerry Hogrefe said that during the initial serving of the search warrant, their tactical team came upon children holding boxes of ammo, and at least one child was armed when he was found. The defendants' attorney tried to downplay the "heavily armed" portion of the case.  

While cross-examining of Hogrefe, the suspects' defense attorneys each took their chance to try and distance the suspects as far from the weapons as possible, and the connotations of violence they imply. One defense attorney suggested it's "prudent" that children learn how to use firearms safely, which Hogrefe agreed to.

The sheriff also confirmed that Alcohol, Tobacco and Firearms is investigating the legalities surrounding the occupants' possession of firearms. 

Another defense attorney pointed out, and Hogrefe confirmed, that the compound's occupants did not shoot at the tactical team as they raided the compound. He did say, however, that Morton was "struggling" and "resisting" while being arrested by deputies. -KOB.com

For her decision to free the suspects, Backus says she has received over 200 threats, including death threats, which resulted in the evacuation of a New Mexico courthouse on Tuesday. 

Backus has received more than 200 threats, according to Barry Massey, a spokesman for New Mexico Courts. Callers have threatened physical violence against Backus, including some people who threatened to slit Backus' throat and smash her head, Massey said. People also lashed out on social media and also threatened court staff, Massey said. -CNN

Backus has been called an "Islamic terrorist sympathizer" and a "disgusting garbage human," according to Massey. 

Published:8/26/2018 3:40:56 PM
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[Entertainment] Mark Hamill, Danny Devito and other celebrities pay tribute to legendary writer Neil Simon Hollywood and theater stars shared personal stories about Neil Simon, who helped shape many of their careers. The playwright died Sunday morning.
     
 
 
Published:8/26/2018 1:39:39 PM
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Published:8/26/2018 11:07:53 AM
[Markets] Unipolarism Vs Multipolarism - The Real Russian Interference In US Politics

Authored by Diana Johnstone via The Ron Paul Institute for Peace & Prosperity,

The Cold War between the United States and the Soviet Union was ostensibly a conflict between two ideologies, two socio-economic systems.

All that seems to be over. The day of a new socialism may dawn unexpectedly, but today capitalism rules the world. Now the United States and Russia are engaged in a no-holds-barred fight between capitalists. At first glance, it may seem to be a classic clash between rival capitalists. And yet, once again an ideological conflict is emerging, one which divides capitalists themselves, even in Russia and in the United States itself. It is the conflict between globalists and sovereignists, between a unipolar and a multipolar world. The conflict will not be confined to the two main nuclear powers.

The defeat of communism was brutally announced in a certain “capitalist manifesto” dating from the early 1990s that proclaimed: “Our guiding light is Profit, acquired in a strictly legal way. Our Lord is His Majesty, Money, for it is only He who can lead us to wealth as the norm in life.”

The authors of this bold tract were Mikhail Khodorkovsky, who went on to become the richest man in Russia, before spending ten years in a Russian jail, and his business partner at the time, Leonid Nevzlin, who has since retired comfortably to Israel.

Loans For Shares

Those were the good old days in the 1990s when the Clinton administration was propping up Yeltsin as he let Russia be ripped off by the joint efforts of such ambitious well-placed Russians and their Western sponsors, notably using the “loans for shares” trick.

In a 2012 Vanity Fair article on her hero, Khodorkovsky, the vehemently anti-Putin journalist Masha Gessen frankly summed up how this worked:

The new oligarchs—a dozen men who had begun to exercise the power that money brought—concocted a scheme. They would lend the government money, which it badly needed, and in return the government would put up as collateral blocks of stock amounting to a controlling interest in the major state-owned companies. When the government defaulted, as both the oligarchs and the government knew it would, the oligarchs would take them over. By this maneuver the Yeltsin administration privatized oil, gas, minerals, and other enterprises without parliamentary approval.

This worked so well that from his position in the Communist youth organization, Khodorkovsky used his connections to get control of Russia’s petroleum company Yukos and become the richest oligarch in Russia, worth some $15 billion, of which he still controls a chunk despite his years in jail (2003-2013). His arrest made him a hero of democracy in the United States, where he had many friends, especially those business partners who were helping him sell pieces of Yukos to Chevron and Exxon. Khodorkovsky, a charming and generous young man, easily convinced his American partners that he was Russia’s number one champion of democracy and the rule of law, especially of those laws which allow domestic capital to flee to foreign banks and foreign capital to take control of Russian resources.

Vladimir Putin didn’t see it that way. Without restoring socialism, he dispossessed Khodorkovsky of Yukos and essentially transformed the oil and gas industry from the “open society” model tolerated by Yeltsin to a national capitalist industry. Khodorkovsky and his partner Platon Lebedev were accused of having stolen all the oil that Yukos had produced in the years 1998 to 2003, tried, convicted and sentenced to 14 years of prison each. This shift ruined US plans, already underway, to “balkanize” Russia between its many provinces, thereby allowing Western capital to pursue its capture of the Russian economy.

The dispossession of Khodorkovsky was certainly a major milestone in the conflict between President Putin and Washington. On November 18, 2005, the Senate unanimously adopted resolution 322 introduced by Joe Biden denouncing the treatment of the Khodorkovsky and Lebedev as politically motivated.

Who Influences Whom?

Now let’s take a look at the history of Russian influence in the United States. It is obvious that a Russian who can get the Senate to adopt a resolution in his favor has a certain influence. But when the “deep state” growls about Russian influence, it isn’t talking about Khodorkovsky. It’s talking about a joking response Trump made to a reporter’s snide question during the presidential campaign. In a variation of the classic “when did you stop beating your wife?” the reporter asked if he would call on Russian President Vladimir Putin to “stay out” of the election.

Since a stupid question does not deserve a serious answer, Trump said he had “nothing to do with Putin” before adding, “Russia, if you're listening, I hope you're able to find the 30,000 e-mails that are missing. I think you will probably be rewarded mightily by our press.”

Aha! Went the Trump haters. This proves it! Irony is almost as unwelcome in American politics as honesty.

When President Trump revoked his security clearance earlier this month, former CIA chef John Brennan got his chance to spew out his hatred in the complacent pages of the New York Times.

Someone supposed to be smart enough to head an intelligence agency actually took Trump’s joking invitation as a genuine request. “By issuing such a statement,” Brennan wrote, “Mr. Trump was not only encouraging a foreign nation to collect intelligence against a United States citizen, but also openly authorizing his followers to work with our primary global adversary against his political opponent.”

The Russians, Brennan declared, “troll political, business, and cultural waters in search of gullible or unprincipled individuals who become pliant in the hands of their Russian puppet masters.”

Which Russians do that? And who are those “individuals”?

'The Fixer in Chief'

To understand the way Washington works, nothing is more instructive than to examine the career of lawyer Jonathan M. Winer, who proudly repeats that in early 2017, the head of the Carnegie Endowment Bill Burns introduced him as “the Fixer in Chief”. Winer has long been unknown to the general public, but this may soon change.

Let’s see what the fixer has fixed.

Under the presidency of fellow Yalie Bill Clinton, Winer served as the State Department's first Deputy Assistant Secretary for International Law Enforcement, from 1994-1999. One may question the selectivity of Bill Clinton’s concern for international law enforcement, which certainly did not cover violating international law by bombing defenseless countries. In any case, in 1999, Winer was awarded for “virtually unprecedented achievements”. Later we shall examine one of those important achievements.

At the end of the Clinton administration, from 2008 to 2013, the Fixer in Chief worked as high up consultant at one of the world’s most powerful PR and lobbying firms, APCO Worldwide. This is how the Washington revolving door functions: after a few years in government finding out how things work, one then goes into highly paid “consultancy” to sell this insider information and influential contacts to private clients.

APCO got off to a big start some thirty years ago lobbying  for Philip Morris and the tobacco industry in general. 

In 2002, APCO launched something called the “Friends of Science” to promote skepticism concerning the harmful effects of smoking. In 1993, the campaign described its goals and objectives “encouraging the public to question – from the grassroots up – the validity of scientific studies.”

While Winer was at APCO, one of its major activities was hyping the Clinton Global Initiative, an international networking platform promoting the Clinton Foundation. APCO president and CEO Margery Kraus explained that the consultancy was there to “help other CGI members garner interest for the causes they are addressing, demonstrate their success and highlight the wide-ranging achievements of CGI as a whole.” Considering that only five percent of Clinton Foundation turnover went to donations, they needed all the PR they could get.

Significantly, donations to the Clinton Global Initiative have dried up since Hillary lost the presidential election. According to the Observer: “Foreign governments began pulling out of annual donations, signaling the organization’s clout was predicated on donor access to the Clintons, rather than its philanthropic work.”

This helps explain Hillary Clinton’s panic when she lost in 2016. How in the world can she ever reward her multi-million-dollar donors with the favors they expected?

As well as the tobacco industry and the Clinton Foundation, APCO also works for Khodorkovsky. To be precise, according to public listings, the fourth biggest of APCO’s many clients is the Corbiere Trust, owned by Khodorkovsky and registered in Guernsey. The trust tends and distributes some of the billions that the oligarch got out of Russia before he was jailed. Corbiere money was spent to lobby both for Resolution 322 (supporting Khodorkovky after his arrest in Russia) and for the Magnitsky Act (more later). Margery Kraus, APCO’s president and CEO, is a member of Mikhail Khodorkovsky’s son Pavel’s Institute of Modern Russia, devoted to “promoting democratic values” – in other words, to building political opposition to Vladimir Putin.

In 2009 Jonathan Winer went back to the State Department where he was given a distinguished service award for having somehow rescued thousands of stranded members of the Muhahedin-e Khalq from their bases in Iraq they were trying to overthrow the Iranian government. The MeK, once officially recognized as a terrorist organization by the State Department, has become a pet instrument in US and Israeli regime change operations directed at Iran.

However, it was Winer’s extracurricular activities at State that finally brought him into the public spotlight early this year – or rather, the spotlight of the House Intelligence Committee, whose chairman Devin Nunes (R-Cal) named him as one of a network promoting the notorious “Steele Dossier” which accused Trump of illicit financial dealing and compromising sexual activities in Russia. By Winer’s own account, he had been friends with former British intelligence agent Christopher Steele since his days at APCO. Back at State, he regularly channeled Steele reports, ostensibly drawn from contacts with friendly Russian intelligence agents, to Victoria Nuland, in charge of Russian affairs, and top Russian experts. These included the infamous “Steele dossier”. In September 2016, Winer’s old friend Sidney Blumenthal – a particularly close advisor to Hillary Clinton – gave him notes written by a more mysterious Clinton insider named Cody Shearer, repeating the salacious attacks.

All this dirt was spread through government agencies and mainstream media before being revealed publicly just before Trump’s inauguration, used to stimulate the “Russiagate” investigation by Robert Mueller. The dossier has been discredited but the investigation goes on and on.

So, it is all right to take seriously information allegedly obtained from “Russian agents” and spread it around, so long as it can damage Trump. As with so much else in Washington, double standards are the rule.

Jonathan Winer and the Magnitsky Act

Jonathan Winer played a major role in Congressional adoption of the “Sergei Magnitsky Rule of Law Accountability Act of 2012” (the Magnitsky Act), a measure that effectively ended post-Cold War hopes for normal relations between Washington and Moscow. This act was based on a highly contentious version of the November 16, 2009 death in prison of accountant Sergei Leonidovich Magnitsky, as told to Congress by hedge fund manager Bill Browder (grandson of Earl Browder, head of the Communist Party USA 1934-1945). According to Browder, Magnitsky was a lawyer beaten to death in prison as a result of his crusade for human rights. 

However, as convincingly established by dissident Russian film-maker Andrei Nekrasov’s (banned) investigative documentary, the unfortunate Magnitsky was neither a human rights crusader, nor a lawyer, nor beaten to death. He was an accountant jailed for his role in Browder’s business dealings, who died of natural causes as a result of inadequate medical treatment. The case was hyped up as a major human rights drama by Browder in order to discredit Russian charges against himself.

In any case, by adopting a law punishing Magnitsky’s alleged persecutors, the US Congress acted as a supreme court judging internal Russian legal issues.

The Magnitsky Act also condemns legal prosecution of Mikhail Khodorkovsky. Browder, on a much smaller scale, also made a fortune ripping off Russians during the Yeltsin years, and later got into trouble with Russian tax collectors. Since Browder had given up his US citizenship in order to avoid paying US taxes, he had reason to fear Russian efforts to extradite him for tax evasion and other financial misdeeds.

It was Jonathan Winer who found a solution to Browder’s predicament.

As Winer tells it:

When Browder consulted me, […] I suggested creating a new law to impose economic and travel sanctions on human-rights violators involved in grand corruption. Browder decided this could secure a measure of justice for Magnitsky. He initiated a campaign that led to the enactment of the Magnitsky Act. Soon other countries enacted their own Magnitsky Acts, including Canada, Estonia, Latvia, Lithuania, and most recently, the United Kingdom.

Russian authorities are still trying to pursue their case against Browder. In his press conference following the Helsinki meeting with Trump, Vladimir Putin suggested allowing US authorities to question the Russians named in the Mueller indictment in exchange for allowing Russian officials to question individuals involved in the Browder case, including Winer and former US ambassador to Moscow Michael McFaul. Putin observed that such an exchange was possible under the Mutual Legal Assistance Treaty signed between the two countries in 1999, back in the Yeltsin days when America was posing as Russia’s best friend.

But the naïve Russians did not measure the craftiness of American lawyers.

As Winer wrote:

“Under that treaty, Russia’s procurator general can ask the US attorney general … to arrange for Americans to be ordered to testify to assist in a criminal case. But there is a fundamental exception: The attorney general can provide no such assistance in a politically motivated case.” (My emphasis.)

“I know this”, he wrote, “because I was among those who helped put it there. Back in 1999, when we were negotiating the agreement with Russia, I was the senior State Department official managing US-Russia law-enforcement relations.”

So, the Fixer in Chief could have said to the worried Browder, “No problem. All that we need to do is make your case a politically motivated case. Then they can’t touch you.”

Winer’s clever treaty is a perfect Catch-22. The treaty doesn’t apply to a case if it is politically motivated, and if it is Russian, it must be politically motivated.

In a July 15, 2016, complaint to the Justice Department, Browder’s Heritage Capital Management accused both American and Russian opponents of the Magnitsky Act of violating the Foreign Agents Registration Act (FARA; adopted in 19938 with Nazis in mind). Among the “lobbyists” cited was the late Ron Dellums (falsely identified in the complaint as a “former Republican congressman”).

The Heritage Capital Management brief declared that: “While lawyers representing foreign principals are exempt from filing under FARA, this is only true if the attorney does not try to influence policy at the behest of his client.” However, by disseminating anti-Magnitsky material to Congress, any Russian lawyer was “clearly trying to influence policy” was therefore in violation of FARA filing requirements.”

Catch-22 all over again.

Needless to say, Khodorkovsky’s Corbiere Trust lobbied heavily to get Congress to pass the Magnitsky Act, which also repeated its defense of Khodorkovsky himself. This type of “Russian interference intended to influence policy” is not even noticed, while US authorities scour cyberspace for evidence of trolls.

Conclusion

The basic ideological conflict here is between Unipolar America and Multipolar Russia. Russia’s position, as Vladimir Putin made clear in his historic speech at the 2007 Munich security conference, is to allow countries to enjoy national sovereignty and develop in their own way. The current Russian government is against interference in other countries’ politics on principle. It would naturally prefer an American government willing to allow this.

The United States, in contrast, is in favor of interference in other countries on principle: because it seeks a Unipolar world, with a single “democratic” system, and considers itself the final authority as to which regime a country should have and how it should run its affairs.

So, if Russians were trying to interfere in US domestic politics, they would not be trying to change the US system but to prevent it from trying to change their own. Russian leaders clearly are sufficiently cultivated to realize that historic processes do not depend on some childish trick played on somebody’s computer.

US policy-makers practice interference every day. And they are perfectly willing to allow Russians to interfere in American politics – so long as those Russians are “unipolar” like themselves, like Khodorkovsky, who aspire to precisely the same unipolar world sought by the State Department and George Soros. Indeed, the American empire depends on such interference from Iraqis, Libyans, Iranians, Russians, Cubans – all those who come to Washington to try to get US power to settle old scores or overthrow the government in the country they came from. All those are perfectly welcome to lobby for a world ruled by America. 

Russian interference in American politics is totally welcome so long as it helps turn public opinion against “multipolar” Putin, glorifies American democracy, serves US interests including the military-industrial complex, helps break down national borders (except those of the United States and Israel) and puts money in appropriate pockets in the halls of Congress.

Published:8/26/2018 10:39:12 AM
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[Markets] Yet Another US-Saudi Massacre In Yemen: UN Condemns Airstrike Killing 22 Children

Just two weeks after a US-Saudi coalition airstrike on a school bus in Yemen killed some 40 children in an event which finally caught international media attention, there's a new report that coalition jets have struck a camp for internally displaced people in the flashpoint region of Hodeidah.

Pro-Houthi rebel outlets were the first to report the massacre, which was quickly picked up in international media. According to reports, at least 22 children and four women were killed

Prior US-Saudi strikes on Yemen in 2017. Image source: Getty via The New Arab

"[The victims were] dead children and women. [It was a] disgusting crime," the Houthi-run Al Masirah TV network reported Thursday. Refugees were reportedly fleeing fighting in the area area when the airstrike occurred. 

The BBC reports the following based on a United Nation official in the region: "The victims were fleeing fighting in the al-Durayhimi district, south of the port city of Hudaydah, when their vehicle was hit on Thursday. A separate air strike the same day killed four children, according to the UN's humanitarian chief Mark Lowcock."

The UN quickly weighing in on the attack is significant, given both Saudi and United States recent statements indicating they do not deliberately target civilians or civilian infrastructure.

Screengrab from Al Jazeera coverage showing the strike aftermath on Thursday.

After the August 9th attack on a school bus in the north of the country, which killed scores of mostly children, the Saudi coalition spokesman defended its actions as "legitimate".

The BBC continues of the heightened scrutiny regarding US-Saudi coalition war crimes in Yemen

Mr Lowcock's statement on Friday confirmed that the victims had been fleeing violence around the rebel-held port city Hudaydah.

He renewed calls for an impartial and independent investigation into air strikes. A report by Human Rights Watch the same day accused the Saudi-led coalition of failing to hold "credible" investigations into such incidents.

The reported attack was condemned by Unicef, Save the Children and other international organisations.

Earlier this month, UN Secretary-General Antonio Guterres called for an independent and prompt investigation into Saudi coalition airstrikes on civilian targets, including the August 9 school bus attack.

UNICEF's regional director in the Middle East and North Africa, had tweeted in the aftermath of the school bus massacre: "NO EXCUSES ANYMORE!!"

There's further been rising bipartisan support in Congress for cutting off US intelligence support and weapons supplied to Saudi Arabia, especially after it was revealed the specific laser-guided bomb used on the school bus was a US-supplied Lockheed Martin manufactured weapon. The UAE also plays a lead role in air operations over Yemen as a regional US and Saudi ally.

In subsequent statements a Pentagon official told Vox that the US is not going to investigate the origins of the bomb from the August 9th attack, saying, “We may never know if the munition [used] was one that the US sold to them.” However, a tracking number on the side of a bomb fragment confirms it was supplied by the US, as also recently confirmed by CNN. 

The Pentagon has lately claimed to be heavily drawing down its assistance to the Saudi coalition fighting in Yemen. 

Published:8/25/2018 10:13:29 PM
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[Markets] Chinese Naval Expansion Hits High Gear

Submitted by SouthFront.org

While there was much fanfare and attention given to the July 3rd launch of two Type 055 guided missile destroyers at the Dalian Shipbuilding Industry Co. (DISC) shipyard in Dalian, very little mention has been made of the many other warships that the People's Liberation Army Navy (PLAN) has launched or commissioned since the beginning of the year. Although the Type 055 DDG is the PLAN’s most powerful surface combatant, and the largest such vessel constructed by an Asian nation since World War II, they are one component in a steadily growing naval force structure. While the addition of three Type 055 DDGs this year, added to the first vessel in class which rolled into the water from Dalian just over a year ago in June of 2017, showcase China’s growing capabilities not only in producing powerful and modern warships, they also illustrate the maturity and  stunning capacity of the Chinese ship building industry. This industry has launched and/or commissioned 15 modern warships in just the first seven months of 2018.

Three More Type 055 Destroyers

This year is proving to be a big year for the PLAN. Of the fifteen vessels built so far in 2018, three have been the newest and most powerful surface warfare vessel in the Chinese arsenal, the Type 055 DDG. The world was stunned when China was able to complete the first of this new class in June of 2017. Sections of a second in this class were clearly visible in satellite imagery at the time. That vessel was launched in May of this year, but two more Type 055 destroyers were launched simultaneously on July 3rd, just two months later. The 5th and 6th vessels in class are already in varying stages of construction.

Although initial reports had suggested that a total of six vessels had been ordered, it has been hinted that this number has been increased to eight. This number will most likely grow to at least 12 vessels by 2025, when the PLAN will be looking to expand its aircraft carrier program with the introduction of at least one carrier of the Type 002 class. It has yet to be determined if this new carrier (CV-18) will employ steam or electromagnetic catapults, but it will definitely be a CATOBAR carrier. PLAN aviators continue to practice CATOBAR take-off and landings at the Huangdicun Airbase in southern China. Chinese naval engineers have had a great deal of success in developing an Electromagnetic Aircraft Launching System (EMALS) that requires much less energy than the system currently utilized aboard the U.S. Navy’s Gerald Ford Class carrier. It remains to be decided if the Type 002 will be conventionally powered, or will make use of a nuclear reactor.

Regardless of the next generation carrier’s specific design specifications and capabilities, powerful surface warfare ships will be required to escort them in a larger aircraft carrier battle group formation. The Type 055 DDG will likely serve a similar role as the Ticonderoga Class CG of the U.S. Navy within the carrier strike groups (CSG), and will also be utilized as a command ship or heavy AAW and ASW platform in PLAN naval task forces or while supporting amphibious ready groups (ARG). The Type 055’s significant weapons payload, multifaceted offensive and defensive capabilities, and great range and endurance will aid Chinese efforts to protect and expand its maritime territories, protect its shipping lanes, and maintain its naval lines of communication.

Type 052D DDG Continued Growth

A number of photos that appeared both online and in the print media exhibiting the two newest Type 055 DDGs to be launched at the DISC shipyard in Dalian failed to mention that three brand new Type 052D destroyers also appeared in these same images. The Type 052D is a powerful guided missile destroyer in its own right, rivaling the U.S. Navy Arleigh Burke Class DDG. China launched the first Type 052D, the Kunming DDG-172 in 2014. There are currently 9 ships of the class in service, 2 undergoing sea trials, and a further two being fitted out. Three Type 052D DDGs have been commissioned in the first half of this year.

No less than five destroyers in various stages of fitting out are docked at the Dalian Shipbuilding Industry Co. (DISC) shipyard on July 3rd; three Type 052D and two Type 055 DDGs.

Although original rumors had hinted at 16 vessels being ordered, some inside sources now claim that the number has been increased significantly. It would seem reasonable that a total of 18 to 26 vessels may end up being built, dependent upon how ambitious the PLAN aircraft carrier program becomes. IHS Janes Defense Weekly reported on May 2nd of this year that satellite imagery appeared to show a Type 052D under construction at the Jiangnan Changxingdao shipyard in Shanghai that had approximately 4 meters (13.1ft) added to its LOA. The after flight deck may have been lengthened to accommodate larger helicopters which would aid the vessel in its ASW role.

It remains to be seen if the above mentioned modification will enter serial production under a different designation, or will prove to be a concept testbed for fielding larger rotary wing assets at sea. It is important to note that China produced six Type052C Class DDGs from 2004 to 2015, and has produced thirteen of the much improved Type 052D Class DDGs in just four years, a six fold increase in annual production.

A Type 055D DDG docking with the aid of a tug at a PLAN naval base. The deck gun and forward 32 cell VLS are clearly visible. Although bearing some similarity to the U.S. Navy’s Arleigh Burke Class DDG, the Type 052D is more streamlined and esthetically pleasing. Its good looks likely equate to a much smaller radar signature.

More Frigates and Corvettes

While smaller warships do not enjoy the limelight of their larger peers, they can teach the observer a great deal about a nation’s maritime defense posture and priorities. While the Chinese shipbuilding industry has constructed and launched nineteen Type 052 DDGs of both variants, and four Type 055 DDGs from 2014 to the present, they have also turned out fourteen Type 054A Class guided missile frigates (total of 32 of all variants) and a no less than twenty Type 056A Class corvettes (total of 42 in class of all variants) over the same period of time.

The smaller warships traditionally perform a number of different roles in naval warfare. Firstly, they serve as coastal patrol craft. They are nimble and fast, heavily armed for their diminutive size, and are outfitted to be flexible enough to perform a multitude of different missions. Their small size equates to limited firepower and shorter range, but they are well suited to serve as picket ships and screening forces to task forces fielding larger and more powerful vessels when those fleets are operating within close range of home ports and naval facilities.

Three Type 056A Class corvettes tied-up alongside one another. The vessel in the middle is conducting a crew muster on the aft flight deck. Approximately half of the 42 vessels in the Type 056 class are of the upgraded Type 056A variant.

The Type 056A Class corvette is ideally suited to patrol China’s coasts, the maritime territories within China’s EEZ, as well as the island archipelagos of the Paracel and Spratly Islands. They will most likely begin patrol operations from the key island bases at Fiery Cross Reef, Subi Reef, and Mischief Reef as the maritime logistics facilities on these islands are improved.

The Type 054A frigate is a well balance and powerful naval surface combatant for its size, and carries an ample arsenal of anti-aircraft, anti-ship, and anti-submarine weapons. It is an ideal escort vessel with a range of over 8,000 nautical miles. It is a traditional multi-purpose frigate, possessing the inherent ability to attack other surface ships, engage aircraft, and track and destroy submarines. It is this class of warship that the PLAN first sent to the Gulf of Aden in 2009 to serve in international anti-piracy duties. Eleven Type 05A frigates have served on anti-piracy duties in this region since that time.

The Type 054A Class Frigate is a flexible, yet powerful surface warfare asset that possesses significant range and the ability to engage in a multitude of operations. It is equipped with an aft hangar and flight deck, and carries either a Ka-28 or Harbin Z-9 helicopter depending on mission requirements. Type 054A FFGs will likely be deployed as part of naval flotillas stationed on a rotational basis at the PLAN naval base in Djibouti, and eventually at Gwadar, Pakistan. They will also be used to police the long maritime supply lines to and from China to strategic waterways near the Horn of Africa and the Straits of Hormuz, as well as continuing patrols in the South China and East China Seas.

Type 054A Yiyang, FFG-548. This vessel was constructed in 2010 and was the seventh vessel in class to be built. Note the 32 cell VLS forward of the superstructure, 76mm dual-purpose deck gun, and Type 87 anti-submarine rocket (ASROC) launchers just forward of the deck gun. Amidships are the twin 4 cell launchers for the C-803 anti-ship/land attack cruise missiles.

New Nuclear Submarines

Without a doubt one of the segments of Chinese defense strategy most shrouded in mystery are the attack submarines and ballistic missile submarines of the PLAN. They are very rarely a topic of discussion by government officials, either on or off the record. What is known is that the PLAN has a newer SSN and SSBN in service. China’s submarine technology has run behind that of both the United States and Russia for decades, but China has been rapidly closing the gap in recent years. It is no secret that Chinese espionage efforts to acquire U.S. submarine warfare technology have been very active, and quite successful over the past decade in particular.

The most capable nuclear attack submarine (SSN) in service with the PLAN is the Type 093B. A notable improvement over the Type 093, it has the capability to fire submarine launched cruise missiles (SLCM) while submerged via a dorsal mounted VLS. Like its predecessor, the Type 093, it retains the ability to fire SLCMs from its bow torpedo tubes. This is accomplished by using a specifically designed torpedo tube missile canister. It is not known how many Type 093B SSNs are currently in service, but most analysts, including those at the U.S. Office of Naval Intelligence, put the number at six. Of greater interest is the newer SSN that is either currently being fitted out or is undergoing sea trials later this year, the Type 095.

A pair of Type 093B SSNs. Of particular interest in this image are the improved hydrodynamics of the conning tower and the slight dorsal hump denoting the presence of a VLS for launching anti-ship and land attack cruise missiles.

The Type 095 is an SSN, but reportedly has a sizeable VLS (12-16 cells) which can fire a multitude of PLAN missiles including anti-ship cruise missiles (ASCM) and land attack cruise missiles (LACM). The U.S. Office of Naval Intelligence has classified the Type 095 as a nuclear attack guided missile submarine (SSGN) due to its large missile capacity. The Type 095 is thought to utilize pump-jet propulsion, make use of noise reducing technologies, and a hybrid pressure hull design.

The Type 095 is being constructed at the new Bohai Shipbuilding Heavy Industry Company (BSHIC) submarine manufacturing facility located in Huludao, in the Liaoning province. It is the largest submarine manufacturing facility in the world, with an assembly building measuring some 430,000 square feet (39,948 sq. meters). Completed in 2017, the main assembly hall can accommodate four submarines at any given time. The facility is totally enclosed, and operations cannot be viewed from the air or via satellite surveillance. This also allows manufacturing operations to continue year round regardless of weather conditions. The facility will be used to build all Type 095 SSN and Type 096 SSBN class submarines.

A satellite image of the BSHIC submarine manufacturing facility in Huludao in the province of Liaoning, China.

The Type 094 Jin Class nuclear ballistic missile submarine has also undergone a noticeable transformation, resulting in what has been renamed the Type 094A. Improvements to the new variant include a larger VLS aft of the conning tower, a more streamlined shape which produces less noise and cavitation while submerged, likely greater speed submerged (less hydrodynamic drag), and a new ballistic missile armament. The Type 094A is most likely equipped with the next generation JL-2A submarine launched ballistic missile (SLBM). The JL-2A is based on the DF-31, and has an estimated maximum range of 11,200 kilometers (6,960 miles). The JL-2A is likely equipped with a multiple independently targetable reentry vehicle (MIRV) warhead. The PLAN likely has between four and six Type 094/094A class SSBNs in service. These SSBNs serve as the third leg of the nuclear deterrent triad that China lacked for so many years, and the 094A offers China a viable second strike capability. The Type 096 SSBN currently being designed will offer notable improvements over the 094A SSBN, yet little is known about the project.

This rare image shows not only a Type 094A Class SSBN in the foreground, but also a Type 093B Class SSN in the background. The improved hydrodynamics of both vessels can be seen, especially in the conning towers that now lack windows. The large dorsal hump of the Type 094A houses the powerful JL-2A submarine launched ballistic missiles that have a range in excess of 11,200 kilometers.

The Sixth and Final Type 071 LPD?

The final Type 071 Class LPD of the original order of six vessels was launched at the Hudong-Zhonghua shipyard on January 20th of this year. The fifth vessel was launched just 7 months prior. It remains unknown if the PLAN will decide to order additional LPDs of this class, or will concentrate instead on the larger Type 075 LHDs currently under construction at the same shipyard which constructed all six Type 071 LPDs.

It is logical to conclude that China may decide to build additional Type 071 LPDs, but this will depend perhaps on how long it takes to construct, launch and commission the first of the new class of LHDs. With six LPDs in service, after the final two vessels are finally commissioned, the PLAN will always have at least two of them ready to deploy as the backbone of a small Amphibious Ready Group (ARG). A PLAN ARG would likely consist of at least one Type 071 LPD, 2 Type 072 LSTs and a surface warfare escort of a mix of DDGs and FFGs.

These smaller amphibious warfare vessels lack the size and capability of bringing their own aviation strike element with them. The Type 071 can accommodate two helicopters on its large aft flight deck, and is equipped to house four helicopters in the adjacent hangar. The Type 072 LST can also accommodate one helicopter on its after flight deck. Lacking a VSTOL attack aircraft, the PLAN will most likely modify the Z-10 attack helicopter for naval use, with it serving a similar purpose as the U.S. Marine Corps AH-1Z Viper and Russian Ka-52k naval attack helicopters. China has already conducted take-off and landing tests with Z-10s on both the Type 071 LPD and 072A LST. The Type 075 LHD will undoubtedly have an attack element of at least eight to ten modified Z-10s.

It is clear that a larger amphibious warfare platform is a requirement for the PLAN in the immediate future. If the time it took China to design, build, launch and fit-out its first indigenous aircraft carrier is an indicator, we are likely looking at the first Type 075 to be launched sometime in 2020. Fitting out and sea trails will take an additional two years before the first vessel is commissioned. The LHD is without a doubt the most flexible and capable of all amphibious warfare platforms and the PLAN will need these vessels to be able to field viable ARGs to respond to challenges within its maritime territories and to project power at greater ranges along the full length and breadth of the Maritime Silk Road.

The All Important Support Vessels

China signaled to the world that it fully intended to field aircraft carrier battle groups (CBG) in the near future when it launched the first Type 901 Fast Combat Support Ship in December of 2015. Built by Guangzhou Shipyard International Company Ltd. (GSI), the first vessel in this class Hulun Hu (hull # 965), commissioned in September of 2017 after successful sea trials and UNREP trails, bears the distinction of being the only fast combat support ship fielded by a nation other than the United States, which operates the Sacramento and Supply Class vessels. These massive underway replenishment ships are designed to be able to meet the logistics needs of fast moving carrier battle/strike groups.

The Type 901 is a massive vessel, with a fully loaded displacement of 48,000 tons. It is equipped with five liquid bulk cargo transfer stations, three on the port side and two on the starboard side, and is also equipped for liquid transfers astern. They can refuel an aircraft carrier with fuel oil and aviation fuel to starboard while supplying fuel oil to surface warfare escorts to port. The disclosed cruising speed is in excess of 25 knots, which is likely understated. It is equipped with a large aircraft hangar and flight deck that can accommodate large Z-8 heavy transport helicopters which are well suited to aerial replenishment duties. A second Type 901 is currently in an advanced state of construction.

The massive size of the Type 901 is clearly on display in this image. The vessel tied up alongside Hulun Hu is a Type 640 Class auxiliary tanker.

The PLAN also operates the Type 903 and Type 903A Class fleet replenishment vessels. The Type 903 was greatly improved and took on the designation Type 903A with the first two examples commissioned in the summer of 2013. There are six Type 903A replenishment ships on active service, and a seventh currently in an advanced state of construction. These vessels have a fully loaded displacement of approximately 24,000 tons and can carry 10,500 tons of bunkers (fuel), 250 tons of potable water, and roughly 700 tons of dry cargo.

Type 903A Honghu, commissioned in July of 2016. The PLAN should take delivery of the seventh such vessel sometime in the middle of 2019. The PLAN increased production of this class of vessel since the first was commissioned in 2013. Four were commissioned in a span of just 8 months from December 2015 to July 2016.

Fleet replenishment vessels are a vital component of a blue water navy. They allow fleet task forces, carrier battle groups and amphibious ready groups to engage in complex missions thousands of miles from home ports and over extended periods of duration. They replenish fuel, food stores, fresh water and munitions to warships while underway, and can provide a rapid logistics solution to both naval and land forces deployed to far flung bases and garrisons. These vessels are indispensable to aircraft carrier battle groups engaged in long deployments.

The Big Picture, PLAN 2025

The rapid pace of warship construction by China is impressive from an engineering and manufacturing standpoint, but of greater interest is in understanding the motivation behind such an ambitious program. Why has the Chinese leadership decided that the PLAN must expand and acquire a full spectrum of naval warfare capabilities that it has previously lacked, and in such a short space of time? The answer to this question becomes clear after a short analysis of China’s geopolitical, economic and national security goals in the twenty-first century.

In many ways, China is engaged in a concerted effort to redefine the economic realities that have established the way the world exchanges goods and services, and distributes the product of human endeavors globally. The New Silk Road/Maritime Silk Road project seeks to once again make China the center of the economic world. China is already the largest economy in the world in terms of economic production, and is on pace to usurp the U.S. as the world’s largest economic consumer as well. Continued growth and prosperity depend upon cheap and efficient movement of energy resources and raw materials to China, and the cheap and efficient movement of finished goods from China. The overwhelming majority of these influxes and outflows transit the international waterways of the world. Continued prosperity and stability depend upon the security of these maritime lanes of trade. In strategic terms, these naval lines of communication must remain open. In times of strife and natural or man-made disaster, China must have the capacity to secure these lines of communication and to keep them open. The great naval strategist Rear Admiral Alfred Thayer Mahan, writing in 1893, then just a Captain, stated this concept very succinctly:

“Let us start from the fundamental truth, warranted by history, that the control of the seas, and especially along the great lines drawn by national interest or national commerce, is the chief among the merely material elements in the power and prosperity of nations. It is so because the sea is the world’s great medium of circulation. From this necessarily follows the principal that, as subsidiary to such control, it is imperative to take possession, when it can be done righteously, of such maritime positions as contribute to secure command.”

Although China has been the first and most determined nation to move in this direction, it is not alone. As China moves to build a new logistics system that aims to redirect the movement of information, energy, and economic goods that competes with the current established system dominated by the United States, the United States and its allies are determined to maintain the status quo. Some of these allies, such as India, are allies of necessity and are also attempting to maintain their independence. China has accepted the wisdom of long standing naval strategy, and has proven the most decisive in embracing these centuries old concepts.

This map illustrates established and potential naval bases of rivals in the Indian Ocean, South China Sea and Asia Pacific regions. The U.S. bases were established through imperialist expansion, war and the long running U.S.-U.K. alliance. India has moved to leverage its own cooperative relationship with the U.S.-U.K. alliance and also maintain a level of independence. China has moved to secure the maritime lines of communication to and from Africa and the Middle East. Bases in Gwadar and Kyaukpyu will prove indispensable if either the Straits of Malacca or Aden become impassable.

If China does not alter its current building projects by increasing or reducing orders, the PLAN will still be a highly transformed fighting force by 2025. The year 2025 will prove to be a milestone for the PLAN for many reasons. By 2025, China will likely be declaring its first Type 002 Class aircraft carrier operational. The Type 002 will be an EMALs assisted CATOBAR capable carrier that may likely be nuclear powered. At the same time, two other aircraft carriers, although recognized as developmental steps along the way to the Type 002, will also be in service. Based on the pace of pilot training and the procurement of aircraft over the past decade, the PLAN will have at least one more regiment of carrier strike aircraft in service, bringing the total to two regiments. China is already seeking to develop and field a carrier borne strike aircraft superior to the J-15, even though many of the J-15’s shortcoming will be rectified by the improved CATOBAR system of the new Type 002 carrier.

Liaoning CV-16 with its air wing of J-15s and rotary wing ASW and support aircraft, and a Type 054A frigate escort. A modest yet impressive start in carrier borne naval aviation, and definitely just the beginning.

The Plan will have 30 Type 054A Frigates, 18 Type 052D and 8 or more Type 055 Destroyers in service. Improvements upon the destroyers will likely occur in the intervening years. A total of 50 Type 056 Corvettes (28 of the Type 056A improved variant) will be policing the coastal waterways of China and its outlying island territories. These modern and capable surface warfare vessels will be supplemented by older vessels that China has been actively modernizing.

The PLAN will be able to transport an enlarged PLA Marine Corps to battle in its first Amphibious Ready Group, albeit with limited capabilities. The First Type 075 LHD will be undergoing operational training to test the capabilities of the vessel and familiarize sailors, marines and airmen with amphibious and air assault missions from such a complex and powerful platform. There will be six Type 071 LPDs in service, as well as 15 Type 072A LSTs. The majority of an additional 17 Type 072 LSTs of an earlier, yet sound design will still be in service. The recently expanded PLAMC, numbering approximately 100,000 men, a five-fold increase from 2017, will finally have the modern amphibious sealift capacity that it currently lacks. PLAMC marines will serve in duties deployed at sea and stationed at a growing number of Chinese sovereign island bases, or abroad at naval bases in foreign countries such as Pakistan and Djibouti.

By 2025, the PLAN will have a robust naval logistics arm available to support naval operations across the length and breadth of the Maritime Silk Road. Two Type 901 fast combat supports ships, and 9 Type 903A replenishment ships will be available at a minimum. Four Type 904 general stores issue vessels are currently in service to resupply island garrisons and offshore bases. This number may be increased in the intervening years.

Of equal interest is the question of just how the U.S. Navy will look in 2015. It will still be the largest and most powerful navy in terms of global reach and power projection; however, it is a military branch that seems to be without focus or direction. The PLAN has increasingly invested in high tech, powerful and flexible conventional warships that are also cost effective when compared to the new designs pursued by the U.S. Navy. Even the Type 002 aircraft carrier is a conservative design, with a limited mission foreseen for it, one which will minimize its weaknesses and make use of its strengths. It is telling that China has built the largest surface warfare ship since the U.S. commissioned the last Ticonderoga Class cruiser Port Royal CG-73 in 1994. The U.S. has no plans to replace the 22 Ticonderoga Class cruisers anytime soon, nor is there a replacement design to consider. The Gerald R. Ford Class CVN-78 has proven to be a costly and disappointing investment so far. It will use the F-35 JSF and F-18 Super Hornet which lack the range to be a threat to peer adversaries. The Zumwalt Class DDG is a dead end failure and the troubled LCS program has proven to be less capable than the traditional multi-purpose frigate designs of other major navies.

Ticonderoga Class cruiser USS Lake Champlain CG-57. Decommissioning of these vessels will begin in 2019, with no viable replacement. The U.S. Navy command has proposed keeping half of the 22 vessels in service. Despite the largest defense budget of any nation in the world, and larger than that of Russia and China combined, the U.S. Navy cited budget constraints as a key factor in being unable of replacing the vessels.

While the U.S. has wasted its great wealth on failed designs, whose sole aim is to earn profits for a defense industry more interested in profit-generating waste than in producing weapons systems that balance capability, efficiency and cost effectiveness, China has done something quite different. China has produced cutting edge warships and aircraft for its navy that are largely improvements upon proven designs and technology. China has made major progress in missile technology, surpassing the U.S. in many respects. It has also reaped rewards from years of investment in research and development of advanced radar and even photon detection technologies. There is no doubt that China has gotten far more return on its investments in terms of its defense industry in comparison to the United States. For the military defense complex that rules the United States the goal is profit, not the defense and security of the nation.

From 2001 to the present, the United States military has morphed into a force obsessed with counterinsurgency and occupation, leaving it woefully unprepared for a conventional conflict with peer adversaries, such as Russia or China. The U.S. Navy has transformed into a global police force meant to be used as a stick to bludgeon any small nation that dares to disobey the diktats of Washington. Its powerful aircraft carrier strike groups (CSG) lack the air wing capable of striking the shores of powerful adversaries, rendering these great symbols of U.S. power impotent against any capable foe in a major conflict. The U.S. Navy is powerless to change the strategic situation in the South China Sea through military means, as China has already “crossed the Rubicon”. Imperial hubris, corruption and arrogance have done greater damage to the U.S. military than any foreign adversary has over the past 17 years.

The year 2025 will witness a PLAN in ascent and a U.S. Navy in decline. This is not to say that the U.S. Navy will not still be the preeminent naval power globally, but it will continue to be mired in a lack of strategic direction, focus and budgetary crisis. The PLAN will be guided by a clear strategic focus, increasing capabilities, and a robust shipbuilding and weapons acquisition program. There is no doubt that the PLAN will emerge as the second most powerful navy in the world, and will exert significant influence in both military and geostrategic terms.

Published:8/25/2018 9:34:40 PM
[Entertainment] John McCain, War Hero and "Maverick" of the U.S. Senate, Dead at 81 John McCain, 2008In the end, John McCain simply wanted what was best for his country. The veteran U.S. Senator, whose most recent indelible mark was made with the silent downturn of his thumb on the...
Published:8/25/2018 8:40:08 PM
[Markets] Escobar: Sun Tzu And The Art Of Fighting A Trade War

Authored by Pepe Escobar via The Asia Times,

It will be long, it will be nasty and Trump would be foolish to underestimate Xi and the resolve of China...

Imagine the Chinese leadership out of the public eye for nearly two weeks – virtually holed up, immersed in a secret debate. That is exactly what just happened at Beidaihe, the beach resort in eastern Hebei province.

While there might be James Bond-ish conspiracy theories out there for this annual ritual, there are no doubts about the key theme of discussions: The US-China trade war.

The second-largest world economy under President Xi Jinping is deep into the long march towards superpower status. The previous geopolitical and geoeconomic status quo is dead.

Xi has made it abundantly clear that for China to just become a “responsible stakeholder” in the post-Cold War US-controlled liberal international order is not enough.

It did not escape the notice of the senior leadership at Beidaihe of the change of direction by the US. President Donald Trump’s administration is taking a belligerent approach while the US National Security Strategy in December 2017 unmistakably labeled China a “revisionist power,” a strategic rival and for all practical purposes, from the Pentagon’s point of view, a top threat.

Instead, what the Beijing leadership identifies is what we could define, in Chinese culture terminology, as the “three threats.”

A threat to their foreign policy concept for the coming decades, such as the Belt and Road Initiative, and a threat to China’s own integration drive centered on the three strategic zones of the Greater Bay Area, the Beijing-Tianjin-Hebei corridor and the Yangtze river delta. And, of course, a threat to the Chinese stock market.

State media is still grappling on how to deal with it. The People’s Daily has, politely, defined the Trump administration’s strategy as “engagement plus containment.”

China Global Television Network (CGTN) has played the soft power card by addressing a sarcastic letter to Trump. The network thanked him for uniting the rest of the world while forcing China to make its economic environment more seductive to foreign investment. The CGTN video subsequently “disappeared” from YouTube and Twitter.

So, even as the leadership consensus may be this is all about containing China’s irresistible rise, and even considering the fog surrounding major Beijing decisions, it’s still possible to detect some fascinating nuances.

No mercy

For Trump, on the record, “trade wars are good and easy to win.” That reflects his fascination with the World Wrestling Entertainment (WWE) ethos. Trump, in this case, is The Undertaker bent on taking Xi to the woodshed. Xi is no more Mr. Nice Guy, Trump’s former “good friend.”

So, Xi cannot possibly believe that galvanizing the crowd like superhero The Rock will save the day. The WWE is not about “win-win” – that is for losers. Now, it is no holds barred. Trump accuses China of US election interference: “Fools that are so focused on looking only at Russia should start also looking in another direction, China.”

China’s military “adventurism” allows the Pentagon to come up with a Space Force. China is also barred from investing in US industries related to national security.

The US response to the reach of the Belt and Roaf Initiative is to invest in the fuzzy “Indo-Pacific” – by committing a paltry $113 million in energy, infrastructure, and digital commerce. “Made in China 2025” is qualified as an absolute threat to “America First.”

And China is increasingly depicted as “malign” – the buzzword of choice that makes Trump, in this case, fully aligned with the industrial-military-security-think tank complex.

So, how to fight a cage match with no referee? Enter Sun Tzu, China’s legendary military strategist who wrote The Art of War. The first rule is simple: “All warfare is based on deception.” As in Beijing gearing up to negotiate both as a partner and a threat.

‘Outside barbarians’

It will be long, it will be nasty, it will be protracted, going way beyond the talks this week in the US, which importantly do not feature Vice-President Wang “Firefighter” Qishan, a key player and Xi’s trusted consigliere. He is more useful coordinating long-term strategy in Beijing.

Here, a quick flashback to the British Empire is in order. In 1793, during the first diplomatic mission to Beijing, led by Lord Macartney and received by Emperor Qianlong, the Brits quickly identified how the teeming markets of China posed a “threat” to Europe and the contemporary world trade system.

China was self-sufficient at the time and exported to Europe goods such as silk, tea, textiles, porcelain. In fact, all the trimmings of the luxury market in a web of silk routes or an earlier version of the Belt and Road.

But what did they import? Not much, apart from Siberian furs, some exotic food and ingredients for traditional Chinese medicine. Here is Emperor Qianlong comments: “The Celestial Empire possesses all things in prolific abundance and lacks no product within its borders. There is, therefore, no need to import the manufactures of outside barbarians in exchange for our own products.”

We all know how that ended – gunboat diplomacy, the Opium Wars, Beijing being sacked in 1860, “unequal treaties” and the Chinese “century of humiliation.”

All that still features deeply in the Chinese collective unconscious as much as the real roots of the current trade war. Deng Xiaoping’s brilliant strategy was to open China’s special economic zones or SEZs as unbeatable, low-cost production bases for Western and Asian multinationals.

Deng offered the prime platform for the expansion of global capitalism. The inevitable consequence was a stampede of foreign direct investment (FDI), off-shoring and outsourcing.

Now, compare it with key data supplied by China’s General Administration and Customs. In the first six months of this year, no less than 41.58% of China’s exports to the rest of the world came from American, European and Asian multinationals.

There is no evidence corporate US – represented by multinational companies – is willing to sacrifice low production costs to “bring those jobs back.” Multinational companies also prize a devalued yuan because that keeps those low production costs down.

Additionally, any Trump attack on “Made in China 2025” does not alter the fact that the world’s second-largest economy is relentlessly climbing up the manufacturing ladder. Eventually, it will overtake the US in technological innovation.

As Zhigang Tao, director of the Institute for China and Global Development at Hong Kong University, pointed out, Beijing handed American capital the proverbial offer you can’t refuse – access to the Chinese market in exchange of technological transfer.

“[In fact,] this technology-for-market-access strategy has worked extremely well, as evidenced by China’s rise in key industries including high-speed rail, aviation, automobiles and wind turbines,” Tao said.

So, the next step should be an extension of the Tesla-in-Shanghai model.

Class struggle?

Seducing American capital to invest in China under more lenient rules may be only one aspect of a Sun Tzu maneuver for Beijing to defuse the trade war. Beidaihe certainly evaluated what might happen if this all goes wrong and becomes a hot trade war.

A Hurricane Tariff would have the potential to devastate China’s employment and financial landscape and provoke high inflation and even a recession. Xi cannot possibly risk losing his de facto power base, which is not the Chinese proletariat, but the rising middle class on a frenetic consumption and global tourism binge.

Add to that, the relentless working-class anger, already in full effect, according to the University of Utah’s Minqi Li. After all “Socialism with Chinese Characteristics” is hardly Marx.

Proverbial Western myopia has been riffing about a China collapse for years. Yes, there is a possible debt bomb. Yes, China’s dependency on foreign sources of oil and gas is a recurrent nightmare. And yes, US-China relations are now unmistakably in Cold War territory, even without considering the South China Sea and Taiwan.

But underestimating a rising power capable of planning a concerted global strategy in detail up to 2049 is foolish. Xi and Trump will have the chance to have a serious face-off on Nov. 30 at the G20 summit in Argentina.

Trump may even bill it as a “win”, as in his summits with Russian President Vladimir Putin and North Korean leader Kim Jong Un. Sun Tzu, though, is waiting in the wings.

Published:8/25/2018 8:40:07 PM
[Entertainment] Missy Elliott Pays Tribute to Aaliyah on 17th Anniversary of Her Death Missy Elliott, AaliyahMissy Elliott is paying tribute to Aaliyah on the 17th anniversary of the singer's death. In a video posted to social media, the "Work It" rapper can be seen writing a note to...
Published:8/25/2018 8:05:52 PM
[Markets] Ebola Deaths In DRC Spike 21% In Four Days, Bordering Countries On High Alert

The latest Ebola outbreak in the Democratic Republic of the Congo (DNC) has claimed 67 lives, up from 55, according to Robert Redfield, director of the CDC. On Friday the WHO said that the virus has spread to an area of "high security risk," and that ongoing local conflicts have made finding and monitoring infected people extremely difficult.

"Really, in two weeks, we’ve gone from 24 cases to 105 cases," said Redfield, who just returned from the hot zone where an outbreak centered in North Kivu is responsible for 105 confirmed or suspected cases, according to the Washington Post. There are currently 77 confirmed cases, 28 probable cases in which biological samples are not available for laboratory testing, while 3,000 people have received an experimental Ebola vaccine. 

Source: World Health Organiztion (WHO)

Redfield said the rapid spread of the disease was primarily because many health workers at a hospital in the town of Mangina, where the outbreak started, contracted the virus after treating early patients without recognizing that they had Ebola. The disease spreads through contact with the bodily fluids of victims, putting health workers and patients’ family members at greatest risk, notes the Post.

"In the next couple of weeks, we’ll have greater clarity," about the scope of the outbreak, said Redfield. 

In response, neighboring Uganda has beefed up precautions at the border, making it more difficult for the roughly 19,000 people who travel from Congo's North Kivu province across the border into the Ugandan town of Mpondwe to shop at an open-air market. 

Source: World Health Organiztion (WHO)

Uganda is determined to keep the deadly hemorrhagic fever from spreading to its side of the border. Before travelers are allowed through, they must step in small tubs of chlorinated water to disinfect their shoes, and their temperatures are taken with no-touch thermometer guns aimed at their temples.

Uganda moved quickly, imposing the precautions a week after the latest outbreak was declared Aug. 1. It has found six suspected cases at this crossing, but laboratory tests cleared them all. -WaPo

“So far, we have not gotten any case of Ebola,” Ithungu Honorata, a nurse who oversees the screening effort, said Friday. “But we don’t want it to come to Uganda.”

One bit of good news; two of the first 10 patients to receive an experimental Ebola treatment have recovered and have been released from isolation

The two people received the mAb114 treatment isolated from a survivor of an Ebola outbreak in 1995. It was the first of five experimental treatments Congo approved for use in the outbreak that was declared on Aug. 1. The others are ZMapp, Remdesivir, Favipiravir and Regn3450 - 3471 - 3479. -WaPo

Published:8/25/2018 8:05:52 PM
[Markets] Andrew Cuomo & The Chronic Existential Anxiety Of The White Male Democrat

Authored by John Derbyshire via Unz.com,

Andrew Cuomo, Governor of my home state of New York, was speaking in Manhattan on Wednesday, signing a bill to make sex trafficking a felony in the state. He made a now-famous gaffe, which says a great deal about the state of the modern Democratic Party.

But first, just a word about sex trafficking.

Kidnapping vulnerable young girls and renting them out for sex is a flourishing business down among the urban underclass. The Pakistani pimps of Rotherham and other English cities are the best-known cases, but plenty of it goes on here in the U.S.A., too. As in England, it’s very much an ethnic affair here, although news reports tie themselves in pretzels trying to obscure the fact. [Inside New York’s silent sex trafficking epidemic, NYPost, April 17, 2018] There’s an immigration angle, too; a lot of the women being trafficked here are illegal aliens from Mexico, Central America, and Asia.

It’s a problem in New York, and our legislators figured we need a new law to deal with it. I find it hard to believe that the laws we already have on kidnapping, prostitution, and abuse of minors are not adequate to deal with the issue; but hey, it’s an election year, Cuomo’s up for re-election as governor, and signing a new law is good show business.

So there was Cuomo doing the soft-shoe shuffle. Our Governor is a sort of grandee of the Democratic Party: son of a former three-term Governorex-husband of a Kennedy gal.

But I should say that the phrase “Democratic Party” in my last sentence refers to the oldDemocratic Party, the party of FDRJFKBill Clinton and John Kerry. Andrew Cuomo, like those other names, is a white guy of European ancestry. Like other white guys in his party, Cuomo has the uncomfortable feeling that the ground is moving under his feet—that the Democratic Party is turning into something different from what it has been though his, and my, lifetime.

As a result, the Governor is nursing some serious political insecurities. Is the Democratic Party still a party for him, for white guys? Or is it on its way to being a party for women, blacks, mestizos, and sexual eccentrics?

Naturally the guy is nervous. He is, as I said, up for re-election in the fall; and before that, next month, he faces off in a Democratic primary against TV actress Cynthia Nixon.

Nobody thinks Ms. Nixon has much of a chance of becoming the Democrat nominee for Governor in the fall, but that’s not really the point. The point is that in Andrew Cuomo’s eyes, and the eyes of old white male heterosexual Democrats like him, Cynthia Nixon looks like the future while he looks like the past. Ms. Nixon is female, homosexual, and wa-a-a-ay out on the political Left. She makes our poor governor feel like a relic.

Don’t place any bets against Cuomo. He’s a skillful politician with the state party in his pocket. He’ll get the nomination, then he’ll win re-election in November. Our state is mostly Republican; but the wee bit that isn’t includes New York City, which has close to half the state’s population … enough said.

Still the guy’s nervous. He was also a little rattled, earlier this week—before the Wednesday bill-signing event—he was a little rattled by President Trump having been in the state on Monday, at a fundraiser for the state Republican Party. At that event our President speculated that maybe Cuomo wants to run for President in 2020. “Please do it, please,” said the President mockingly. [Trump dares NY Gov. Cuomo to run against him in 2020, says 'anybody that runs against Trump suffers', By Alex Pappas, Fox News, August 13, 2018] The Governor doesn’t like to be mocked, any more than you or I do.

So when Cuomo stepped up on Wednesday to sign this bill against sex trafficking, he was both suffering from chronic existential anxiety about the direction of his party andrattled by Trump’s Monday remark. Under those stresses, his self-control slipped, and he spoke unwisely.

What he actually said was:

We’re not going to make America great again. It was never that great. We have not reached greatness, we will reach greatness when every American is fully engaged, we will reach greatness when discrimination and stereotyping against women, 51 percent of our population, is gone and every woman’s full potential is realized and unleashed and every woman is making her full contribution.

[Andrew Cuomo shocks crowd, says America 'was never that great', by Adam Shaw, August 1, 2018]

Now, taken on face value, that’s gibberish. Men and women are biologically different; they are never going to exhibit identical profiles on every kind of behavior, achievement, or social outcome. As for “discrimination”: Well, someone should ask the governor why, if women are “51 percent of our population,” they are 56 percent of college students but less than seven percent of federal prison inmates.

But that’s giving the Governor’s words more respect than they deserve. He’s not making observations about real things in the real world; he’s a politician sending out signals to likely voters. The signal there was:

“I’m not a part of that rotten old patriarchy trying to keep women down. I am cool and up-to-date with the newDemocratic Party, which is absolutely not a party of straight old white guys.”

But Cuomo just went a bit too far, saying that America “was never that great.” It’s a logical thing for a Progressive to think. American society in the past had imperfections and injustices; therefore we shouldn’t talk about it having been great; that’s the Progressive mentality.

What it misses is, that all societies everywhere have imperfections and injustices, and this will always be so. The U.S.A. was, and is, great because it had, and has, fewer imperfections and injustices than other nations. That’s why so many people—so many millions, tens of millions of people—wanted, and want, to come and live here.

I got to know the U.S.A. during its Golden Age—the third quarter of the 20th century—and mostly from outside: I grew up in England, didn’t actually get here until 1973. Boy, America was great! —free, rich, victorious, generous, creative…Britain was in imperial decline, half of Europe was under the Soviet yoke, Africa was sinking into post-colonial chaos, India and Pakistan were at loggerheads, South America was run by buffoons like Juan Perón, and in China tens of millions were starving to death under the crudest, cruellest kind of totalitarian dictatorship.

America was great—with very restricted immigration and men mostly running things. We had imperfections, sure; but by comparison with any other country at that time…Well, there was no comparison. We were the greatest.

The Progressive vision is narrow, provincial, and present-centric. The past, according to them, was bad; the present is just tolerable; the future will be radiant.

That is no basis for policy. There are good reasons to think that if we don’t get a grip on mass immigration, America’s future will be Venezuela. There are good reasons to think that if the insulting and belittling of men under labels like “toxic masculinity” keeps going, the things that men do better than women—leadership, risk-taking, science, engineering—won’t get done, or will get done elsewhere, not in America.

Whether Andrew Cuomo understands any of that, I don’t know. He has to pretend notto understand it because of the threat from his Left—from people like Cynthia Nixon, who surely don’t understand it.

That is the dilemma of white men in the Democratic Party today. They deserve it.

Published:8/25/2018 7:34:26 PM
[Opinion] Liberals Are So Hateful And Thoughtless That They Endanger Their Own Future And Wellbeing

By Dave King -

Will South Africa become Zimbabwe 2.0 - Ben Garrison

How many American liberals, the concerned people they pretend to be, have given their money or even their homes to a Native American tribe because the property was stolen from the Native Americans by their great, great, great grandparents? Similarly, how many liberals have given a vacation property, a farm or ...

Liberals Are So Hateful And Thoughtless That They Endanger Their Own Future And Wellbeing is original content from Conservative Daily News - Where Americans go for news, current events and commentary they can trust.

Published:8/25/2018 7:34:26 PM
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Published:8/25/2018 7:07:13 PM
[Markets] Not Just China Anymore: "Facial Biometrics" Scan Used To Catch Imposter At D.C. Airport

A year ago we explained how what at first seemed like creeping tip-toe incrementalism toward the use of biometric ID for travel is quickly becoming a warp-speed reality.

At that time DHS and U.S. Customs and Border Protection (CBP) announced that they would integrate government databases with a private company to speed up biometric processing in an experimental test program initially rolled out only at a couple of select airports. Since that time the program has exploded to include a dozen or more international airports

It's essentially what China has already implemented on a large, Orwellian scale, and involves plans for possible mandatory face scans for all travelers to foreign destinations. And US officials are now touting the technology's recent use at Washington Dulles International Airport to catch an alleged imposter traveling on a fake passport

According to the government and contract industry defense tech news site NextGov:

CBP officials at Washington Dulles International Airport Wednesday said the newly implemented facial biometric program identified a 26-year-old Congolese man attempting to enter the U.S. using a French passport.

The man, traveling from Sao Paulo, Brazil on Tuesday, went through the new international entry system at Dulles Airport, which brings travelers directly to a CBP officer for document inspection. While the documents are being scanned, a biometric camera analyzes the passenger’s face and compares it against records associated with the passport or other travel documents.

With this first successful case of flagging fake credentials based on the technology, the American public will likely soon be flooded with more "success stories" as federal authorities prepare the American public for more stringent security measures as citizens pass through airport checkpoints. 

In this particular case, the facial recognition technology was only in its third day of use. 

The NextGov report describes further that "In this instance, the system flagged the man as a mismatch for the passport on record and he was removed for additional screening. At that time, officers said he became visibly nervous and an authentic ID card showing he was a citizen of the Republic of Congo was found in his shoe."

Not missing an opportunity to soften American citizens' legitimate concern for privacy in what appears a Minority Report dystopian scenario where people's biometric data could be stored by the feds for all time (DHS officials and program-related documents have previously "promised" this won't happen, and hopes that people will simply take them at their word), DHS officials are hailing this as an "important step forward" in protecting Americans from terrorism and crime

“Facial recognition technology is an important step forward for CBP in protecting the United States from all types of threats,” says Casey Durst, director of CBP's Baltimore Field Office, in a public statement after the Dulles incident. “Terrorists and criminals continually look for creative methods to enter the U.S. including using stolen genuine documents. The new facial recognition technology virtually eliminates the ability for someone to use a genuine document that was issued to someone else.”

Noting that 14 more airports have integrated biometric procedures this summer alone, the NextGov report notes this not-too-comforting fact: "The programs are also extending beyond customs to the entire air travel system. A pilot program at JFK International Airport in New York was recently expanded to integrate the system with Transportation Security Administration checkpoints."

Facial recognition scan in action at TSA screening point. Image via NBC News

Meanwhile one notable outspoken critic of the program, Harrison Rudolph, who runs the Center on Privacy and Technology at Georgetown University Law School says the technology may actually at times falsely identify people, and that the potential permanent government database storage is a legitimate looming concern. 

The privacy researcher was cited by NPR last Spring"DHS doesn't seem to know whether its system will falsely reject folks," that is, be unable to match the face scan with photos it has in the system, at higher rates because of their race or gender. "That's a serious problem," he says.

Rudolph said further, "DHS hasn't issued a single rule under this program to protect Americans' privacy," and added, "So what DHS decides to do with this information tomorrow, I'm not sure. And without rules there may be few protections for Americans' privacy."

With such issues left completely unsettled, and with the government claiming it would never, never abuse such a technology... the consistent refrain in reports over the last year has been its fast coming to an airport near you.

Published:8/25/2018 7:07:13 PM
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Published:8/25/2018 6:07:19 PM
[Markets] Latest Freight Data Confirms Alarming Slowdown In Global Trade

While the US stock market and economy continue to remain stubbornly immune to the ongoing trade war, the same can not be said for global trade as observed and measured by world freight shipping and volumes. According to the latest Goldman freight data, there has been a gradual slowing in global trade since 4Q17, and the July readings suggest an alarming continuation, and in some cases acceleration, of this trend.

The deceleration has closely tracked a tightening in global financial conditions, particularly evident in EM data, which in turn has largely been a manifestation of the ongoing escalation in trade tensions between the US and China.

Indeed, the implementation of the first round of US-China tariffs in early July may also have had an impact: US West Coast inbound port volumes were -1% in July (5% in 1H), while Chinese ports’ throughput growth slowed to 2% (6% in 1H), worse than implied by the close historical correlation with Chinese export orders. At the same time, air cargo growth at Europe’s key hubs turned negative (-2%) in July, with weakness cited on Asia-Europe. Looking forward, global manufacturing export orders in June/July were consistent with slightly positive, albeit slowing growth.

Breaking down freight by segment, here are some observations from a recent Goldman report:

  • Sea & air freight (volume growth positive, momentum negative): Freight datapoints have indicated a deceleration in growth since 4Q17. July data appears to have stabilised in Sea, with volumes growing c.3% in line with June, while Air freight growth has decelerated further; e.g. EU airport cargo -2% yoy from 1% in 1H, 7% in 2017.
  • Container: Active fleet growth continues to slow following announced capacity cuts (6% in August vs. 9% in 1H); Goldman expects further slowing to c.2% by mid-2019. While overcapacity in 1H limited carriers’ ability to pass on rising bunker and charter costs, there are now clear signs of supply rationalisation, as carriers begin to hand back capacity and new orders remain low.
  • Airlines (momentum weaker): While the market environment has remained broadly positive for EU-airlines ytd, growth in load factors has been slightly weaker recently. Forward capacity data suggests stable short-haul capacity trends in Europe, while long-haul supply growth is decelerating.
  • Infrastructure (volume growth positive, momentum stable): Airport (EU hub) traffic grew 4% in July, a slight deceleration from 6% growth in 1H18/2017/2016. Looking at scheduled airline seat capacity for the coming months suggests near-term traffic growth will remain at similar levels, albeit with growth slowing from high levels in Frankfurt, Spain and Portugal.
  • Commodities shipping (freight rates improving, momentum better): In dry bulk, rates have been slightly stronger owing to improved Asian demand and low supply growth of c.2%. Oil tanker rates have been weak over the past year but appear to have stabilized, and slowing fleet growth could be supportive of rate upside. LNG tanker rates have improved ytd from historical lows as higher Asian imports have boosted demand

Here is how global trade has slowed down recently in charts:

While freight volume growth remains steady c.3% in Sea, Air turned slightly negative in July for the first time in 2 years.

One of the factors cited for the slowdown in global manufacturing trade has been the tightening in financial conditions this year.

At the same time, even as the weaker Yuan has been supportive of East-West volumes...

... container rates have been on a declining path recently following capacity cuts.

Chinese port data was surprisingly weak in July

But it's not just China, as Asian hubs have been generally weaker

Transit through the Suez Canal trade hub has also slowed sharply in July, up just 4% vs 10% in Q2

US port throughput has also been weaker, with LA/LB imports down in July

Meanwhile, inventories have been building in the EU as sales growth weakens

Due to declining transit and higher fuel prices, containership vessel speeds have continued to slow.

 

After hitting historic lows recently, the idle fleet of charter owners and liners is starting to rise again.

 

More concerning is that the global shipping orderbook as a % of the total fleet is at record lows.