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[Markets] Trader Warns Yield Curve Inversion Confirms Fed's "Inadvertent Transmission Of A Sense Of Panic"

Via Bloomberg's Richard Breslow,

It isn’t all that meaningful to debate whether the inverted yield curve in the U.S. that occurred Friday will lead to a recession a year from now. Nothing is written in stone. Whether one comes to pass or not doesn’t validate nor negate the signal one way or the other.

The point is, it was a clear sign that investors perceive that there is trouble lurking now. And you need to trade accordingly. We aren’t talking about making a decision about investing in a new manufacturing facility or a share buyback. But whether it is better, here and now, to be looking to add to 10-year longs at 2.50% or fade the market against 2.40%.

It is a mistake to watch how the shape of the Treasury curve evolves and start parsing the U.S. data in isolation. Because if you do that, it is in fact reasonable to conclude that the market has probably overreacted. As has the Fed. If not in deed, in how they conveyed their message. They inadvertently transmitted a sense of panic, the assurances that the economy is in a “good place” notwithstanding.

[ZH: The market is now pricing an easier Fed in 2019 than ECB]

But it just isn’t possible to escape the fact that how the rest of the world is faring directly affects the U.S. economy and asset prices. Just how attractive U.S. assets and the dollar appear has to be judged through the prism of what are the global alternatives. Not to mention, where along the duration spectrum, the Treasury Department decides to finance the growing deficit.

The PMI data out of Europe really shook people up. The core country readings were horrid and sent bunds back below zero. They were the seminal data at the end of last week and had global repercussions, including for Treasuries and U.S. equities. Today’s IFO data from Germany seems to have lifted traders’ mood. It’s not a question of whether Germany was cured over the weekend. It’s of the need to just keep on reminding ourselves that these are markets that are excessively fickle. Which is another way of saying, it doesn’t take much to cause things to turn on a dime.

If you are watching 10-year Treasuries, the low in yield from the very beginning of the year is shaping up to be an enormous pivot level. It may seem far away, but really isn’t. If Friday’s move was real, you shouldn’t expect this level, circa 2.55%, to be breached. If bund traders conclude negative yields aren’t actually appropriate, we could easily see that Treasury pivot come into play. Overnight volumes in Treasury futures ran very high. There is a lot of interest at these levels. The market hasn’t been moving on air.

As far as equities are concerned, the S&P 500 traded conveniently down to and settled at its first major technical level at 2800.

It was instructive that I heard more people discuss how much further it can fall and still be “corrective.” Oddly fewer seemed to be arguing to take advantage of this “gift.” I can’t wait to see what will be written this evening.

Emerging-market currencies, gold, crude and the Dollar Index have all traded to meaningful technical levels. I won’t try to predict where everything will be at the end of the week. But it seems clear that when we close the books on the first quarter they won’t be here.

Published:3/25/2019 8:31:06 AM
[Markets] NZ On Edge: Festival Evacuated Over 'Far-Right' Tattoo; Crime To Download, Distribute Manifesto

New Zealand is on edge following the March 15 terror attacks at two Christchurch mosques that left 50 dead. 

On Saturday, around 5,000 concertgoers were evacuated from the Homegrown Music Festival in Wellington because a festival worker reported someone with a 'far-right' tattoo.

After the roughly 30 minute evacuation, the tattoo was discovered to be "traditional" instead, according to the New Zealand Herald (h/t Cassandra Fairbanks of Gateway Pundit)

"Some of the Homegrown crew identified a person that they were concerned about and police made the call that person needed to be found," said Homegrown spokeswoman Kelly Wright, adding that the incident was an "innocent misunderstanding."

"It all happened at the change-over of the music so people were moving around and police couldn't spot the person immediately so they made the call to evacuate the stage. The person was found and it turned out that is was a completely innocent misunderstanding and everyone was allowed to return."

Illegal manifesto

According to New Zealand's Chief Censor David Shanks, a so-called manifesto attributed to suspected gunman Brenton Tarrant was ruled "objectionable" on Saturday, making it a crime to possess or distribute it anywhere in the country. 

"People who have downloaded this document, or printed it, should destroy any copies," said Shanks. 

"There is an important distinction to be made between ‘hate speech,’ which may be rejected by many right-thinking people but which is legal to express, and this type of publication, which is deliberately constructed to inspire further murder and terrorism," said Shanks, adding "It crosses the line." 

Prosecutors have also gone after people who shared that video.

As of Thursday, at least two people had been charged with sharing the video via social media, under a law that forbids dissemination or possession of material depicting extreme violence and terrorism.

Others could face related charges in connection with publicizing the terrorist attack, under a human rights law that forbids incitement of racial disharmony. -NYT

"It promotes, encourages and justifies acts of murder and terrorist violence against identified groups of people," said Shanks. "It identifies specific places for potential attack in New Zealand, and refers to the means by which other types of attack may be carried out. It contains justifications for acts of tremendous cruelty, such as the deliberate killing of children." 

As far as 'hate speech' which is 'legal to express,' Shanks may want to touch base with police in Masterton, who announced that they were charging a 28-year-old woman with 'inciting racial disharmony' over a Facebook post which contained an "upsetting" message related to "the events in Christchurch and this person's views on what had occurred."

Senior Sergeant Jennifer Hansen

"We were made aware that this post had been put up on Facebook which had upset a number of people to the point that they felt uncomfortable taking kids to school because of the comments that had been made," said Sergeant Jennifer Hansen. 

Meanwhile, several Kiwis who have shared videos of the Christchurch massacre at work have been fired

Last week, New Zealand authorities have reminded citizens that they face up to 10 years in prison for "knowingly" possessing a copy of the New Zealand mosque shooting video - and up to 14 years in prison for sharing it. Corporations (such as web hosts) face an additional $200,000 ($137,000 US) fine under the same law. 

Free speech advocates, however, are concerned with Ardern’s censorship-heavy approach.

“People are more confident of each other and their leaders when there is no room left for conspiracy theories, when nothing is hidden,” Stephen Franks, a constitutional lawyer and spokesman for the Free Speech Coalition, told AP.

“The damage and risks are greater from suppressing these things than they are from trusting people to form their own conclusions and to see evil or madness for what it is.”

Speaking about Tarrant’s first-person-shooter-style video, counterterrorism expert Jennifer Breedon told RT that banning such videos does nothing to prevent future attacks.

“We need to stop putting band-aids on gunshot wounds,” she said. “We’re spending so much time talking about ‘we can’t have videos like this’...rather than answering questions that need to be asked.”

Into the memory hole

Meanwhile, journalist Nick Monroe noted that New Zealand news outlet Stuff has deleted an article in which a 30-year-old New Zealand resident converted to Islam and was "introduced to radical Islam at the Al-Noor mosque in Christchurch."

New Zealand has also banned books by author Jordan Peterson

In short, "never let a good crisis go to waste" applies in New Zealand.  

Published:3/24/2019 9:28:12 PM
[Markets] New Jersey Legislators Demand "Huck Finn" Be Removed From State's Schools

Via The College Fix,

Here we go again: A pair of lawmakers in New Jersey want the state’s schools to stop using the classic Mark Twain novel “Adventures of Huckleberry Finn“ in their classrooms.

As reported by Politico, although the book contains numerous “anti-racist and anti-slavery themes” it also features over 200 mentions of the N-word. New Jersey State Assembly members Verlina Reynolds-Jackson and Jamel Holley contend the latter “can cause students to feel upset, marginalized or humiliated and can create an uncomfortable atmosphere in the classroom.”

The lawmakers’ non-binding resolution notes various school districts in Pennsylvania, Virginia, Minnesota and Mississippi have ditched the book from their curricula.

“There are other books out there that can teach about character, plot and motive — other ways besides using this particular book for that lesson,” Reynolds-Jackson told Politico. 

She noted the catalyst for the measure was a cyber-bullying incident against a black student which featured racist epithets and threats of lynching … but admitted Twain’s novel had nothing to do it.

According to the American Library Association, “Huck Finn” was the 14th most challenged or banned book from 2000-2009.

Top 20 Banned/Challenged Books: 2000-2009

1. Harry Potter (series), by J.K. Rowling
2. Alice series, by Phyllis Reynolds Naylor
3. The Chocolate War, by Robert Cormier
4. And Tango Makes Three, by Justin Richardson/Peter Parnell
5. Of Mice and Men, by John Steinbeck
6. I Know Why the Caged Bird Sings, by Maya Angelou
7. Scary Stories (series), by Alvin Schwartz
8. His Dark Materials (series), by Philip Pullman
9. ttyl; ttfn; l8r g8r (series), by Lauren Myracle
10. The Perks of Being a Wallflower, by Stephen Chbosky
11. Fallen Angels, by Walter Dean Myers
12. It’s Perfectly Normal, by Robie Harris
13. Captain Underpants (series), by Dav Pilkey
14. The Adventures of Huckleberry Finn, by Mark Twain
15. The Bluest Eye, by Toni Morrison
16. Forever, by Judy Blume
17. The Color Purple, by Alice Walker
18. Go Ask Alice, by Anonymous
19. Catcher in the Rye, by J.D. Salinger
20. King and King, by Linda de Haan

From the story:

The Assembly resolution by Reynolds-Jackson and Holley states that the book’s inclusion in school curricula “in effect requires adolescents to read and discuss a book containing hurtful, oppressive, and highly offensive languages directed towards African-Americans.”

While the resolution does not state that “Adventures of Huckleberry Finn“ is a racist book, Reynolds-Jackson — who said she read it “many years ago“ — believes it is.

“I think this is a racist book,” she said. “I think in the climate that we’re in right now, where you have a president that is caging up our children and separating us in this way, I think to use this book in this climate is not doing the African-American community any justice at all.”

However, Reynolds-Jackson acknowledged that several teachers she spoke with like teaching the book.

“I think you have to make sure you have a strong instructor to lead that conversation and those technical skills in developing our students,” she said.

Acclaimed (black) author Toni Morrison, who as a child was disturbed by the novel, said that she grew to appreciate the book in “later readings.” She noted that attempts to censor the classic are “a purist yet elementary kind of censorship designed to appease adults rather than educate children.”

h/t: RedState

Published:3/24/2019 8:57:53 PM
[The Blog] Baltimore bookgate continues: Where are all the books?

Hard to follow the money when there are no receipts

The post Baltimore bookgate continues: Where are all the books? appeared first on Hot Air.

Published:3/24/2019 8:54:37 AM
[Markets] France Is The Socialist Future We Should Dread

Authored by Veronique de Rugy via The American Institute for Economic Research,

A lot of attention and ink are being poured these days in trying to explain to a generation of voters why socialism always fails. Not only does socialism always fail to deliver the economic goods; it is also a source of massive oppression and pain.

I get why so many are devoting such amounts of energy to this task. First, the likes of Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez and few others have made the notion of socialism acceptable in some circles and even hip. Also, according to a poll from August, for the first time since Gallup has asked the question, more Democrats approve of socialism than of capitalism.

However, if all we do is talk about how Venezuela is a hellhole and Cuba is a terrible place, I fear that we might end up being the modern equivalent of Don Quixote fighting the windmill.

The Cuban Model

There is a ton of work still to do to help younger Americans understand how Venezuela and Cuba ended up being such horrible places (in some cases, we even have to explain that yes, indeed, these are horrible places). Until Venezuela was in the news on a regular basis because of the approach of its people toward starvation, as well as the expropriation and daily tyranny from Chavez-Maduro regime, there were plenty of intellectuals praising the system. And let’s not forget the praises or lack of condemnation for the oppressive regime that is Cuba coming from many world leaders after Fidel Castro finally died.

So yes, there is a lot of work to be done. However, if that’s all we do in response to AOC and Sanders promising Americans that a socialist regime will produce a world where everyone works less, earns more, gets free healthcare and schooling, and receives generous subsidies from the government even when one decides not to work, no one tempted by socialism will listen.

The Swedish Model

That’s because when Sanders and his ilk talk about socialism, they aren’t talking about expropriating property rights, nationalizing all businesses, or eliminating all but one - the state’s - television channel. They aren’t talking about Venezuela or Cuba. Instead, they are talking about Denmark and Sweden.

It is true that Sanders and his people fail apparently don’t to understand that socialism exists on a spectrum. On one side you have the dictatorships, while on the other side you have the social democracies. Both sides of the spectrum use oppression and compulsory taxation to achieve their goals. But the degree to which they do so varies a great deal.

This variation in socialist methods gives rise also to variation in the legitimacy of different degrees of socialism. No one seriously ever thinks of French president Emmanuel Macron as a despot (even though his own people happen to call him tyrannical on a regular basis) in spite of the gigantic size of the French state and the enormous amount of taxes extracted by the regime. One side allows elections, the other side either forbids them or makes a mockery of the concept.

Yet, it is also true that all varieties of socialism fail to achieve their goals for the same reason: all varieties attempt, to one degree or another, to substitute the decisions of government planners for those of private citizens interacting in competitive markets.

And in doing so, all varieties of socialism suffer from the insurmountable knowledge problem, as beautifully demonstrated by the late economist Don Lavoie in his book 1985 book, National Economic Planning: What is Left?

That said, there is still a vast difference between Venezuela and Denmark in term of how much of the economy planners try to control and, as a result, how much of the economy planners destroy. I worry that if we keep talking as if today’s American Democrats envision controls as extensive as exist in Venezuela, those of us who warn of the dangers that lurk in the schemes of Sanders and AOC won’t get through.

The French Model

In addition to this difficulty is the fact that while they claim that they are talking about Nordic countries, what Sanders and AOC actually have in mind is a regime more like that of France. When Sweden and Denmark each had in place a regime closer to what Sanders is talking about, the results were so bad that each of these countries put in place pretty dramatic free-marketreforms. These two countries are by no means libertarian paradises, but thanks large spending cuts and lower taxes, they aren’t the hot mess that they once were.

France is, though, such a mess. That’s because there is one aspect in particular that the AOCs and Sanderses of the world fail to mention to their followers when they talk about their socialist dream: all of the goodies that they believe the American people are entitled to receive in fact come at a great cost -–and so the only way to pay for these goodies is with oppressive and regressive taxes (i.e., taxes heaped on to the backs of the middle class and the poor).

France was once a role model for what big government can do for its people. But it has become an embarrassing example since “The Gilets Jaunes” took to the streets to demonstrate against the insane amount of taxes they pay. These guys aren’t upper class. They are the people who have until now supported the policies that are inevitable when you have the government providing so many services and involved so deeply in so much of the economy.

Talking about taxes, the WSJ had a good summary of the situation:

The Organization for Economic Cooperation and Development (OECD) released its annual Revenue Statistics report this week, and France topped the charts, with a tax take equal to 46.2% of GDP in 2017. That’s more than Denmark (46%), Sweden (44%) and Germany (37.5%), and far more than the OECD average (34.2%) or the U.S. (27.1%, which includes all levels of government).

France doesn’t collect that revenue in the ways you might think. Despite the stereotype of heavy European income taxes on the rich, Paris relies disproportionately on social-insurance, payroll and property taxes. Social taxes account for 37% of French revenue; the OECD average is 26%. Payroll and property taxes contribute 3% and 9%, compared to the OECD averages of 1% and 6%.

As a reminder, the payroll tax is very regressive; it consumes a larger share of low and middle class earners than rich people. In addition:

Then Europe adds a regressive consumption tax, the value-added tax. In France, VAT and other consumption taxes make up 24% of revenue, and that’s on the low side compared to an OECD average of 33%. Consumption taxes often fall hardest on the poor and middle class, who devote a greater proportion of their income to consumption.

To be sure, the spending is also more regressive in France in that the biggest share goes to the middle and low-income earners. But it is a stupid system in which you tax one group to redistribute to that same group.

Add one more increase to an already high (and regressive) gas tax in France to the existing 214 taxes and duties and the people went nuts. They have been protesting continuously since November 17th, 2018. I don’t condone the violence, but I understand why the protestors are so furious.

Regimentation in Labor

Their anger is further fueled by the very rigid labor market. France has all sorts of labor regulations on the books: some preventing firms from firing workers and, hence, creating a disincentive to hire workers in the first place. Other regulations, such as the minimum wage, that make the cost of employing people so high that employers don’t employ people. It is also not surprising that so many fast food restaurants in France have replaced employees with robots.

Like other countries, the French also have all sorts of “generous” family friendly laws that end up backfiring and penalizing female employment. The French government is also very generous to those people who don’t work. All of these policies make the lives of lower and middle-class people harder, unemployment is high (24.5 percent for young French people) and economic growth has been anemic for decades.

The bottom line is this. All those people in America who currently fall for the socialism soup that AOC and Sanders are selling need to realize that if their dream came to pass, they, not the rich – not the bankers and politicians – will be ones suffering the most from the high taxes, high unemployment, and slow growth that go hand in hand with the level of public spending they want.

Everyone would suffer, of course. But those who will be screwed the most are definitely those at the bottom.

Published:3/24/2019 7:26:25 AM
[Markets] Greenwald: Coping Strategies For All Russiagate Peddlers Now In Mourning

The Intercept's Glenn Greenwald has some advice for the mainstream media and pundit class, already in mourning — or perhaps in the initial "denial stage" of grief on how to cope after it's now glaringly evident that Mueller is to indict zero Americans for conspiring with Russia to influence the 2016 election.

“Special Counsel Mueller is not recommending ANY further indictments am told” — CNN’s Justice Department reporter Laura Jarrett tweeted upon the Friday conclusion of the two year long investigation. 

Greenwald, himself no Trump supporter yet long smeared as a "Russian stooge" for daring to question the whole basis of two years of endless media 'Russiagate' hysteria, has some clear-eyed advice and coping strategies for a mainstream media sure to spend this weekend in shock and denial...

"If you constantly went on TV or wrote things to mislead millions into believing Mueller was coming to arrest Trump, Jr., Jared and a whole slew of others for conspiring with the Russians, just admit it. Save yourselves the embarrassment of all this whitewashing & pretending," Greenwald advised.  

Of Friday's major network reporting, Greenwald noted:

"At least CNN and MSNBC had the decency last night to have a funereal tone."

Greenwald pointed out possible signs of mainstream media baby steps in the grieving process: "There were no admissions of wrongdoing, and it seemed more pained and coerced than voluntary, but at least it was the first step in the coping process. Down that path lies some salvation at least."

Over at MSNBC, Rachel Maddow appeared to grapple with holding back a range of emotions Friday night. 

Funereal tone indeed.

Greenwald continued:

I mean: they didn't even get Carter Page! When I was urging a full investigation in lieu of media leaks & predicting the likely outcome back in March, 2017, even I thought they'd get one low-level person for Russia conspiring. No: they got zero.

With final collapse of the narrative, Greenwald said further, it is crucial to recall the following: "It's absolutely true nobody benefited more from the endless stream of Trump/Russia bullshit than MSNBC. It saved careers & that network. It generated huge ratings."

"It enabled them to sell best-selling books to deluded followers. It turned them into stars. It was a 2-year party," he concluded.

Now the party's over. 

But no doubt the goal posts are already being moved, tweets are being deleted, and we are likely moments away from "Mueller who?" and "now look over there". 

It's likely that most will skip the mourning process altogether and get straight to scrubbing recent history.

They would be wise to heed Greenwald's prudent coping advice: Save yourselves the embarrassment of all this whitewashing & pretending.

Published:3/23/2019 3:49:58 PM
[Markets] Watergate - The First Deep State Coup

Authored by Peter Brimelow via The Unz Review,

James Fulford writes: 

The Mueller Report, which was supposed to be about alleged “Russian collusion” with Trump, is due out, and many people in the Democrat/Media conglomerate are hoping for a rerun of Watergate, which they think of as a victory for the Rule of Law. It wasn’t, and we need to have one of those famous “conversations” about what it was, and why it mustn’t happen again.

In 1972, Richard Nixon was reelected with 520 electoral votes. He was running on winning the Vietnam War and also fighting a War on Crime. His opponent, George McGovern (17 electoral votes) was running on a plan to lose the Vietnam War, and surrender on the War on Crime.

But by August 1974, Nixon was removed from office, and in April 1975, Vietnamese Communist troops occupied Saigon. What finished off South Vietnam was the “Watergate Congress” which voted to cut off all supplies. For details see James Webb’s Peace? Defeat? What Did the Vietnam War Protesters Want?American Enterprise Institute, May/June 1997.

Who did this? Well, the Democrat-controlled Senate investigated the hell out of a break-and-enter committed by Republicans, which they never did when LBJ, JFK, Truman, and FDR engaged in similar activities. See It Didn’t Start With Watergate , [PDF]by Victor Lasky, published in 1977. On the Senate investigative staff was a young, far-Left Wellesley graduate named Hillary Clinton.

The Democratic media, which hated Nixon with the same kind of hate they now display towards Trump, did the same thing, led by the famous Woodward and Bernstein, who probably get too much “credit” for this.

Finally, in something that Editor Peter Brimelow speculated about in his 1981 Policy Review article reposted below, the secret figure of “Deep Throat” (Woodward and Bernstein’s name for an source inside the Government) turned out to Mark Felt, second in command of the FBI. [The Myth of Deep Throat | Mark Felt wasn’t out to protect American democracy and the rule of law; he was out to get a promotion, by Max Holland September 10, 2017]

Peter Brimelow described this phenomenon of using lawfare to overturn elections by trying to criminalize the victors in his post Manafort, Marlborough, And Robert E. Lee: Criminalizing Policy/ Personnel, Differences— U.S. Politics Regressing To The Primitive.

Once again, the Establishment is trying, as they did during Watergate, to overturn the results of an election with the aid of a Deep State, and the “foreign policy” establishment. “Deep Throat” Felt thought Nixon was interfering with the “independence” of the FBI, which he thought should be immune to interference by the President of the United States, and apparently James Comey feels the same way.

If this coup succeeds, instead of the Republic of South Vietnam being overrun by foreign invaders and destroyed, the victim will be the Historic American Nation.

Machiavelli Redux

By Peter Brimelow, Policy Review,Winter 1981

GO QUIETLY . . . OR ELSE. By Spiro T. Agnew. (Wm. Morrow, New York, 1980)

THE TERRORS OF JUSTICEBy Maurice Stans. (New York, Everest House, 1978)

WILL: THE AUTOBIOGRAPHY OF G. GORDON LIDDY. By G. Gordon Liddy. (St. Martins Press, New York, 1980)

Machiavelli concluded The Prince by quoting Petrarch in an attempt to inspire the rulers of Italy:

For th’ old Romane valour is not dead
Nor in th’ Italians brests extinguished.

Reading these three books by survivors of the Nixon disaster brings home how totally that Administration, which more than any other in recent history would have welcomed comparisons with Machiavelli, departed from his prescription. The reason was not exactly lack of patriotism, but rather a failure to understand the humane, even idealistic spark that animated Machiavelli’s ironic realism. Indeed, the books raise the broader question of whether American society itself is going through the kind of degeneration Machiavelli decried in Italy, so that it no longer supports what might loosely be called the “Roman” or “military” virtues: courage, loyalty, and personal integrity.

These reflections may seem odd, given that all three authors fought losing bouts with the law. Spiro Agnew resigned the Vice-Presidency and entered a plea of nolo contendere to a charge that he received payments in 1967 which were not expended for political purposes and which were therefore subject to income tax. The prosecution’s statement included forty pages about Mr. Agnew’s alleged bribe-taking while he was Governor of Maryland; Mr. Agnew issued a one-page denial. The judge said, accurately, that both were irrelevant to the case before him, and fined Mr. Agnew $10,000. Maurice Stans, Nixon’s 1972 Finance Chairman, pleaded guilty to two charges of unknowingly accepting illegal contributions and three charges of reporting contributions tardily. He was fined $5,000. Previously Mr. Stans had been found innocent, along with John Mitchell, on ten counts of conspiracy, obstruction of justice, and perjury relating to an alleged attempt by financier Robert Vesco to buy protection from the Securities and Exchange Commission. Gordon Liddy was sentenced to twenty years in prison and fined $40,000 for the Watergate burglary, a year and a half for refusing to talk to the Watergate grand jury, and a (suspended) year for contempt of Congress.

With the exception of Mr. Liddy, who merits separate examination, it will immediately be seen that the infractions that were actually proved were basically technical. The connection between them was a hysterical illusion, and the punishments unusually harsh. This is particularly true for Maurice Stans, who was dealing with a complex law which changed in the course of the campaign, and who was also the victim of a quantum jump in public standards. Mr. Stans makes a convincing case that his CREEP stewardship was at least as respectable as the work of his contemporaries in other campaigns. They too had (less publicized) legal difficulties; Edmund Muskie’s fundraiser even volunteered to testify for Mr. Stans at the Vesco trail.

If Mr. Agnew did accept rake-offs, as the prosecutors claimed, it should be asked in all fairness whether his conduct varied substantially from accepted Maryland standards—particularly since there is no evidence that the money influenced his decisions. As always where Watergate is concerned, the real question becomes: Why did such practices excite such abnormal attention under Nixon, when Congress and press have shrugged off similar standards before and since? The many disparate Nixonian problems combined to produce a mixture that makes free-base cocaine look safe as chewing gum in comparison, under the influence of mysterious forces similar to those that produced the Grande Peur, or Salem’s witch trials. An instructive parallel might well be Britain’s 1962-63 Profumo crisis, which likewise enabled hostile opinion to l ink wildly unrelated charges, and incinerated an unpopular government.

As Mr. Agnew has repeatedly pointed out, of course, allegation is not conviction, although it has been treated as such by the media and the IRS, whose demands for back taxes on bribes Mr. Agnew denied taking caused him a cash-flow crisis from which he was rescued by the remarkable generosity of Frank Sinatra. But the irreducible fact of his resignation overshadows any attempted defense. Mr. Agnew ascribes his surrender to the impossibility of receiving a fair trial because of prejudicial publicity, overheated politics, implacably ambitious prosecutors, and impossible costs; and to his own exhaustion and bitterness at his abandonment by Nixon.

Mr. Agnew also says that Alexander Haig implied he might be killed if he did not “go quietly.” However, this may be the token sensational revelation all Watergate memoirs require, like H.R. Haldeman’ s claim of a mooted partition of China, Gordon Liddy’s contemplated assassinations of Jack Anderson and Howard Hunt, and John Dean’s insinuation that Nixon faked Alger Hiss’ typewriter. Other regular features of this new literary form are dramatic opening scenes, followed by flashbacks; and copious direct speech. On the whole, the results have compared very favorably with other native American genres like Westerns and Perry Mason.

Mr. Agnew’s story rings sincere when he writes of “the emotional reaction that made me physically ill” on reviewing the prosecutors’ files on his case (obtained years later), or of his wife’s dead faint when he told her he was capitulating. But even after that, he assured conservatives he would fight to the end, although his lawyers were already negotiating terms. This unedifying betrayal of his loyal supporters renders consideration of his guilt or innocence ultimately irrelevant.

On the other hand, Mr. Agnew had hardly been given a good example by the Nixon White House. Incredibly, President Nixon apparently hoped to induce Mr. Agnew to resign without even discussing the subject face to face. The picture of Mr. Agnew and his staff waiting in his office until 9 p.m. after Attorney General Richardson had revealed the charges to them—hoping desperately for a call from the President or a summons to Camp David (whence, it emerged, he had fled)—is infinitely pathetic. What they got was a meeting with General Haig and Bryce Harlow, who announced that they thought that the President felt that he should resign. Loyalty to Nixon was a one-way proposition. The White House staff was quick to pounce on any of their number who suffered political injury.

This cult of toughness was naive to the point of stupidity. Even elementary precautions like funding the Watergate burglars’ families were reneged on. It is hardly surprising that the front-line troops mutinied, whereupon the whole structure disintegrated. Machiavelli in a famous passage urged rulers to ensure that the interests of their lieutenants were advanced along with their own; this promoted mutual confidence. This seemingly obvious advice was never more needed. In fact, one of the Administration’s subsequent rationales for its detente policies—that Americans were too engrossed in current gratifications to finance any alternative—can probably best be explained as merely a projection of the leaders’ own short-sighted selfishness.

All three books make the point that the guarantees of equal justice, due process, and presumption of innocence—generally thought to be intrinsic to our system of justice—are simply not operative in a modern bureaucratic state. Mr. Stans spent $400,000 to defend himself against the Vesco charges. The prosecution probably spent over $1 million, but that was taxpayers’ money. That both Mr. Stans and Mr. Agnew could afford no more defense at that price is quite plausible. The IRS even threatened to have Mr. Agnew’s passport revoked if he attempted to resist their demands—an unbreakable hold on a man forced to earn his living in international business because of his Untouchable status at home. The three books also establish that there are few real checks on the legal bureaucracy once it is determined to bring home a conviction. Judge Sirica’s excesses in Mr. Liddy’s trial featured his seating of a juror who could not understand English—a mistake arising because Judge Sirica truncated the voir dire to prevent defense questions about pretrial publicity. (Judge Sirica used his powe r to seal the record about that incident, which remained a secret.) Mr. Liddy was amused: “I really had to hand it to the old goat; neither of us ever hesitated to use power.”

Less amusing were the lengths to which the prosecutors went in the Stans and Agnew cases to induce potential witnesses to co-operate. It should be a matter of some concern that Mr. Agnew was brought down by the testimony of men who themselves were guilty of serious crimes, the consequences of which seem to have been palliated by their cooperation. One witness actually had his conviction overthrown because he was able to show that his guilty plea was induced by illegal promises of leniency, which the trial judges chose to ignore. Having indicted Mr. Stans on the basis of two grand jury appearances—which he made after being assured he was not under investigation—the prosecutors launched an incredible nationwide search for evidence. They hauled President Nixon’s brother in from the West Coast ten times, for example, to “review” his testimony on the single point of whether Mr. Stans had asked for Vesco’s contribution in cash. (Answer: No.)

Worst of all were the constant leaks to the press, from Justice Department and grand jury alike. Maurice Stans found that newspapers routinely printed as fact allegations against him that had been disproved, and that major media outlets like Time refused to carry retractions even when caught in indisputable error. Mr. Stans, whose book is a model of reason and comprehensiveness, suggests thoughtfully that maybe the U.S. media should follow the British system of restricting publicity after indictment, and also that the Supreme Court’s Sullivan ruling went too far in depriving public figures of the means to protect their reputation. He even permits himself to wonder why the media should not (voluntarily) retract untruths in the same way that the Federal Trade Commission compels corporations to correct unsupported advertising claims.

This is the problem in a nutshell. All three books make it depressingly clear that, yes, there is a New Class. And that class makes its own rules in the struggle with rival powers like corporations and elected officials—of either party; previous attorney generals would not have been defeated in attempts to suppress Billygate.

Gordon Liddy’s beautifully written book adds a cultural dimension to this struggle within America, although his factual contribution to the Watergate saga appears limited. Mr. Liddy confines himself narrowly to what he personally saw. He says that he waited until the statute of limitations had expired before speaking, to protect his colleagues. (Actually, he is probably still protecting them.) Although he does reveal that the Nixon administration had CIA technical assistance in some operations, he generally supports the thesis that Watergate was after all a second-rate burglary, not a set-up, as some have speculated. The order came from above, he says, and he believes that the purpose was to find out what derogatory material the Democrats had on their opponents. This version is not likely to satisfy everyone. On closer examination, moreover, Mr. Liddy’s account does leave some questions carefully open. Some of these relate to the details of the burglary; others to the extraordinary circumstances that led to the creation of the White House “Plumbers” unit in the first place: the withdrawal (by J. Edgar Hoover) of the FBI cooperation upon which all previous administrations had relied. Mr. Liddy had been proud to be an FBI agent, and stresses his admiration for Mr. Hoover. But he also prints a memo he wrote in late 1971 urging that Mr. Hoover be removed as Director by the end of the year. Mr. Liddy notes laconically that the President praised the memo, but Mr. Hoover survived. As usual, one is left with an eerie feeling that the Watergate affair has a secret history, untold despite the millions of words.

Mr. Liddy is obviously a cultured man, but his preoccupation with matters of honor, strength, and courage—matters that have been traditional male concerns in almost every society except our own—has rendered him about as comprehensible to the average book reviewer as a Martian. Hence he is ridiculed (by Larry L. King in theNew York Times) or ignored (by the Wall Street Journal, the leading conservative newspaper, which has not reviewed his book—or Mr. Stans’s either, for that matter). The situation is complicated because Mr. Liddy is a cultist, one of the tiny minority of conservatives (and others) who are fascinated by the Third Reich. It is hard to know how serious he is about this. Some of his hints are so blatant (he named the Plumbers group ODESSA, after “a World War II German veterans organization belonged to by some acquaintances of mine”—i.e., the Waffen SS) as to recall his celebrated hand-in-the-flame exhibitions of willpower. Professor Alan Dershowitz of Harvard picked up all these hints, and wrote an angry review in The New Republicasking how a card-carrying Nazi went so far in anyone’s White House. But in fact cultism often has about as much relevance to contemporary politics as transvestism, which it rather resembles. Mr. Liddy supported the liberal Republican who beat him in the New York 25th district primary in 1968, to the chagrin of the Conservative Party, which had nominated him on its own line. His White House career showed a similar pragmatism, except perhaps when his G-man instincts were engaged. And Mr. Liddy obviously liked the blacks he met in prison, finding their harsh society a satisfying substitute for the Korean War he missed through illness, and possibly a rest after the Nixon White House. He quietly but systematically supplies much other evidence of lack of prejudice.

However repellant Mr. Liddy’s code may be, it has some strengths, notably his evident pride in his handsome family. Men like Mr. Liddy are the falcons of society, to be kept hooded until needed. James E. Mahon, who became Eli Hazeev and died training his gun on the Palestinians ambushing Meir Kahane’s followers in Hebron, was reportedly another example. Both found no place in modern America. We need look no further to explain the fiasco at Desert One.

Published:3/22/2019 11:45:27 PM
[Markets] 16 Years After Iraq, The US Has Become A Nation Of Passive Neocons

Authored by Whitney Webb via,

After Iraq, the neocons began waging another war, one for America’s soul.

Sixteen years have passed and the memory of the Iraq War is distant for many, save for the millions of people — Iraqi and American alike — who saw their lives destroyed by one of the greatest lies ever sold to the American public.

Yet, while plenty of Americans sleep easy thinking that such an atrocity as the invasion and occupation of Iraq could never happen again, the U.S. government has continuously been involved in many smaller, equally disastrous wars — both seen and unseen — largely thanks to the fact that those who brought us the Iraq War remain both respected and still present in the halls of power.

Indeed, the only thing the domestic outrage over the Iraq War seemed to accomplish has been a massive effort waged by the government and the corporate elite to engineer a public that doesn’t complain and doesn’t care when their government meddles or invades another country.

For many Americans today, much like the war itself, the outrage over the Iraq War is a distant memory and comparable outrage has failed to emerge over any other U.S. government crime committed or contemplated on a similar scale — whether it be the “regime change” invasion of Libya, the ongoing genocide in Yemen, or in response to crimes the government is now setting up.

Our forgetfulness has informed our silence and our silence is our complicity in the crimes — past and present — orchestrated by the neocons, who never left government after Iraq but instead rebranded themselves and helped to culturally engineer our passivity. As a consequence, we have again been hoodwinked by the neocons, who have transformed America in their image, creating a nation of neocon enablers, a nation of passive neocons.

Iraq War lies revisited

Though the lies that led the U.S. to invade Iraq are well-documented, they deserve to be remembered. A summary of the many  lies — including those regarding alleged yet false links between Saddam Hussein and Al Qaeda as well as Saddam’s alleged links to the anthrax attacks and Iraq’s nonexistent nuclear weapons program — can be found here.

Yet arguably more important than the lies told in the direct lead-up to the war, is the conclusive evidence that key officials in the Bush administration, many of them members of the neoconservative organization known as the Project for a New American Century (PNAC), had planned and called for an invasion of Iraq long before the September 11th attacks had even taken place.

Some researchers say the plan for the Iraq War began decades before with the drafting of the 1992 Defense Policy Guidance (DPG), which was overseen by Paul Wolfowitz, then Under-Secretary of Defense for Policy, who would later become one of the chief architects of the 2003 Iraq War. The DPG spoke of the need to secure “access to vital raw materials, primarily Persian Gulf oil.” It also spoke of the need for the U.S. to develop a protocol for unilaterally pursuing interventions abroad, stating that “the United States should be postured to act independently when collective action cannot be orchestrated.”

The DPG would again find prominence among a new group who called themselves the Project for a New American Century (PNAC). Founded in 1997 by Robert Kagan and Bill Kristol, its first act was to publish a statement of principles that promoted “a Reaganite policy of military strength and moral clarity.” That statement was signed by several politically prominent neoconservatives — Wolfowitz, Dick Cheney and Donald Rumsfeld among them.

Bush, center, answers questions from the media while standing with, from left to right, National Security Adviser Condoleezza Rice, Vice President Dick Cheney, Secretary of Defense Donald Rumsfeld, and Joint Chiefs Chairman Richard Myers, about his Iraq War strategy. Pablo Martinez Monsivais | AP

PNAC is arguably best known for publishing the document “Rebuilding America’s Defenses” in September 2000. That document, which cites the DPG as its inspiration, contains many controversial passages, one of which reads:

The United States has for decades sought to play a more permanent role in Gulf regional security. While the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein.”

After George W. Bush was declared the winner of the 2000 election, many PNAC signatories took prominent positions in his administration, including Cheney and Rumsfeld. Other PNAC signatories — including Dov Zakheim, John Bolton, and Elliott Abrams — would also soon find their way into the Bush administration, where they too would become intimately involved in planning and executing the Iraq War. Notably, Bush’s brother Jeb Bush was also a PNAC signatory.

Once the Bush administration took office, planning for the invasion of Iraq quickly moved ahead, with Saddam’s removal the priority topic during Bush’s inaugural national-security meeting. Former Treasury Secretary Paul O’Neill later recalled that the meeting “was all about finding a way to do it. The president saying, ‘Go find me a way to do this.’”

Just two weeks later, Vice President Dick Cheney — former Halliburton CEO — took the helm of a newly formed energy task force that began secretly meeting with top oil executives. In a matter of weeks, by March 2001, the Pentagon produced a document called “Foreign Suitors for Iraqi Oilfield Contracts” for Cheney’s taskforce, which included potential areas of Iraq primed for exploratory drilling. Notably, other top Bush officials, such as Condoleezza Rice, were, like Cheney, former petroleum industry executives.

Then, just hours after the 9/11 attacks, a Rumsfeld aid wrote: “Best info fast. Judge whether good enough [to] hit SH [Saddam Hussein] @ same time. Not only UBL [Usama bin Laden].”

On September 19, 2001, the Pentagon’s Defense Policy Board, chaired by Richard Perle — another PNAC member — declared that Iraq must be invaded after Afghanistan.

The next day, PNAC, in a letter to Bush, wrote:

Even if evidence does not link Iraq directly to the attack, any strategy aiming at the eradication of terrorism and its sponsors must include a determined effort to remove Saddam Hussein from power.”

It was not until December 2001 that the administration, led by Cheney, had begun to claim that Saddam was linked to Al Qaeda.

Yet, as outlined above, the war plan by then was already well underway.

As the public outrage over the lies and years-old schemes that led to the Iraq war mounted, it was not the exposure of their crimes that riled neoconservatives. Instead, their concern was over the lingering public outrage that severely limited the U.S.’ ability to intervene militarily abroad, leading them to develop more covert operations and other “regime-change” methods aside from outright military intervention. Indeed, Bush had complained that, after Iraq, his “hands were tied,” a reality that prompted him to push the development of secret cyberwarfare programs and the expansion of the drone war, among other new and quieter arrows in the quiver.

In addition to the rise of more covert “regime-change” operations after Iraq, a concerted effort began that aimed to whitewash neoconservatives, particularly the prominent neocons who had been the architects of the Iraq War. These neocons began to rebrand themselves, dumping the now-tainted PNAC in favor of the Foreign Policy Initiative and several other prominent think-tanks that obfuscate their past. Their rebranding has been so successful that PNAC co-founders like Bill Kristol are now considered a part of the Democratic-led “Resistance” to President Donlad Trump.

Jon Lovett, Bill Kristol, Symone Sanders and Jason Miller attend Politicon at The Pasadena Convention Center on Aug. 29, 2017, in Pasadena, Calif. Colin Young-Wolff | Invision | AP

By 2008, the neocons made it clear that rebranding their ideology was the plan, with PNAC co-founder Robert Kagan penning the article “Neocon Nation,” in which, in an effort to whitewash the ideology’s bloodsoaked legacy, he claimed that neoconservatism is “deeply rooted in American history and widely shared by Americans.”

Of course, Kagan’s claim was ironic given that he once criticized Colin Powell for not believing that “the United States should enter conflicts without strong public support,” revealing Kagan’s own disdain for the opinion of the American public. However, his 2008 article shows how, after Iraq, the neocons began waging another war, one for America’s soul.

Obama and “The World the Kagans Made”

After Barack Obama won the 2008 presidential election, many Americans felt that the days of “wars for oil” and wars built on lies would end, particularly after then-President-elect Obama won the Nobel Peace Prize for his warm rhetoric about the need for world peace. Sadly, to this day, many who viscerally opposed the Bush administration’s Iraq War either fail or refuse to acknowledge that Obama was every bit as murderous as his predecessor, though he did so with smooth words, charm and a media-generated personality cult.

While neoconservatives, particularly those who brought us the Iraq War under Bush, are often associated with the Republican Party, the Obama administration — particularly the Hillary Clinton-led State Department — was plugged directly into the same network of neoconservative actors responsible for the destruction of Iraq.

Indeed, upon becoming secretary of state, Clinton quickly appointed Robert Kagan to her 25-member Foreign Affairs Policy Board, a position he continued to hold after John Kerry took over the State Department. Kagan’s book “The World America Made,” was particularly influential on Obama, who cited the book as having inspired his 2012 State of the Union address as well as his 2012 re-election campaign.

Kagan, one of the most influential and prominent neocons of all, served as a State Department official in the Reagan administration and later went on to co-found PNAC in 1997. As early as 1998, Kagan was calling for the U.S. government to “remove Mr. Hussein and his regime from power.” In 2002, Kagan — along with fellow PNAC member Bill Kristol — claimed that Saddam was supporting “a terrorist training camp in Iraq, complete with a Boeing 707 for practicing hijackings, and filled with non-Iraqi radical Muslims.” He also assertedthat alleged 9/11 “mastermind” Mohammad Atta had met with Iraqi intelligence just months before September 11. Both allegations were extremely influential in promoting the Iraq War, and both are completely false.

However, Kagan’s troubling track record didn’t stop the Obama administration from giving both Kagan and his wife considerable influence over government policy. In 2011, the Obama administration brought on Kagan’s wife, Victoria Nuland, to serve as State Department spokesperson. Nuland was subsequently given the post of Assistant Secretary of State for European and Eurasian Affairs in 2013, which she used to engineer the 2014 “regime change” coup in Ukraine — an event that continues to have deadly consequences in that country and has even helped bolster Neo-Nazi elements in the United States.

Nuland is a textbook example of the continuity of the neocons from the Bush administration to the Obama administration. From 2003 to 2005, during the Iraq War and subsequent occupation, Nuland was Dick Cheney’s deputy national security advisor. Cheney, thrilled with her performance, recommended she be appointed to serve as U.S. ambassador to NATO. As the executive branch changed management in 2008, Nuland became the special envoy for conventional armed forces in Europe before becoming the Obama state department spokesperson just three years later.

Trump: “Against” the Iraq War But Willingly Surrounded By Iraq War Criminals

Though Donald Trump blasted the Iraq War, and the Bush administration’s role in creating it, on the campaign trail, he — like Obama before him — has invited neocons into his administration since its inception.

Trump’s first secretary of defense, Jim “Mad Dog” Mattis, as well as his first national security advisor, H.R. McMaster, were close to Iraq War architect and influential neocon Paul Wolfowitz — so much so that Wolfowitz was covertly guiding their policy through email correspondence in the early days of the Trump administration.

Mattis’ nomination by Trump was particularly strange given the latter’s frequent criticism of the Iraq War, where Mattis earned his nickname “Mad Dog” after overseeing the 2004 sieges of Fallujah, in which the U.S. military illegally used white phosphorus, a chemical weapon, as well as depleted uranium in the densely populated Iraqi city. As a consequence of the U.S.’ attack over a decade ago, Fallujah’s children continue to be born with horrific birth defects.

While Mattis and McMaster have since departed, the neocons are more powerful than ever in the Trump administration, as seen in the appointment of another PNAC signatory, John Bolton, to the role of national security advisor. In addition, PNAC signatory, Elliot Abrams, was recently named special representative for Venezuela, despite his role in the Iran-Contra affair and in arming Latin American death squads that slaughtered thousands of civilians, and also despite the fact that Abrams is a convicted felon.

A Nation of Enablers

Though they have done their best to hide it, the United States has become a nation governed by and for the neoconservatives and their various corporate clients. The outrage voiced over their crimes in Iraq — to them — was not a call for change but merely an indicator that such outrage must be reduced and silenced, a task since accomplished through cultural engineering and, more recently, censorship.

The bodies of four children killed after their family car came under fire from U.S. troops in Fallujah, Iraq, Sept. 30, 2004. Bilal Hussein | AP

Since the Iraq War, neocons and their allies have used every tool at their disposal to mold us in their image, creating an uncaring nation that feels little or no empathy for the millions murdered and maimed in their name; a nation that is not repulsed by the fact that many of its top public officials are convicted war criminals; a nation that worships war and death and mocks anti-war voices — even when they are themselves war veterans — as “apologists” for foreign leaders who want to keep their countries out of the Pentagon’s crosshairs.

With millions set to die in Yemen from a man-made famine supported by the U.S. and a war being planned for Venezuela, a country that is twice the size of Iraq, our silence and noninterest in these matters is our complicity.

How many millions must neocons and their ilk murder before we say enough is enough? The “War on Terror” alone has already taken an estimated 8 million lives. How many nations will we allow its architects to destroy? We have already laid waste to Afghanistan, Libya, Syria, Iraq, and Somalia; engineered the war in South Sudan; supported the war in Yemen and the destruction of Palestine. Would Venezuela be the “last straw” that finally rouses us to action? It seems unlikely.

The hard truth is that, while the Iraq War may be publicly remembered as an “embarrassment” for the neocons, it was the true beginning of our transformation into a nation of their passive enablers. Regular Americans may not plan and plot forever wars or the destruction of nations and innocent lives, but most certainly go along with it, especially when we are told that “Leader X” kills his own people and “Leader Y” represents a threat to “national security.” Our consent to be governed and guided by madmen has led us to become a nation of passive neocons.

The neocons are still in power and still the public face of American policy only because we allow it. That simple fact means that they will remain in power until we say we have had enough. How many years after the Iraq War will it be before that moment finally arrives?.

Published:3/22/2019 10:45:14 PM
[Markets] Will The "Little Red App" Destroy Democracy?

Authored by Katusa Research via,

You are probably familiar with the most printed book in the world: the Bible.

But you’ve probably never even heard of the second-most printed book. It’s known as the “Little Red Book.”

It’s a collection of statements from the speeches and writings of Mao Zedong, the founder of the People’s Republic of China.

Mao, who once said that “to read too many books is harmful,” had more than one billion copies of this single book printed and distributed.

Its purpose was to force people to internalize Mao’s ideals. This elevated him to the status of deity within China.

The book remained an icon of Mao Zedong’s cult of personality and a mainstay in Chinese culture through the ‘70s.

As a result, an entire generation of Chinese have grown up not knowing anything better than what the Party has to offer them.

And now, the Chinese government is doubling down their efforts to control the thoughts of its 1.4 billion citizens...

The Little Red App - Redefining Propaganda in the Information Age

It’s been called the “Little Red App”.

But the impact it’s having is far from little.

Chinese President Xi Jinping has created a platform much like Chairman Mao’s Little Red Book. Its purpose is to indoctrinate people with the Party’s ideologies.

The app was released in January 2019. Its official name is “????.” (And pronounced shu-yue--hee--qi-ung--gu-wo).

The title contains a clever pun on Xi Jinping’s name: It can mean either “Study the Great Nation,” or “Learn Xi [Jinping’s] Great Nation.”

And right now, it’s the most-downloaded app in China – but for all the wrong reasons.

Regular usage of this app rewards you with “Xi study points.”

  • Reading an article or watching a video earns you 0.1 points.

  • Commenting earns you 0.1 points, to a maximum of 0.2 points a day.

  • Spending half an hour on the app nets you an entire 1 point.

There are even certain times of day in which your point gain is doubled. For example, if you’re on the app between 8:30-10:00 p.m. on weekdays. This way, you can ensure Xi Jinping’s rhetoric is fresh in your head before going to bed.

Above: Xi Jinping’s Eight Absolutes, from the Study the Strong Nation website.
Note the Little Red Book motif.

If you think you can just open up an article and leave the app open for a few minutes, you’d be wrong.

The app tracks your activity too, like whether or not you’re scrolling through the articles. This ensures that people are actually engaging with the content. And not just faking lip service to the Party.

Scores are shared publicly, and people with low scores are shamed by their friends.

It’s Orwell’s “Two Minutes Hate” come to life. Only now it’s gamified, and everyone is competing to get a higher score than everyone else.

The Chinese government is using a classic carrot-and-stick treatment. For now, Xi study points are supposed to get you small gifts in future versions of the app.

But you can bet it’s only a matter of time before the study points are tied to Social Credit Scores.

Want to Stay Employed - You Better be on the Little Red App…

Many government departments and workplaces are already making sure employees hit a daily target of Xi study points.

The government is exercising special oversight into how the app is used by Party members and by teachers. Basically, anyone who can ensure the next generation does not step out of line.

It would have been easy to ignore the book form. Or left to collect dust on a shelf somewhere.

It’s an app whose daily use is required in order to keep your job. It means you need to be on it to keep a roof over your head, and food on your table.

Xi Jinping has not only introduced a vehicle for brainwashing the masses…

He’s also created a means to ensure no citizen will ever be able turn a blind eye to it.

The entire Chinese populace will have no choice but to absorb its content.

This is powerful and well thought out. And it has an incredible shot at working.

Brought to You by the Country That Banned Winnie the Pooh

The question of whether such an app – or even its content – is good or bad is not the issue.

The issue is the fact that China, of all countries, is the one implementing it.

And no one is talking about this in the Western world… yet.

Here are a couple of other ways China is “teaching” its citizens:

  • An estimated 1-3 million Uyghurs and other ethnic minorities are being held in “re-education camps” in Xinjiang.

  • The recent Christopher Robin movie was banned. Not because of disagreeable material. Because of joke images circulating on the internet comparing Presidents Obama and Xi Jinping to Tigger and Winnie the Pooh, respectively.

Above: the image that caused the movie “Christopher Robin” to get banned in China.

The long-term consequences of forcing more than a billion people to study the same material – no exceptions – should send shivers down anyone’s spine.

The fact that this is happening via the hands of a government like China’s is nothing short of terrifying.

It marks the complete transition of China from an authoritarian government to a very well organized and powerful totalitarian government.

It’s no longer just required submission to the Party line. It’s governmental control over every single aspect of public and private life.

China Will Become the World’s Largest Economy – But is it Ready for Center Stage?

Of course, China is not the only country in the world where the government attempts to influence the people.

The Political parties in control within the U.S. or Canada try. But they have never created a platform that has the potential to succeed at the goal such as what China has created.

The difference is – China is the world’s second largest economy…

Its GDP is projected to surpass the United States’ sometime in the 2020s.

The Chinese Yuan has the third largest weighting in the IMF’s world reserve currency basket.

In 2012, it was the thirteenth-most-used currency. In 2015, it was fourth.

China’s economic might is massive. It has been trying to build its soft power for years.

It both produces and consumes the most food of any country in the world.

Likewise, it tops or is near the top for both production and consumption of resources like gold, coal, copper, aluminum and iron ore.

It’s the world’s largest exporter of goods, ranging from clothing to industrial machinery to consumer electronics.

In the rapidly escalating trade war, it has gone toe-to-toe with the U.S. Every threat of tariffs has been met with another threat of tariffs.

And when Canada drew China’s ire through the extradition case of Huawei executive Meng Wanzhou, China responded in a familiar manner.

Recently, China shut down imports of canola from one of Canada’s largest exporters.

Even so, the U.S. and Canadian governments refuse to back down.

The other countries of the world aren’t quite ready to roll over and play dead. Especially not for China.

But this is all part of the Chinese government’s long-term plan. They want the Yuan to be seen as an alternative to the U.S. Dollar as the global currency.

This move wouldn’t just give them greater global clout or support the economic reforms. It would allow them to spread their authoritarianism to the rest of the world… including the U.S.

China is doing many things right and nobody should underestimate their political ability.

More importantly, China has launched what may be the most powerful app ever created.

Are you prepared for a Little Red App in America?

The two blue apps – Facebook and Twitter – already have years of your data and behaviour on their servers.

You wouldn’t want to be influenced or indoctrinated unknowingly, would you?

*  *  *

Clearly, there are many strange things afoot in the world. Distortions of markets, distortions of culture. It’s wise to wonder what’s going to happen, and to take advantage of growth while also being prepared for crisis. How will you protect yourself in the next crisis? See our PDF guide that will show you exactly how. Click here to download it now.

Published:3/22/2019 7:15:05 PM
[The Blog] Thousands of those books Baltimore’s mayor sold are sitting in a warehouse

Reading is fundamentally crooked in this case

The post Thousands of those books Baltimore’s mayor sold are sitting in a warehouse appeared first on Hot Air.

Published:3/20/2019 2:03:54 PM
[General] Author of several books about the Electoral College not a big fan of mob rule or stolen elections

Stop trying to change the rules and take an honest look at why you lost.

The post Author of several books about the Electoral College not a big fan of mob rule or stolen elections appeared first on

Published:3/19/2019 8:59:14 PM
[Markets] The Coming Wave Of High-Tech Authoritarianism

Authored by John Rubino via,

One of history’s hard lessons is that collapsing financial systems beget authoritarian politics...

Today’s world, alas, is following this script, as rising debts lead to wrenching political changes in nearly every country that holds free elections, while fascism and socialism are once again being taken seriously by people who in normal times would inhabit the political center.

But there’s one big difference this time around: the advanced state of social control technology. Past governments, when trying to tamp down dissent, were limited to blunt-instrument policies like curfews, phone taps and press shutdowns. Today’s would-be Big Brothers can do vastly more, and in many cases will use the coming financial/political emergency as an excuse to place Orwell’s proverbial boot on their citizens’ necks.

Some examples from a recent Wall Street Journal article titled The Autocrat’s New Tool Kit:

  • Chinese authorities are now using the tools of big data to detect departures from “normal” behavior among Muslims in the country’s Xinjiang region—and then to identify each supposed deviant for further state attention.

  • The Egyptian government plans to relocate from Cairo later this year to a still-unnamed new capital that will have, as the project’s spokesman put it, “cameras and sensors everywhere,” with “a command center to control the entire city.”

  • Moscow already has some 5,000 cameras installed with facial-recognition technology, and it can match faces of interest to photos from passport databases, police files and social media.

But scary as these things sound, they’re crude compared to what’s coming. From the same WSJ article:

“Microtargeting” enables governments to build personality assessments of citizens and tailor propaganda for targets’ psychological weak spots. Russia’s Internet Research Agency reportedly harvested data from Facebook to craft specific messages for individual voters during the 2016 US presidential race. Private firms are developing artificial intelligence that can automate this customization for whole populations.

Bots – algorithms that emulate human posters – will soon be indistinguishable from humans online, which is to say capable of denouncing anti-regime activists, attacking rivals and amplifying state messaging in lifelike ways.

Deep fakes. It is now possible to create images, voices and videos that are virtually indistinguishable from the real thing. Targets will have no way of knowing whether what they’re seeing and hearing is real or a government-generated fake.

AI profiling. Artificial intelligence is learning to extract “attitude, emotion and intent” from our social media posts, giving governments the ability to see dissent coming before it can coalesce into unrest.

Extremely smart cards. Venezuela has introduced its own “carnet de la patria” (fatherland card), a smart-chip-based piece of identification that citizens need to get access to government services such as health care and subsidized food. Human Rights Watch reports that the card may capture voting history as well.

Super-human facial recognition. We’re good at recognizing familiar faces. Tomorrow’s computer networks will be vastly better. Already, the Chinese have deployed facial-recognition glasses, and are selling the tech in Africa and Europe. Such glasses can be used to help identify criminals like thieves and drug dealers—or to hunt human-rights activists and pro-democracy protesters.

Smart cities. Combine the Internet of Things with Big Data analytics and you get entire cities where cameras cover every outdoor inch and using public services like busses require biometric ID. Some Chinese restaurants already have “smile to pay” systems that interpret facial expressions.

As the Journal sums it up,

“The internet dispersed data, but new technological advances can concentrate its power in the hands of a few. With more than 30 billion devices expected to be connected to the internet by 2020, each one generating new data, those who can control, process and exploit the information rush will have a major advantage. A regime bent on stability may feel virtually compelled to do so.”

The take-away?

Preparing to the next financial crisis requires a little more thought than for those of the past. How do you preserve wealth when a panicked government can identify, track and debit financial accounts? How do you preserve freedom of thought, association and action when even your seemingly private conversations and social media interactions are flowing into automated profiling algorithms?

Obviously, gold and silver coins become vastly more valuable in this world as a means of private wealth storage and anonymous transaction. Geographic diversification (i.e., storing wealth in different countries) lessens the odds of complete confiscation by any one government. And finding ways to evade the emerging surveillance state is crucial. Here are a couple of books on the subject:

How to Disappear: Notes on Invisibility in a Time of Transparency

The Art of Invisibility: The World’s Most Famous Hacker Teaches You How to Be Safe in the Age of Big Brother and Big Data

Published:3/19/2019 6:56:33 PM
[The Blog] Baltimore Mayor resigns from board that paid $500K for her books

The gravy train has pulled into the station

The post Baltimore Mayor resigns from board that paid $500K for her books appeared first on Hot Air.

Published:3/19/2019 1:55:12 PM
[9d2238a0-3d0e-55b4-806b-8e12ef27068d] Todd Starnes: Sex offender reads to kids at library's drag queen story time -- How the heck did that happen? The Houston Public Library says they mistakenly allowed a convicted sex offender to read books to small children during a Drag Queen Storytime event and many parents are wondering what in the name of the Dewey Decimal System is wrong with the librarians. Published:3/18/2019 2:22:58 PM
[Bible Prophecy] Repetitive Prophecy Books Keep Getting It Wrong

Ron Rhodes has written many popular prophecy books. While there’s always something new in each book, most of his books repeat the same themes and errors

The post Repetitive Prophecy Books Keep Getting It Wrong appeared first on Godfather Politics.

Published:3/18/2019 11:19:35 AM
[Bible Prophecy] Repetitive Prophecy Books Keep Getting It Wrong

Ron Rhodes has written many popular prophecy books. While there’s always something new in each book, most of his books repeat the same themes and errors

The post Repetitive Prophecy Books Keep Getting It Wrong appeared first on Godfather Politics.

Published:3/18/2019 11:19:35 AM
[Markets] Boeing Slides As BEA Confirms "Clear Similarities" In 737 Crashes, Ethiopian Air Freezes Orders

Boeing shares are sliding back lower off their opening rebound from overnight lows of FAA/Boeing probe headlines.

Confirming the Ethiopian government's comments yesterday, Bloomberg reports that the team investigating the crash of a Boeing 737 Max operated by Ethiopian Airlines noted “clear similarities” between the flight-recorder data from the crashed airplane and that of Lion Air Flight 610, French air-safety agency BEA says in a tweeted statement:

Data from the flight-data recorder and the cockpit-voice recorder has been transferred to the Ethiopian Accident Investigation Bureau, BEA says.

“During the verification process of the FDR data, clear similarities were noted by the investigation team between Ethiopian Airlines Flight 302 and Lion Air Flight 610, which will be the subject of further study during the investigation.”

Ethiopian Accident Investigation Bureau plans to release a preliminary report within 30 days

Additionally, it appears the backlog of orders that underpins so many of the analyst community's unrelenting bullishness may be under pressure as Ethiopian Airlines Group’s remaining orders for Boeing Co. 737 Max aircraft will depend on preliminary results of an investigation of a March 10 crash that killed 157 people, according to spokesman Asrat Begashaw.

Ironically, as Reuters reports that Boeing’s losses are not Airbus’ gains, because, unfortunately for 91 billion euro Airbus, chock-full production lines and order books stretching for years mean it can’t take up much slack.

Published:3/18/2019 10:49:30 AM
[Markets] Next, New Zealand Firearms: They Never Learn

Authored by Leesa Donner via,

Knee jerk reaction to tragedy ignores the harsh reality...

Getting your hands on a firearm in New Zealand is no easy task. Everyone knows this and yet here we are again having the same old knee-jerk discussion about more gun control, following a shooting at two mosques in Christchurch early Friday.

At this writing, the death toll stands at 50, and approximately two dozen people remain hospitalized. Like all acts of terror, ‘tis a sad tale, indeed.

At such times it is a politician’s wont to rush to judgment, to try and fix things and come out of it all looking very moral and heroic. Customarily these efforts result in making the situation worse. Such appears to be the case as the prime minister of New Zealand prepares to “fix” the country’s gun problems with more restrictions in the wake of this tragedy.

But here’s the rub: New Zealand already has quite a strict gun control policy as it is. Owning a firearm in the land of the Kiwi is not a right but rather a privilege bestowed upon those who are willing to run the gauntlet of gun laws. And they are many. Everyone must be licensed and background checked. They must all take a safety class – it is a long and arduous process to legally own a firearm. If you can think up a gun control law, New Zealand likely already has it on the books.

It’s Never Enough

Guess what all these firearm restrictions did to stop Friday’s tragedy? How about nothing. If you look at the facts of the case (and they are difficult to ascertain amid all the vitriol), one could even make the case that New Zealand’s totalitarian gun laws made the situation worse. How so? If you dig into what really happened, you will notice that a heroic bystander wrestled the weapon from the shooter and managed to fire two rounds as the attacker attempted to flee the scene.

Ah yes – the old good guy with a gun scenario that gun control advocates love to ignore time and again.

So, one must ask, what if there were armed people in and around those mosques? What if they had fired upon the perpetrator? Could he have been stopped before so many lives were lost? The logical answer to all these questions is yes, yes and yes.

Last year the worst car crash in 13 years occurred in New Zealand. The next morning the airwaves in South Taranaki were not filled with people calling for a ban on vehicles. Why? Because a vehicle isn’t a weapon unless someone uses it in that manner. Such is the case with a firearm. But don’t tell the politicians that. They will have no reason to grandstand.

As it is, the mosque killings have provided ammunition for the anti-gun political class to run amok. Prime Minister Jacinda Ardern already has plans to “act swiftly to enact stricter laws” and her cabinet plans to meet on Monday for “proposed reforms,” according to The Guardian.

More Sheep Than People

Prime Minister Jacinda Ardern

Step aside because the anti-firearm show is about to begin, even though the leftalready loves to point out that, “New Zealand generally has very low levels of gun violence — likely due, in part, to its restrictions on firearms.” Perhaps it’s actually because of a projected population density of only 18.4 people per kilometer by 2020. Fact is, there are about seven times more sheep than people in New Zealand. Might that have something to do with the low homicide rate?

There is one bit of good news for those who believe in the right to bear arms – approximately 1.2 million people in New Zealand own a gun. That’s about one firearm for every four people. Let’s hope these gun-owners will not be led to the slaughter like their four-hoofed friends; let’s hope they resist all efforts of the do-gooder class to take away their firearms.

Published:3/17/2019 8:45:21 PM
[World] [Eugene Volokh] “Your Honor, My Stomach Just Naturally Produced Alcohol”

"Auto-brewery syndrome" (or "gut fermentation syndrome") is apparently a thing -- but, the Maine high court says, the judge permissibly excluded a particular expert who wanted to testify this thing might have happened in this case.

From State v. Burbank, decided a week ago:

John M. Burbank appeals from a judgment convicting him of operating under the influence [with a blood alcohol level of 0.31] .... Burbank contends that the trial court erred by excluding testimony of [a witness] Burbank had designated ... as [an expert] to testify that at the time of his arrest he had a condition known as "auto-brewery syndrome" [also called "gut-fermentation syndrome"] a phenomenon associated with the production of alcohol within the body itself under certain circumstances. ...

The court first concluded that, although auto-brewery syndrome may well exist as a physiological phenomenon, Burbank's witness was not qualified to testify about it because she had no training or work experience relating to the condition and instead relied only on a limited number of case studies in this area of science, which is still emerging and is not the subject of much literature. The court also concluded that, because significant differences existed between Burbank's purported condition and that of patients with auto-brewery syndrome as revealed in the case studies, the witness's testimony did not sufficiently relate the syndrome to Burbank and to matters pertinent to this case....

Maine Rule of Evidence 702 provides: "A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if such testimony will help the trier of fact to understand the evidence or to determine a fact in issue." We review the court's ruling on the admissibility of expert testimony for an abuse of discretion.

For expert testimony to be admissible under Rule 702, "the trial court must determine that the testimony (1) is relevant in accordance with M.R. Evid. 401, and (2) will assist the trier of fact in understanding the evidence or determining a fact at issue." Expert testimony can be relevant only if it is reliable, and so, for the evidence to be admissible, the court must make a preliminary determination that the proponent has presented a sufficient demonstration of reliability. Indicia of reliability include "whether any studies tendered in support of the testimony are based on facts similar to those at issue; ... whether an expert's conclusion has been tailored to the facts of the case; ... [and] the nature of the expert's qualifications." [Footnote moved: Burbank asserts on appeal that "Like 'credibility,' the 'reliability' of evidence is a factual finding" reserved only for the fact-finder. To the contrary, Maine Rule of Evidence 104(a) requires the court to "decide any preliminary question about whether a witness is qualified ... or evidence is admissible"—precisely the issue here.] ...

First, the court did not err by finding that the proffered expert lacked the qualifications necessary to offer an opinion as to whether Burbank was suffering from auto-brewery syndrome. The expert testified that, although she has a Ph.D. in toxicology and physiology, she had not taken any classes on auto-brewery syndrome and had neither performed any studies nor worked directly on matters relating to the syndrome. Instead, her knowledge regarding the syndrome appears to have stemmed entirely from her review of four articles and four abstracts of different articles she cited during her testimony—sources that predominantly consist of individual case studies.

As the court properly observed while addressing the framework set out in Rule 702, because the witness had no hands-on, experience-based understanding of auto-brewery syndrome, in order for her to qualify as an expert witness any expertise needed to be derived from some other informational source, which here were the articles and abstracts in the professional literature. But as the court found with support in the record, the amount of available research material on auto-brewery syndrome is "thin." The court was entitled to determine, as it did, that the witness's review of only a small number of case studies—even when combined with her general qualifications as a toxicologist and physiologist—did not qualify her to provide expert testimony about auto-brewery syndrome.

Second, the court did not err by concluding in the alternative that the evidence was insufficient to demonstrate that auto-brewery syndrome, as it is understood through the literature, has any bearing on this case. In an attempt to make that connection, Burbank presented the court with an offer of proof describing his anticipated trial testimony: he had not consumed alcohol since the beginning of 2016; he has a family history of diabetes and had been found to be pre-diabetic; and at the time of his arrest he was eating a high-sugar diet and had been taking a prescribed antibiotic for two days.

During her testimony, the witness acknowledged that she had not independently examined Burbank, nor had she ordered any lab work or other testing to determine the levels of yeasts or fungi in Burbank's system that would have been necessary for ethyl alcohol to be produced endogenously. Instead, she pointed to blood tests conducted during routine medical exams in April 2016 and January 2017 showing that Burbank then had levels of blood glucose that were slightly above the normal range. She also noted that the antibiotic he had taken prior to his arrest might have killed his normal bacterial gut flora, which could have resulted in elevated levels of fungal yeasts, which could have then combined with excess glucose to produce ethyl alcohol—but only if there was a contemporaneous "slowing of the gut or stasis in the areas of the gut."

The resulting alcohol, she stated, would work its way into the bloodstream and then into the lungs so that it can be detected in the person's breath, although a breath test instrument cannot reveal whether the alcohol was introduced to the person's system endogenously or exogenously. The witness expressed the opinion that, given Burbank's claim that he had not consumed alcohol at any time relevant to this case, the alcohol in his breath must have been caused by this sequence of events.

Notwithstanding her opinion, the witness admitted that the available information regarding Burbank's condition and symptomatology did not closely match any of the limited number of case studies referenced in the articles and abstracts. She also acknowledged that none of the medical records she had reviewed showed what bacteria or yeast were present in Burbank's system, nor did they indicate the conditions within his system that, in her opinion, would have likely affected the production of alcohol at the time of his arrest.

At the conclusion of the hearing, the court excluded the expert's testimony stating that there was "not enough evidence to show that the hypothesis is tied to the facts of this case and [there are] actually significant differences between most of the case studies and the evidence that we have here about Mr. Burbank."

A trial court is entitled to exclude expert testimony that is supported only by evidence that is so general as to lack reliability and therefore is not relevant. Here, the trial court acted within its discretion by excluding the witness's ostensibly expert testimony. The court was entitled to determine that, as a matter of admissibility, the evidence proffered by Burbank could not reasonably allow a jury to draw a connection between Burbank's elevated glucose levels in April of 2016 and January of 2017 and his ingestion of an antibiotic in the days before his arrest, and the hypothesis that Burbank endogenously produced the alcohol detected in the blood alcohol test administered after Burbank was arrested.

Finally, Burbank argues that by excluding both expert witnesses' testimony, the court violated his constitutional right to be able to present a defense.

The constitutional guarantee of a meaningful opportunity to present a complete defense, though rooted in the Due Process Clause of the Fourteenth Amendment, is nevertheless subject to "reasonable restrictions." "[S]tate ... rulemakers have broad latitude under the Constitution to establish rules excluding evidence from criminal trials ... so long as [those rules] are not 'arbitrary' or 'disproportionate to the purposes they are designed to serve."

Contrary to Burbank's assertion, the court's considered and reasonable application of established principles of evidence and case management did not result in a constitutional deprivation to Burbank....

Because of the specific grounds that lead us to [our] outcome, however, our opinion should not be construed as implicitly accepting the notion that the crime of OUI [operating under the influence] does not encompass a situation where the alcohol in the accused's system is generated through some endogenous process. The parties have not developed meaningful presentations on that broader question, and the court based its ruling entirely on narrower evidentiary principles. Absent a fully developed record and sufficient advocacy that would allow a proper analysis of that categorical question, we leave its resolution to another day.

Justice Alexander's concurrence argues that even if Burbank had been right on the facts, he would still not have had a defense on the law:

[W]e explicitly rejected the "involuntary intoxication" defense to an OUI charge nearly forty years ago in State v. West (Me. 1980). "Since the only elements of the offense charged are operating a motor vehicle and being under the influence of intoxicating liquor while doing so, it follows that intoxication— whether self-induced or not self-induced—cannot establish a reasonable doubt as to the existence of any element of the particular offense here in question." ...

If [the involuntary intoxication] defense is left unaddressed, it may invite many "I didn't know there was vodka in my orange juice" or similar defenses to OUI ... charges.

The statute prohibiting operating under the influence, prohibits operating a motor vehicle "(1) While under the influence of intoxicants; or (2) While having an alcohol level of 0.08 grams or more of alcohol per 100 milliliters of blood or 210 liters of breath." Thus, OUI is defined to include only two elements: (1) the forbidden conduct of operating a motor vehicle, and (2) the attendant circumstances of being under the influence of intoxicants or having a blood alcohol content of .08 or greater....

Two years ago, in another OUI appeal, we held that involuntariness is a defense to a crime, but will only "negate the actus reus of a crime when the forbidden conduct was an involuntary act, that is, the conduct was caused by a reflex, seizure, or some other act over which the defendant had no conscious control." "Voluntary conduct is the result of an exercise of [a] defendant's conscious choice to perform [it]," whatever the source of the motivation to do so, "whereas involuntary conduct includes reflex [es], convulsion[s], or other act[s] over which a person has no control." "Conscious choice is best understood by what it is not: a reflexive or convulsive action." ... Burbank does not argue that the alcohol allegedly produced in his gut made his operation of his vehicle physically involuntary or the result of a reflex or convulsion over which he had no conscious control.

I think the concurrence is mistaken (and indeed overreads State v. West, which dealt with a person who "intentionally or knowingly introduce[d] into [her] body substances which [she knew or ought to have known] tend to cause intoxication"); if someone does have auto-brewery syndrome, yet neither knows nor has reason to know this (and neither knows nor has reason to know that he is alcohol-impaired as a result), that should indeed be a defense to a charge of drunk driving. But, though I'm not an evidence law expert, it does sound like the proposed expert evidence here was too tenuous to be admitted under the Rules.

Published:3/16/2019 1:36:21 PM
[The Blog] Baltimore Mayor landed sweet deal selling her self-published books

Good work if you can get it

The post Baltimore Mayor landed sweet deal selling her self-published books appeared first on Hot Air.

Published:3/16/2019 10:37:49 AM
[Markets] How To Win On Immigration: Italy's Salvini Shows The Way

Authored by Guillaume Durocher via The Unz Review,

Really and truly, I did not expect the most promising developments in West-European politics to come from Italy. Who could predict that the strange government appointed in June 2018 – an uneasy alliance of nationalists under Matteo Salvini’s Lega and the populist-but-vague Five-Star Movement – would last as long or achieve as much as it has? Italy’s parliamentary regime is notoriously unstable, governments falling with unnerving regularity, and yet this strange hybrid has gone from strength to strength.

The globalists – notably the EU institutions and the various migrant NGOs, many supported by George Soros’ Open Societies Foundation – had adopted a criminal policy whereby the goal of their operations was not to reduce illegal immigration but to “solve” the problem by “rescuing” migrants at sea, even if they barely left the coast of North Africa, and breaking down Europe’s external and national borders.

Locations of so-called EU “rescue operations.”

The Italians, suffering from the crushing burden of supporting an endless wave of economically useless and often violent African migrants, rebelled against this. In fact, the decline in migration had already begun under the previous center-left government, which had grown increasingly frustrated with the NGOs. In July 2017, Interior Minister and “Lord of Spies” Marco Minniti began the crackdown on NGOs which, in conjunction with other efforts, led to a sharp decline in illegal immigration by the end of the year. In this sense, the successful crackdown on illegal immigration has been possible as part of a national consensus that the country could not cope and had to actually address the root of the problem.

Illegal immigrants arriving in Italy by sea from 2016 to 2018.

The overwhelming majority of immigration to Western nations is occurring because our governments are willingly allowing this happen, permanently changing the population against the will of their own citizens and people.

Since coming to power as interior minister, Salvini has built on the previous government’s efforts: preventing any return to previous levels (the social-democrats had not been firm on this) and further reducing illegal immigration to negligible levels. For this, his efforts must be saluted.

Illegal immigrants arriving in Italy for the January-March 11 periods of each year.

Furthermore, Salvini has adopted a much more confrontational attitude than his predecessors. Whereas the center-left was always embarrassed to have to take the “heartless” measures necessary to enforce Italy’s immigration laws and stop the invasion, Salvini has made a media spectacle of every step, rubbing the media-political elite’s faces in his successes. His popularity has only grown as a result.

This certainly has not been easy for Salvini. The elites hate him just as elites across the West hate all Western nationalists. Salvini has furthermore innumerable enemies among the old and decadent ruling class in Europe. When Salvini suggested that he wants to “help Italians to make more children” rather than import Africans, Jean Asselborn, the baby-boomer foreign minister of Luxembourg – a glorified tax haven – was so enraged that he was reduced to shouting obscenities: “Merde alors !

Many Catholic Church officials have turned against Salvini, including the archbishop of Milan and the Catholic weekly Familia Cristiana (who, though claiming to be good Christians, apparently have no problem with Europe, the heartland of Christendom, becoming an Islamic land, as happened to the formerly Christian Roman Middle East and North Africa centuries ago).

Fittingly for the land which produced the poet-politician Gabriele d’Annunzio, Salvini has not been averse to mixing artistry with politics. One American magazine got worked up because he quoted the American poet Ezra Pound:

Or in Pound’s original American vernacular: “If a man isn’t willing to take some risk for his opinions, either his opinions are no good or he’s no good.” Is Pound not a staple of American civilization, still taught in high school English literature classes in the United States? Or is his name being erased from history, too painful to hear for the left, along with those of Robert E. Lee and, soon enough, Thomas Jefferson?

The courts have gone so far as to prosecute Salvini for enforcing immigration laws by leaving migrants “stranded” on a ship rather than let them land in Italian ports. Fortunately, thus far his parliamentary immunity has been preserved, thanks to the support of his Five-Star allies.

Nothing great can be accomplished in this world except by overcoming great opposition. As Salvini said recently: “Tanti nemici, tanto onore” (Many enemies, much honor).

How does Salvini do it?

We cannot underestimate the power of psychological energy. Salvini thrives on his people. Il Capitano is constantly touring Italy, throwing himself into the crowds, shaking hands, kissing babies and grandmothers, making promises, drawing from the Life-Force, getting the power and confidence needed to fight off the nation-wreckers. (See, on this, the numerous videos and pictures he uploads.) Salvini also often gets a remarkably positive response from the studio audiences of Italian TV shows.

Salvini also understands the power of dogs.

Salvini is frequently the subject of vicious attacks, but he has a thick skin. He frequently shares the attacks against him on social media and responds with comments like “I don’t stop smiling,” “what a nice lady,” or simply “un bacio” (a kiss). By doing this, Salvini shows he is unaffected by and above such petty attacks. More practically, he responded to a “Fuck Salvini” graffiti in Brussels with a call on his supporters to give the Eurocrats a drubbing by voting for him in the upcoming EU parliamentary elections. All this can sadly only contrast with President Donald Trump, who not only has failed to deliver many of his campaign promises (above all The Wall), but resorts to attacking former supporters like Ann Coulter who dare to hold him to account.

Salvini has benefited from unique Italian conditions. Italy has, since the fall of Rome, never been the most organized country. The economic situation is poor and this no doubt contributes to Italians’ not being too comfortable and, therefore, a bit more “real” and self-interested than their naïve northern European cousins. Furthermore, there is something to what Ezra Pound called “the Mediterranean sanity.” Northern European societies, at least in modern times, have tended to be more rigorous and successful at whatever they put their minds to (see Germany: best at fascism, best at communism, best at capitalism . . .). But the northern European mind also tends to be unbalancedtoo attached to abstract principles, lacking in common sense.

In short, there has never been such a taboo on far-right politics in Italy – even after the Second World War – as in Germany, Britain, or France. The comparison with France is instructive. In France, any alliance between the nationalist Front National and the mainstream conservatives was blocked at an early stage from the 1980s. This was in part due to the pressure of Jewish lobbying organizations: Le Monde reported in March 1986 that the B’nai B’rith “reminds the representatives of [conservative] parties of the pledges they undertook, during B’nai B’rith fora, before the community, . . . to in no case ally themselves with the Front National.” By contrast, far-right parties have generally been able to work with conservative parties in Italy.

Furthermore, and remarkably, Salvini is not governing as a junior coalition partner in a conservative government. Rather, the Lega is an essentially co-equal ruling party along with a populist party, the Five-Stars. The government has then been able to actually govern and deliver on their promises to their constituents.

I have long thought that nationalist governments, if given a chance, would be politically quite successful with voters. Why? Because human beings are on the whole inherently tribal and conservative – or nostalgic – by nature. Regular people don’t like to see their culture destroyed, their population replaced with strange aliens, their women raped, their people murdered by criminals and Islamic terrorists, or their nation dissolved. The over-educated media-political elites really are weirdos in this respect, completely out of touch with regular people.

Any government sending patriotic signals – authentic or not – is likely to gain politically as a result. People are reassured in the knowledge, or at least the impression, that their government is standing up for their culture and interests. But evidently, this is already too much to grasp for those who run the European Union or write for the New York TimesA patriotic government need only be honest: simply publicize the truth, highlight the reality of migrants raping and murdering our people – which occurs all the time – and you will begin to change public opinion. No one likes to see their women and children abused and murdered. Salvini did this just recently, denouncing a system which had allowed a drugged up and drunk Moroccan with a criminal record to kill two Italians with his vehicle and pledging with a Dutertist flourish to “wipe drug dealers off the face of the Earth.”

Salvini is not an anti-European, or even anti-EU as such, but has actively sought to work with European patriots in other countries. In Great Britain, the limp conservative government has gotten mired in an endless mess in its attempt to leave the European Union. In fact, renegotiating Britain’s economic relationship with a trade bloc ought to be a relatively minor matter and one of little interest to identitarians. By contrast, Salvini has insisted that he “believes in Europe,” has been conciliatory towards fellow European immigrants, and has cultivated ties with patriotic governments in Hungary and Poland. Salvini has notably called for the establishment of “an Italo-Polish axis”:

Poland and Italy will be the heroes of this new European spring, this revival of real European values, where there will be less finance, less bureaucracy, more work and more family, and above all more security.

Finally, Salvini’s core promises have been for the most part achievable. There is nothing difficult about reducing legal and illegal immigration. It is a simple and straightforward matter of will. Salvini’s successes in the face of the hostile metropolitan elites have galvanized his supporters. As a result, the Lega’s popularity has steadily increased. By contrast, Five-Stars has fallen victim to its vague ideology and unrealistic economic promises (while the government has managed to push through a deficitary stimulus budget, despite EU opposition, the country has still fallen into recession). As a result, Five-Stars have been suffering brutal losses in regional elections in Abruzzo and Sardinia, while right-wing parties have been going from strength to strength.

If an election were held today, a right-wing coalition (Lega, Berlusconi’s Forza Italia, and the far-right Brothers of Italy) would practically obtain a majority on their own. If the economic situation continues to deteriorate, it seems likely Salvini will ditch the Five-Stars and call elections at the height of his popularity, to form a coalition with the conservatives, Lega being the senior partner. This could enable Italy to then have healthy immigration and demographic policies, as well as the probably necessary economic reforms and stability to stem the country’s crippling brain-drain to northern Europe.

Salvini is now suggesting he will shut down the EU’s perfidious “Operation Sophia” naval mission in the Mediterranean, which had taken a leading role in encouraging illegal immigration. As one Italian official told Politico Europe:

Sophia was meant to fight people smugglers and ended up bringing 45,000 migrants to Italy. We can control our own border. We don’t need technical help to pick people up at sea.

And the magazine rightly observes that shutting down Sophia would strengthen Salvini’s hand before the upcoming EU elections:

It would trigger a predictable outcry from humanitarian campaigners and liberal-minded political opponents across Europe, burnishing Salvini’s credentials as the toughest fighter against illegal migration in the weeks before polling day. . . . Scrapping Sophia would be an easy way to manufacture a crisis and put migration — and Salvini — back in the headlines.

Say what you want about Salvini, he is a winner. And if I were to summarize his willing formula:

  1. Stay close to your people.

  2. Don’t let the haters get to you.

  3. Work with other opponents of the system.

  4. Simply tell the truth.

  5. Deliver on your promises.

Ave, victoria!

Published:3/16/2019 7:36:39 AM
[Markets] Pity The Nation: War Spending Is Bankrupting America

Authored by John Whitehead via The Rutherford Institute,

“Pity the nation whose people are sheep

And whose shepherds mislead them

Pity the nation whose leaders are liars

Whose sages are silenced

And whose bigots haunt the airwaves

Pity the nation that raises not its voice

Except to praise conquerors

And acclaim the bully as hero

And aims to rule the world

By force and by torture…

Pity the nation oh pity the people

who allow their rights to erode

and their freedoms to be washed away…”

—Lawrence Ferlinghetti, poet

War spending is bankrupting America.

Our nation is being preyed upon by a military industrial complex that is propped up by war profiteers, corrupt politicians and foreign governments.

America has so much to offer—creativity, ingenuity, vast natural resources, a rich heritage, a beautifully diverse populace, a freedom foundation unrivaled anywhere in the world, and opportunities galore—and yet our birthright is being sold out from under us so that power-hungry politicians, greedy military contractors, and bloodthirsty war hawks can make a hefty profit at our expense.

Don’t be fooled into thinking that your hard-earned tax dollars are being used for national security and urgent military needs.

It’s all a ruse.

You know what happens to tax dollars that are left over at the end of the government’s fiscal year? Government agencies—including the Department of Defense—go on a “use it or lose it” spending spree so they can justify asking for money in the next fiscal year.

We’re not talking chump change, either.

We’re talking $97 billion worth of wasteful spending.

According to an investigative report by Open the Government, among the items purchased during the last month of the fiscal year when government agencies go all out to get rid of these “use it or lose it” funds: Wexford Leather club chair ($9,241), china tableware ($53,004), alcohol ($308,994), golf carts ($673,471), musical equipment including pianos, tubas, and trombones ($1.7 million), lobster tail and crab ($4.6 million), iPhones and iPads ($7.7 million), and workout and recreation equipment ($9.8 million).

So much for draining the swamp.

Anyone who suggests that the military needs more money is either criminally clueless or equally corrupt, because the military isn’t suffering from lack of funding—it’s suffering from lack of proper oversight.

Where President Trump fits into that scenario, you decide.

Trump may turn out to be, as policy analyst Stan Collender warned, “the biggest deficit- and debt-increasing president of all time.”

Rest assured, however, that if Trump gets his way—to the tune of a $4.7 trillion budget that digs the nation deeper in debt to foreign creditors, adds $750 billion for the military budget, and doubles the debt growththat Trump once promised to erase—the war profiteers (and foreign banks who “own” our debt) will be raking in a fortune while America goes belly up.

This is basic math, and the numbers just don’t add up.

As it now stands, the U.S. government is operating in the negative on every front: it’s spending far more than what it makes (and takes from the American taxpayers) and it is borrowing heavily (from foreign governments and Social Security) to keep the government operating and keep funding its endless wars abroad.

Certainly, nothing about the way the government budgets its funds puts America’s needs first.

The nation’s educational system is pathetic (young people are learning nothing about their freedoms or their government). The infrastructure is antiquated and growing more outdated by the day. The health system is overpriced and inaccessible to those who need it most. The supposedly robust economy is belied by the daily reports of businesses shuttering storefronts and declaring bankruptcy. And our so-called representative government is a sham.

If this is a formula for making America great again, it’s not working.

The White House wants taxpayers to accept that the only way to reduce the nation’s ballooning deficit is by cutting “entitlement” programs such as Social Security and Medicare, yet the glaring economic truth is that at the end of the day, it’s the military industrial complex—and not the sick, the elderly or the poor—that is pushing America towards bankruptcy.

We have become a debtor nation, and the government is sinking us deeper into debt with every passing day that it allows the military industrial complex to call the shots.

Simply put, the government cannot afford to maintain its over-extended military empire.

Money is the new 800-pound gorilla,” remarked a senior administration official involved in Afghanistan. “It shifts the debate from ‘Is the strategy working?’ to ‘Can we afford this?’ And when you view it that way, the scope of the mission that we have now is far, far less defensible.” Or as one commentator noted, “Foreclosing the future of our country should not be confused with defending it.”

To be clear, the U.S government’s defense spending is about one thing and one thing only: establishing and maintaining a global military empire.

Although the U.S. constitutes only 5% of the world's population, America boasts almost 50% of the world's total military expenditure, spending more on the military than the next 19 biggest spending nations combined.

In fact, the Pentagon spends more on war than all 50 states combined spend on health, education, welfare, and safety.

The American military-industrial complex has erected an empire unsurpassed in history in its breadth and scope, one dedicated to conducting perpetual warfare throughout the earth.

Since 2001, the U.S. government has spent more than $4.7 trillion waging its endless wars.

Having been co-opted by greedy defense contractors, corrupt politicians and incompetent government officials, America’s expanding military empire is bleeding the country dry at a rate of more than $32 million per hour.

In fact, the U.S. government has spent more money every five seconds in Iraq than the average American earns in a year.

Then there’s the cost of maintaining and staffing the 1000-plus U.S. military bases spread around the worldand policing the globe with 1.3 million U.S. troops stationed in 177 countries (over 70% of the countries worldwide).

Future wars and military exercises waged around the globe are expected to push the total bill upwards of $12 trillion by 2053.

The U.S. government is spending money it doesn’t have on a military empire it can’t afford.

As investigative journalist Uri Friedman puts it, for more than 15 years now, the United States has been fighting terrorism with a credit card, “essentially bankrolling the wars with debt, in the form of purchases of U.S. Treasury bonds by U.S.-based entities like pension funds and state and local governments, and by countries like China and Japan.”

War is not cheap, but it becomes outrageously costly when you factor in government incompetence, fraud, and greedy contractors.

As The Nation reports:

For decades, the DoD’s leaders and accountants have been perpetrating a gigantic, unconstitutional accounting fraud, deliberately cooking the books to mislead the Congress and drive the DoD’s budgets ever higher, regardless of military necessity. DoD has literally been making up numbers in its annual financial reports to Congress—representing trillions of dollars’ worth of seemingly nonexistent transactions—knowing that Congress would rely on those misleading reports when deciding how much money to give the DoD the following year.

For example, a leading accounting firm concluded that one of the Pentagon’s largest agencies “can’t account for hundreds of millions of dollars’ worth of spending.”

Unfortunately, the outlook isn’t much better for the spending that can be tracked.

A government audit found that defense contractor Boeing has been massively overcharging taxpayers for mundane parts, resulting in tens of millions of dollars in overspending. As the report noted, the American taxpayer paid:

$71 for a metal pin that should cost just 4 cents; $644.75 for a small gear smaller than a dime that sells for $12.51: more than a 5,100 percent increase in price. $1,678.61 for another tiny part, also smaller than a dime, that could have been bought within DoD for $7.71: a 21,000 percent increase. $71.01 for a straight, thin metal pin that DoD had on hand, unused by the tens of thousands, for 4 cents: an increase of over 177,000 percent.

That price gouging has become an accepted form of corruption within the American military empire is a sad statement on how little control “we the people” have over our runaway government.

Mind you, this isn’t just corrupt behavior. It’s deadly, downright immoral behavior.

The U.S. government is not making the world any safer. It’s making the world more dangerous. It is estimated that the U.S. military drops a bomb somewhere in the world every 12 minutes. Since 9/11, the United States government has directly contributed to the deaths of around 500,000. Every one of those deaths was paid for with taxpayer funds.

The U.S. government is not making America any safer. It’s exposing American citizens to alarming levels of blowback, a CIA term referring to the unintended consequences of the U.S. government’s international activities. Chalmers Johnson, a former CIA consultant, repeatedly warned that America’s use of its military to gain power over the global economy would result in devastating blowback.

Those who call the shots in the government—those who push the military industrial complex’s agenda—those who make a killing by embroiling the U.S. in foreign wars—have not heeded Johnson’s warning.

The U.S. government is not making American citizens any safer. The repercussions of America’s military empire have been deadly, not only for those innocent men, women and children killed by drone strikes abroad but also those here in the United States.

The 9/11 attacks were blowback. The Boston Marathon Bombing was blowback. The attempted Times Square bomber was blowback. The Fort Hood shooter, a major in the U.S. Army, was blowback.

The transformation of America into a battlefield is blowback.

All of this carnage is being carried out with the full support of the American people, or at least with the proxy that is our taxpayer dollars.

The government is destabilizing the economy, destroying the national infrastructure through neglect and a lack of resources, and turning taxpayer dollars into blood money with its endless wars, drone strikes and mounting death tolls.

As Martin Luther King Jr. recognized, under a military empire, war and its profiteering will always take precedence over the people’s basic human needs.

Similarly, President Dwight Eisenhower warned us not to let the profit-driven war machine endanger our liberties or democratic processes.

“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. This is, I repeat, the best way of life to be found on the road the world has been taking. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron. […] Is there no other way the world may live?”

We failed to heed Eisenhower’s warning.

The illicit merger of the armaments industry and the government that Eisenhower warned against has come to represent perhaps the greatest threat to the nation today.

It’s not sustainable, of course.

Eventually, inevitably, military empires fall and fail by spreading themselves too thin and spending themselves to death.

It happened in Rome. It’s happening again.

The America empire is already breaking down.

We’re already witnessing a breakdown of society on virtually every front, and the government is ready.

For years now, the government has worked with the military to prepare for widespread civil unrest brought about by “economic collapse, loss of functioning political and legal order, purposeful domestic resistance or insurgency, pervasive public health emergencies, and catastrophic natural and human disasters.”

For years now, the government has been warning against the dangers of domestic terrorism, erecting surveillance systems to monitor its own citizens, creating classification systems to label any viewpoints that challenge the status quo as extremist, and training law enforcement agencies to equate anyone possessing anti-government views as a domestic terrorist.

We’re approaching critical mass.

As long as “we the people” continue to allow the government to wage its costly, meaningless, endless wars abroad, the American homeland will continue to suffer: our roads will crumble, our bridges will fail, our schools will fall into disrepair, our drinking water will become undrinkable, our communities will destabilize, our economy will tank, crime will rise, and our freedoms will suffer.

So who will save us?

As I make clear in my book, Battlefield America: The War on the American People, we’d better start saving ourselves: one by one, neighbor to neighbor, through grassroots endeavors, by pushing back against the police state where it most counts—in our communities first and foremost, and by holding fast to what binds us together and not allowing politics and other manufactured nonrealities to tear us apart.

Start today. Start now. Do your part.

Literally and figuratively, the buck starts and stops with “we the people.”

Published:3/15/2019 11:03:54 PM
[Bible] ‘Grinding Out’ More Bad Prophecy Books

End-time prophecy books never cease.

The post ‘Grinding Out’ More Bad Prophecy Books appeared first on Godfather Politics.

Published:3/14/2019 9:23:04 AM
[Bible] ‘Grinding Out’ More Bad Prophecy Books

End-time prophecy books never cease.

The post ‘Grinding Out’ More Bad Prophecy Books appeared first on Godfather Politics.

Published:3/14/2019 9:23:04 AM
[World] [Doriane Coleman] In Defense of the Status Quo

The still-salient case for a biologically-based women’s category in elite sport.

As the long history of sex testing in elite sport reflects, sex segregation has been the design from the beginning. The point has always been to exclude male-bodied athletes from women's events so that females could be featured despite their relative physical disadvantages. Title IX represents a modern version of this original design, requiring schools receiving federal funds to establish separate women's teams and to set aside more or less equal funding, facilities, coaches, and competitive opportunities for their female student-athletes.

The goals of elite sport today remain consistent: to ensure the same number of spots in finals and on podiums for females as for males, both as an end unto itself and as an expressive vehicle to empower girls and women in society more generally. An identity-based eligibility standard for women's sport would do different work for those whose gender identity doesn't match their biology, but it would be category defeating.

Here's a summary of the value the women's category provides to individuals and to society:

  • Individual goods include the physical, developmental, psychological, reputational, and financial rewards that result from competing and winning at the elite level. The long-term benefits are less well known but important. Per Donna de Varona of the Women's Sports Foundation and Beth Brooke-Marciniak of Ernst & Young: "Girls who play sport stay in school longer, suffer fewer health problems, enter the labor force at higher rates, and are more likely to land better jobs. They are also more likely to lead. EY research shows stunningly that 94% percent of women C-Suite executives today played sport, and over half played at a university level."
  • Stakeholder goods include the political, economic, and psychological benefits that flow from close association with individual winners. Here are just a few of the women whose achievements are recognized as having produced important stakeholder value. If the category were not defined on the basis of sex, we would not know their names: Serena Williams. Aly Raisman. Brandi Chastain. Simone Manuel. Katie Ledecky. Michelle Carter. Dana Vollmer. Ibtihaj Mohammed.
  • Societal goods include, from Sex in Sport, "'challenging rigid gender norms' so that girls and women gain "'opportunities to become supported, educated and empowered.'" Per de Varona and Brooke-Marciniak, "[I]nvestment in girls and sport has significant [economic] development payoffs and contributes to economic growth overall. Sport empowers women and contributes to gender equality globally."

Defining the category on the basis of sex is necessary to the attainment of these goods. As detailed in yesterday's post, "Any other option that has males and females competing together works mainly to highlight, isolate, and display male bodies and hierarchies." And from the NYT: "This may sound like hyperbole but it isn't. In competitive sport, winning and room at the top are what ultimately matter, so relative numbers are irrelevant. It doesn't matter that there are 100 females and three males in a girls' race if the three males win spots in the final or on the podium because they are males."

It is precisely because success in the elite sport space is tied to our distinct reproductive biology that, in the absence of a compromise, there is no reconciling the rights of females and the interests of society in this version of women's sport with the interests of male-bodied athletes who identify as women and their constituencies. We have to choose: Do we continue to support women's sport as a protected category, with or without a conditional right of entry for male-bodied athletes who identify as female? Or, do we abandon that project in favor of the different one that is recognizing individuals based exclusively on their gender identity?

I don't see a compelling argument for abandoning the women's category in its current form.

Doing so would have real costs—see above—which I doubt could be outweighed by the benefits thus far articulated by the other side. The most important or weighty of these benefits include respect for individual autonomy, and enhanced empathy for and equal treatment of historically marginalized people. But to me, they apply equally to females. And I don't find it useful to compete over which of us has suffered most from our respective marginalizations.

The category is also clearly lawful. Equal protection doctrine allows, and in some cases encourages, anti-subordination measures designed to empower females based on inherent (sex) differences. See RBG in VMI and also Title IX. In the human rights space, this is through the UN Convention on the Elimination of All forms of Discrimination against Women. Although there is a lot of important advocacy around developing a comparable convention for people who are intersex and transgender, there are as yet no such protections on the books. There is certainly no preemptive right to self-identify into lawfully established set asides for females. The ubiquitous "rights talk" on social media and in the popular press is, to date, just that.

Early on, the loudest arguments in support of an identity-based category came from intersex advocates who seek to convince their audience that the science around the biology of sex is the faulty product of medical imperialism and the patriarchy; that sex is impossible to define; that those who disagree with this conclusion are ignorant; and that classifying people based on the secondary sex characteristics that develop from male T levels is racist and/or inappropriately privileges a particular view of femininity. Without going too far down the rabbit hole, I tried to address these points in Sex in Sport, with a focus on the harm that deconstructing sex to the point of nonexistence would cause for females.

Their Alice in Wonderland quality is also why I appreciate Rachel McKinnon. She is refreshingly smart about sport and also honest about science. Because of this, we're now finally in a position to debate the right issues. Here she is in USA Today, making the argument the ACLU has also adopted:

We cannot have a woman legally recognized as a trans woman in society, and not be recognized that way in sport. Focusing on performance advantage is largely irrelevant because this is a rights issue. We shouldn't be worried about trans people taking over the Olympics. We should be worried about their fairness and human rights instead.

I'll close out today with these three brief reactions:

First, as I note above, the claim that the integrity of sport is subordinate to the rights of transwomen to be classified as they identify assumes rights not yet established, and doesn't otherwise resolve the conflict since it's also a rights issue for females.

Second, sport already recognizes transwomen as women and includes them in competition as such, so long as they don't enter as superwomen. (More on this tomorrow.) This qualification isn't wrong a priori, either legally or logically, i.e., transwomen aren't similarly situated to biological females in the ways that matter to the category, and sport isn't the only space where—regardless of how we identify—our reproductive biology is always relevant. See Joanna Harper's terrific work on athletic gender.

And then, welcome to my world. While we've made lots of progress towards women's equality over the last century, the notion that we might walk this earth—go for a job interview, a run in the forest, or onto the streets at night—without people taking our reproductive sex into account is foreign to every female I know. I welcome all transwomen to the club who want in, and it doesn't bother me that they might also be inconvenienced from time to time by having their reproductive biology considered, especially when it actually matters.

Third, describing performance advantage as "largely irrelevant" subordinates the integrity of sport and its legitimate, multifaceted goals to those of McKinnon's own cause, assuming the answer to what is clearly a contested issue. It also ignores that the women's category wouldn't exist as a space for transwomen to enter were it not for the sex-linked advantages males have over females. If this rationale is rejected, I don't see how or why the category survives.

Published:3/13/2019 8:18:22 AM
[Markets] The Global Economy Is A Time Bomb Waiting To Explode

Authored by Marshall Auerback via,

In the aftermath of the greatest financial calamity since the Great Depression, then–chief of staff for the Obama administration Rahm Emanuel made the call for aggressive action to prevent a recurrence of the meltdown of 2008.

Although the U.S. government’s system of checks and balances typically produces incremental reform, Emanuel suggested that during times of financial upheaval, the traditional levers of powers are often scrambled, thereby creating unique conditions whereby legislators could be pushed in the direction of more radical reform. That’s why he suggested that we should never let a crisis go to waste. Ironically, that might be the only pearl of wisdom we ever got from the soon-to-be ex-mayor of Chicago, one of those figures who otherwise embodied the worst Wall Street-centric instincts of the Democratic Party. But give Rahm props for this one useful insight.

But we did let the crisis of 2008 go to waste. Rather than reconstructing a new foundation out of the wreckage, we simply restored the status quo ante, and left the world’s elite financial engineers with a relatively free hand to create a wide range of new destructive financial instruments.

To cite some examples, consider the case of the UK, where England’s local councils have taken on significant risk via structural financial products known as “LOBO loans” (lender option borrower option). Financial blogger Rob Carver explains how they work:

“[Let’s] say I offer to lend you £40 and charge you 3% interest for 5 years. Some other guy comes along and offers you the same deal; but the twist is he will have the option to ask for his money back whenever he likes.

“You wouldn’t borrow money from him because it’s clearly a worse deal. …

“Suppose he sticks to his guns but as a concession he will lend you the money at only 2.9% interest. Would you take that? What about 2.5%? 2%?”

What Carver is describing here is the so-called “teaser”: a seductively low starting interest rate that is sufficiently attractive to induce the buyer to take on the LOBO in the first place. It’s designed to entice someone away from fixed interest rate borrowing (which at least has the virtue of being constant and therefore more readily predictable). The seductive quality of the teaser is that one’s borrowing costs might appear “cheaper” than the higher initial fixed-rate costs offered by the Public Works Loan Board (PWLB), a wing of the government. But the troubles become more apparent with the passage of time.

What happens if and when rates unexpectedly move up? In general, as Carver notes, having to suddenly repay your loan when interest rates have risen to 4 percent is the worst possible time for you. It’s akin to taking away the umbrella the minute it starts to pour. Worse, the authority is likely locked into a contract that typically has a lifespan of 40-70 years. (And who can forecast with any degree of certainty the trend of interest rates over that sort of time span? It makes the whole notion of buying an instrument on that premise to be speculative in the extreme.) Banks have the option of raising rates at their discretion, and although the councils are able to opt out of their contract, they will pay huge penalties if they seek to renegotiate or exercise that option to opt out.

So there’s a huge negotiating imbalance built into the contract, and the likely upshot is that the local council ends up paying more in interest charges over the course of the loan. How much more? According to an activist group, #NoLOBOs (created to help housing authorities combat the impact of these instruments), “a substantial number of housing councils are facing 7-9 % interest rates, which is more than twice the current rate of lending at the PWLB.” And in many instances, the municipalities have been burdened with these higher borrowing costs at a time when additional funding from the national government has been cut back, so they are confronted with a double whammy on both sides of the balance sheet.

What was initially sold as a means to manage risk, then, ultimately metamorphoses into a recipe for financial fragility, especially when it occurs at the municipal level with institutions that don’t have the capacity to create new currency (as a federal authority can do). The “teaser” becomes a poison pill. This means a local authority (or level of government that is a user, rather than issuer, of currency) can go bust.

To give some sense of the magnitude of the market, the Independent notes:

“There is around £18bn worth of private sector loans on councils’ books, according to figures from the Department for Communities and Local Government. … [A]round £15bn of these are Lobos.

“Annual sales to local authorities regularly topped £1bn in the run-up to the financial crisis and peaked at £1.5bn in 2007, before crashing to £600m a year later and then dwindling to nothing in 2012.”

Their revival since 2012 has resulted in hundreds of millions of pounds being skimmed from struggling town hall budgets, which were hit by the double whammy of these toxic instruments, along with austerity-imposed cutbacks from the national government. One particularly egregious example was the cash-strapped town of Newham, which had £398m of exposure to LOBOs back in 2014. Faced as well with cutbacks from the national Tory government, the local council was forced to remove financial support from a homeless hostel, “leading to the eviction of a group of single mothers to save £41,000,” reported British publication Private Eye.

Needless to say, banks and brokers have profited handsomely from the whole exercise, pocketing hundreds of millions of pounds in profits.

Here’s another disaster waiting to happen: Globally, financial markets today are seeing a rebirth of “collateralized loan obligations” (CLOs), instruments broadly similar to the “collateralized debt obligations” (CDOs), which helped to blow up the financial system in 2008. CDOs were asset-backed instruments, a “blended” security comprised of risky mortgage-backed bonds and much of the rest from theoretically safer tranches. The theory underlying them was that the lower the investment quality, the higher the compensating yield, but in reality most turned out to be toxic junk. What distinguishes CLOs from their CDO “cousin” is that instead of repackaging mortgages, subprime and otherwise, CLOs repackage corporate loans, and consumer credit, such as car loans.

Unfortunately, in yet another instance of lessons unlearned from 2008, the collateralized loan obligations, like the CDOs, have virtually non-existent investor protection, “with over 70 percent lacking any covenants that would allow monitoring of financial condition and early intervention to manage problem borrowers. This exacerbates the risk of higher losses,” argues Satyajit Das, a former banker who first identified the risks to financial stability posed by these kinds of instruments back in 2008. In fact, Das elaborates, “relative to mortgages, [CLOs] typically are made up of fewer and larger loans, which increases concentration risk. Leveraged loans are highly sensitive to economic conditions and defaults may be correlated, with many loans experiencing problems simultaneously.” Which intuitively makes total sense: during a slowdown, virtually all economic activity slows down, whether that be housing, car sales, or consumer borrowing. Diversification of risk is therefore more apparent than real.

In an environment of prevailing low interest rates (and, hence, lower yields from conventional instruments), debt investors have been told (again) that they can enhance their portfolio returns, through these higher-yielding CLOs, while mitigating risk simply by diversifying. In theory, the risk is dispersed, but in practice, as Das has pointed out, if you’re simply diversifying different kinds of financial excrement, the end result is more likely to be insolvency for the whole instrument. A common theme is that in spite of the disastrous performance of these instruments during the market crash, many of the underlying loans today still lack standard provisions to protect lenders, such as reporting and requirements to maintain certain income and asset levels. Consequently, more toxic junk is being passed around the system like a hot potato. Last one holding the potato loses.

Given the scale of issuance, all major financial institutions are likely to be left holding these bags. CLOs, notes Das, have been growing at a rate of around $100bn a year for the past decade, and total levels outstanding now approach the size that existed in the CDO market by the time of the 2008 crisis. As the cycle has matured, the quality of the assets of the loans has diminished, and the borrowers have become increasingly leveraged.

This follows a classic pattern of a typical borrowing cycle, as credit structures move from relatively stable “hedge financing” (where the underlying units can meet payment commitments out of income flow) to “Ponzi” finance (borrowing simply to pay interest on the interest), a process originally outlined by the economist Hyman Minsky. Based on the relatively benign conditions of the recent past, both borrowers and lenders are lulled into a false sense of security and increase their respective risk profiles accordingly. Minsky was by no means the only economist whose work has become associated with manias, panic and crash. He built his analysis on the shoulders of analysts of the Great Depression, such as Irving Fisher, John Maynard Keynes, and John Kenneth Galbraith. But what distinguishes Minsky’s scholarship is that he focused it on the “upward” source of the financial instability, as opposed to its disastrous denouement. In relation to today’s CLO market, the parallel is that the decade-long period of stability in the aftermath of 2008 (in reality, faux stability achieved through the injection of trillions of dollars in public sector bailouts) has again given the users a stream of data providing the illusion that leverage is safe.

Rather than respond to each financial meltdown by seeking to curb the activities that led to the crisis in the first place, the sheer ongoing dominance of our financial sector has ensured that policy has merely worked to bail out the big players, and do everything to keep the rigged casino of the economy in their favor. Thus, financial institutions continue to concoct increasingly esoteric and opaque financial instruments that they market to less financially sophisticated counterparties.

Let’s roll back the tape to a few financial crises ago, from the early 1990s. At that time, Bob Citron, the Orange County treasurer, bankrupted his county via leveraged investments he made in structured notes (i.e., customized notes designed to fit the investment wishes and opinions of particular institutional buyers). If you tailor an exotic instrument to fit your investment outlook, you’d better know what you’re doing and appreciate the downside risks. Customization entails a level of financial expertise that Citron later conceded he did not fully possess. He was a sitting duck in a sea of sharks (to mix metaphors). Citron made a bet on the direction of interest rates (he bet they would stay low, which was wrong). As a result of his miscalculation, by 1994 Orange County’s investment portfolio began hemorrhaging hundreds of millions of dollars, ultimately going broke. Without conceding any liability, ultimately Merrill Lynch paid out $400m in penalties to settle the case.

That was an early warning signal, which unfortunately remained unheeded, as it was followed in quick succession by the Asian financial crisis in 1997, the bankruptcy of Long-Term Capital Management and the concomitant Russian debt default in 1998, the bust, and finally the complete seizure of the global financial system by 2008. Each time, a common foolhardy notion was the idea that higher levels of reward could be achieved without any corresponding increase in risk. All of this occurred against a backdrop of deregulation, minimal transparency and inadequate market supervision.

If you thought the near-breakdown of the global economy in 2008 was enough to make global policymakers and regulators rethink their persistent accommodation of financial innovation and deregulation, think again. Regulators have continued to accommodate this complexity, rather than minimizing it. Complex financial systems beget yet more complex (and ultimately ineffective) regulation. It is better to simplify the system in order to improve the quality of the regulation and the ease of oversight (which the complexity is designed to avoid).

Unfortunately, that’s not what our policymakers have done. Instead of redesigning the system, the monetary authorities have simply inserted themselves in the chain of intermediation that included an ever-evolving variety of books of business without actually considering whether there were too many weak links in the credit chain in the first place. Rather than shorten or redesign the economy’s credit structures, and curb the risks accordingly, central banks instead have simply acted as the ultimate guarantors in a supply chain from money-like instruments to longer-term and riskier credit. Absent any kind of sanction for undertaking more systemically dangerous activities, our policymakers have therefore made the same mistakes that were made in the early 2000s: they are establishing perverse ongoing incentives that increase risk, punishing the timid (prudent?) with low returns. It’s a classic illustration of Gresham’s Law, whereby bad money drives out good.

So here we go again. No less a figure than Claudio Borio, the chief economist of the Bank for International Settlements central, who warned of the dangers of a synchronized housing bubble well before the 2008 crisis, is again sounding the alarm about a recurrence. The crash gave us a chance to downsize finance and restrict its ability to wreak comparable havoc on the economy going forward. Instead, we let the crisis go to waste, which almost certainly means a nasty sequel to 2008 facing us in the near future.

This article was produced by Economy for All, a project of the Independent Media Institute.

Published:3/12/2019 8:14:24 PM
[World] BOOK REVIEW: 'The Case for Trump' by Victor Davis Hanson


By Victor Davis Hanson

Basic Books, $30, 400 pages

The title of Victor Davis Hanson's new book "The Case for Trump," might give some readers the impression that it is a whitewash or a dogged defense of the subject. Instead it is a well-researched explanation of ... Published:3/12/2019 7:15:12 PM

[Entertainment] Katharine McPhee Looks Back on Her Unforgettable School Days With Meghan Markle Meghan Markle, Katharine McPheeKatharine McPhee will never forget one special classmate. While the Hollywood actress has moved on from school books and recess, there's one familiar face who has made a lasting...
Published:3/12/2019 12:41:07 PM
[Markets] China Scrambles To Defuse $6 Trillion "Hidden Debt Bomb" With "Titanic Credit Risk"

When it comes to estimating China's total outstanding debt, there has long been confusion about the real number with most putting the debt/GDP at around 250%, while the IIF in 2017 calculated China's debt load as high as 300% of GDP (which means that by now it is substantially higher).

Then, last year, China watchers added another 40% of debt/GDP to the total when, as S&P calculated, China’s local governments had accumulated 40 trillion yuan ($6 trillion) - or even more - in off-balance sheet, or Local government financing vehicles (LGFV) debt, an amount Bloomberg has dubbed China's "hidden debt bomb", suggesting the already record surge in defaults in 2018 is set to accelerate further.

"The potential amount of debt is an iceberg with titanic credit risks," S&P credit analysts wrote in October 2018, with much of the build-up related to local government financing vehicles, which don’t necessarily have the full financial backing of local governments themselves.

Local government debt has quickly emerged, together with "shadow banking" debt, as one of the main risks for China's economy, because with the national economy slowing, and as a result of a crackdown on shadow lending and a Beijing quota for issuance of local-government bonds not enough to fund infrastructure projects to support regional growth, authorities across the country have resorted to LGFVs to raise financing, according to S&P. That’s left LGFVs “walking a tightrope” between deleveraging and transforming their businesses into more typical state-owned enterprises, S&P warned.

So fast forward 6 months, when in China's ongoing attempt to contain the soaring financial risks from its debt bubble, Beijing - seemingly content with the progress it has made on containing shadow debt - is re-focusing on the "hidden debt" owed by local governments, as officials seek to reduce repayment pressures amid falling tax revenues.

And with Beijing adding pressure on local authorities to become more transparent with their liabilities, Bloomberg reports that provinces and cities from Jiangsu in the east to Qinghai in the west are looking for means to pay-off or restructure their implicit borrowings, which include trillions in "off the books" funding via financing vehicles. Some authorities are seeking cheap refinancing from the nation’s largest policy lender, the China Development Bank, and others are selling off state-owned assets such as office buildings and housing.

Efforts to deleverage the "hidden time bomb" of 40 trillion in local government debt have gained urgency after the government recently pledged to cut taxes by two trillion yuan ($300 billion), further draining local coffers and adding to the possibility of missed repayments. Meanwhile, the lack of official estimates of the total local government debt load - S&P's CNY40 trillion estimate is just that - which usually carries higher rates than on-book ones, makes the issue even trickier.

There is a more pressing reason behind the rush to deleverage: as Nomura's China economist Lu Ting said, the motive is “just that the problem can’t be delayed anymore,” as in many places fiscal revenues and gross domestic product aren’t enough to cover the interest and principals.

In other words, China may be just months ahead of its own Minsky Moment.

With official probes now taking place to quantify the local debt, so far they’ve shown that hidden debt in some places exceeds the on-book borrowing, a lawmaker of the National People’s Congress Zhu Mingchun said over the weekend, according to Bloomberg.

Meanwhile, payments due for local-government financing vehicle debt are soaring and could reach 2.3 trillion yuan this year, according to estimates by Industrial Securities Co, which notes that local authorities will have to carry that burden at a time of slowing revenue growth due to tax cuts and shrinking receipts from land sales.

One possible solution is massive restructuring of the debt: in one case in December, the CDB led a group of commercial lenders in a swap of 260.7 billion yuan of implicit debt borrowed by Shanxi province to build highways. The debt was restructured with a tenor of up to 25 years, allowing the local authorities to save 3 billion yuan in interest payments every year, according to Shanxi Transportation Holdings Group. As Bloomberg notes, asset sales are also being used. For example, a district in the northeastern city of Shenyang is planning to sell more than 38,000 square meters of offices and government-built housing to repay maturing debt.

Of course, since in China everything is in some state of being a bubble, officials are simply using “the healthier part of the balance sheet of the public sector to address some of the hidden issues,” but they have to make sure the risky loans won’t get out of control again in the future, because by that time the balance sheet would be less capable of absorbing them, according to Grace Ng, a China JPMorgan economist.

China is also taking advantage of the current euphoria involving local capital markets: a financing platform in the eastern province of Jiangsu, where the CDB is involved in some cases of debt restructuring, sold a 270-day bond last week with a coupon of 4.8 percent, 150 basis points lower than a similar note the company issued in January. On Monday, a financing and investment company owned by a city in Shanxi province was upgraded to AA+ from AA by China Chengxin International Credit Rating Co., which cited the better outlook for capital quality.

"The bigger worry is the moral hazard issue,” said Zhu Ning, a professor of finance at Tsinghua University and the author of “China’s Guaranteed Bubble.” “Implicit government guarantees still lie at the core of so many problems."

And nowhere is the problem of moral hazard greater than in China, whose financial sector is approaching double the size of its US peer even as China's GDP is years behind catching up with America's. Which makes Beijing's choice relatively easy: keep kicking the can, or watch as the long-overdue Minsky Moment finally arrives and topples the biggest house of financial cards ever constructed.

Published:3/12/2019 9:40:56 AM
[Books] Socialism and “The “Experts” (Steven Hayward) New York magazine has produced a list of the “best books to understand socialism” that is so stupefyingly inane that you wonder if this is intended as satire or a really big put on. But no—they are quite earnest about this list, because it was curated by “experts.” Among the best books to understand socialism, according to NY mag, are several by Marx himself (fair enough, if you really want to Published:3/12/2019 1:08:28 AM
[Markets] Could Brexit Trigger The Demise Of Sterling As A Reserve Currency? - Part Two

Authored by Steven Guinness,

In part one of this series we looked briefly into the history of sterling crises that originated after the end of World War II.

Two important aspects were highlighted. The first is that over the past seventy years, a depletion of international sterling reserves has routinely coincided with exchange rate crises, whilst the second indicates that a slew of sterling downturns since 1945 have weakened substantially its role as a reserve currency.

We will now examine why Britain leaving the European Union through a ‘hard‘ Brexit may prove a harbinger for the first major sterling crisis of the 21st century.

In 2018 the media began publishing what mutated into incessant warnings about the dangers of leaving the EU with no withdrawal agreement. The majority were and continue to be focused on possible disruptions to food and medical supplies, the UK’s beleaguered car industry and the prospect of a Brexit induced recession.

What has not been given the same degree of analysis is the impact a no deal scenario could have on the position of sterling as a reserve currency. Ever since the post referendum decline of the pound, it generally only attracts attention if its value against the dollar rises significantly above daily fluctuations, or declines a percentage point or more amidst fears of a ‘disorderly‘ exit.

Let’s briefly summarise the few occasions where the pound’s reserve status has been called into question since 2016, as well as matters interconnected with the subject.

May 2016

A month before the referendum, ratings agency Standard and Poor’s issued a warning that sterling could cease to be a reserve currency if the UK left the EU. They also declared that Britain’s triple A credit rating could come under pressure. The line was that national governments might seek alternatives to the pound as a store of value should a leave vote materialise. As for why they could do this, a breakdown in existing trading arrangements, a depreciation of sterling and an increasing current account deficit were all cited as reasons by S&P.

July 2016

With S&P having stripped the UK of its triple A credit rating (as they suggested would happen following a leave vote), Reuters reporter Jamie McGeever penned an article which detailed how the decline of sterling since the referendum had so far been the biggest of any of the world’s four major currencies since the collapse of the Bretton Woods system in the early 1970s.

The day after the vote (June 24th) saw sterling’s value drop by 8%, marking the largest one day fall in the pound since the introduction of free-floating exchange rates following the collapse of Bretton Woods.

October 2016

Five months before Article 50 was invoked, Standard and Poor’s issued a new warning about the pound’s reserve status.  Ravi Bhatia, the director of sovereign ratings for Britain, was reported by The Independent as saying a ‘hard‘ Brexit eventuality could jeopardise sterling’s reserve currency role. Bhatia summarised reserve status as countries having trust in a currency, with governments and traders content to hold assets in a particular denomination.

At the time of S&P’s latest intervention, the pound was down 17% against the dollar since June 2016.

S&P were at it again later in the month, with the Financial Times detailing that pronounced falls in sterling could end up ‘reducing confidence and eventually threaten its role as a global reserve currency.’ They added that sterling would no longer be considered a reserve currency by the S&P if its share of reserves dropped below 3%. They currently stand at 4.49%.

On top of this, S&P warned of further cuts to Britain’s credit rating should they ‘conclude that sterling will lose its status as a reserve currency or if public finances or GDP per capita weaken markedly beyond our current expectations‘.

November 2016

Reuters Jamie McGeever followed up his article from July 2016 by questioning the pound’s position in global foreign exchange reserves. Here, McGeever linked sterling’s role as a reserve currency to the UK’s current account deficit, which to this day remains one of the largest in the world. He pointed out that this particular deficit requires hundreds of billions of overseas capital inflows every year to balance Britain’s books. According to McGeever, central bank demand for sterling reserves are a vital and stable source of these inflows. He went on to report that the amount the UK needs to attract in order to balance its books is around £100 billion a year.

S&P’s fellow ratings agency Moody’s were credited by McGeever as warning about the danger of ‘substantial and persistent‘ capital outflows, and how this would raise serious doubts about the pound’s reserve status.

McGeever also quoted Brad Setser, a senior fellow at the Council on Foreign Relations and former economist at the U.S. treasury, as saying that a fall in reserve share to 3% would be sterling ‘punching a little below its weight‘.

August 2018

As no deal Brexit coverage gathered momentum in the press, an article again published by Reuters on sterling’s future as a reserve currency gained next to no attention. This time it was the turn of Bank of America Merrill Lynch (BAML), who made a connection between the UK leaving the EU with no withdrawal agreement and central banks selling the pound in response. BAML estimated that a 1% decline in sterling’s share of international reserves would equate to upwards of £100 billion of selling. This calculation was based on the pound’s average share of 3.6% of reserves since 1995. Should banks re-denominate their holdings in line with this long term average, the theory goes that this would point to over a £100 billion reduction in reserves.

BAML stressed that this potential scenario would be off the back of a no deal exit from the EU. ‘Central bank flows are an important source of flow which could determine whether sterling succumbs to a more protracted current account crisis‘.

December 2018

As demonstrated above, both Jamie McGeever at Reuters and Bank of America Merrill Lynch have touched on the subject of Britain’s current account deficit. Latest figures released in December showed that the deficit in the third quarter of 2018 was the highest in two years at £ – 26.5 billion (4.9% of GDP).

When you look at how this was interpreted within the financial media, the link back to sterling’s position as a reserve currency – although not raised directly – lingers in the background. The current account deficit has not only called into question its sustainability, but also whether foreign investors will continue to finance the deficit to the same level by purchasing UK assets after Brexit.

Other noteworthy data released at the same time as the current account numbers included a cut in investment by firms of 1.1% from July to September. This represented three consecutive quarters of cuts, the first time this has occurred since 2008-2009. Households were shown as net borrowers for the eighth straight quarter – the biggest stretch since the 1980s. Lastly, the UK’s household savings fell to 3.8%, the lowest on record.


Looking back on the EU referendum of 2016, my perspective is that the depreciation of sterling in the aftermath cannot be construed as a crisis. Before the result was confirmed, the pound was trading as high as $1.50. Once the reality of the leave vote had dawned, an initial sharp drop of 8% was followed by further declines leading to a low of $1.19 recorded in January 2017. In seven months, sterling had shed as much as 20% of its value (for a limited time at least).

The reason why this is not befitting of a crisis is due to global reserves of sterling remaining consistent throughout the period. Indeed, international reserves of the pound grew in 2018 amidst the rising uncertainty of the Brexit withdrawal process.

At no stage so far have the Bank of England acted to defend the currency from speculators or central banks adapting their compositions. Their initial reaction post referendum was to cut interest rates by 0.25% and expand quantitative easing by £60 billion.

Fifteen months later, with inflation running at over 3% and the value of sterling remaining suppressed, the BOE raised interest rates for the first time in a decade. They followed this up with another quarter point hike in August 2018.

It is logical to think that the impact of a ‘hard‘ Brexit on sterling would precipitate a far steeper decline than witnessed three years ago. Consider that the fall witnessed then was simply off the back of a referendum result. Nothing material had changed in the relationship between the UK and EU.

I believe it is also logical to surmise that in response to a renewed depreciation, not only would inflation pick up once more, but the Bank of England would defy conventional wisdom and raise interest rates. The bank themselves have indicated that the most likely ramifications of a no deal Brexit would be inflationary. They continue to state publicly that the response to such a scenario would likely be to tighten rather than loosen monetary policy.

However, this does not account for what would happen to global reserves of sterling. Historically, exchange rate crises have seen a depletion in reserves of the pound. Whereas inflationary pressures take time to feed through the system, a run on sterling can materialise in a matter of minutes. Therefore, it is conceivable that the Bank of England could raise interest rates in response to try and stabilise the currency, a measure entirely separate to their mandate of 2% inflation.

Allied to this measure would likely see the BOE convert foreign currency holdings into sterling to counteract international holders dumping the pound.

As documented in part one, the BOE hold close to $150 billion in foreign currency total reserves. Total reserve assets amount to around $180 billion. The majority of these assets are denominated in dollars and euros.

How sustained any selling could be is impossible to gauge at this stage, as is the scale of damage which may be inflicted on sterling reserves.

If warnings issued by Standard and Poor’s and Bank of America Merrill Lynch are taken at face value, the pound is in danger of diminishing to the level of no longer being a global reserve currency should a ‘disorderly‘ Brexit happen. Only if this does occur would we be able to assess the validity of their warnings.

Anyone who regularly follows communications emanating from national central banks, the IMF and the Bank for International Settlements will have seen a developing narrative of ‘money in the digital age‘ and how currencies in future could be provided. The combination of a possible ‘hard‘ Brexit and an escalation in the ‘trade war‘ between the United States and China may not only put sterling at risk, but also the role of the dollar as world reserve currency. Brexit is one strand of what I have suspected for some time is an attempt by globalists (think the IMF and the BIS) to administer institutional reforms in the manner of a currency framework, which would mean a realignment in currency compositions with the IMF’s Special Drawing Rights part of this process.

As ever, to achieve this scale of reform globalists would require sustained crises events to distract away from what are long held intentions. Will Brexit and actions stemming from the Trump administration prove to be to their benefit? 2019 will surely begin to answer that question.

Published:3/12/2019 1:08:27 AM
[Markets] Dems' Tit-For-Tat: Gun Violence National Emergency

Authored by Graham Noble via,

Why a future Democratic president will never declare a national emergency over gun violence...

President Donald Trump has encountered criticism from both sides over his declaration of a national emergency on border security. Beyond the discussion of whether the situation warrants such action, many in the political world have raised the prospect that Trump is setting a dangerous precedent that will give future chief executives the opportunity to declare national emergencies to address any domestic issue by fiat, bypassing Congress.

It is a weak argument on several levels, but it appears to be the reason why a growing number of Senate Republicans have buckled to objections from Democrats and will support a joint resolution to terminate the president’s declaration. Trump still has the veto, though, so the resolution will prove meaningless and the fight will be taken to the courts, where the president’s clear authority will be upheld.

No Need For A National Emergency

As the president himself pointed out during his CPAC address, he is not setting any precedent because a future Democratic president would invoke national emergency powers if they saw fit to do so, regardless of what Trump does in the present. How quickly people forget that the most stunning example – in recent years – of a president completely bypassing Congress to take action on a major issue of national concern was Barack Obama’s creation of the DACA program. In that instance, the president simply ignored Congress, commandeered its authority to legislate, and changed federal law. Obama did not even declare a national emergency to do so and Congress put up no fight.

The idea, then, that Trump’s national emergency declaration will embolden future presidents to use the same tactic is nonsense. Congressional Democrats have shown that they are willing to simply cede unlimited authority to a president, should they choose to do so.

The argument – strawman that it may be – has been put out there, though. Specifically, Democratic presidential hopefuls have suggested they may use the measure to deal with gun violence. Could a national emergency declaration do anything to reduce gun crime or would it merely be an excuse to further erode the Second Amendment rights of law-abiding citizens?

Democrats have volunteered no explanation of what the threatened national emergency on gun violence would look like. The truth is, the threat is empty. There is no possible legal basis for a president to unilaterally alter federal firearms laws. National emergency statutes do not grant any authority to impose new laws or to alter existing ones.

Once again, Obama’s creation of the DACA program shows that a future Democratic president need not declare a national emergency to impose draconian new gun restrictions. In fact, using the national emergency statutes would actually limit a president’s power, in this respect.

2A Rights Guaranteed During National Emergencies

In 2006, the 109th Congress passed the Disaster Recovery Personal Protection Act which prohibits the confiscation – either permanently or temporarily – of privately-owned firearms during times of national emergency. It also prohibits the establishment of a gun registry and the imposition of restrictions on the carrying of firearms. This law does not, of course, override any existing federal, state or local firearms regulations already on the books, but it explicitly prevents a national emergency declaration being used to justify the creation of new restrictions.

There is certainly an argument to be made that the situation with the influx of illegal aliens across the southern border should never have gotten to this point, but the fault lies squarely with Congress. Both Democrats and Republicans have failed, for decades, to adequately address the issue. The president elevated the problem to the level of national emergency in order to appropriate adequate funds to construct border barriers and provide the resources necessary to expedite the processing of illegal border-crossers.

As with previous national emergencies, however, this latest one does nothing to infringe upon the constitutional rights of American citizens. A dangerous precedent would be to declare such an emergency as a way of depriving Americans of a right protected in the very founding document that forms the basis of all U.S. law.

House Speaker Nancy Pelosi (D-CA) has already hinted at the possibility of a gun-related national emergency and it is clearly a talking point that her party has adopted and intends to promote. Julian Castro, who is competing for the Democratic presidential nomination, told MSNBC: “I will come into office with a strong belief … that the fact that so many people in this country die because of gun violence, that is a national emergency.” Castro has also suggested, in a tweet, that climate change may also be a policy area over which a national emergency could be declared.

Another presidential candidate, California Democrat Kamala Harris, dutifully parroted the party line by hinting that, in addition to gun violence and climate change, healthcare may require a national emergency.

Is any president justified in using executive authority to mold domestic policy without legislation from Congress – even to address a major issue that Congress has consistently proved unwilling and/or unable to deal with? Even to those who view with skepticism any expansion or overreach of presidential authority, it is difficult to dismiss the argument that, where the legislative branch fails to resolve an ongoing national problem, the executive branch should take action. Certainly, those Democrats – and Republicans – who uttered not one word of objection when Obama legalized illegal aliens with the stroke of a pen would agree.

On the other hand, a president has no constitutional or moral authority to deprive citizens of their rights in the name of what they have decided to call an emergency; whether that be the right to own and carry a firearm or the right to choose a health insurance plan.

Defining An Emergency

The second question to consider is: How does one define emergency? The abuse of America’s immigration laws has taken place over several decades, so is it really now an emergency? The same can be said of gun violence, the affordability of healthcare or the effects of climate change. The (Merriam-Webster) dictionary definition of an emergency is “an unforeseen combination of circumstances or the resulting state that calls for immediate action,” or “an urgent need for assistance or relief.”

None of the aforementioned situations are unforeseen and whether any of them require urgent relief is an entirely subjective argument. If emergency measures are needed in order to save lives, then why not declare the consumption of alcohol a national emergency – or smoking, for that matter?

According to the National Institute on Alcohol Abuse and Alcoholism, some 88,000 Americans die every year from alcohol-rated causes, making this “the third leading preventable cause of death in the United States.” Smoking – incidentally – is number two. This figure for alcohol-related fatalities dwarfs the number of annual gun-related deaths, so why would gun violence warrant a national emergency but alcohol consumption not?

Empty Threat

Clearly, a future Democratic president would have no credible basis for declaring gun violence a national emergency and no legal authority to use such a declaration to enact any additional gun restrictions. The threat is empty. Any future president who wants to deprive Americans of their Second Amendment rights will attempt to do so without invoking national emergency powers.

Democrats using this threat are being outrageously disingenuous. Republicans going along with them are either entirely out of touch with reality or they are willingly perpetrating a ruse and assuming the American people are gullible enough to believe them.

Published:3/11/2019 12:35:54 PM
[Books] Ready, Set, Launch the New Books! (Steven Hayward) It was ten years ago that I wrote a controversial feature in the Washington Post lamenting that the conservative intellectual world was not producing significant serious books that attracted large public notice. With only a very few exceptions conservative best-sellers of the aughts seemed to be the frothy polemics from Ann Coulter, Glenn Beck, and such. Lately however there are a large number of new conservative books that are making a Published:3/7/2019 7:12:59 PM
[Markets] The Intelligent Cryptocurrency Investor

Authored by Boss Cole via,

If you wish to be an intelligent investor in the cryptocurrency markets, you are about to get your chance. The speculators have gone home, the optimists have packed their bags and the pessimists are running the show.

While we may be lacking in the financial data required to obtain true intrinsic value estimations we now have the opportunity to look for real companies, building the future, expanding their size and generating revenues and profits.

If we assume to know that the current sentiment is negative and that we are likely sitting in the depression stage of the market cycle, we can then compare this list of high-quality companies to the current pricing, stage in the cycle and their past market values to arrive at a value approximation.

The Intelligent Cryptocurrency Investor

Recently I have been reading “The Intelligent Investor” By Benjamin Graham. I have read a lot of trading and investing books, so it was interesting that I had not read this iconic piece already. There is a wealth of old knowledge in this book that still rings true today. In fact, I have found recently that reading old books, or “classics” often gives you a better summary of the core principles around a topic than the new editions.

Let me set the scene with a quote from the book.

The whole point of investing is not purely to earn more money than average, but to earn enough money to meet your own needs. The best way to measure your investing success is not by whether you are beating the market right now, but whether you have put in a financial plan and a behavioural discipline that are likely to get you to where you want to go. In the end what matters isn’t crossing the finish line before anybody else but making sure that you do cross it.

It’s easy for us to lose focus on this, with the constant feed of price data and news headlines our brains can become completely overwhelmed. Cryptocurrency investing is unique. It involves a much larger degree of speculation than stock market investing because there is a distinct lack of hard, factual and financial data.

This means you need new frameworks for valuation and trading, which is why for cryptocurrency I have leaned towards focussing on the technical analysis of long term trends and market psychology. I believe this is the approach I will be using for a long time yet, as I cannot see a wealth of new data flooding the scene any time soon.

The Intrinsic Value Of A Cryptocurrency

While we cannot accurately speculate on the intrinsic value of a cryptocurrency without insider knowledge of assets, revenues and profits we can evaluate the opinion and beliefs of the market participants. In value investing the first step is to run the numbers and decide what the overall value of the business is by looking at its current net assets, its past performance and conservative future revenue earning potential. Yet in cryptocurrency, we do not have this data. What we are left to make our judgments from is past market values and market psychology at that time. Doing this will give us an approximation to the “true market value” (different to the intrinsic value).

For example, if a cryptocurrency has been falling into an area that it held previously on a number of occasions, you can assume that this level was a fair market value for that cryptocurrency. However, what you need to add into this technical calculation, is the emotional state of the market at previous times, and at this current time.

Let’s say that as price approached this specific level, and it then broke down. Did the price break down because of the overall negative market sentiment? Or was it due to more negative market opinions of the individual asset in question? If it was caused by an overall shift in the market sentiment, there is a chance this asset dropped below its true market value due to the manipulation in overall emotions. However, if the price dropped in a time of overall positive market sentiment, it is more likely that there is something specific and different about the asset in question.

Determining The Top Of An Asset Bubble

Now, all of this information is useful to determine the potential bottoms, and the true market value of cryptocurrencies, however, it is most helpful when judging and profiting from the overvaluation of assets.

As we talked about earlier individual cryptocurrencies are highly speculative in nature. Combine this with the fact that the majority of the investors are non-institutional or “average” people we can begin to create a clearer picture. The result is a market environment much like the early years of the stock market. A plethora of new valuation methods are being created, and the market is still dominated by emotion.

To use the terminology of Howard Marks, we see the pendulum of investor psychology swing back and forth, at an incredibly fast speed. What would usually take weeks, months or years, happens in hours and days. This is due to a lack of sophistication, liquidity, and players in the market. One of the main lessons I have learned in cryptocurrency is that what goes up, will almost always come back down.

We can use our framework of fair market value to observe assets that have been pushed up above this level and are likely headed for a retracement. We can also use this framework to inform potential buying opportunities as prices approach fair market valuations.

The Psychology Of An Intelligent Investor

Back in the spring of 1720, Sir Isaac Newton owned shares in the South Sea Company, the hottest stock in England. Sensing that the market was getting out of hand, the great physicist muttered that he “could calculate the motions of the heavenly bodies, but not the madness of the people.” Newton dumped his South Sea shares, pocketing a 100% profit totaling £7,000. But just months later, swept up in the wild enthusiasm of the market, Newton jumped back in at a much higher price?—?and lost £20,000 (or more than $3 million in today’s money). For the rest of his life, he forbade anyone to speak the words “South Sea” in his presence.

Why is this relevant?

The problem illustrated above is that nobody can predict the top of such bubbles or price increases. In the case of cryptocurrency, prices often take time to return to their fair market value, but they usually do. There are miniature bubbles confined to a handful of assets expanding and popping constantly because nobody believes, or can accurately assess the “intrinsic value” of these cryptocurrencies. There always becomes a price so high, that nobody wants to pay it anymore. Then the news turns negative, sentiment shifts, and the crowd moves from that “hot” asset to the next “hot asset”.

“The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The Intelligent Investor is a realist who sells to optimists and buys from pessimists.”?—?Benjamin Graham

In cryptocurrency, our main role is to assess the cycle of emotions, and how that cycle is correlated to price, and I believe the above quote serves that purpose. In cryptocurrency, the optimists are usually proved wrong, and when the last pessimist falls, those optimists will take control yet again.

If you wish to be an intelligent investor in the cryptocurrency markets, you are about to get your chance. The speculators have gone home, the optimists have packed their bags and the pessimists are running the show. While we may be lacking in the financial data required to obtain true intrinsic value estimations we now have the opportunity to look for real companies, building the future, expanding their size and generating revenues and profits. If we assume to know that the current sentiment is negative and that we are likely sitting in the depression stage of the market cycle, we can then compare this list of high-quality companies to the current pricing, stage in the cycle and their past market values to arrive at a value approximation.

“Investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
Published:3/6/2019 9:37:42 PM
[Markets] The Long History Of US-Russian "Meddling"

Authored by Stephen Cohen via The Nation,

The two governments have repeatedly interfered in each other’s domestic politics during the past 100 years - and it’s not all bad.

Even though the bipartisan Senate Intelligence Committee found “no direct evidence of a conspiracy between the Trump campaign and Russia,” Russiagate allegations of “collusion” between candidate and then–President Donald Trump and the Kremlin have poisoned American politics for nearly three years. They are likely to continue to do so for the foreseeable future, and due not only to the current subpoena-happy Democratic chairs of House “investigative” committees. 

At the core of the Russiagate narrative is the allegation that the Kremlin “meddled” in the 2016 US presidential election. The word “meddle” is nebulous and could mean most anything, but Russiagate zealots deploy it in the most ominous ways, as a war-like “attack on America,” a kind of “Pearl Harbor.” They also imply that such meddling is unprecedented when in fact both the United States and Russia have interfered repeatedly in the other’s internal politics, in one way or another, certainly since the 1917 Russian Revolution.

For context, recall that such meddling is an integral part of Cold War and that there have been three Cold Wars between America and Russia during the past one hundred years. The first was from 1917 to 1933, when Washington did not even formally recognize the new Soviet government in Moscow. The second is, of course, the best known, the forty-year Cold War from about 1948 to 1988, when the US and Soviet leaders, Ronald Reagan and Mikhail Gorbachev, declared it over. And then, by my reckoning, the new, ongoing Cold War began in the late 1990s, when the Clinton administration initiated the expansion of NATO toward Russia’s borders and bombed Moscow’s longtime Slav and political ally Serbia.

That’s approximately eighty-five years of US-Russian Cold War in a hundred years of relations and, not surprisingly, a lot of meddling on both sides, even leaving aside espionage and spies. The meddling has taken various forms.

In the period from 1917 to 1933, such interference was extreme on both sides. In 1918, President Woodrow Wilson sent approximately 8,000 US troops to Siberia to fight against the “Reds” in the Russian Civil War. For its part, Moscow founded the Communist International (Comintern) in 1919 and urged the American Communist Party to pursue revolutionary regime change in the United States, an historical analogue of the “democracy promotion” later pursued by Washington. During these years, both sides eagerly generated, and amply funded, “disinformation” and “propaganda” directed at and inside the other country.

During the second Cold War, from 1948 to 1988, the “meddling” was expanded and institutionalized. At least until the McCarthyite attempted purge of such activities, the American Communist Party, now largely under the control of Moscow, was an active force in US politics, with some appeal to intellectuals and others, as well as bookstores and “schools”—all amply supplied with English-language Soviet “propaganda” and “disinformation”—in many major cities.

US meddling during those years took various forms, but the most relevant in terms of the role of social media in Russiagate were nearly around-the-clock Russian-language short-wave radio broadcasts. When I lived in Moscow off and on from 1976 to 1982, every Russian I knew had a short-wave radio and as well as a nearby place where reception was good. Many were enticed by the then-semi-forbidden rock music—Elton John was the rage, having surpassed The Beatles—but stayed tuned for the editorial content, which was, Soviet authorities complained, “disinformation.”

Suspect “contacts” with the other side was another Cold War precursor of Russiagate. Here too I can provide first-hand testimony. By 1980, my companion Katrina vanden Heuvel—now my wife and publisher and editor of The Nation—joined me on regular stays in Moscow. Most of our social life was among Moscow’s community of survivors of Stalin’s Gulag and the even larger community of active dissidents. In mid-1982, both of us were denied Soviet visas. I appealed to two sympathetic high-level Soviet officials. After a few weeks, both reported back, “I can do nothing. You have too many undesirable contacts.” (Our visas were reissued shortly after Mikhail Gorbachev came to power in March 1985.)

In the post-Soviet era since 1992, at least until Russiagate allegations began in mid-2016, almost all of the “meddling” has been committed by the United States. During the 1990s, under the banner of “democracy promotion,” there was a virtual American political invasion of Russia. Washington openly supported, politically and financially, the pro-American faction in Russian politics, as did American mainstream media coverage. US government and foundation funding went to desirable Russian NGOs. And the Clinton administration lent ample support, again political and financial, to President Boris Yeltsin’s desperate and ultimately successful reelection campaign in 1996. (For more on the 1990s, see my Failed Crusade: America and the Tragedy of Post-Communist Russia.) Conversely, there was almost no Russian meddling in American politics in the 1990s, apart from the pro-Yeltsin lobby, largely made up of Americans, in Washington.

As for Russia under Vladimir Putin, since 2000, again there was virtually no notable Russian “meddling” in American politics until the Russiagate allegations began. (Not surprisingly, in light of the history of mutual “meddling,” Russian social media was active during the 2016 US election, but with no discernible impact on the outcome, as Aaron Maté has shown and as Nate Silver has confirmed.) American meddling in Russia, on the other hand, continued apace, or tried to do so. Until more restrictive Russian laws were passed, US funding continued to go to Russian media and NGOs perceived to be in US interests. Hillary Clinton felt free in 2011 to publicly criticize Russian elections, and, the same year, then–Vice President Joseph Biden, while visiting Moscow, advised Putin not to return to the presidency. (Imagine Putin today advising Biden as to whether or not to seek the US presidency.)

Indeed, the Kremlin may be more tolerant of American “meddling” today than Washington is of Russian “interference.” Maria Butina, a young Russian woman living in the US, has been in prison for months, much of the time in solitary confinement, charged with “networking” on behalf of her government without having registered as a foreign agent. Hundreds of Americans have “networked” similarly in Russia since the 1990s, myself among them, to the indifference of the Kremlin, though this may now be changing, largely in reaction to US policies.

How should we feel about US-Russian “meddling” of the kind that involves dissemination of their respective information and points of view? We should encourage it on both sides. Attempts to suppress it is leading to censorship in both countries, while the more conflicting information and dialogue we have the better—better understanding and better policymaking and more and better democracy on both sides. (Disclosure: All of my own books and many of my articles have been published in Moscow in Russian-language translations. The reactions of Russian readers are exceptionally valuable to me, as they should be to any American author.)

Published:3/6/2019 7:37:32 PM
[World] [Eugene Volokh] The Executive Power Was an Empty Vessel

The three functions of a “complete” government.

My last post showed that, at least on Madison's bookshelf, the executive power meant the power to execute the law. As "Article II Vests the Executive Power, Not the Royal Prerogative" goes on to demonstrate, everyone understood that power to be both subsequent and subordinate. In fact, until there were legislative instructions to implement, executive power was just an empty vessel. Unless the Founders suddenly and totally abandoned the ordinary meaning of the term, the Executive Power Clause was conceptually incapable of serving as a source of independent substantive authority.

At bottom, the empty vessel point is simple. It relates to the standard eighteenth-century trope of a "perfect" or "complete" government. Modern scholars have sometimes misunderstood such references as a gesture toward the police power. That's wrong. When the Founders talked this way, they weren't referring to morality, beauty, or jurisdictional competence. Rather, they meant the idea of government action as a three-part functional sequence: successive exercises of what "Cato" was typical in calling "legislative, judicial, and executive power." A government couldn't be "complete" unless it had all three powers with respect to each subject matter competence over which it had jurisdiction.

As "A Bostonian" explained, that's because these "three grand immutable principles in good government" were logically intertwined. Legislative action was the formulation of political intent in the form of operational instructions. Judicial action (sometimes viewed as a subset of its executive sibling) was the impartial assessment of how legislated instructions should apply to particular circumstances. And executive action was the active implementation of legislated instructions in the real world. Each was indispensable to a coherent whole. "A Bostonian" was typical in observing that these functional powers of government "so intimately depend upon each other, that it is an absurdity in terms to give the name to any constitution where they are not in complete and uniform action."

Let David Hume stand for a long list of commentators in explaining the logical consequences: "The executive power in every government is altogether subordinate to the legislative." Note the formulation: in every government. This was not a contingent point about parliamentary sovereignty. Nor was it otherwise grounded in the particular constitutional law of England. Hume was making a conceptual and thoroughly generalizable point about the relationship between legislation and execution. It was thus a commonplace for Gad Hitchcock's famous 1774 election day sermon to observe that "the executive power is strictly no other than the legislative carried forward, and of course, controllable by it."

The point was common ground across the ideological spectrum. The most radical republicans agreed with Rousseau that "the executive power ... is only the instrument for applying the law." The most committed divine rights theorists agreed with Filmer that "[w]hen the law must rule and govern the monarch, and not the monarch the law, he hath at the most but a gubernative or executive power." And the likes of Edmund Burke scolded those who "mistake the condition of a King of Great Britain" as "an executive officer." To the contrary, Burke insisted, the English monarch "is a real King," concerned with must more than just "contemptible details."

As I'll discuss in a later post, Burke and Filmer's disdain for the executive power was unwarranted. But their point reflects an uncontested universal understanding. The only thing conveyed by "the executive power" was the empty-vessel authority to execute instructions issued by a valid exercise of legislative authority. Without the latter, the former had nothing to do.

[For all the posts in this series, click here.]

Published:3/6/2019 7:34:53 AM
[Markets] Key Words: The ‘Game of Thrones’ season 8 trailer is here The end is near for the hit HBO series based on George R.R. Martin’s books.
Published:3/5/2019 1:29:20 PM
[Markets] "I Called For Diversity Of Thought... My Peers Compared Me To A Neo-Nazi"

Authored by Diana Soriano via The College Fix,

As I took part in a recent student leadership board meeting for the Department of Political Science at Boston University, a group that works to advise faculty on ways to improve, I offered some advice: the department could use more intellectual diversity.

I suggested more debates in the classroom, as opposed to what I had witnessed in my three years at the school, that being an assumption during class that everyone agrees.

I broached my idea after I had sat and respectfully listened to the ideas of others for an hour, but my peers, and a professor and an administrator in the room, were not about to return the favor.

One student chided me that “debate” was too aggressive of a word, that I should use “discussion” instead. Another student, a College Democrat in the room, then compared me to a well-known peer from Boston University who is often regarded as a neo-Nazi and who went to the white supremacist rally in Charlottesville, noting “he has sat here in these seats asking for intellectual diversity as well.”

I felt shocked and insulted. I waited to see if either the professor or administrator or any of the other students in the room would defend me. None did. One student suggested conservatives shouldn’t major in political science at Boston University, as they’d have a hard time. The room erupted in laughter.

I wish I could say I was surprised. But after years of experiencing liberal bias, both at Boston University as well as Lehigh University, where I attended before I transferred, it felt like just another day on campus.

To that end, there are plenty of anecdotes I could supply. Here are just a few.

As a freshman, or as the administration likes to say to avoid being sexist— as a “first-year”— I was required to take an English class. My instructor was a teaching assistant, but insisted we call her professor. The morning after President Trump won, she dismissed class early because she could not stop crying. Later that day, she sent out an email giving us information about a designated “safe space” on campus to commiserate the election results. Nevermind that my university has an entire police department to protect it.

During a course I took on political theory, my professor dedicated the entire chapter on fascism to President Trump. He constantly referred to Trump as a fascist, and brought up the Mueller investigation during each class session.

In my statistics class, my professor made an entire exam question that necessitated a final conclusion that Fox News is not a reliable news source. The chi-square test is a statistic that measures the “goodness of fit” between how well an observed distribution fits with the expected distribution. We were given the average amount of gun deaths that occur per year in the United States and the average amount of terrorist attacks that are perpetrated toward Americans per year. We were also given the amount of times CNN, MSNBC, ABC and Fox News reported on each of these issues, and the idea is that one would expect the news organizations to report on the respective issues a proportional amount. When one worked out the math, Fox News’ reporting ended up having the worst goodness of fit, and we had to write that meant they were the least reliable and most unbalanced.

In other courses, I’ve been forced to include my “pronouns” in my introductions at the beginning of the term. After revealing I’m Catholic, I’ve been asked if my priests ever “microaggressed” me. I’ve been told by a climate-alarmist professor that I would face consequences if I ever brought single-use plastic into his classroom.

Were these experiences kind of annoying because I just want to get my degree and not feel like I was sitting in on my professors’ therapy sessions? Yes. Do I feel oppressed? Not even close.

These experiences have given me a beautiful thing — they’ve helped ground me in my conservative beliefs. I’ve always had these values in me, but never cared to dig into them until they felt endangered.

The more my professors and peers mocked, challenged and disputed conservatism, the more time I spent studying and learning the counterarguments against their arguments. I watched videos, read books, listened to podcasts to hear another perspective, and even helped start a Young Americans for Freedom chapter.

Because of my experiences on campus, I have become the proud conservatarian I am today. To my professors and peers, I am certain this was not what you had intended, but thank you anyway.

Published:3/5/2019 12:29:47 PM
[World] [Keith E. Whittington] Considering the Law and Politics of Presidential Impeachments

Constitutional Lawyers are Helpful, but Impeachments Require Politics in the Highest Sense

I recently wrote a review essay on the law and politics of impeachments, particularly presidential impeachments. There have been some high-quality recent book-length studies of the impeachment power (very much with Donald Trump in mind), and the essay grapples with some particularly informative recent books by Michael Gerhardt, Gene Healy, Cass Sunstein, and Laurence Tribe and Joshua Matz, as well classic books from the Watergate period by Charles Black and Raoul Berger. The essay provides an overview of the impeachment power, the history of its use, the reasons for its use, and how to think about the meaning of "high crimes and misdemeanors." The Cato Institute's Gene Healy has laid out the case for a particularly expansive understanding of the scope of the impeachment power. I think his reading would go too far toward turning impeachments into a weapon of ordinary politics and is not fully consistent with the origins, logic, and history of our constitutional impeachment power, but he does lay his finger on the reasons why the impeachment power cannot be easily hemmed in by rigid constitutional rules. The essay is still available for a law review that wants to publish it sooner rather than later.

From the conclusion:

In our current debates over President Donald Trump, there are important questions of fact but there will also be unavoidable questions of law. There is more to be learned about what exactly President Trump has done, but there is a remarkable amount of information already available. The more fundamental disagreements are not over the basic contours of the charges against the president but over whether any of those charges rise to the level of high crimes. Although the president's most ardent defenders might like to make out the case that nothing the president has done can rightfully fall within the category of impeachable offenses, as Alan Dershowitz does in arguing that only indictable crimes can be impeachable offenses, only partisans are likely to be persuaded.

. . . .

The hard questions surrounding Trump are political questions in the broadest sense. How grave are his offenses? What remedies are available to address them? How risky is it to leave the president to serve out his term in light of what he has already done? How risky is it to forcibly remove a populist president from power on a largely partisan basis? The constitutional impeachment power forces Congress to confront such questions. Partisans will reach different answers on such questions, but even reasonable people not blinded by partisan passions are likely to differ in assessing them. Foes of the president and advocates of impeachment bear a burden to make a genuine effort to construct arguments that can find broad appeal and help persuade the skeptical and the uncommitted. Allies of the president and opponents of impeachment have a duty to listen to such arguments and take them seriously. Foes of the president have the obligation to demonstrate that impeachment is the last resort and that all other remedies have been tried and have proven insufficient to the task. Allies of the president have the obligation to take steps to walk the president out of impeachment territory by designing remedies that can be effective at mitigating the genuine damage that their fellow citizens see being done and to not simply try to sweep offenses under the rug. The impeachment process stirs passions, but the constitutional system only works if we are willing to deliberate in good-faith with those with whom we disagree and look beyond our most immediate interests and inclinations. If impeachments come to be perceived as nothing but a formidable weapon of faction, then we will have taken a long step toward destabilizing our constitutional order and we will have tarnished a potentially necessary constitutional tool.

You can read the whole draft here.

Published:3/5/2019 9:32:49 AM
[Markets] AOC Chief-Of-Staff Funneled $1 Million Of Campaign Cash Into His Own Companies: Report

The chief of staff to Democratic Socialist Rep. Alexandria Ocasio-Cortez reportedly funneled more than $1 million in political donations from two political action committees he founded into two of his own private companies, reports the Washington Examiner, citing a Monday complaint filed with the Federal Election Commission. 

The cash transfers from the PACs — overseen by Saikat Chakrabarti, the freshman socialist Democrat's chief of staff — run counter to her pledges to increase transparency and reduce the influence of "dark money" in politics.

Chakrabarti's companies appear to have been set up for the sole purpose of obscuring how the political donations were used.

The arrangement skirted reporting requirements and may have violated the $5,000 limit on contributions from federal PACs to candidates, according to the complaint filed by the National Legal and Policy Center, a government watchdog group. -Washington Examiner

According to campaign finance attorneys cited by the Examiner, the arrangement is "really weird," and an indication that "there's something amiss," noting that since there's no way to know where the political donations went, "they could have been pocketed or used by the company to pay for off-the-books campaign operations," writes the Examiner's Alana Goodman. 

While PACs are required by law to disclose how funds are used, Chakrabarti's private companies are exempt from such reporting

The FEC complaint names both Chakrabarti and Ocasio-Cortez as respondents, and demands that the two PACs be audited because they were allegedly engaged in "an elaborate scheme to avoid proper disclosure of campaign expenditures."

Tom Anderson, director of the National Legal and Policy Center's Government Integrity Project, said: “It appears Alexandria Ocasio-Cortez and her associates ran an off-the-books operation to the tune of hundreds of thousands of dollars, thus violating the foundation of all campaign finance laws: transparency." -Washington Examiner

The 33-year-old Chakrabarti was a Bernie Sanders organizer during the 2016 election. He founded a PAC called Brand New Congress in 2016, and another in 2017 called Justice Demopcrats which has the stated goal of helping to elect progressives to Congress.  

"Our idea is really to run a single unified presidential-style campaign that is going to look a lot like the Bernie Sanders campaign," said Chakrabarti during a 2016 interview with MSNBC's Rachel Maddow. "The campaign infrastructure and fundraising is set aside from the campaigning."

Between 2016 and 2017 his PACs raised approximately $33 million - mostly from small donations, while the committees transferred over $1 million to two shell companies Chakrabarti controlled during the same time period. The shells were formed with similar names to the PACs; "Brand New Campaign LLC and Brand New Congress LLC" according to the Examiner report. 

A few weeks after starting the Brand New Congress PAC, Chakrabarti formed one of the companies, Brand New Campaign LLC, in Delaware, using a registered agent service and mailbox-only address.

Over the next seven months, as small-dollar political donations poured into the PAC from progressives across the country, the committee transferred over $200,000, 82 percent of the contributions, to the company Brand New Campaign LLC. The payments were for "strategic consulting," according to federal election filings. They were sent to an apartment address listed for Chakrabarti in the Greenwich Village area of Manhattan.

In 2017, Brand New Congress PAC transferred another $240,000 to Brand New Congress LLC, also for "strategic consulting." Another PAC co-founded by Chakrabarti that year called "Justice Democrats" transferred an additional $605,000 to Brand New Congress LLC in 2017. -Washington Examiner

Of note, Brand New Congress is not registered in any Secretary of State databases, and as such it is unclear where it was incorporated. 

According to former FEC lawyer Adav Noti, the arrangement is "highly unusual," and appears to have been designed to obscure the use of funds. 

"None of that makes any sense," said Noti, adding: "I can’t even begin to disentangle that. They're either confused or they’re trying to conceal something."

"It does seem like there’s something amiss. I can only think of really two likely possibilities for this sort of pattern of disbursements," he said. "One is the scam PAC possibility — they're really just paying themselves and they’re concealing it by using the LLC. The other is that there’s actually another recipient, that the money is going to the LLC and then being disbursed in some other way that they want to conceal."

Former FEC chairman Bradley A. Smith said that he has never seen an arrangement quite like this, calling it a "It's a really weird situation." 

"I see almost no way that you can do that without it being at least a reporting violation, quite likely a violation of the contribution limits. You might say from a campaign finance angle that the LLC was essentially operating as an unregistered committee." 

Chakrabarti is reportedly no longer affiliated with Brand New Congress PAC, which communications director Zeynab Dey says went through a recent "transition period." 

A spokesperson for Justice Democrats said he did not know why the PAC paid so much money to Chakrabarti’s LLCs. When asked what the Justice Democrats PAC does on a daily basis, he said “it’s very clear what we do” but declined to elaborate. -Washington Examiner

From cow farts to bullshit... 

Published:3/5/2019 5:31:17 AM
[Markets] One Year On... Britain Puts New Roof On Skripal House Of Horrors

Authored by George Galloway,

In 12 months of shifting sands, one thing remains as its original foundations: the British state narrative on Salisbury stands as a castle in the air.

One year from the dastardly fate of Sergei and Yulia Skripal, no one is a step forward on what happened to them, how, why, or of course where they are.

One year ago, a nerve agent was allegedly sprayed onto their front doorknob. One year later, their house needs a new roof as a result. And why the roof? And why only the roof?

I don't know what happened to the stricken pair but then, neither do you, however much you've followed the story in Britain's mass media. In fact, the more you've read, the more confused you're likely now to be.

There are some things I do know, however.

The first is that the Russian state had as little to gain from attacking this pair in broad daylight on a Salisbury street with a signature Soviet-developed weapon, 'novichok,' as I said at the time.

It was exactly 100 days before the World Cup, just days before President Putin's re-election. If – and it's a big if – the Russian state wanted to kill the Skripals, many things would've been different.

Firstly, they would've been dead. Yulia would've been dead in Russia where she lived. And Sergei would've been dispatched at a less sensitive time by rather more reliable, less identifiable means, and by rather less comical killers.

The killers would not have flown directly from and back to Moscow. They would not have entrusted their egress to the Sunday service of Wiltshire public transport. They would not have smiled up at every CCTV camera they could find.

They would not have stayed at a downscale small hotel in East London, they would not have smoked drugs there, and they would not have noisily entertained a prostitute in their room. They would not have left traces of their nerve agent in their hotel room. They would not have spent a mere hour scoping Salisbury the day before the alleged poisoning of the Skripals. Nor would they have returned by public transport to London for their sex and drug party, only to retrace their steps by public transport the next day.

If they were going to kill a man and his daughter, they would not have trusted nerve agent on a doorknob when there was no conceivable way of knowing who's hand would touch it. Yulia? Sergei? The milkman? Any Tom, Dick or Harry in the street (or any of their children)?

If they were going to smear nerve agent on a doorknob, they would've done it in the dark – not at noon the next day, when anyone or any camera could watch them doing so, yet no one did. Quite apart from the salient fact that by noon the victims had already left the house never to return to it.

If the Skripals were merely victims in this case, why were both of their phones switched off in the hours between leaving their home and their afternoon repast. How did they manage to happily feed ducks in the park with bread between drinks and lunch, and share that bread with a local child – but neither child nor ducks suffered any ill effects?

If they left home early that morning, why were no signs of illness observed until after the pub and the restaurant at least five hours later? If the roof of the Skripals' house has to be replaced, why not the roof of the restaurant? If Detective Sergeant Nick Bailey was affected, why wasn't the first responder? How come the first responder turned out to be a most senior British Army nurse?

Why did the police wait months before publishing the likenesses of the two chief suspects?

If the Skripals were merely victims, why have they been hidden, why haven't they told us what happened?

Why was there a second bottle of perfume? How did it get into the hands of Dawn Sturgess? Why would the assassins need two bottles of perfume? Why and where did they discard the second, unopened, bottle?

Believe me, I could adumbrate 500 questions more but you'd be dropped down at your door if I did – from fatigue!

Suffice to say, there are way more questions than answers in the Skripal story. But not for the British government.

Their answers were swift and have had serious consequences for Russia, for Britain, and for the world. That they have made no effort to persuade a highly skeptical British public, relying on crude methods of information warfare instead, is a further reason why I and many others simply don't believe them.

Neither will history, if I'm any judge.

Journalism – history's first draft – is easy to purloin when most journalists haven't the time, inclination or resources to question the state – especially inclination. History books though, grind exceedingly fine.

Published:3/5/2019 1:28:18 AM
[Markets] US Conservatives Pursue A "Ben Option" Of Global Ramification

Authored by Alastair Crooke via The Strategic Culture Foundation,

Are we ‘Rome’? The question has weighed heavily on the minds of American conservatives, libertarians and Catholics at their various conferences. Is America headed the way of the Roman empire? Bureaucratic decay, massive public debt, an overstretched military, a political system seemingly incapable of responding to challenges – “the late Roman empire suffered these maladies, and so, some fear, does contemporary America”, notes The American Conservative, a journal which has been pursuing this ‘line’ diligently, and with a growing constituency, over a number of years. (Note that this is not the constituency of Vice-President Pence who represents an Evangelical, fundamentalist, literal insistence on imminent Redemption, with its ‘Rapture’ politics).

The American Conservative rather warns:

“If libertarians on the Right worry about structural collapse – cultural and religious conservatives add a moral and spiritual dimension to the debate. Rising hedonism, waning religious observance, ongoing break-up of the family, and a general loss of cultural coherence — to traditionalists, these are signs of a possible Dark Age ahead”.

And this is their narrative in response to these fears: Around the year 500 (CE), a generation after the Franks deposed the last Roman Emperor, a young Umbrian man (i.e. hailing from a rural province in Italy), was sent to Rome by his wealthy parents to complete his education. However, disgusted at ‘Rome’s decadence, he fled to the forest, to pray as a hermit.

His name was Benedict. And he went on to found a dozen monastic communities, and wrote his famous ‘rules’ which are credited with having helped an earlier culture and its values survive in needy times. Professor Russell Hittinger summed up Benedict’s lesson to the Dark Ages like this: “How to live life as a whole. Not a life of worldly success, so much as one of human success”.

And just how might a medieval monk be somehow relevant to our secular époque? Because, says the moral philosopher Alasdair MacIntyre, they show that it is possible to construct “new forms of community within which the moral life could be sustained” during a Dark Age – including perhaps, an age like our own.

MacIntyre offers the "disquieting suggestion" that the tenor of today’s moral debate (its shrillness and its interminability) is the direct outcome of a catastrophe in our past: a catastrophe so great, that moral inquiry was very nearly obliterated from our culture and its vocabulary exorcised from our language. He refers to the European ‘Enlightenment’. What we possess today, he argues, are nothing more than fragments of an older tradition. And as a result, our moral discourse, which uses terms like good, and justice, and duty, has been robbed of the context that makes it intelligible.

“For MacIntyre”, Rod Dreher, the author of The Benedict Option writes: “we too are living through a Fall of Rome-like catastrophe, one that is concealed by our liberty and prosperit”. Dreher continues, “In his influential 1981 book, After Virtue, MacIntyre argued that the Enlightenment project cut Western man off from his roots in tradition, but failed to produce a binding morality based on Reason alone. Plus, the Enlightenment extolled the autonomous individual. Consequently, we live in a culture of moral chaos and fragmentation in which many questions are simply impossible to settle. MacIntyre says that our contemporary world is a dark wood, and that finding our way back to the straight path will require establishing new forms of community”.

“The “Benedict Option” thus refers to [those] in contemporary America who cease to identify the continuation of civility and moral community with the maintenance of American Empire, and who therefore are keen to construct local forms of community as loci of Christian resistance against what the Empire represents. Put less grandly, the Benedict Option — or ‘Ben Op’ — is an umbrella term for Christians [and American conservatives], who accept MacIntyre’s critique of modernity”.

The Ben Op is no call to monasticism. It is envisaged, as it were, as a more practical way for this American constituency to manage being ‘in’, but not ‘of’, today’s modernity. And… where have we heard something like this before? Well – in Italian political philosopher, Julius Evola’s post-war, reflections of a radical traditionalist – Men Among the Ruins – in which he argues for a defence and a resistance against the disorder of our age. It was the writings of Evola, and others of a similar ilk, who sustained Russian intellectuals through their ‘dark ages’ of late communism and then, of full-blown neo-liberalism. Similar broad impulses helped impel the concept of Eurasianism (though its roots extend back to the 1920s in Russia).

The latter reflects the contemporary trend, manifested most particularly by Russia, but which reaches well beyond Russia, towards the endorsement of pluralism (the main plank in contemporary ‘populism’); or in other words, the ‘diversity’ that precisely privileges one’s culture, narratives, religiosity, and ties of blood, land and language. This notion comports exactly with MacIntyre's point that it is cultural tradition alone which provides sense to terms such as good, justice and telos. “In the absence of traditions, moral debate is out of joint and becomes a theatre of illusions in which simple indignation and mere protest occupy centre stage”.

The idea here, rather, is of a grouping of ‘nations’ and ‘communities’, each reaching back to its primordial cultures and identities – i.e. America being ‘American’ in its own ‘American (or Russian, in its own) cultural way’ – and not permitting itself to be coerced into succumbing to the coercion of a diversity-shorn, cosmopolitan empire.

Clearly this sits ill at ease with the mainstream Americannotion of a compliant, rules-based globalist ‘order’. It is a clear rejection too, of the idea that ‘melting pot’ cosmopolitanism can procreate any true identity, or any moral grounding. For, “without the notion of telos (directionality, and purposiveness to human life) serving as a means for moral triangulation, moral value judgments lost their factual character. And, of course, if values become ‘factless’, then no appeal to facts can ever settle disagreements over values”.

Dreher is explicit about this radical opposition. He says of Ben Op, “you might even say that it’s a story about the progressive possibilities of tradition, and a return to roots – in defiance of a rootless age”.

And just to be clear, US conservatives who think they have found an ‘easy’ ally in MacIntyre, “fail to attend to his understanding of the kind of politics necessary to sustain the virtues [any quality that is required for discharging one's path in life]. 

MacIntyre makes clear that his problem with most forms of contemporary conservatism is that conservatives mirror the fundamental characteristics of liberalism. The conservative commitment to a way of life structured by a free market results in an individualism, and in particular a moral psychology, that is as antithetical to the tradition of the virtues as is liberalism. Conservatives and liberals, moreover, both try to employ the power of the modern state to support their positions in a manner alien to MacIntyre’s understanding of the social practices necessary for the common good”.

What is so interesting to an outsider, is how the Ben Op’s author, Dreher, situates it within the US political context:

“Many of us on the Right who have been dismayed by the Trumpening (sic), and have been hard hit by the Kavanaugh debacle, have concluded that [nonetheless], we have no choice but to vote Republican this November – if only out of self-defense. (He refers to November 2018)

“But let me quote two passages from The Benedict Option:

“The cultural Left—which is to say, the American mainstream— has no intention of living in post-war peace. It is pressing forward with a harsh, relentless occupation, one that is aided by the cluelessness of Christians [i.e. those mirroring liberalism], who don’t understand what’s happening. Don’t be fooled: the upset presidential victory of Donald Trump has at best given us a bit more time to prepare for the inevitable (emphasis added).

[Those] who believe that politics alone will be sufficient – are not going to be prepared for what’s going to come when the Republicans lose the White House and/or Congress, which is inevitable. Our politics have become so sulfurous that there will be a vicious backlash, and that backlash will fall primarily on social and religious conservatives. When the Democrats regain power, conservative Christians are going to be in very bad shape”.

The Ben Op, in other words, is another important window into what Professor Mike Vlahos has described as the gathering, next chapter to America’s unresolved ‘civil war’:

“America today fissuring into two visions of the nation’s future way of life: “Red” virtue imagines a continuity of family and community within a publicly affirmed national community. “Blue” virtue imagines personally chosen communities mediated through the individual’s relationship with the state. So, even though these two divided visions of America have been opposed for decades, and so far have controlled the urge to violence, there is in their bitter contest [of today] a sense of gathering movement toward an ultimate decision”.

“Today, two righteous paths are gridlocked in opposition … Red and Blue already represent an irreparable religious schism, deeper in doctrinal terms even than the 16th-century Catholic-Protestant schism. The war here, is over which faction successfully captures the (social media) flag, as true inheritor of American virtue. Both perceive themselves as champions of national renewal, of cleansing corrupted ideals, and of truly fulfilling America’s promise. Both fervently believe that they alone – own virtue.” 

We might conclude that this Ben Op is just a uniquely American manifestation, of little wider import to the world at large. But if we did, we would wrong. Firstly, Macintyre traces the moral tradition from its origin in Traditionalist Homeric literature (i.e. to its Pre-socratic roots) and to this ‘heroic society’ becoming the repository for moral stories about eternal values: Narratives that have the peculiar ability of becoming embodied in the life of the community that cherishes them. And seeing community per seas ‘a character’ of sorts, in an historically-extended, moral narrative.

In other words, Ben Op is not founded exclusively in Christianity at all. Rather, MacIntyre suggests that narrative provides a better explanation for the unity of a particular human life. The self has continuity because it has played the single and central character in a particular story: the narrative of a person's life. He puts it this way: "In occupying these roles we simultaneously become subplots in the stories of others' lives, just as they have become subplots in ours. In this way, the life stories of members of a community are enmeshed and intertwined. This entanglement of our stories is the fabric of communal life … For the story of my life is always embedded in the story of those communities from which I derive my identity". Here, we are being directly returned to Homer.

But secondly, we would be missing something essential which links the Ben Op impulse to the wider push-back against today’s millenarian globalists who root their ‘redemption’ in a teleological process of ‘melting’ away cultural identity, of making ethnicity and gender matters of personal choice (and therefore never definitive).

This critique, coming from an important American conservative constituency which votes Trump yet is aware of his drawbacks, is one that may resonate more widely with other non-American constituencies. But as Rod Dreher, who initiated this campaign as far back as 2006 notes, its members in fact already comprehend its wider import. Dreher says:

“Hey, I’m not Catholic either. So what? We Orthodox claim him [Benedict] as one of our own, as all the pre-schism saints are. But never mind. [Christians] need to look deeply into Church history to find the resources to withstand the pressures of modernity. St. Benedict is one of them. Because of our varying ecclesiologies, a Catholic Ben Op is going to look different from a Protestant one, and an Orthodox one will look different too. That’s okay. Depending on the telos of the Ben Op institution, we may be able to work together ecumenically”.

Published:3/4/2019 11:27:24 PM
[Markets] There Is A Violent Move Taking Place Below The Market's Surface Today

While the broader market is suffering from one of its biggest selloffs of 2019, sparking worries that the "goldilocks rally" is finally over as Goldman warned over the weekend...

... Nomura's Charlie McElligott once again focuses on what is taking place just beneath the market's surface, and finds some violent moves in the form of significant factor rotation which appear to be at the core of today's broader Index-level selloff (which he describes as "GASP -75bps…yes, 2019 has been that absurd"), with the Nomura strategist's favorite “Value” over “Growth” imbalance dynamic again looking like "patient zero" of today's slump as Monday's performance behavior indicates potential "rebalancing" of risk exposures which in-turn may be causing general portfolio distress across L/S managers in particular (and likely behind some of the dynamic hedging in futures/ETFs).

As McElligott - who recently correctly predicted the curve's acute steepening - explains yet again, “Value” over “Growth” outperformance has become a standard pain-trade/de facto “Momentum” factor unwind of multi-year consensual “slow-flation” macro narrative positioning, this has worked flawlessly in conjunction with the Fed’s post-GFC efforts to flatten the US yield curve to maximize “easy” financial conditions (low rates, flat curves forever drive folks into stuff that can work “secularly” and doesn’t need a “hot” economic cycle).

In this vein, the “Long Growth, Short Value” consensual positioning dynamic of the past 5 years has been a critical performance driver for most equity funds over this period, with “Long Growth, Short Value” effectively becoming a market-neutral “Momentum” expression—which is why any catalyst for a resurgence in “Value” is a constant driver of fear for the majority of Equities players as it promptly leads to a broader market selloff as the equilibrium of the market gets tipped — which may also explain why such “reversal blasts” (and performance drawdowns) in recent years periods of “Value over Growth” have all been incredibly short-lived, "instead associated more with bouts of “Gross-Down” stress/book unwinds as opposed to any sort of macro regime change which could actually stick" according to the Nomura strategist.

However, as we have covered in recent months, at the core of McElligott's 2019 trading view is the belief that "the catalysts are now largely in-place for a US yield curve STEEPENING over the coming 1Y + (featuring two very different but realistic scenarios for either a  bull- or bear- steepening, based upon “end-of-cycle slowdown”- OR “reflation” / “cyclicals over defensives”- view)" which could also conspire against said legacy “Long Growth, Short Value” factor positioning in a much “stickier” long-term fashion… "because in this post-GFC regime, yield curve steepening has correlated with strong “Value” factor performance against “Growth”- and “Momentum” underperformance."

However, instead of being a representation of the “steepening”/macro regime change as the near-term driver though (despite the 5s30s more than doubling from +21bps in start Oct to the current +56bps), today’s behavior is most realistically related to the peak “Growth” factor LONG proxy that is the “Software & Services” space trading off ~2% (CRM earnings tonight as a huge input here, options pricing-in a 7.9% move), which is also why we see a bloodbath in some of the most popular trades, including the “Most Crowded” basket down -2.8%, “1Y Price Momentum Longs” -2.3%, “Cash / Assets (Growth) Longs” -2.6%, “Software 8x’s EV / Sales” basket -4.7% and “EBITDA / EV (Value) Shorts” -3.1% which as Charlie notes, "has a ~60% weighting between “Software & Services” along with addition “Growth Longs” proxy Biotech."

To simplify his point, there are three things of note:

  • Days when “Value” is outperfomring “Growth” /(i.e., long-short “Momentum”), like today, tend to be associated with negative broader stock performance, and today is just another expression of this
  • This asymmetrical positioning dynamic with investors again crowded into “Growth” and short / underweight “Value” (as many view this current global CB “dovish pivot” as meaning that we are returning to a “low rates and flat curves in perpetuity” slowing-growth world) is now receiving a lot more attention though, because PMs, CIOs and other trigger-pullers are increasingly susceptible to this crowding risk; to this end, McElligott also writes that in over three months of client meetings, "the point of greatest concern/ interest has again centered around my view that the a longer-term US yield curve STEEPENING in 2019 will “knock-on” into the acceleration of this “VALUE” OVER “GROWTH” reversal dynamic within US Equities."
  • Today’s trade could be about mitigating this factor exposure risk looking-out further down the road (the structural “US YIELD CURVE STEEPENING” trade) via today’s possible rebalancing-type flows, "thus we see the ensuing damage in crowded Growth-overweights like “Tech Momentum Longs” (-2.7%), “Cash / Assets Longs” (-2.6%) and “R&D / Sales Longs” (-2.4%) factors or Biotech (-1.9%), all of which is leaning on the performance on “long” books—in turn forcing “unwindy” type flows on the “short” side, with “Value” outperforming as it remains broadly underweighted / shorted."

Charlie's appropriate conclusion:

"Factor exposures always seem to matter more on the drawdown days"—Every Equities PM ever

Published:3/4/2019 2:55:59 PM
[Markets] Beijing Threatens Jailed Canadians With Espionage Charges In Latest Retaliation For Huawei CFO's Arrest

Beijing has fired off its latest threatening message to Ottawa on Monday, just days after the Canadian Justice Ministry decided to allow extradition hearings for Huawei CFO Meng Wanzhou to move forward.

With Meng set to make her first court appearance during the extradition proceedings later this week, two Chinese media reports published Monday claimed that jailed Canadian nationals Michael Kovrig - a former diplomat - and Michael Spavor - a businessman who arranged tours to North Korea - would face charges of spying on Beijing. Earlier, Chinese officials had said only that the two men faced charges related to threatening national security, which allowed Chinese authorities to immediately imprison the two men while an investigation was still underway.


The reports, which were summarized by the Financial Times, claimed that Spavor, who is being held in isolation in Liaoning, "provided intelligence to Kovrig and was an important intelligence contact of Kovrig." One Chinese media personality said the reports suggest that Kovrig was the primary target in the crackdown, and that he was responsible for stealing state secrets.

While the charges haven't been officially filed, the message to Ottawa is clear: Kovrig and Spavor could face the death penalty if found guilty, just like a third Canadian national who late last year saw his sentence for drug trafficking modified from a 15 year prison term to the death penalty.

Unlike Spavor and Kovrig, who have been kept in solitary confinement, denied books sent by friends and allowed only a single consular visit per month, Meng has been under house arrest in her sprawling Vancouver home.

Meng's extradition must now be decided by Canadian courts, a process that could take months or even years. Meanwhile, her lawyers have sued Canada over alleged civil-rights violations from when she was detained in Vancouver on Dec. 1.

Published:3/4/2019 1:27:14 PM
[4ef43614-6801-52b2-b60f-db9f9c4db8c5] Faith formula to success: How to strengthen your relationship with God Question marks are greater than periods. This is actually the formula Jesus used throughout his life. In the four books written about his life, Jesus was asked 183 questions, but only answered three—and at the same time, he asked 307 questions of his own!  Published:3/4/2019 10:54:51 AM
[Markets] Kupperman: "Can't Spell Felon Without Elon"

Submitted by Harris Kupperman, founder of Praetorian Capital, courtesy of Adventures In Capitalism

For Part I Click Here

This may surprise people, but accounting isn’t a black and white endeavor—there’s actually a lot of gray area—particularly when you deal with accruals and estimates for future events. This is the reason that two very similar companies can report very different short-term results. What is the useful life of equipment from a depreciation standpoint? What is the eventual cost of environmentally remediating an oil well? What assumptions should you use for a pension fund’s performance and discount rate? Two well-meaning CFOs may come to two very different sets of assumptions. The assumptions used are often colored by the CEOs goals. Is the company trying to smooth earnings and play a “beat the quarterly estimate game,” or are they manipulating the numbers to create short term earnings for a capital raise? What if the business plan mostly focuses on a vindictive desire to squeeze the shorts?

Most accountants are, by nature, focused on accuracy and take the conservative route when offered two paths. However, when a corporate culture is based on pushing the envelope including; knowingly selling defective products that kill people, ignoring obvious workforce safety issues and cutting corners to hit aggressive Twitter boasts to promote the stock, you’d have to think that pushing on the financials would fit right in—at least no one dies when the numbers are inflated.

Tesla continues to gain market share in safety violations. They have more violations than 10 large plants in USA combined.

Fortunately, financial statements are numbers based. You can tease the numbers, review the estimates used and reach your own conclusions as to their accuracy and ulterior motives. Look at my Q3 Tesla piece if you want to get some clarity on how this is done.

With the 10-K now released, we get to look at new data. Take depreciation for instance. In 2018, they lowered the rate of depreciation on Model S & X tooling by 30% from 250,000 to 325,000. From the financials, it’s hard to tell exactly how much capitalized tooling was related to the S & X but it’s likely between $500 million and a billion as total year-end tooling at cost was $1.398 billion and we know that Model 3’s are mostly built by hand in a tent.

Ironically, the Q4 shareholder letter made a point of noting this increase in gross margin. Let’s just say cost reductions weren’t actually responsible for the change.

Gross margin of Model S and Model X declined very slightly compared to Q3, which was in line with our guidance. Further cost reductions partially offset lowered prices in China as well as other negative factors. For full year 2018, Model S and Model X non GAAP gross margin improved by over 500 bp and GAAP gross margin improved by over 300 bp compared to 2017, mainly due to significant cost reductions. (Q4/2018 Shareholder Letter)

Of course, accounting works in funny ways, if these tooling assets were already depreciated by 50% at the time of the accounting change, then the reduction in depreciation cost per vehicle would be twice the magnitude (noted above)—at least for a few quarters. While this would adjust through the financials over time as new capital is added to the depreciable base, it does serve to increase GAAP earnings dramatically in the short run.

Let’s look at a bigger driver of earnings.

Our current and future warranty reserves may be insufficient to cover future warranty claims which could adversely affect our financial performance. Subject to separate limited warranties for the supplemental restraint system, battery and drive unit, we provide four-year or 50,000-mile limited warranties for the purchasers of new Model 3, Model S and Model X vehicles and either a four-year or 50,000-mile limited warranty or a two-year or 100,000- mile maximum odometer limited warranty for the purchasers of used Model S or Model X vehicles certified and sold by us. The limited warranty for the battery and drive unit for new Model S and Model X vehicles covers the drive unit for eight years, as well as the battery for a period of eight years (or for certain older vehicles, 125,000 miles if reached sooner than eight years), although the battery’s charging capacity is not covered under any of our warranties or Extended Service plans; the limited warranty for used Model S and Model X vehicles does not extend or otherwise alter the terms of the original battery and drive unit limited warranty for such used vehicles specified in their original New Vehicle Limited Warranty. For the battery and drive unit on our current new Model 3 vehicles, we offer an eight-year or 100,000-mile limited warranty for our standard or mid-range battery and an eight-year or 120,000-mile limited warranty for our long-range battery, with minimum 70% retention of battery capacity over the warranty period. In addition, customers of new Model S and Model X vehicles have the opportunity to purchase an Extended Service plan for the period after the end of the limited warranty for their new vehicles to cover additional services for up to an additional four years or 50,000 miles. (2018 10-K)

Apologies as that’s a lot of boring legal language, but it’s important for what follows. Servicing warranties is a major cost for an automaker. Naturally Tesla is pushing the envelope here as well.

Note the charge to provisions in the Q2 “big bath” quarter followed by the gutting of provisions afterwards

Now, I’ll admit that this calculation isn’t the world’s cleanest number. There are solar systems and energy storage included here that have their own metrics, there’s a change in vehicle mix to include more Model 3 with a lower price point. I get all of this. However, a shift in vehicle mix shouldn’t move warranty cost by almost $600/car from the 2017 average of $2,409/car to the Q4 number and I’m pretty confident the mix in Q4 was quite similar to Q3, yet the accrual dropped by $400/car. Only deceptive accounting could do that—especially as Q3 was almost in line with prior accrual levels.

Thinking of warranty accruals in a different way, in Q4, Tesla spent $60.75 million on warranty costs or an annualized rate of $243 million a year or $486 per car based on approximately 500,000 cars on the road by year-end. Given that the warranty is 8 years on the battery and drive unit (the most expensive parts of the car), the 8-year cost would work out to an anticipated cost of $3,888 per car, yet Q4’s accrual for warranty of $1,833 would work out to only 47% of the actual expected cost. But wait, there’s more!! The average fleet on the road is around 2 years old today. If batteries and drive units are going to fail, it’s as they age, not when they’re young. $3,888 is the best case scenario for total cost—the likely cost is DRAMATICALLY WORSE!! I wouldn’t be surprised if the real number is well over $10,000—meaning that Tesla wasn’t profitable for the only two quarters that they claimed to be profitable. Is it any wonder that Tesla has choked off spending on vehicle servicing and it now takes months to get any parts for a car? Even while underspending on their warranty costs, they’re still under-reserved dramatically!!

This leads to the obvious question, “Kuppy, I get it, auto OEM calculations are convoluted and these guys are cheating a bit, but isn’t this a cash flow generation story now? Look at how cash generation has inflected positive in the past 2 quarters?” To that I say that they’re likely gaming the cash numbers too, just like with the accruals.

At the end of Q4, Tesla claims they had $3.878 billion of cash including restricted cash. At the end of Q3, that number was $3.123 billion for an average cash balance of $3.502 billion. During the quarter, they earned $7.348 million in interest income or an average rate of interest of 0.84% despite the fact that money market rates were in the mid-2s for the quarter. I understand that some cash is needed for operating the business and some is restricted or overseas but they’ve earned about a third of what they should have. Either they’re hopelessly incompetent at cash management, or that cash wasn’t really there all quarter and shows up only at quarter end due to some transaction designed to pad the balance sheet with cash. While the low interest income is not a smoking gun, it shows something just isn’t what it claims to be either. For a point of reference, in Q3, they had a blended 1.00% yield on average cash balances despite average prevailing interest average rates being lower during that quarter. Did they suddenly get worse at cash management or are they playing more games with the cash balances?

Ponzi Schemes are like sharks, as soon as they stop swimming forward, they drown. This is because well run Ponzi Schemes use accruals to hide costs in the present that only pop up in the future. If your revenue numerator is growing, your costs on the denominator side will stay constant or decline as a percentage of revenue as they’ve been deferred—leading to margin growth. When revenue slows or goes in reverse, the fraud collapses. When accruals catch up, earnings will always inflect downwards—that’s why it’s so important to watch what’s happening with revenues.

I can keep pointing to obvious issues with the numbers (don’t get me started on the VIEs or how they’ve been capitalizing their vehicles to shift them into PP&E to increase their earnings or how they’ve under-reserved for liabilities throughout their leasing assets) but this piece is long enough already. Tesla has squeezed the numbers as hard as they can be squeezed. Is there a bit more lemonade in there? Maybe. Once you’ve crossed the red line, you might as well keep squeezing until someone catches you. Tesla seems to be at that point today. Tesla had 2 CAOs quit last year; they’ve had 3 CFOs in as many years. Anyone anywhere near the numbers flees at the first opportunity. Clearly, the accountants think that the lemonade is already quite toxic.

Going back to the shark analogy, when revenue inflects negatively, these accruals will catch up with Tesla quite rapidly. Watch monthly vehicle sales. January was awful. February was worse. They just fired all the sales people—how can March be any better? Tesla is imploding. It’s over and it will soon become obvious to everyone. Before, as a short, you had to use logic against a well-orchestrated stock promote complete with highly manipulated numbers. They can’t fake the numbers as revenue declines and they can’t promote the stock with only bad news coming. I added even more puts and put spreads this Friday.

The Gigafraud is about to detonate!!!

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Published:3/3/2019 2:47:25 PM
[Abortion] Dr. Seuss is in Leftist cross hairs, but conservatives shouldn’t rush to his support

With the Left now gunning for Dr. Seuss, it’s tempting for conservatives reflexively to support him — but they may want to think twice about doing so. I’m sure that you’ve already heard that, per the most recent Leftist purge of pre-woke people, ideas, and books, a new study states that Dr. Seuss (aka Theodor […]

The post Dr. Seuss is in Leftist cross hairs, but conservatives shouldn’t rush to his support appeared first on Bookworm Room.

Published:3/3/2019 11:48:05 AM
[Social Media] ‘Where the breadline ENDS’: AOC-inspired children’s books titles go VIRAL with hilarious tag #OcasioCortezChildrensBooks

Every once in a while we come across a hashtag that really needs very little if any explanation and the #OcasioCortezChildrensBooks tag is just such a tag. AOC seems to have inspired so many various titles of children’s books that the tag not only went viral but is trending in the top spot on Twitter […]

The post ‘Where the breadline ENDS’: AOC-inspired children’s books titles go VIRAL with hilarious tag #OcasioCortezChildrensBooks appeared first on

Published:3/3/2019 7:45:32 AM
[Markets] The Real Reason Why Globalists Are So Obsessed With Artificial Intelligence

Authored by Brandon Smith via,

It is nearly impossible to traverse web news or popular media today without being assaulted by vast amounts of propaganda on Artificial Intelligence (AI). It is perhaps the fad to end all fads as it supposedly encompasses almost every aspect of human existence, from economics and security to philosophy and art. According to mainstream claims, AI can do almost everything and do it better than any human being. And, the things AI can't do, it WILL be able to do eventually.

Whenever the establishment attempts to saturate the media with a particular narrative, it is usually with the intent to manipulate public perception in a way that produces self fulfilling prophecy. In other words, they hope to shape reality by telling a particular lie so often it becomes accepted by the masses over time as fact. They do this with the idea of globalism as inevitable, with the junk science of climate change as “undeniable” and they do it with AI as a technological necessity.

The globalists have long held AI as a kind of holy grail in centralization technology. The United Nations has adopted numerous positions and even summits on the issue, including the “AI For Good” summit in Geneva. The UN insinuates that it's primary interest in AI is in regulation or observation of how it is exploited, but the UN also has clear goals to use AI to its advantage. The use of AI as a means to monitor mass data to better institute “sustainable development” is written clearly in the UN's agenda.

The IMF is also in on the AI trend, holding global discussions on the uses of AI in economics as well as the effects of algorithms on economic analysis.

The main source for the development of AI has long been DARPA. The military and globalist think tank dumps billions of dollars into the technology, making AI the underlying focus of most of DARPA's work. AI is not only on the globalist's radar; they are essentially spearheading the creation and promotion of it.

The globalist desire for the technology is not as simple as some might assume, however. They have strategic reasons, but also religious reasons for placing AI on an ideological pedestal. But first I suppose we should tackle the obvious.

In most white papers written by globalist institutions on AI, the thrust centers on mass data collection and surveillance. The elites are careful to always assert that their interests focus on the public good. This is why the UN and other agencies argue that they should be the leaders in oversight of mass data collection. That is to say, they want us to believe that they are objective and trustworthy enough to manage rules for data surveillance, or, to manage the data itself.

For the safety of the public, the globalists want centralized management of all data collection, ostensibly to save us from those evil corporations and their invasion of data privacy. Of course, most of those corporations are also run by globalists that fill the guest books of events like the World Economic Forum to discuss the advancements and advantages of AI. The WEF has made it a mandate that AI be promoted widely and that the business world and the general public be convinced of AI's advantages. Bias against AI must be prevented...

So, what we have here is yet another false paradigm in which globalist institutions are opposed to corporations in terms of how AI is used.  Yet, globalist corporations and globalist institutions both develop AI as well as pro-AI sentiment.  The public, with its innate distrust of corporate moral compass, is supposed to be convinced to support UN regulatory reforms as a counterbalance. But in reality, corporate powers have no intention of fighting against UN control, they will ultimately welcome it.

This was the goal all along.

The actual effectiveness of AI as a means to help humanity is questionable. AI is primarily about “learning algorithms”, or machines that are programmed to learn from experience. The problem is that a learning algorithm is only as effective as the human beings that program it in the first place. That is to say, learning is not always a cause and effect process. Sometimes, learning is a spontaneous epiphany. Learning is creative. And, in some cases, learning is inborn.

When a machine is pitted against a human in a system built on very simple and concrete rules, machines tend to prevail. A chess game, for example, is designed around hard rules that never change. A pawn is always a pawn and always moves like a pawn; a knight always moves like a knight. While there can be moments of creativity in chess (which is why humans to this day are still on occasion able to beat computers at the game), the existence of the rules makes AI seem smarter than it is.

Human systems and natural systems are far more complicated than chess, and the rules tend to change, sometimes without warning. As quantum physics often discovers, the only thing that is predictable when observing the universe and nature is that all things are unpredictable. How well would an algorithm do in a chess game where a pawn could suddenly evolve to move like a knight, without any specific predictable patterns? Not very well I suspect.

And this is where we get into the crux of how the image of AI is being inflated into a kind of half-assed electronic god; a false prophet.

AI is being inserted not only into chess, but into everything. Mass surveillance is impossible to manage by humans alone; the amount of sheer data is overwhelming. So, one core purpose of AI for the globalists becomes clear – AI is meant to streamline mass surveillance and automate it. AI is meant to scour social media or electronic mail for “key words” to identify potential miscreants and opposition. It is also meant to monitor public sentiment towards specific issues or governments. The goal is to gauge and eventually “predict” public behavior.

This becomes more difficult when we start talking about individuals. While groups are more easily observed and mapped in their behavior, individuals can be abrupt, volatile and unpredictable. AI mapping of personal habits is also prominent today. It is more visible in the corporate world where marketing is tailored to individual consumer patterns and interests. That said, governments are also highly interested in tracking individual habits to the point of creating psychological profiles for every person on the planet if possible.

This all boils down to the idea that AI will one day be able to identify criminals before they ever commit an actual crime. In other words, AI is meant to become and “all seeing eye” that not only monitors our behavior, but also reads our minds as a force for a pre-crime identification.

The question is not whether AI can actually tell us who is a future criminal. AI is obviously incapable of accurately predicting a person's behavior to such a degree. The question is, WHO is setting the standards that AI is looking for when identifying potential “criminals”? Who gets to set the rules of the chess game? If an algorithm is programmed by a globalist, then AI will label anti-globalists as future or current criminals. AI does not truly think. AI does not enact the power of choice in its decisions. AI does as it is programmed to do.

The globalist obsession with AI, however, goes far beyond centralization and control of populations. As noted above, there is a religious factor.

In my recent article 'Luciferianism: A Secular Look At A Destructive Belief System', I outlined the root philosophy behind the globalist cult. The primary tenet of luciferianism is the idea (or delusion) that certain special people have the ability to become “gods”. But, there are some consequences of this belief that I did not explore in that article.

First, in order to become a god, one would have to have total observational power. Meaning, you would have to be able to see all and know all. Such a goal is foolish, because observing everything does not necessarily mean a person knows everything. Total observation would require total objectivity. Bias blinds people to the truth right in front of their faces all the time, and globalists are some of the most biased and elitist people on the planet.

Completely objective observation is impossible, at least, for humans and the algorithms they program. From physics to psychology, the observer always affects the observed and vice versa. That said, I think the globalists don't really care about this reality. It is enough for them to pretend they are gods through mass surveillance. They aren't actually interested in attaining godlike enlightenment or objectivity.

Second, to become a god, in a mythological or biblical sense, one would be required to create intelligent life from nothing. I believe that in the minds of the luciferians the creation of AI is the creation of an intelligent life form, rather than software. Of course, luciferians have a disturbed notion of what constitutes “intelligent life”.

As I examined in my article breaking down and debunking luciferian ideology, the existence of inherent psychological archetypes form the basis for the human ability to choose, or to be creative in their choices. The existence of inherent understanding of good and evil establishes the foundation of human conscience and moral compass – the “soul” if you will. Luciferians argue despite ample evidence that none of this actually exists. They argue that humans are blank slates – machines that are programmed by their environment.

To understand this ideology or cult built on blank slate theory, we must consider the fact that globalists often exhibit the traits of narcissistic sociopaths.  Full blown narcissistic sociopaths make up less than 1% of the total human population; they are people who actually lack any inherent empathy or the normal personality tools that we would associate with humanity.  It would not be an exaggeration to say that such people are more like robots than people.

I have also theorized that luciferianism is a religion designed by narcissistic sociopaths for narcissistic sociopaths.  It is a kind of binding or organizing tool to gather sociopaths into an effective group for mutual benefit - A club of parasites.  If this theory is true, then it represents something that is rarely if ever dealt with in mainstream psychological or anthropological observation; the existence of a cabal of narcissistic sociopaths conspiring together to hide their identities and to become more successful predators.

To summarize, luciferianism is the perfect belief system for narcissistic sociopaths.  They are, in a way, inhuman.  They are blank slates devoid of humanity, and so they adopt a religion which treats this notion as "normal".

So, it makes sense that they would consider something as simple and empty as AI to be intelligent life.  As long as it is able to be programmed to act “autonomously” (which they seem to consider sentience), their definition of intelligent life is fulfilled. There is nothing intelligent about artificial intelligence when it comes to moral or creative actions, but narcissistic sociopaths have no concept of this anyway.

I leave readers with this to consider; last year an AI program was given the task of creating its own works of art. The outcome was highly publicized and some of the art was sold for over $400,000. I inivte you to look at this artwork here if you have not seen it already.

From what I have witnessed, the common human reaction to this “art” is for people to recoil in horror. It seems like a strange parroting of human elements of art, but with none of the soul. Intuitively, we understand that AI is not life; but for globalists it is the very definition of life, probably because the soulessness of the creation is reflective of the soulessness of the creators.  Just as Christians believe that mankind was made in the image of God, luciferians in their pursuit of godhood have created a "life form" that is perhaps ironically just like them.

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Published:3/2/2019 10:46:47 PM
[Books] The missing link (Scott Johnson) Writing about Richard Samuelson’s review of Gordon Wood’s new book on Adams and Jefferson yesterday, I omitted the link to Richard’s excellent review. Here it is: “Best of enemies.” As is frequently the case with the Claremont Review of Books, here we have a case of perfectly matched reviewer and book. Published:3/2/2019 5:39:17 AM
[a7e9ae69-85ce-5623-8b17-a3658b02a131] It's Read Across America Day -- Here's what our kids must know as literacy grows more complex What is literacy? We previously would have defined literacy using terms like reading, writing, speaking and listening and referenced the use of paper, pencils, books and telephones to communicate and disseminate information. Published:3/2/2019 3:09:47 AM
[Markets] Here's How You'll Die When The SHTF (And How To Prevent Your Untimely Demise)

Authored by Daisy Luther via The Organic Prepper blog,

When it hits the fan…I mean REALLY hits the fan in a permanent kind of way, the most likely outcome is death.

That’s not pretty, and I’m well aware of it. I always try to be positive and optimistic, because for me, preparedness is the ultimate act of optimism, but sometimes we have to look at the numbers and face some things that are pretty terrifying. The first reality check is that some research says that only 3 million Americans are preppers.  That means that 315 million Americans are not preppers. Some experts predict that within 30 days of the power going out, 50% of Americans will be dead. Within a year, an astounding 90% of the population will be dead.

Do you want to survive such a scenario? Do you want your children to survive? When you read this information, you have to realize that it’s very unlikely that you and your family would live through a grid failure of a year or more unless you are proactive and develop a preparedness plan that takes all of these causes of death into consideration.

The Top 10 Ways to Die in a Long-term Disaster

So here are the cold hard facts. One of these is the way that you are most likely to die when the SHTF, particularly in the event of a long-term grid failure. The good news is, now that you know this, you can take steps to prevent your untimely demise.

  1. You die of thirst or waterborne illness.  Most people have a case of water bottles kicking around, and perhaps a 5 gallon jug for the water cooler. What they don’t have is a gallon a day per person for a long-term emergency. Most people also don’t own a gravity fed, no-power necessary water filtration device with spare parts and extra filters. Most people do not have the skills and knowledge necessary to purify their water without these devices either.  Waterborne illness is the number one cause of death after a natural disaster. If just one person handles water and waste incorrectly, this can cause an epidemic of such deadly illnesses as Hepatitis A, viral gastroenteritis, cholera, Shigellosis, typhoid, Diphtheria and polio.  The other worry is dehydration. It only takes 3 days for a person to die of thirst.  Learn more about the importance of water preparedness HERE. If you’d like information on water preparedness in a print version, check out my book on the subject.

  2. You die from fantasy-world planning. So many preppers have poorly thought out plans for survival. They think they’ll “live off the land” and hunt, forage, and farm their way through the apocalypse, but they’ve never milked a goat or planted the contents of their seed banks. They don’t understand that gardens and crops can fail for innumerable reasons. They think they’re still in the same physical condition that they were 25 years ago and overestimate their ability to perform physical labor, like chopping wood for the fire. There are hundreds of bad strategies that will get preppers killed (in fact, here are 12 of them), and mostly it boils down to one crucial fact: it’s all a fantasy. They’ve never done ANY of the things that they think they will do for survival, or if they have done them, it was decades ago, when they were younger, fitter, and more resilient. I can tell you right now, if we had to live off of the contents of this year’s drought-stricken, deer-and-gopher-raided garden, we’d last about a week, enjoying salsa by the jarful, but little else.

  3. You freeze to deathDepending on where you live, you may freeze to death when the power goes out.  When temperatures plummet, people will become desperate to get warm, and this will lead to other modes of death such as carbon monoxide poison from improperly vented heat sources and house fires when people use fireplaces or wood stoves that have not been maintained for years. Learn about staying warm during a winter power outage HERE and begin to develop a plan that will keep your family cozy during a long-term scenario.

  4. You starve to death. Most people only have enough food to see them through until the next grocery trip.  Most people go to the grocery store more than once per week. In urban centers, it’s customary to buy your food fresh from the market each day.  If disaster strikes and you only have a few days’ worth of food, you are going to be one of those people standing in line for hours, begging FEMA for a bottle of water and an MRE to split amongst your family.  Even worse, in an extremely widespread disaster, FEMA won’t be coming at all, and you’ll be on your own, left with only what you have in your home…before it spoils and if you can figure out a way to cook it with no power.  Food poisoning, starvation, and malnutrition will be common causes of death. Learn about building a pantry on a budget HERE. To start yourself out with a speedy supply, go HERE for a variety of high quality, non-GMO kits.

  5. You have an accident involving major trauma. This is something that is difficult to prevent – that’s why they call it an accident. To up your chances of survival, always where the proper protective gear, such as safety goggles and gloves. Secondly, spend some time learning to deal with medical situations. Many communities offer free First Aid courses to get you started. Stock up on books that provide information for times when medical care is not available (this one is the very best in my opinion), and have advanced supplies on hand to deal with injuries.

  6. You get murdered when raiders or looters come to steal your stuff.  Remember the 315 million unprepared Americans? They’re going to be hungry. And the hungrier and more desperate people become, the more dangerous the world is going to be. It’s imperative that you be prepared to defend your home and family from them. If you’re one of those people who says, “I don’t want to live in a world where I have to shoot someone because they’re hungry” you just might get your wish. Because they won’t have a problem shooting you. This is one of the major reasons that preppers must be armed. The danger isn’t just from mobs of strangers.  If you tend to talk too much, your friends, extended family, and neighbors just might be the ones to kill you for your supplies.

  7. You get sick. Without our normal standards of cleanliness and the access to medical care, the likelihood of getting sick increases. Without the access to medical care, the likelihood of that sickness spiraling out of control is exponentially greater. Learn how to treat and manage sickness naturally so that you can get a handle on an illness before it kills you. This book is a fantastic reference, written with the prepper in mind.

  8. You get an infection. A silly little cut or splinter that we take for granted now could be a death sentence after the SHTF. With the possibility that your hygiene standards may drop and that you’ll be getting a lot dirtier doing physical labor, infection is fairly likely. It’s vital to immediately treat even the most trivial-seeming wound. For treating a wound, I can’t recommend this spray enough. I have used it on all sorts of animal infections that I thought would prove fatal, with 100% positive results. Because of this, we use it on our own wounds as soon as possible, too. That may not always be enough to prevent an infection however, so having the right antibiotics on hand could mean the difference between life and death. (Check out this antibiotic primer by Joe Alton of Dr. Bones fame) Many veterinary antibiotics are identical to those made for humans. You can find them on Amazon and add them to your stockpile.

  9. You die because you are fat and/or out of shape. If the Zombies approached and you found yourself outnumbered, are you fit enough to run away?  What if you had to bug out across the mountains? Would your heart hold up to the steep climb? Would your knees hold up to the descent? What if you add a 50 pound backpack? Now is the time to get yourself in shape. Most Americans lead fairly sedentary lives, sitting down to a desk all day for work. It’s not something you can fix overnight, so now is the time to increase your fitness. If you won’t do it for yourself, do it for the family members who will have to wait for you while you huff and puff. They’ll be killed when you slow them down. The road to fitness can start easily. If you can walk, you can improve your fitness level dramatically. This article discusses how to start out slowly and then build up your endurance and this PDF book will help you to reach a healthy body weight.

  10. You die when you daily medication runs out. This one is tougher to prevent. You can extend life expectancy by stockpiling medication but if the crisis outlasts your supply, there is a limit to what you can do. Who can forget the heartbreaking story of the diabetic girl in the book One Second After?  Don’t underestimate the difficulty for some of going without psychiatric drugs. Depending on the drug, withdrawal can be horrific, particularly if they have not been able to slowly wean themselves off. Some conditions,when untreated, can cause the sufferer to lose touch with reality and suffer a psychotic break, making them dangerous to themselves and others. Depending on the medication you require, there are sometimes natural alternatives and dietary tweaks that can help. Some existing conditions can be managed better now through lifestyle changes, which will increase your chances for survival later. For example, if you suffer from Type 2 Diabetes and are significantly overweight, improving your diet and losing weight now can reduce your dependence on daily medication in many cases. Keep in mind that some medications are okay after the expiration dates, while others can be deadly. (Learn more about pharmaceutical expiration dates HERE.) Learn everything you can about your medical condition and figure out a plan ahead of time.

Good news: nearly all of these deaths will be preventable

Now that you know how you’ll die, you can take the necessary steps to prevent it. Almost every cause of death mentioned here is entirely preventable.

What will save you when an epic disaster strikes is what you do now to prepare for it. Make education and good health your mission now and you’ll not only survive the SHTF, you’ll thrive against the odds.

Published:3/1/2019 11:07:36 PM
[Books] CRB: Best of enemies (Scott Johnson) This week we have previewed three stellar review/essays from the new (Winter) issue of the Claremont Review of Books (subscribe here). It is an invaluable magazine for those of us who love penetrating essays on, and reviews of books about, politics, history, literature and culture. We conclude our preview with Richard Samuelson’s review of Friends Divided, Gordon Wood’s book-length study of Adams and Jefferson. Our friend Richard judges: “Wood’s inner Published:3/1/2019 7:03:37 AM
[Books] CRB: Battle for a continent (Scott Johnson) In the third installment of our preview of the new (Winter) issue of the Claremont Review of Books (subscribe here), Algis Valiunas takes up Francis Parkman’s monumental history of the settling of North America and the contest between France and England for control. Parkman’s work has itself receded into history that exists only to be renounced and condemned. In the review/essay “Battle for a continent,” Algis declines to subscribe to Published:2/28/2019 6:56:31 AM
[Administrative state] CRB: Draining the swamp (Scott Johnson) We continue our preview of the new (Winter) issue of the Claremont Review of Books hot off the press. It went into the mail on Monday and is accessible online to to subscribers now. Buy an annual subscription including immediate online access here for the modest price of $19.95. It is an invaluable magazine for those of us who love trustworthy essays on, and reviews of books about, politics, history, Published:2/27/2019 6:21:36 AM
[Markets] John Pilger: The War On Venezuela Is Built On Lies

Authored by John Pilger via,

The reporter as clown - for whom the truth is too difficult to report - may be the final stage of much of mainstream journalism’s degeneration...

Travelling with Hugo Chavez, I soon understood the threat of Venezuela.  At a farming co-operative in Lara state, people waited patiently and with good humor in the heat. Jugs of water and melon juice were passed around. A guitar was played; a woman, Katarina, stood and sang with a husky contralto.

“What did her words say?” I asked.

“That we are proud,” was the reply.

The applause for her merged with the arrival of Chavez. Under one arm he carried a satchel bursting with books.  He wore his big red shirt and greeted people by name, stopping to listen.

Hugo Chavez in 2004. (Franklin Reyes via Wikimedia)

What struck me was his capacity to listen. 

But now he read. For almost two hours he read into the microphone from the stack of books beside him: Orwell, Dickens, Tolstoy, Zola, Hemingway, Chomsky, Neruda: a page here, a line or two there. People clapped and whistled as he moved from author to author. Then farmers took the microphone and told him what they knew, and what they needed; one ancient face, carved it seemed from a nearby banyan, made a long, critical speech on the subject of irrigation; Chavez took notes.

Wine is grown here, a dark Syrah type grape. “John, John, come up here,” said El Presidente, having watched me fall asleep in the heat and the depths of Oliver Twist.

“He likes red wine,” Chavez told the cheering, whistling audience, and presented me with a bottle of “vino de la gente.” My few words in bad Spanish brought whistles and laughter.

Watching Chavez with the people, la gente, made sense of a man who promised, on coming to power, that his every move would be subject to the will of the people.  In eight years, Chavez won eight elections and referendums: a world record. He was electorally the most popular head of state in the Western Hemisphere, probably in the world.

Every major chavista reform was voted on, notably a new constitution of which 71 percent of the people approved each of the 396 article that enshrined unheard of freedoms, such as Article 123, which for the first time recognized the human rights of mixed-race and black people, of whom Chavez was one.

Their First Champions

One of his tutorials on the road quoted a feminist writer: “Love and solidarity are the same.” His audiences understood this well and expressed themselves with dignity, seldom with deference. Ordinary people regarded Chavez and his government as their first champions: as theirs.

Crowds at the funeral of Hugo Chávez Frías, Military Academy, Caracas, March 2013. (Cancillería del Ecuador via Flickr)

This was especially true of the indigenous, mestizos and Afro-Venezuelans, who had been held in historic contempt by Chavez’s immediate predecessors and by those who today live far from the barrios, in the mansions and penthouses of East Caracas, who commute to Miami where their banks are and who regard themselves as “white.” They are the powerful core of what the media calls “the opposition.”

When I met this class, in suburbs called Country Club, in homes appointed with low chandeliers and bad portraits, I recognized them. They could be white South Africans, the petite bourgeoisie of Constantia and Sandton, pillars of the cruelties of apartheid.

Cartoonists in the Venezuelan press, most of which are owned by an oligarchy and oppose the government, portrayed Chavez as an ape. A radio host referred to “the monkey.” In the private universities, the verbal currency of the children of the well-off is often racist abuse of those whose shacks are just visible through the pollution.

Although identity politics are all the rage in the pages of liberal newspapers in the West, race and class are two words almost never uttered in the mendacious “coverage” of Washington’s latest, most naked attempt to grab the world’s greatest source of oil and reclaim its “backyard.”

For all the chavistas’ faults — such as allowing the Venezuelan economy to become hostage to the fortunes of oil and never seriously challenging big capital and corruption — they brought social justice and pride to millions of people and they did it with unprecedented democracy.

Chavez voting in 2007. (Wikimedia)

Stellar Election Process

“Of the 92 elections that we’ve monitored,” said former President Jimmy Carter, whose Carter Center, is a respected monitor of elections around the world, “I would say the election process in Venezuela is the best in the world.” By way of contrast, said Carter, the U.S. election system, with its emphasis on campaign money, “is one of the worst.”

In extending the franchise to a parallel people’s state of communal authority, based in the poorest barrios, Chavez described Venezuelan democracy as “our version of Rousseau’s idea of popular sovereignty.”

In Barrio La Linea, seated in her tiny kitchen, Beatrice Balzo told me her children were the first generation of the poor to attend a full day’s school and be given a hot meal and to learn music, art and dance. “I have seen their confidence blossom like flowers,” she said.

In Barrio La Vega, I listened to a nurse, Mariella Machado, a black woman of 45 with a wicked laugh, address an urban land council on subjects ranging from homelessness to illegal war. That day, they were launching Mision Madres de Barrio, a program aimed at poverty among single mothers. Under the constitution, women have the right to be paid as caregivers, and can borrow from a special women’s bank. Now the poorest housewives get the equivalent of $200 a month.

In a room lit by a single fluorescent tube, I met Ana Lucia Fernandez, aged 86, and Mavis Mendez, aged 95. A mere 33-year-old, Sonia Alvarez, had come with her two children. Once, none of them could read and write; now they were studying mathematics. For the first time in its history, Venezuela has almost 100 percent literacy.

This is the work of Mision Robinson, which was designed for adults and teenagers previously denied an education because of poverty. Mission Ribas gives everyone the opportunity of a secondary education, called a bachillerato. (The names Robinson and Ribas refer to Venezuelan independence leaders from the 19th century).

In her 95 years, Mavis Mendez had seen a parade of governments, mostly vassals of Washington, preside over the theft of billions of dollars in oil spoils, much of it flown to Miami. “We didn’t matter in a human sense,” she told me. “We lived and died without real education and running water, and food we couldn’t afford. When we fell ill, the weakest died. Now I can read and write my name and so much more; and whatever the rich and the media say, we have planted the seeds of true democracy and I have the joy of seeing it happen.”

In 2002, during a Washington-backed coup, Mavis’s sons and daughters and grandchildren and great-grandchildren joined hundreds of thousands who swept down from the barrios on the hillsides and demanded the army remained loyal to Chavez.

“The people rescued me,” Chavez told me. “They did it with the media against me, preventing even the basic facts of what happened. For popular democracy in heroic action, I suggest you look no further.”

Carmen Vásquez, 85, learning to read and write at the Misión Robinson, Isla Borracha, Anzoátegui, Venezuela,2004.(Franklin Reyes/J.Rebelde via Wikimedia)

Saddam Hussein Incarnate

Since Chavez’s death in 2013, his successor NicolásMaduro has shed his derisory label in the Western press as a “former bus driver” and become Saddam Hussein incarnate. His media abuse is ridiculous. Onhis watch, the slide in the price of oil has caused hyperinflation and played havoc with prices in a society that imports almost all its food; yet, as the journalist and film-maker Pablo Navarrete reported this week, Venezuela is not the catastrophe it has been painted.

“There is food everywhere,” he wrote. “I have filmed lots of videos of food in markets [all over Caracas] … it’s Friday night and the restaurants are full.”

In 2018, Maduro was re-elected president. A section of the opposition boycotted the election, a tactic tried against Chavez. The boycott failed: 9,389,056 people voted; 16 parties participated and six candidates stood for the presidency. Maduro won 6,248,864 votes, or 68 percent.

On election day, I spoke to one of the 150 foreign election observers. “It was entirely fair,” he said. “There was no fraud; none of the lurid media claims stood up. Zero. Amazing really.” 

Like a page from Alice’s tea party, the Trump administration has presented Juan Guaidó, a pop-up creation of the CIA-front National Endowment for Democracy, as the “legitimate President of Venezuela.” Unheard of by 81 percent of the Venezuelan people, according to The Nation, Guaidó has been elected by no one.

“Chavez, I swear, I will vote for Maduro,” sign on wall in 2013. (Wikimedia)

Maduro is “illegitimate,” says Donald Trump (who won the U.S. presidency with 3 million fewer votes than his opponent), a “dictator,” says demonstrably unhinged Vice President Mike Pence and an oil trophy-in-waiting, says “national security” adviser John Bolton (who when I interviewed him in 2003 said, “Hey, are you a communist, maybe
even Labour?”)

As his “special envoy to Venezuela” (coup master), Trump has appointed a convicted felon, Elliot Abrams, whose intrigues in the service of Presidents Reagan and George W. Bush helped produce the Iran-Contra scandal in the 1980s and plunge central America into years of blood-soaked misery.

Putting Lewis Carroll aside, these  “crazies” belong in newsreels from the 1930s. And yet their lies about Venezuela have been taken up with enthusiasm by those paid to keep the record straight.

On Channel 4 News, Jon Snow bellowed at the Labour MP Chris Williamson, “Look, you and Mr. Corbyn are in a very nasty corner [on Venezuela]!” When Williamson tried to explain why threatening a sovereign country was wrong, Snow cut him off. “You’ve had a good go!”

In 2006, Channel 4 News effectively accused Chavez of plotting to make nuclear weapons with Iran: a fantasy. The then Washington correspondent, Jonathan Rugman, allowed a war criminal, Donald Rumsfeld, to liken Chavez to Hitler, unchallenged.

Overwhelming Bias

Researchers at the University of the West of England studied the BBC‘s reporting of Venezuela over a 10-year period. They looked at 304 reports and found that only three of these referred to any of the positive policies of the government. For the BBC, Venezuela’s democratic record, human rights legislation, food programs, healthcare initiatives and poverty reduction did not happen.  The greatest literacy program in human history did not happen, just as the millions who march in support of Maduro and in memory of Chavez, do not exist.

2016 protests against removal of Chávez and Bolivar images from National Assembly. (Wikimedia)

When asked why she filmed only an opposition march, the BBC reporter Orla Guerin tweeted that it was “too difficult” to be on two marches in one day.

A war has been declared on Venezuela, of which the truth is “too difficult” to report.

It is too difficult to report the collapse of oil prices since 2014 as largely the result of criminal machinations by Wall Street. It is too difficult to report the blocking of Venezuela’s access to the U.S.-dominated international financial system as sabotage. It is too difficult to report Washington’s “sanctions” against Venezuela, which have caused the loss of at least $6 billion in Venezuela’s revenue since 2017, including $2 billion worth of imported medicines, as illegal, or the Bank of England’s refusal to return Venezuela’s gold reserves as an act of piracy.

Chavez and Pilger, 2007. (

The former United Nations Rapporteur, Alfred de Zayas, has likened this to a “medieval siege” designed “to bring countries to their knees.” It is a criminal assault, he says. It is similar to that faced by Salvador Allende in 1970 when President Richard Nixon and his equivalent of John Bolton, Henry Kissinger, set out to “make the economy [of Chile] scream.” The long dark night of Pinochet followed.

The Guardian correspondent, Tom Phillips, has tweeted a picture of a cap on which the words in Spanish mean in local slang: “Make Venezuela fucking cool again.” The reporter as clown may be the final stage of much of mainstream journalism’s degeneration.

Should the CIA stooge Guaidó and his white supremacists grab power, it will be the 68th overthrow of a sovereign government by the United States, most of them democracies. A fire sale of Venezuela’s utilities and mineral wealth will surely follow, along with the theft of the country’s oil, as outlined by John Bolton.

Under the last Washington-controlled government in Caracas, poverty reached historic proportions. There was no healthcare for those could not pay. There was no universal education; Mavis Mendez, and millions like her, could not read or write. How cool is that, Tom?

Published:2/26/2019 11:19:32 PM
[Markets] Nomi Prins: Survival Of The Richest

Authored by Nomi Prins via,

All are equal, except those who aren't...

Like a gilded coating that makes the dullest things glitter, today’s thin veneer of political populism covers a grotesque underbelly of growing inequality that’s hiding in plain sight. And this phenomenon of ever more concentrated wealth and power has both Newtonian and Darwinian components to it.

In terms of Newton’s first law of motion: those in power will remain in power unless acted upon by an external force. Those who are wealthy will only gain in wealth as long as nothing deflects them from their present course. As for Darwin, in the world of financial evolution, those with wealth or power will do what’s in their best interest to protect that wealth, even if it’s in no one else’s interest at all.

In George Orwell’s iconic 1945 novel, Animal Farm, the pigs who gain control in a rebellion against a human farmer eventually impose a dictatorship on the other animals on the basis of a single commandment:

“All animals are equal, but some animals are more equal than others.”

In terms of the American republic, the modern equivalent would be:

“All citizens are equal, but the wealthy are so much more equal than anyone else (and plan to remain that way).”

Certainly, inequality is the economic great wall between those with power and those without it.

As the animals of Orwell’s farm grew ever less equal, so in the present moment in a country that still claims equal opportunity for its citizens, one in which three Americans now have as much wealth as the bottom half of society (160 million people), you could certainly say that we live in an increasingly Orwellian society. Or perhaps an increasingly Twainian one.

After all, Mark Twain and Charles Dudley Warner wrote a classic 1873 novel that put an unforgettable label on their moment and could do the same for ours. The Gilded Age: A Tale of Today depicted the greed and political corruption of post-Civil War America. Its title caught the spirit of what proved to be a long moment when the uber-rich came to dominate Washington and the rest of America. It was a period saturated with robber barons, professional grifters, and incomprehensibly wealthy banking magnates. (Anything sound familiar?) The main difference between that last century’s gilded moment and this one was that those robber barons built tangible things like railroads. Today’s equivalent crew of the mega-wealthy build remarkably intangible things like tech and electronic platforms, while a grifter of a president opts for the only new infrastructure in sight, a great wall to nowhere.

In Twain’s epoch, the U.S. was emerging from the Civil War. Opportunists were rising from the ashes of the nation’s battered soul. Land speculation, government lobbying, and shady deals soon converged to create an unequal society of the first order (at least until now). Soon after their novel came out, a series of recessions ravaged the country, followed by a 1907 financial panic in New York City caused by a speculator-led copper-market scam.

From the late 1890s on, the most powerful banker on the planet, J.P. Morgan, was called upon multiple times to bail out a country on the economic edge. In 1907, Treasury Secretary George Cortelyou provided him with $25 million in bailout money at the request of President Theodore Roosevelt to stabilize Wall Street and calm frantic citizens trying to withdraw their deposits from banks around the country. And this Morgan did -- by helping his friends and their companies, while skimming money off the top himself. As for the most troubled banks holding the savings of ordinary people? Well, they folded. (Shades of the 2007-2008 meltdown and bailout anyone?)

The leading bankers who had received that bounty from the government went on to cause the Crash of 1929. Not surprisingly, much speculation and fraud preceded it. In those years, the novelist F. Scott Fitzgerald caught the era’s spirit of grotesque inequality in The Great Gatsby when one of his characters comments: “Let me tell you about the very rich. They are different from you and me.” The same could certainly be said of today when it comes to the gaping maw between the have-nots and have-a-lots.

Income vs. Wealth

To fully grasp the nature of inequality in our twenty-first-century gilded age, it’s important to understand the difference between wealth and income and what kinds of inequality stem from each. Simply put, income is how much money you make in terms of paid work or any return on investments or assets (or other things you own that have the potential to change in value). Wealth is simply the gross accumulation of those very assets and any return or appreciation on them. The more wealth you have, the easier it is to have a higher annual income.

Let’s break that down. If you earn $31,000 a year, the median salary for an individual in the United States today, your income would be that amount minus associated taxes (including federal, state, social security, and Medicare ones). On average, that means you would be left with about $26,000 before other expenses kicked in.

If your wealth is $1,000,000, however, and you put that into a savings account paying 2.25% interest, you could receive about $22,500 and, after taxes, be left with about $19,000, for doing nothing whatsoever.

To put all this in perspective, the top 1% of Americans now take home, on average, more than 40 times the incomes of the bottom 90%. And if you head for the top 0.1%, those figures only radically worsen. That tiny crew takes home more than 198 times the income of the bottom 90% percent. They also possess as much wealth as the nation’s bottom 90%. “Wealth,” as Adam Smith so classically noted almost two-and-a-half-centuries ago in The Wealth of Nations, “is power,” an adage that seldom, sadly, seems outdated.

A Case Study: Wealth, Inequality, and the Federal Reserve

Obviously, if you inherit wealth in this country, you’re instantly ahead of the game. In America, a third to nearly a half of all wealth is inherited rather than self-made. According to a New York Times investigation, for instance, President Donald Trump, from birth, received an estimated $413 million (in today’s dollars, that is) from his dear old dad and another $140 million (in today's dollars) in loans. Not a bad way for a “businessman” to begin building the empire (of bankruptcies) that became the platform for a presidential campaign that oozed into actually running the country. Trump did it, in other words, the old-fashioned way -- through inheritance.

In his megalomaniacal zeal to declare a national emergency at the southern border, that gilded millionaire-turned-billionaire-turned-president provides but one of many examples of a long record of abusing power. Unfortunately, in this country, few people consider record inequality (which is still growing) as another kind of abuse of power, another kind of great wall, in this case keeping not Central Americans but most U.S. citizens out.

The Federal Reserve, the country’s central bank that dictates the cost of money and that sustained Wall Street in the wake of the financial crisis of 2007-2008 (and since), has finally pointed out that such extreme levels of inequality are bad news for the rest of the country. As Fed Chairman Jerome Powell said at a town hall in Washington in early February, "We want prosperity to be widely shared. We need policies to make that happen." Sadly, the Fed has largely contributed to increasing the systemic inequality now engrained in the financial and, by extension, political system. In a recent research paper, the Fed did, at least, underscore the consequences of inequality to the economy, showing that “income inequality can generate low aggregate demand, deflation pressure, excessive credit growth, and financial instability.”

In the wake of the global economic meltdown, however, the Fed took it upon itself to reduce the cost of money for big banks by chopping interest rates to zero (before eventually raising them to 2.5%) and buying $4.5 trillion in Treasury and mortgage bonds to lower it further. All this so that banks could ostensibly lend money more easily to Main Street and stimulate the economy. As Senator Bernie Sanders noted though, “The Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world... a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

The economy has been treading water ever since (especially compared to the stock market). Annual gross domestic product growth has not surpassed 3%in any year since the financial crisis, even as the level of the stock market tripled, grotesquely increasing the country’s inequality gap. None of this should have been surprising, since much of the excess money went straight to big banks, rich investors, and speculators.  They then used it to invest in the stock and bond markets, but not in things that would matter to all the Americans outside that great wall of wealth.

The question is: Why are inequality and a flawed economic system mutually reinforcing? As a starting point, those able to invest in a stock market buoyed by the Fed’s policies only increased their wealth exponentially. In contrast, those relying on the economy to sustain them via wages and other income got shafted. Most people aren’t, of course, invested in the stock market, or really in anything. They can’t afford to be. It’s important to remember that nearly 80% of the population lives paycheck to paycheck.

The net result: an acute post-financial-crisis increase in wealth inequality -- on top of the income inequality that was global but especially true in the United States. The crew in the top 1% that doesn’t rely on salaries to increase their wealth prospered fabulously. They, after all, now own more than half of all national wealth invested in stocks and mutual funds, so a soaring stock market disproportionately helps them. It’s also why the Federal Reserve subsidy policies to Wall Street banks have only added to the extreme wealth of those extreme few.  

The Ramifications of Inequality

The list of negatives resulting from such inequality is long indeed. As a start, the only thing the majority of Americans possess a greater proportion of than that top 1% is a mountain of debt. 

The bottom 90% are the lucky owners of about three-quarters of the country’s household debt. Mortgages, auto loans, student loans, and credit-card debt are cumulatively at a record-high $13.5 trillion.

And that’s just to start down a slippery slope. As reports, wealth and income inequality impact “everything from life expectancy to infant mortality and obesity.” High economic inequality and poor health, for instance, go hand and hand, or put another way, inequality compromises the overall health of the country. According to academic findings, income inequality is, in the most literal sense, making Americans sick. As one study put it, “Diseased and impoverished economic infrastructures [help] lead to diseased or impoverished or unbalanced bodies or minds.”

Then there’s Social Security, established in 1935 as a federal supplement for those in need who have also paid into the system through a tax on their wages. Today, all workers contribute 6.2% of their annual earnings and employers pay the other 6.2% (up to a cap of $132,900) into the Social Security system. Those making far more than that, specifically millionaires and billionaires, don’t have to pay a dime more on a proportional basis. In practice, that means about 94% of American workers and their employers paid the full 12.4% of their annual earnings toward Social Security, while the other 6% paid an often significantly smaller fraction of their earnings.

According to his own claims about his 2016 income, for instance, President Trump “contributed a mere 0.002 percent of his income to Social Security in 2016.” That means it would take nearly 22,000 additional workers earning the median U.S. salary to make up for what he doesn’t have to pay. And the greater the income inequality in this country, the more money those who make less have to put into the Social Security system on a proportional basis. In recent years, a staggering $1.4 trillion could have gone into that system, if there were no arbitrary payroll cap favoring the wealthy.

Inequality: A Dilemma With Global Implications

America is great at minting millionaires. It has the highest concentration of them, globally speaking, at 41%. (Another 24% of that millionaires’ club can be found in Europe.) And the top 1% of U.S. citizens earn 40 times the national average and own about 38.6% of the country’s total wealth. The highest figure in any other developed country is “only” 28%.

However, while the U.S. boasts of epic levels of inequality, it’s also a global trend. Consider this: the world’s richest 1% own 45% of total wealth on this planet. In contrast, 64% of the population (with an average of $10,000 in wealth to their name) holds less than 2%. And to widen the inequality picture a bit more, the world’s richest 10%, those having at least $100,000 in assets, own 84% of total global wealth.

The billionaires' club is where it’s really at, though. According to Oxfam, the richest 42 billionaires have a combined wealth equal to that of the poorest 50% of humanity. Rest assured, however, that in this gilded century there’s inequality even among billionaires. After all, the 10 richest among them possess $745 billion in total global wealth. The next 10 down the list possess a mere $451.5 billion, and why even bother tallying the next 10 when you get the picture?

Oxfam also recently reported that “the number of billionaires has almost doubled, with a new billionaire created every two days between 2017 and 2018. They have now more wealth than ever before while almost half of humanity have barely escaped extreme poverty, living on less than $5.50 a day.” 

How Does It End?

In sum, the rich are only getting richer and it’s happening at a historic rate. Worse yet, over the past decade, there was an extra perk for the truly wealthy. They could bulk up on assets that had been devalued due to the financial crisis, while so many of their peers on the other side of that great wall of wealth were economically decimated by the 2007-2008 meltdown and have yet to fully recover.

What we’ve seen ever since is how money just keeps flowing upward through banks and massive speculation, while the economic lives of those not at the top of the financial food chain have largely remained stagnant or worse. The result is, of course, sweeping inequality of a kind that, in much of the last century, might have seemed inconceivable.

Eventually, we will all have to face the black cloud this throws over the entire economy. Real people in the real world, those not at the top, have experienced a decade of ever greater instability, while the inequality gap of this beyond-gilded age is sure to shape a truly messy world ahead. In other words, this can’t end well.

Published:2/26/2019 9:48:45 PM
[Markets] "Quadruple Top": Stocks Fall As Trade Optimism Fizzles, Powell Looms

Was that it for the "trade war optimism" euphoria?

While traders were delighted to buy the rumor and then buy the news of the China March 1 tariff extension, expecting an imminent trade deal between the US and China, sentiment soured on Tuesday as world shares took a breather on Tuesday after hitting a five-month high, with global markets dropping as the rush of optimism over U.S.-China trade talks turned to pessimism, leading to a sea of red in world markets with even the Chinese stock bubble pausing overnight as concerns about a breakout in hostilities between India and Pakistan spooked the region, while in FX the pound soared, hitting the highest against the Euro since 2017, as the May government gave signs it was willing to delay Brexit.

Europe's Stoxx 600 Index slumped and S&P 500 Index futures drpoped after President Trump raised the possibility of signing a new trade deal with Chinese counterpart Xi Jinping, but cautioned an agreement “might not happen at all.”

“It looks like they will be coming back quickly again,” Trump told reporters Monday, referring to the possibility of Chinese negotiators returning after a week of talks on trade. “We are going to have a signing summit, which is even better,” he said, adding: “We are getting very very close.” However, the president promptly tempered his enthusiasm, noting that a deal “might not happen at all.” As Bloomberg notes, with Trump set to hold another summit with North Korean leader Kim Jong-Un this week, a diplomatic effort in which China will play a critical role, the risk of a setback remains significant.

And so with the S&P once again failing to break decisively above 2,800, is it time to consider the dreaded (and technically non-existant) "quadruple top" formation, and the possibility that the next big target for the S&P will be the December lows.

Traders will now focus on Fed Chair Powell's semiannual testimony on monetary policy and the state of the economy over two days to House and Senate committees. With the Fed already fully dovish, there is little that Powell can say to "dove" up the case, and the risk is that he comes off sounding hawkish.

As DB's Jim reid asks, will Powell keep the recent dovish Fed momentum going when he delivers his semi-annual Humphrey Hawkins testimony before the Senate Banking Committee? In terms of what to look for, our US economists expect Powell to reiterate that “patience” remains the order of the day and in this regard, the January FOMC meeting minutes should be a good template for his prepared remarks. The minutes indicated “a patient posture would allow time for a clearer picture of the international trade policy situation and the state of the global economy to emerge and, in particular, could allow policymakers to reach a firmer judgment about the extent and persistence of the economic slowdown in Europe and China.” In short, expect the Chair to convey the message that the Fed is cautiously optimistic about the outlook but will be monitoring conditions and would be willing to adapt as the uncertainties realise.

Overnight, Fed Vice Chair Clarida said that the Fed pays a lot of attention to whether the curve is flattening because of a fall in inflation expectations and reiterated that going ahead the Fed is likely to be patient and data dependent.

Meanwhile, JPMorgan analysts urged investors to curb some of their enthusiasm. “It is notable that 1) no new deadline date (on U.S. China trade talks) has been set and 2) there weren’t any formal statements published from either side following the talks in Washington.”

Earlier in Asia, traders took JPM's advice as the MSCI Asia-Pacific index dipped 0.5% after the "trade hope" driven rally ran into profit-taking overnight and it was a bumpy start for Europe as the pound’s leaped to $1.32 and some poor company news shoved London’s FTSE down as much as 1 percent.


As discussed earlier, Indian markets were rattled by flaring border tensions between India and Pakistan, both of which have nuclear arms. The broader NSE stock index skidded, the rupee fell prompting the central bank to intervene and sell dollars, and bonds rose in a flight to safety. Elsewhere, Australian shares lost 0.9 percent, weighed by energy stocks as oil prices tumbled overnight, Japan’s Nikkei stumbled 0.4 percent and Chinese shares closed down after surging on the U.S. trade hopes on Monday.

Investors will also keep an eye on a two-day U.S.-North Korea summit this week where leaders of the two countries will try to reach an agreement on Pyongyang’s pledge to give up its nuclear weapon program.

In Company specific news, Tesla fell as much as 5.4% in post-market trading after regulators asked a judge to hold Elon Musk in contempt for violating last year’s SEC settlement. Caterpillar also slumped on a double downgrade from UBS to "sell", while Home Depot also dropped after reporting Q4 EPS of 2.09, below the 2.16 expected, while revenue of 26.5BN also came in short to the $26.57BN expected as comp stores missed; the company's solution: a USD 15bln share repurchase authorization.

In FX, it was all about sterling as pound bulls latched onto reports that May was considering delaying the March 29 deadline for Britain’s exit from the European Union, a day after the main Labour opposition party had shifted towards supporting a second referendum. The British currency surged 1% against the dollar after BOE Governor Mark Carney said officials are not seeing any liquidity strains in the market ahead of the U.K.’s Brexit departure date; sterling was already supported after the Labour party came out in favor of a second Brexit vote.

The dollar was steady while U.S. Treasuries edged higher "as the rush of optimism over U.S.-China trade talks from earlier in the week faded" while the yen strengthened against most major peers while antipodean and Scandinavian currencies dropped as stocks traded in the red.

Oil markets were steadied after a blast from U.S. President Donald Trump at OPEC for “too high” prices had triggered the biggest tumble of the year. Brent (+0.3%) and WTI (+0.1%) prices were slightly firmer trading towards the top of the day’s very narrow USD 1/bbl range, after a largely unchanged overnight session. In terms of recent news flow Saudi Aramco expect oil demand to increase substantially, with this predominantly driven by transport. Adding that in order to meet future demand growth long term investment is required. Elsewhere, BP’s CEO has stated that oil prices within the range of USD 50-70/bbl works for both consumers and producers. Separately, the UAE are to host a meeting between the state oil firm and those involved in Libya’s conflict in order to resolves the El Sharara oil filed situation; with the 300k BPD field remaining closed. Gold was little changed with the yellow metal hovering towards the middle of its daily range, mimicking the dollar which is largely uneventful ahead of today’s testimony by Fed Chair Powell to the Senate Banking Committee at 15:00GMT.

Today's calendar sees economic data including housing starts and consumer confidence. Scheduled earnings include Home Depot, EOG Resources, Worldpay.

Market Snapshot

  • S&P 500 futures down 0.4% to 2,785.50
  • STOXX Europe 600 down 0.5% to 370.36
  • MXAP down 0.4% to 160.16
  • MXAPJ down 0.5% to 526.61
  • Nikkei down 0.4% to 21,449.39
  • Topix down 0.2% to 1,617.20
  • Hang Seng Index down 0.7% to 28,772.06
  • Shanghai Composite down 0.7% to 2,941.52
  • Sensex down 0.6% to 35,995.18
  • Australia S&P/ASX 200 down 0.9% to 6,128.39
  • Kospi down 0.3% to 2,226.60
  • German 10Y yield fell 0.5 bps to 0.103%
  • Euro unchanged at $1.1358
  • Brent Futures up 0.06% to $64.80/bbl
  • Italian 10Y yield fell 7.3 bps to 2.414%
  • Spanish 10Y yield fell 2.8 bps to 1.135%
  • Brent Futures up 0.06% to $64.80/bbl
  • Gold spot down 0.2% to $1,325.24
  • U.S. Dollar Index down 0.03% to 96.39

Top Overnight News

  • May is considering a plan to delay Brexit and stop the U.K. leaving the European Union with no deal next month, according to people familiar with the situation. U.K. opposition Labour Party Leader Jeremy Corbyn has bowed to pressure from his members of parliament and agreed to support a new Brexit referendum
  • Federal Reserve Chairman Jerome Powell will probably gloss over an emerging division among policy makers about what it will take for them to resume raising interest rates when he speaks to lawmakers on Tuesday. Fed Vice Chair Clarida notes that yield curve is getting flatter
  • Donald Trump’s second summit with Kim Jong Un gives the two leaders the chance to once again share the spotlight and demonstrate their mutual affection -- but not even the White House expects a breakthrough leading to Pyongyang’s surrender of its nuclear arsenal
  • It’s becoming a familiar choice for OPEC: risk the pain of an oil-price slump, or provoke the wrath of President Donald Trump
  • Bank of Japan Governor Haruhiko Kuroda says the impact of a planned sales-tax hike will depend on employment conditions and consumer sentiment at the time it’s implemented
  • Indian fighter jets destroyed a major terrorist camp in Pakistan, the ANI news agency said, as tensions between the nuclear-armed rivals rose following an attack in Kashmir earlier this month
  • The strength of direct bids at this year’s auctions of coupon- bearing U.S. debt should give the Treasury confidence in the support of a significant group of buyers. These latest auctions show demand holding up despite significant compression in front- end yields
  • Spain is making its second visit to the primary market in about a month after being among a host of countries to draw record order books from euro bond sales this year. The nation is offering 5 billion euros ($5.7 billion) of July 2035 notes at a guidance price of about 85 basis points above benchmark rates, according to a person familiar with the matter
  • Poland’s ruling populists, faced with sagging opinion-poll ratings and a growing challenge from a freshly united opposition, are about to fire off a set of new stimulus measures

Asian stocks traded mostly lower following an uninspiring lead from Wall Street where the major US indices gave up a bulk of their gains amidst a turn-around in risk sentiment. ASX 200 (-1.0%) extended losses from the open, with all sectors in the red and underperformance in IT, material and oil names amid price action in the energy and base metals complexes. Nikkei 225 (-0.4%) failed to hold onto opening gains as safe-haven flows into the JPY pressured the Japanese benchmark. Elsewhere, Shanghai Comp. (-0.7%) swung wildly between gains and losses following the prior day’s 5% trade-induced rally, whilst Hang Seng (-0.7%) failed to nurse losses as the index was pressured by heavyweight oil names alongside shares in Apple supplier ACC Technologies, which tumbled over 12% following a profit warning. Finally, US equity futures ebbed further from the prior day’s best levels, E-Mini futures (-0.4%) lost more ground below the 2800 level whilst DJIA futures (-0.4%) dipped below 26,000 with some attributing the downside to month-end rebalancing.

Top Asian News

  • India’s Fledgling 2019 Dollar Bond Deals Tested After Air Strike
  • Chinese Stocks Simmer Down as Officials Warn of Rise in Leverage

Major European equities are in the red [Euro Stoxx 50 -0.3%], taking the lead from a downbeat Asia session as risk sentiment began to fade. The FTSE 100 (-1.3%) is underperforming its peers weighed on by the currency effects of a strong pound, alongside poor performance in IAG (-4.6%) following the MSCI stating that it plans to delete the stock from MSCI Global Standard Indexes as of March 1st. Additionally impacted by Fresnillo (-7.6%) as the Co. state that they expect 2019 to be a challenging year. Sectors are mixed, with some underperformance in IT names, after Apple supplier ACC Technologies issued a profit warning. Towards the bottom of the Stoxx 600 are Babcock (-4.8%) after the Co. issued guidance regarding restructuring costs ahead of Brexit. At the other end of the Stoxx 600 are BASF (+3.9%) who are firmly in the green following their earnings, which included a beat on Q4 EPS.

Top European News

  • BASF CEO Looks Beyond Market Gloom to Profit Growth in 2019
  • Swedbank Estonia Unit Actively Sought Wealthy Russian Clients
  • Persimmon Rises as Billion-Pound Profit Marks Homebuilder First
  • Aixtron Sinks; Analysts Flag Disappointing 2019 Ebit Outlook

In FX, Sterling is the standout G10 outperformer ahead of the latest Brexit update from UK PM May amidst heightened speculation that she will bow to Cabinet pressure and pull a no deal scenario off the table and perhaps entertain an extension to the March 29 deadline if Parliament rejects the WA next month or next week. Buyers seem to be front running U-turns on the former if not both, with Cable breaching resistance around 1.3100, then circa 1.3150 (near the 50 WMA) and subsequently tripping stops at 1.3160 on its way to 1.3238 at best, so far and posting a new high for the year (Prior was 1.3217). Meanwhile, Eur/Gbp has retreated sharply to below 0.86, and also filling sell orders that were reportedly sitting between 0.8625-20 on the way. BoE testimony to the TSC on February’s QIR is now underway, but Brexit remains paramount and the PM is due to speak from 12.30GMT.

  • AUD/CAD/NZD – The major laggards on a mixture of tempered US-China related risk appetite and softer/stable crude prices after President Trump’s latest bearish interjection. Aud/Usd has duly retreated from Monday’s peaks having faded ahead of loftier highs reached last week and is back below 0.7150 where previous resistance at the 50 DMA (0.7134) may now provide some technical support. However, the Loonie has not been able to hold above 1.3200 vs its US rival and the Kiwi is hovering closer to the base of a 0.6872-88 range with hefty option expiry interest likely to cap the upside ahead of the NY cut (1.8 bn at the 0.6900 strike).
  • JPY/CHF/EUR – All on a firmer footing vs the Greenback that is drifting lower with the index down to fresh, albeit marginal lows (DXY just shy of 96.300). Usd/Jpy has eased back from 111.00+ to a 110.76 low and the Franc has pared losses from parity+ again, while the single currency appears more intent on taking out chart hurdles that have been protecting a more pronounced approach towards 1.1400, like the 30 DMA at 1.1363. If broken, 1.1393 represents daily resistance and 1.1402 is a 50% Fib, while decent expiries lie from 1.1390-1.1400 (1.6 bn).

In commodities, Brent (+0.3%) and WTI (+0.1%) prices are slightly firmer trading towards the top of the day’s very narrow USD 1/bbl range, after a largely unchanged overnight session. In terms of recent news flow Saudi Aramco expect oil demand to increase substantially, with this predominantly driven by transport. Adding that in order to meet future demand growth long term investment is required. Elsewhere, BP’s CEO has stated that oil prices within the range of USD 50-70/bbl works for both consumers and producers. Separately, the UAE are to host a meeting between the state oil firm and those involved in Libya’s conflict in order to resolves the El Sharara oil filed situation; with the 300k BPD field remaining closed.

Gold (U/C) is little changed with the yellow metal hovering towards the middle of its daily range, mimicking the dollar which is largely uneventful ahead of today’s testimony by Fed Chair Powell to the Senate Banking Committee at 15:00GMT. Elsewhere, spot Palladium rose above USD 1550/oz, with the metal hitting a new high of USD 1554.50/oz; following strike threat by South African mineworkers added to supply concerns.










Published:2/26/2019 6:45:13 AM
[2020 Presidential Election] CRB: 2020 Foresight (Scott Johnson) The Claremont Review of Books is of course the flagship publication of the Claremont Institute. I find in every issue an education in the true understanding of politics, public policy, and statesmanship. It is my favorite magazine. Purchase an annual subscription here for $19.95 and get immediate online access to the whole thing. The Winter 2019 issue of the CRB has just been placed in the mail. The editors have Published:2/26/2019 5:23:43 AM
[Markets] Hijabbed Muslim Woman On Swedish Town's Welcome Sign Sparks Outrage, Confusion

A municipality in Sweden has come under fire for a welcome sign featuring a prominent local Muslim woman tied to a controversial mosque. 

Facebook / Mikael Svensson

Explaining the billboard as a gesture celebrating diversity, the costal municipality of Gavle welcomes people with the image of Nizam Hindi - a local Muslim woman who helps run the controversial Al-rashideen mosque.

Not everybody feels this way - such as Sweden Democrats MP Roger Hedlund, a member of the municipality council. 

"One should think what this is signaling. Some indeed use this garment, the hijab, voluntarily. But not everyone. This a garment that for millions of women around the world represents a lack of freedom," said Hedulnd in a quote by news website Nyheter Idag. 

Politician Ghazal Saberian (SD) shared the following message over Facebook: 

... Don't you think that in this now women are in prison in Iran and punished with a punishment for whipping them off the veil? Don't you think that women are stoned to death in Saudi Arabia for taking off the veil.

Can anyone tell me why we should be bombarded with pictures and messages in our public environment by women at the height of the female repression veil? " -Nyheteridag

Hindi was featured in a 2009 story by Arbetarbladet when the mosque opened, where she was described as a guide for Gavle Sunni Muslims. She described how the congregation had to submit detailed plans to convert the methodist church - telling the magazine "We had never been able to dream that it would be so nice." 

The mosque was funded by a grant from Qatar and furnishings from Saudi Arabia. 

Suzan Hindi

Inside the women there is a shelf with books about Islam, Koran and covering clothes to borrow for visitors. Women and men traditionally pray in separate rooms. -Arbetarbladet

"If I had a woman in front of me when I pray, it will be quite difficult to concentrate on the prayer. I feel bad when I hear people who think we are oppressing women, Nizam says," wearing a hijab she would be beaten or arrested for not wearing in certain parts of the world, such as Iran. It is unclear if Nizam is still affiliated with the mosque. 

Outside Al-Rashideen Mosque, Gavle
Imam Abu Raad

The mosque's Imam, Abu Raad, was accused by a local newspaper of collecting money for terrorist groups in Iraq and Syria, along with spreading radical Salafist ideas. After the newspaper's editor-in-chief received death threats over the criticism, the man who issued them was sentenced to two months in jail. 

Published:2/26/2019 3:45:14 AM
[Markets] All Roads Lead To Russia For Unhinged Hysterics In British Media

Authored by George Galloway, op-ed via,

A fortnight ago, the Mail on Sunday devoted over 12 pages to the destruction of Jeremy Corbyn in one of the biggest misfires in media history. It returned like a dog to its own vomit last weekend with more tales from the east.

This time, the main target was not Labour leader Corbyn but his right-hand man Seumas Milne (full disclosure: Milne has been a close friend of mine since the 1970s), the Labour Party’s director of communications and strategy.

The top line was – in the mouth of Sir Richard Dearlove, the disgraced former head of the British Iraq-War security services – that unless Corbyn ditched Milne, neither the US nor other “allied” countries would share information with the UK under a Corbyn premiership, which would thereby be rendered impossible. The implication was that the Privy Council would advise the Queen to select someone else instead of the winner of the election!

Milne – it was claimed over several thousand words in the paper – has effectively been a former Soviet and now Russian surrogate since the 1970s. Moreover, he is linked to “terrorist groups” which are themselves – in the words of the article – said to be Russian surrogates.

To call this fervid doesn’t do fever any justice. In 50 years of following British journalism (and many years writing a column for the Mail on Sunday), I have never seen more hallucinogenic ravings make it into print anywhere.

Milne is a scholar, a brilliant Oxford-trained intellectual who before serving nearly 30 years as an associate editor of the Guardian, worked for the BBC’s Andrew Neil at the Economist. He is the author of bestselling books that are still in print after three decades. His father, Alasdair Milne, was the director-general of the BBC. According to today’s newspaper though, Milne has been in the service (presumably unpaid as no Moscow gold is alleged) of the Kremlin since Oxford University, from Brezhnev through Andropov, Chernenko, Gorbachev and Putin. As allegations go, that’s a big one.

It is all, of course, arrant nonsense. And I speak as someone with close knowledge of his activities, beliefs and even travel plans throughout the decades in question. The writer David Rose, who made public (and several private) apologies for previous far more deadly flights of fancy in the run-up to the Iraq War. But such a track record merely enhances his employability with the Mail, known as the Forger’s Gazette since it was the sewer of choice for the security-services-fabricated ‘Zinoviev Letter’ that brought down the first Labour government nearly a century ago. The forgery is now acknowledged in the Official History of Dearlove’s own service.

That intelligence service – with its credibility in tatters after the Iraq-War fiasco – has now licensed its former head to try to kill the electoral chances of the Labour opposition. This illustrates that it has learned nothing about democracy in the past 100 years, or that it imagines the rest of us have forgotten what we knew.

Effectively, Richard Dearlove set out in the newspaper the conditions under which British Intelligence would tolerate a Corbyn Labour government in a way which they refused to tolerate the Labour government of Ramsay MacDonald. It represents a very British coup.

Somehow it all recalled the words of Lady Astor dining at the Savoy when she was told the election results in 1945.

I’m afraid m’lady,” the maitre d’ told her, Winston is out, it’s a Labour landslide.

A Labour landslide,” shouted her ladyship, the country will never stand for it!

Published:2/26/2019 2:45:53 AM
[Markets] The Militarization Of Xi Jinping's China: "Recovering" Areas They Have Never Ruled

Authored by Gordon Chang via The Gatestone Institute,

  • The People's Liberation Army is arming fast, and that development is triggering alarm. Beijing has always claimed its military is for defensive purposes only, but no country threatens territory under China's control. The buildup, therefore, looks like preparation for aggression.

  • Chinese leaders - not just Xi Jinping - believe their domains should be far larger than they are today. The concern is that, acting on their own rhetoric, they will use shiny new weapons to grab territory and occupy, to the exclusion of others, international water and airspace.

  • Moreover, in the 1930s the media publicized the idea that Japan was being surrounded by hostile powers that wished to prevent its rise. Eri Hotta in Japan 1941: Countdown to Infamy writes that the Japanese "talked themselves into believing that they were victims of circumstances rather than aggressors." That is exactly what the Chinese are doing at this moment.

  • Unfortunately, this tragic pattern is evident today in a Beijing where Chinese, wearing stars on their shoulders, look as if they want to repeat one of the worst mistakes of the last century.

Much of the equipment that China's People's Liberation Army is acquiring — aircraft carriers, amphibious troop carriers, and stealth bombers — is for the projection of power, not homeland defense. Pictured: China's Type 001A aircraft carrier, in 2017. (Image source: GG001213/Wikimedia Commons)

"Be ready for battle." That's how the South China Morning Post, the Hong Kong newspaper that increasingly reflects the Communist Party line, summarized Xi Jinping's first order this year to the People's Liberation Army (PLA). Xi, in his own words, which were broadcasted nationwide, demanded this: "prepare for a comprehensive military struggle from a new starting point."

China's bold leader has been threatening neighbors and the United States with frequency during the last several months. "Xi is not just toying with war," Victor Mair of the University of Pennsylvania wrote on the Fanell Red Star Rising listserve this month. "He's daring himself to actually start one. He's in a dangerous frame of mind."

Dangerous indeed. From Washington to New Delhi, policymakers wonder whether China will begin history's next great conflict. Beijing of course wants to "win without fighting," but the actions Xi Jinping are taking could lead to fighting nonetheless. One particularly disturbing development in this regard is the Chinese military gaining power in Beijing's political circles.

The PLA, as the Chinese military is known, is arming fast, and that development is triggering alarm. Beijing has always claimed its military is for defensive purposes only, but no country threatens territory under China's control. The buildup, therefore, looks like preparation for aggression. Much of the equipment the People's Liberation Army is acquiring — aircraft carriers, amphibious troop carriers, and stealth bombers — is for the projection of power, not homeland defense.

Chinese leaders — not just Xi Jinping — believe their domains should be far larger than they are today. The concern is that, acting on their own rhetoric, they will use shiny new weapons to grab territory and occupy, to the exclusion of others, international water and airspace.

The Chinese — leaders and others — certainly have the world's worst case of irredentism as they seek to "recover" areas they have in fact never ruled, but they do not necessarily envision military conquest as the means of acquiring vast "lost territories." They believe they can intimidate and coerce and then take without force.

The fast rearmament also has other objectives. Speaking of China, Arthur Waldron of the University of Pennsylvania told Gatestone Institute:

"I think her goal is to increase her awesomeness in the eyes of the world, so her buildup is therefore to be understood as an attempt to become strong enough to flout the international system without consequences."

Despite the rhetoric, the Chinese know the "imponderables" of actually going to war. For centuries, they have not been very good at it, enduring defeat after defeat and invasion after invasion.

Their military record during the tenure of the People's Republic is similarly unimpressive. Yes, the Chinese grabbed control of the Paracel Islands and specks in the Spratlys in the South China Sea in a series of skirmishes with various Vietnamese governments, but these incidents were minor compared to the setbacks.

Mao Zedong sustained perhaps 600,000 killed — including his son, Mao Anying — to obtain a draw in Korea in the early 1950s. His successor, Deng Xiaoping, launched an incursion in 1979 "to teach Vietnam a lesson" and instead suffered a humiliating defeat at the hands of his small communist neighbor.

Despite its undistinguished record, China causes grave concern. Xi was already beholden to the generals and admirals, who form the core of his political support in Communist Party circles, and they have gotten even more powerful as the Chinese people have become more restive.

As Willy Lam of the Chinese University of Hong Kong told Gatestone this month, "the top leadership is paranoid about massive social unrest" and so has given the military and police "extra power to tighten internal security... Xi understands very well that it is the army and the police that are keeping the Party alive."

Xi has tried to bring the military under control with both "anti-corruption" efforts — in reality a series of political purges — and, as June Teufel Dreyer of the University of Miami told Gatestone, "a sweeping military organization."

Yet those efforts have not been entirely successful. That is why Xi is trying, in the words of Waldron, to be viewed as the "martial emperor." He knows the power of the PLA as "kingmaker," able to back and depose civilian leaders. "The current Chinese focus on the military undoubtedly has internal political roots and is not related to changes in the security environment," Waldron said. Xi, in order to curry favor, has to accede to the flag officers.

Just because the process is internally driven does not make it less dangerous. Xi has sponsored overly large military budgets and has allowed senior officers to have outsized roles in formulating provocative external policies. The November 2013 declaration of the East China Sea Air-Defense Identification Zone, an audacious attempt to control the skies off its shores, is a clear example of the military influence. The seizure of Scarborough Shoal in early 2012 and the reclamation and militarization of features in the Spratly chain in the South China Sea are other destabilizing events.

Military influence in the Chinese capital means that hostility never goes out of fashion. Twice in December, senior PLA officers publicly threatened unprovoked attacks on the U.S. Navy. "The United States is most afraid of death," said Rear Admiral Luo Yuan in the second of the outbursts.

"We now have Dong Feng-21D, Dong Feng-26 missiles. These are aircraft carrier killers. We attack and sink one of their aircraft carriers. Let them suffer 5,000 casualties. Attack and sink two carriers, casualties 10,000. Let's see if the U.S. is afraid or not?"

Everyone, not just the U.S., should be afraid, in part because of the parallels between China's military today and Japan's in the 1930s.

In the 1930s, Japan's military officers, as Dreyer told Gatestone, took "drastic action to force the government into a war footing, even assassinating Japanese politicians who opposed such moves."

Then, the Japanese military, like the Chinese one today, was emboldened by success and ultra-nationalism. Then, like now, civilians controlled Asia's biggest army only loosely. Then, like today, Asia's largest military is full of assertion and belligerence.

Moreover, in the 1930s the media publicized the idea that Japan was being surrounded by hostile powers that wished to prevent its rise. Eri Hotta in Japan 1941: Countdown to Infamy writes that the Japanese "talked themselves into believing that they were victims of circumstances rather than aggressors." That is exactly what the Chinese are doing at this moment.

"If we ask, 'Did they want war?' the answer is yes; and if we ask 'Did they want to avoid war?' the answer is still yes," noted Maruyama Masao, a leading postwar political scientist, as recounted by Hotta.

"Though wanting war, they tried to avoid it; though wanting to avoid it, they deliberately chose the path that led to it."

Unfortunately, this tragic pattern is evident today in a Beijing where Chinese, wearing stars on their shoulders, look as if they want to repeat one of the worst mistakes of the last century.

Published:2/26/2019 1:13:49 AM
[Entertainment] Kisses, Selfies and Lots of Style: Inside the Oscars 2019 After-Parties Rami Malek, 2019 Oscars, After PartyWith another Oscars in the Hollywood history books, it was time for the stars to celebrate. And that they did all over Los Angeles on Sunday night. After the annual ceremony wrapped...
Published:2/25/2019 8:48:24 AM
[Markets] Buffett: Berkshire Nearly Made "A Very Large" Acquisition During Q4

Avid readers of Warren Buffett's annual investor letter complained over the weekend that the legendary investor's 2019 missive was a little repetitive, as Buffett once again lamented that Berkshire didn't see many options for investing its $100 billion cash pile - despite his desire to make another big deal. After accruing just $4 billion in GAAP profits for the full year, analysts and the WSJ described 2018 as one of Buffett's "worst years ever", as an unexpected $3 billion writedown on its investment in Kraft Heinz during Q4 helped lead to a $25 billion loss on the quarter.

But as Buffett revealed during an interview Monday morning on CNBC's Squawk Box, it nearly wasn't so.  Because while Berkshire Hathaway didn't pull the trigger on any new deals last year, it did come close to pulling the trigger during Q4. However, the deal ultimately fell through, and Buffett said he didn't think it was "still on the books."

"We had at least one deal possible that would have been very large," Buffett told CNBC's Becky Quick from Berkshire-owned Nebraska Furniture Mart on Monday. "I liked stocks in the fourth quarter but I would like buying a business even better."

In his letter, Buffett explained that, while the prospect of buying a company makes he and Berkshire No. 2 Charlie Munger's "pulse rates soar", the sky high valuations for any companies with decent long-term prospects meant that Berkshire would likely continue to focus on buying marketable securities in 2019.

"That disappointing reality means that 2019 will likely see us again expanding our holdings of marketable equities. We continue, nevertheless, to hope for an elephant-sized acquisition. Even at our ages of 88 and 95 – I'm the young one – that prospect is what causes my heart and Charlie's to beat faster," he said.

When asked for a hint about the mystery deal, Buffett said only that the company he had in mind was "on this planet." Berkshire hasn't bought a company since 2015, when it bought Precision Castparts in a deal valued at $32 billion. 

Watch a clip from the interview below:

Warren Buffett says he was close to making 'very large' acquisition in Q4 but it fell apart from CNBC.

Published:2/25/2019 7:41:36 AM
[40aef92e-5525-51bd-bdab-e0adda06a43f] 'Black Panther' makes Oscar history twice for diversity "Black Panther" went back-to-back into the Oscar history books on Sunday evening. Published:2/25/2019 6:11:04 AM
[Markets] How America's Dictatorship Works

Authored by Eric Zuesse via,

Trump could not have become America’s President if he had not won the “vote” of his nation’s second-largest political donor in 2016, casinos-owner Sheldon Adelson.

In publicly recorded donations, as of 25 December 2018, Adelson and his wife donated$82,522,800 to Republican candidates in 2016, and this amount doesn’t include any of the secret money. Of that sum, it’s virtually impossible to find out how much went specifically to Trump’s campaign for President, but, as of 9 May 2017, the Adelsons were publicly recorded as having donated $20.4 million to Trump’s campaign.

Their impact on the Presidential contest was actually much bigger than that, however, because even the Adelsons’ non-Trump-campaign donations went to the Republican Party, and the rest went to Republican pro-Trump candidates, and the rest went to Republican PACS — and, so, a large percentage (if not all) of that approximately $60 million non-Trump-campaign political expenditure by the Adelsons was boosting Trump’s Presidential vote.

The second-largest Republican donor in 2016 was the hedge fund manager Paul Singer, at $26,114,653. It was less than a third, 31.6%, as large as the Adelsons’ contribution. Singer is the libertarian who proudly invests in weak entities that have been sucked dry by the aristocracy and who almost always extracts thereby, in the courts, far larger returns-on-investment than do other investors, who have simply settled to take a haircut on their failing high-interest-rate loans to that given weak entity.

Singer hires the rest of his family to run his asset-stripping firm, which is named after his own middle name, “Elliott Advisors,” and he despises any wealthy person who won’t (like he does) fight tooth-and-nail to extract, from any weak entity, everything that can possibly be stripped from it. His Elliott Advisors is called a “vulture fund,” but that’s an insult to vultures, who instead eat corpses. They don’t actually attack and rip apart vulnerable struggling animals, like Singer’s operation does.

So, that’s the top two, on the Republican Party side.

On the Democratic Party side, the largest 2016 donor was the largest of all political donors in 2016, the hedge fund manager Thomas Steyer, $91,069,795. The second-largest was hedge fund manager Donald S. Sussman, $41,841,000. Both of them supported Hillary Clinton against Bernie Sanders, and then against Donald Trump.

As of 23 January 2019, the record shows that Trump received $46,873,083 in donations larger than $200, and $86,749,927 in donations smaller than $200. Plus, he got $144,764 in PAC contributions. Hillary Clinton received $300,111,643 in over-$200 donations, and $105,552,584 in under-$200 donations. Plus, she got $1,785,190 in PAC donations. She received 6.4 times as much in $200+ donations as Trump did. She received 1.2 times as much in under-$200 donations as he did. Clearly, billionaires strongly preferred Hillary.

So, it’s understandable why not only America’s Democratic Party billionaires but also many of America’s Republican Party billionaires want President Trump to become replaced ASAP by his V.P., President Pence, who has a solid record of doing only whatever his big donors want him to do. For them, the wet dream would be a 2020 contest between Mike Pence or a clone, versus Hillary Clinton or a clone (such as Joe Biden or Beto O’Rourke). That would be their standard fixed game, America’s heads-I-win-tails-you-lose ‘democracy’.

On 18 January 2018 was reported that“Trump pulled in $107 million in individual contributions, nearly doubling President Barack Obama’s 2009 record of $53 million.”

However, in both of those cases, the figures which were being compared were actually donations to fund the inaugural festivities, not the actual campaigns. But Adelson led there, too: “Casino magnate Sheldon Adelson was [the] most generous [donor], giving $5 million to the inaugural committee.”

The second-biggest donor to that was Hushang Ansary of Stewart & Stevenson, at $2 million. He had previously been the CEO of the National Iranian Oil Company until the CIA-appointed dictator, the brutal and widely hated Shah, was overthrown in 1979 and replaced by Iran’s now theocratically overseen limited democracy. The US aristocracy, whose CIA had overthrown Iran’s popular and democratically elected Prime Minister in 1953, installed the Shah to replace that elected head-of-state, and they then denationalized and privatized Iran’s oil company, so as to cut America’s aristocrats in on Iran’s oil.

Basically, America’s aristocracy stole Iran in 1953, and Iranians grabbed their country back in 1979, and US billionaires have been trying to get it back ever since. Ansary’s net worth is estimated at “over $2 billion,” and, “By the 1970s, the CIA considered Ansary to be one of seventeen members of ‘the Shah’s Inner Circle’ and he was one of the Shah’s top two choices to succeed Amir Abbas Hoveyda as Prime Minister.”

But, that just happened to be the time when the Shah became replaced in an authentic revolution against America’s dictatorship. Iran’s revolution produced the country’s current partially democratic Government. So, this would-be US stooge Ansary fled to America, which had been Iran’s master during 1953-79, and he was welcomed with open arms by Amerca’s and allied aristocracies.

Other than the Adelsons, the chief proponents of regime-change in Iran since 1979 are the US-billionaires-controlled CIA, and ‘news’-media, and Government, and the Shah’s family, and the Saud family, and Israel’s apartheid regime headed by the Adelsons’ protégé in Israel, Netanyahu. America’s billionaires want Iran back, and the CIA represents them (the Deep State) — not the American public — precisely as it did in 1953, when the CIA seized Iran for America’s billionaires.

In the current election-cycle, 2018, the Adelsons have thus far invested $123,208,200, all in Republicans, and this tops the entire field. The second-largest political investor, for this cycle, is the former Republican Mayor of NYC, Michael Bloomberg, at $90,282,515, all to Democrats. Is he a Republican, or is he a Democrat? Does it actually make any difference? He is consistently a promoter of Wall Street. The third-largest donor now is Tom Steyer, at $70,743,864, all to Democrats. The fourth-largest is a Wisconsin libertarian-conservative billionaire, Richard Uihlein, at $39,756,996.

Back on 19 March 2018, Politico reported that “Uihlein and his wife, Elizabeth, are currently the biggest Republican donors of the 2018 midterm elections, having given $21 million to candidates for federal office and super PACs that will support them. And that doesn’t include their funding of state candidates.” On 1 October 2016, International Business Times had listed the top ten donors to each of the two Parties, and the Uihleins at that time were #4 on the Republican side, at $21.5 million.

Of course, all of the top donors are among the 585 US billionaires, and therefore they can afford to spend lots on the Republican and/or Democratic nominees. Open Secrets reported on 31 March 2017 that “Of the world’s 100 richest billionaires, 36 are US citizens and thus eligible to donate to candidates and other political committees here. OpenSecrets Blog found that 30 of those [36] [or five sixths of the total 36 wealthiest Americans] actually did so, contributing a total of $184.4 million — with 58 percent [of their money] going to Republican efforts.” Democratic Party nominees thus got 42%; and, though it’s not as much as Republican ones get, it’s usually enough so that if a Democrat becomes elected, that person too will be controlled by billionaires.

For example, in the West Virginia Democratic Presidential primary in 2016, Bernie Sanders won all 55 counties in the state but that state’s delegation to the Democratic National Convention handed 19 of the state’s 37 votes at the Convention to his opponent, Hillary Clinton, who got more money from billionaires than all other US Presidential candidates combined. The millions of Democrats who voted for Hillary Clinton were voting for the billionaires’ favorite, and she and her DNC stole the Party’s nomination from Sanders, who was the nation’s most-preferred Presidential candidate in 2016; and, yet, most of those voters still happily voted, yet again, for her, in the general election — as if she hadn’t practically destroyed the Party by prostituting it to its billionaires even more than Obama had already done.

Of course, she ran against Trump, and, for once, the billionaires were shocked to find that their enormous investment in a candidate had been for naught. That’s how incompetent she was. But they still kept control over both of the political Parties, and the Sanders choice to head the DNC (the Democratic National Committee, the Democratic Party itself) lost out to the Obama-Clinton choice, so that today’s Democratic Party is still the same: winning is less important to them than serving their top donors is.

This means that America’s winners of federal elections represent almost entirely America’s 585 billionaires, and not the 328,335,647 Americans (as of noon on 23 January 2019). Of course, there is a slight crossover of interests between those two economic classes, since 0.000002 of those 328,335,647, or 0.0002% of them, are billionaires. However, if 0.0002% of federal office-holders represent the public, and the remaining 99.9998% represent the billionaires, then is that actually a bipartisan Government? If instead 99.9998% represented 328,335,062 Americans, and 0.0002% represented the 585 billionaires; then, that, too, wouldn’t be bipartisan, but would it be a democratic (small “d”) government? So, America is not a democracy (regardless of whether it’s bipartisan); it is instead an aristocracy, just like ancient France was, and the British empire, etc. The rest of America’s population (the 328,335,062 other Americans) are mere subjects, though we are officially called ‘citizens’, of this actual aristocracy.

The same is true in Israel, the land that the Adelsons (the individuals who largely control America) are so especially devoted to. On 8 November 2016, Israel’s pro-Hillary-Clinton and anti-Netanyahu Ha’aretz newspaper headlined “The Collapsing Political Triangle Linking Adelson, Netanyahu and Trump”, and reported that Ha’aretz’s bane and top competitor was the freely distributed daily Israeli newspaper, Israel Hayom, and:

Israel Hayom was founded by Adelson nine years ago, in order to give Netanyahu – who has been rather harshly treated by the Israeli media throughout his political career – a friendly newspaper. Under Israeli law, the total sum an individual can donate to a politician or party is very limited, and corporate donations are not allowed.

Israel Hayom has been a convenient loophole, allowing Adelson to invest the sort of money he normally gives American politicians on Netanyahu’s behalf. It has no business model and carries far fewer ads than most daily newspapers. While the privately owned company does not publish financial reports, industry insiders estimate that Adelson must spend around $50 million annually on the large team of journalists and the printing and distribution operations.

Distributed for free, in hundreds of thousands of copies the length and breadth of the country, Israel Hayom … clings slavishly to the line from Netanyahu’s office – praising him and his family to the heavens while smearing his political rivals, both on the left and the right.

A billionaire can afford to use his or her ‘news’-media in lieu of political campaign donations. Lots of billionaires do that. They don’t need to make direct political donations. And ‘making money’ by owning a ‘news’-medium can even be irrelevant, for them. Instead, owning an important ’news’-medium can be, for them, just another way, or sometimes their only way, to buy control over the government. It certainly works. It’s very effective in Israel.

Adelson is #14 on the 2018 Forbes 400 list of wealthiest Americans, all having net worths of $2.1 billion or more, his being $38.4 billion, just one-third as large as that of Jeff Bezos. Bezos is the owner of around 15% of Amazon Corporation, whose profits are derived almost entirely from the Amazon Web Services that are supplied to the US Pentagon, NSA, and CIA. So, he’s basically a ‘defense’ contractor.

Bezos’s directly owned Washington Post is one of America’s leading neoconservative and neoliberal, or pro-invasion and pro-Democratic Party, media; and, so, his personal ownership of that newspaper is much like his owning a one-person national political PAC to promote whatever national policies will increase his fortune. The more that goes to the military and the less that goes to everything else, the wealthier he will become. His newspaper pumps the ‘national security threats’ to America.

Adelson controls Israel’s Government. Whereas he might be a major force in America’s Government, that’s actually much more controlled by the world’s wealthiest person, the only trillionaire, the King of Saudi Arabia. He has enough wealth so that he can buy almost anybody he wants — and he does, through his numerous agents. But, of course, both Israel’s Government and Saudi Arabia’s Government hate Iran’s Government at least as much as America’s Government does.

In fact, if Russia’s Government weren’t likely to defend Iran’s Government from an invasion, then probably Iran would already have been invaded. Supporters of America’s Government are supporters of a world government by America’s billionaires, because that’s what the US Government, in all of its international functions (military, diplomatic, etc.) actually represents: it’s America’s global dictatorship.

They throw crumbs to America’s poor so as to make it a ‘two-party’ and not merely a ‘one-party’ government and so that one of the Parties can call itself ‘the Democratic Party’, but America’s is actually a one-party government, and it represents only the very wealthiest, in both Parties. The aristocracy’s two separate party-organizations compete against each other. But their real audience is the aristocracy’s dollars, not the public’s voters. This “two-Party” dictatorship (by the aristocracy) is a different governing model than in China and some other countries.

The great investigative journalist Wayne Madsen headlined on January 24th “Trump Recognition of Rival Venezuelan Government Will Set Off a Diplomatic Avalanche” and he reported the possibility of a war developing between the US and Russia over America’s aggression against Venezuela. US media even have pretended that the US Government isn’t the one that customarily perpetrates coups in Latin America, and pretended that Russia’s and Cuba’s Governments are simply blocking ‘democracy’ from blossoming in Venezuela.

On January 24th, Middle East Eye reported that Morgan Stanley’s CEO James Gorman had just told the World Economic Forum, in Davos, that the torture-murder of Saudi Crown Prince Salman’s critic and Washington Post columnist Jamal Khashoggi was “unacceptable,” “But what do you do? What part do you play in the process of economic and social change?” and the report continued: “Gorman said he did not judge any country’s attempts to root out corruption,” and Gorman and a French tycoon joined in throwing their “weight behind Riyadh’s economic and social direction, by saying, ‘it is quite difficult and brave what the kingdom is doing’,” by its ‘reforms’. It was all being done to ‘root out corruption, and to spread democracy’. Sure.

There’s “a sucker born every minute,” except now it’s every second. That seems to be the main way to win votes.

On January 26th, Trump appointed the fascist Elliott Abrams to lead this ‘democratization of Venezuela’, by overthrowing and replacing the elected President by the second-in-line-of succession (comparable in Venezuela to removing Trump and skipping over the Vice President and appointing Nancy Pelosi as America’s President, and also violating the Venezuelan Constitution’s requirement that the Supreme Judicial Trbunal must first approve before there can be ANY change of the President without an election by the voters).

It’s clearly another US coup that is being attempted here. Trump, by international dictat, says that this Venezuelan traitor whom the US claims to be installing is now officially recognized by the US Government to be the President of Venezuela. Bloomberg News reported that Abrams would join Trump’s neocon Secretary of State on January 26th at the UN to lobby there for the UN to authorize Trump’s intended Venezuelan coup. The EU seemed strongly inclined to follow America’s lead. On the decisive U.N. body, the Permanent Security Council, of China, France, Russia, UK, and US, the US position was backed by three: US, France, and UK. Russia and China were opposed.

In the EU, only France, Germany, Spain, and UK, came out immediately backing the US position. On January 25th, Russia’s Tass news agency was the first to report on the delicate strategic situation inside Venezuela. It sounded like the buildup to Obama’s successful coup in Ukraine in February 2014, but in Venezuela and under Trump. In fact, at least two commentaors other than I have noted the apparent similarities: Whitney Webb at “Washington Follows Ukraine, Syria Roadmap in Push for Venezuela Regime Change” and RT at “‘Venezuela gets its Maidan’: Ukrainian minister makes connection between regime change ops”.

Abrams’s career has been devoted to “regime-change,” and is as unapologetic about it as is John Bolton. Also like Bolton, he’s an impassioned supporter of Jewish apartheid. He wrote in his 1997 book Faith or Fear, that “Outside the land of Israel, there can be no doubt that Jews, faithful to the covenant between God and Abraham, are to stand apart from the nation in which they live. It is the very nature of being Jewish to be apart — except in Israel — from the rest of the population.”

Israel is, in this and the view of many billionaires, the whole world’s ghetto, and ‘real’ Jews don’t belong anywhere else than there. And, according to that, nobody else does belong there, except people who accept being ruled by Jewish Law - the Torah. So, on 25 June 2001, George W. Bush, as the main representative of America’s billionaires, made Abrams the Special Assistant to the President and Senior Director for Democracy, Human Rights, and International Operations at the National Security Council.

Of course, Abrams was gung-ho for Americans to conquer Iraq, because Iraqis didn’t like Israel. And the current US President hires that same agent of Israel, Abrams, now to sell internationally America’s current coup to grab Venezuela for America’s billionaires. Abrams, for years, had been courting Trump’s favor by having declined to include himself among the many Republican neoconservatives, both Jewish and non-Jewish, who endorsed Hillary Clinton for President. He thereby has now won his new job, on the real-world sequel to The Apprentice, which is known as President Trump’s Administration. Another such winner, of course, is John Bolton, who likewise had declined to endorse Hillary.

Perhaps the US regime thinks that testing the resolve of Russia’s Government, regarding Venezuela, would be less dangerous than testing it over the issue of Iran. But Big Brother says that this imposition of America’s corruption is instead merely a part of rooting out corruption and spreading democracy and human rights, throughout the world.

The US has managed to get Venezuela in play, to control again. Some American billionaires think it’s a big prize, which must be retaken. The largest oil-and-gas producers — and with the highest reserves of oil-and-gas in the ground — right now, happen to be Saudi Arabia, Iran, Qatar, Russia, Venezuela, and US. So, for example, Venezuela is a much bigger prize than Brazil.

All of those countries have an interest in denying the existence of human-produced global warming, and in selling as much of their product as quickly as possible before the world turns away from fossil fuels altogether. High-tech doesn’t drive today’s big-power competition nearly so much as does the fossil-fuels competition — to sell as much of it as they can, as fast as they can. The result of this competition could turn out to be a nuclear winter that produces a lifeless planet and thus prevents the planet from becoming lifeless more slowly from global burnout — the alternative outcome, which would be produced by the burnt fossil fuels themselves. Either way, the future looks bleak, no matter what high-tech produces (unless high-tech produces quickly a total replacement of fossil fuels, and, in the process, bankrupts many of the billionaires who are so active in the current desperate and psychopathic global competition).

This is what happens when wealth worldwide is so unequally distributed that the “World’s Richest 0.7% Own 13.67 Times as Much as World’s Poorest 68.7%”. According to economic theory (which has always been written by agents for the aristocracy), the distribution of wealth is irrelevant. This belief was formalized by a key founder of today’s mathematized economic theory, Vilfredo Pareto, who, for example, in his main work, the 1912 Trattato di Sociologia Generale, wrote (# 2135), that, though “the lover of equality will assign a high coefficient to the utility of the lower classes and get a point of equilibrium very close to the equalitarian condition, there is no criterion save sentiment for choosing between the one [such equality of wealth] and the other [a single person — whom he called “superman” — owning everything].”

The article on Pareto in the CIA’s Wikipedia doesn’t even so much as mention this central feature of Pareto’s thinking, the feature that’s foundational in all of the theory of “welfare” in economics. Pareto was also the main theoretician of fascism, and the teacher of Mussolini. This belief is at the foundation of capitalism as we know it, and as it has been in economic theory ever since, actually, the 1760s. Pareto didn’t invent it; he merely mathematized it.

So, we’ve long been in 1984, or at least building toward it. But US-allied billionaires wrote this particular version of it; George Orwell didn’t. And it’s not a novel. It’s the real thing. And it is now becoming increasingly desperate.

If, in recognizing this, you feel like a hog on a factory-farm, then you’ve got the general idea of this reality. It’s the problem that the public faces. But the publics in the US and its allied regimes are far less miserable than the publics in the countries that the US and its allied regimes are trying to take over — the targeted countries (such as Syria). To describe any realistic solution to this systematic global exploitation would require an entire book, at the very least — no mere article, such as here. The aristocracy anywhere wouldn’t publish such a book. Nobody would likely derive any significant income from writing it. That’s part of the reality, which such a book would be describing.

However, a key part of this reality is that for the billionaires — the people who control international corporations or corporations that even are aspiring to grow beyond their national market — their nation’s international policies are even more important to them than its domestic affairs (such as the toxic water in Flint, Michigan; or single-payer health insurance — matters that are relatively unimportant to billionaires), and, therefore, the most-censored and least-honestly reported realities on the part of the aristocracy’s ‘news’-media are the international ones. And, so, this is the field where there is the most lying, such as about “Saddam’s WMD,” and about all foreign countries.

However, when a person is in an aristocracy’s military, deception of that person is even more essential, especially in the lower ranks, the troops, because killing and dying for one’s aristocracy is far less attractive than killing or dying in order honestly to serve and protect an authentic democracy. Propagandizing for the myth that the nation is a democracy is therefore extremely important in any aristocracy.

Perhaps this is the reason why, in the United States, the military is consistently the institution that leads above all others in the public’s respect. It’s especially necessary to do that, in the nation that President Barack Obama repeatedly said is “the one indispensable nation”. This, of course, means that every other nation is “dispensable.” Any imperial nation, at least since ancient Rome, claimed the same thing, and invaded more nations than any other in the world when it was the leading imperial nation, because this is what it means to be an empire, or even to aspire to being one: imposing that given nation’s will upon other nations — colonies, vassal states, or whatever they are called.

When soldiers know that they are the invaders, not the actual defenders, their motivation to kill and die is enormously reduced. This is the main reason why the ‘news’-media in an imperial nation need to lie constantly to their public. If a news-reporting organization doesn’t do that, no aristocrat will even buy it. And virtually none will advertise in it or otherwise donate to it. It will be doomed to remain very small and unprofitable in every way (because the “World’s Richest 0.7% Own 13.67 Times as Much as World’s Poorest 68.7%”). Billionaires donate to ‘news’-organizations that might report accurately about domestic US problems, but not to ones that report accurately about international affairs, especially about important international affairs. Even liberal ‘news’-media are neoconservative, or favorable toward American invasions and coups. In order to be a significant player in the ‘news’-business in the United States, one has to be.

So: this is how America’s dictatorship works. This is not America’s exceptionalism: it is America’s ordinariness. America’s Founders had wanted to produce something not just exceptional but unique in its time: a democratic republic. But what now exists here is instead a dictatorial global empire, and it constitutes the biggest threat to the very existence of the United Nations ever since that body’s founding in 1945. If that body accepts as constituting the leader of Venezuela the person that America’s President declares to be Venezuela’s leader, then the U.N. is effectively dead.

This would be an immense breakthrough for all of the US regime’s billionaires, both domestically and throughout its allied countries (such as in France, Germany, Spain, and UK). It would be historic, if they win. It would be extremely grim, and then the U.N. would immediately need to be replaced. The US and its allies would refuse to join the replacement organization. That organization would then authorize economic sanctions against the US and its allies. These will be reciprocated. The world would break clearly into two trading-blocs. In a sense, the UN’s capitulation to the US on this matter would create another world war, WW III. It would be even worse than when Neville Chamberlain accepted Hitler’s offer regarding the Sudetenland. We’d be back to the start of WW II, with no lessons learned since then. And with nuclear weapons.

Published:2/24/2019 11:08:04 PM
[Politics] We’ve got a new commenting system! Some of you may have noticed that we have a new comment system below the posts. It’s called wpDiscuz and it’s been around for quite a few years. As you can see, . . . Published:2/24/2019 10:38:05 PM
[Politics] We’ve got a new commenting system! Some of you may have noticed that we have a new comment system below the posts. It’s called wpDiscuz and it’s been around for quite a few years. As you can see, . . . Published:2/24/2019 10:08:54 PM
[Markets] When The Winter Of Our Discontent Meets Fyre Festival

Authored by Jim Quinn via The Burning Platform blog,

“When a condition or a problem becomes too great, humans have the protection of not thinking about it. But it goes inward and minces up with a lot of other things already there and what comes out is discontent and uneasiness, guilt and a compulsion to get something–anything–before it is all gone.” ? John Steinbeck, The Winter of Our Discontent

Sometimes I wonder about strange coincidences. In an email exchange with Marc (Hardscrabble Farmer) in the Fall, he mentioned he had begun reading Steinbeck’s Winter of Our Discontent and planned to write an article about it. Coincidentally, I had just bought a used copy of the same novel at Hooked on Books in Wildwood. I didn’t plan on buying it, but I’ve read most of Steinbeck’s brilliant novels and felt compelled by the title and our national state of discontent to select it from among the thousands of books in the store.

Marc had posted his Steinbeck-esque article in December, but I didn’t read it until I had finished the novel. Marc’s perspective on the value of money and his diametrically opposite path from Ethan Hawley, the discontented anti-hero of Steinbeck’s final novel, was enlightening and thought provoking. I’m sure it impacted my consciousness as I wrote this article.

Steinbeck’s title was taken from Shakespeare to reflect the unhappiness of Ethan Hawley at the outset of the novel. The quote, “Now is the winter of our discontent / Made glorious summer by this sun of York”, is the first line of Shakespeare’s Richard III, written in 1594. Shakespeare was using the summer/winter weather as a metaphor for the fortunes of the English House of York and its rivalry with the Plantagenets for the English throne. The ‘sun of York’ was a comment on the ‘son of York’ Edward IV, a harbinger of better times ahead. This theme of discontent was true in 1594, in 1961 when Steinbeck published his final novel, and is true today, as discontent blows across the land like a deadly polar vortex. At this point, it is difficult to see better times ahead.

The reason Steinbeck’s Nobel Prize winning novel still resonates today is because humans do not change. The human condition, our frailties, foibles, moral shortcomings, greed, avarice, narcissism, ability to forgive and seek redemption has remained constant through the ages. Steinbeck wrote the novel to address the moral degeneration of American culture during the 1950s and 1960s. The game show scandals, nativism and plagiarism of the 1950’s was representative of the decay.

Twenty-two years before, in 1939, Steinbeck addressed man’s inhumanity to man and the greed of evil men creating the suffering of the common man during the Great Depression in his classic novel Grapes of Wrath. Steinbeck’s characters have biblical aspects, as the battle between good and evil is always a subplot. If Steinbeck thought American culture had degenerated in 1961, I wonder what he would think today.

The definition of discontent is dissatisfaction with the prevailing social or political situation. If ever a word defined the current state of our world, it would be discontent. And it so happens, we are also in the depths of a bleak tumultuous winter season. The social and political discontent is reflected in the epic struggle between far-left treasonous Deep State operatives and the deplorables supporting Trump’s battle to retain the presidency.

An open coup has been in progress for two years as the Obama/Clinton surveillance state cronies, fully supported by the left-wing fake news propaganda outlets, attempt to remove a democratically elected president. This is truly a dark moment in our history and could mark a turning point in the demise of our Republic.

“It’s so much darker when a light goes out than it would have been if it had never shone.” ? John Steinbeck, The Winter of Our Discontent

Steinbeck’s story about the moral decline of Ethan Hawley was a parable about the human condition set in the 1950s, but applicable throughout human history, and as relevant today as it was then. Ethan was a war hero whose integrity and honesty were the noble standards he lived by every day. His father recklessly lost the family fortune and he was left as a lowly grocery store clerk working for a foreigner.

It is a story of how easy it is for a good man to be corrupted through societal expectations, the opinions of prominent people, and the disapproval of family for their status in the community. The love of money is the root of all evil, as presented by Steinbeck. Ethan Hawley’s fall from grace was self-imposed as he allowed his darker nature to control his actions in order to regain his once prominent station in the community. The opinions of others considering him a failure led to his fall from grace.

“Men don’t get knocked out, or I mean they can fight back against big things. What kills them is erosion; they get nudged into failure.” ? John Steinbeck, The Winter of Our Discontent

He sacrificed his self-respect, life long friendships, and the lives of two men, in order to climb the social ladder and regain the wealth and influence his father had squandered. Ethan’s ego and sense of self worth led him down a path paved with evil intentions. He had his boss deported, provided the means for his best friend to commit suicide, planned to rob a bank, and eventually came to the realization his own disregard for morality had been passed on to his son, who saw no problem with cheating to get what he wanted in life.

Ethan knew right from wrong. He was well read. He had killed Germans fighting for his country. He willfully chose to manipulate, lie and scheme in order to achieve his materialistic ambitions. The difference between Ethan and the materialistic, delusional, dishonest masses inhabiting our country today, is his sense of guilt impelled him to take his own life. But the unwavering love of his daughter convinced him to soldier on and redeem himself.

Our society is now infinitely more materialistic, narcissistic, and greedy than it was in the 1950s. Moral degeneration has reached new lows, unthinkable during the relatively innocent 1950s. But the common theme is human failings, foibles, and fallacies. Whatever a culture values you get more of. Our culture values achievement, wealth and power, at any cost.

Achieving success through hard work, intellectual accomplishment, or a superior product is antiquated and passé. Success is achieved through regulatory capture, bribing politicians, financial engineering schemes, monopolization of markets, and the power of propaganda. As Ethan cynically expounded, strength and success, even if achieved through criminal means, is all that matters in the end. The victors write the history books.

“To most of the world success is never bad. I remember how, when Hitler moved unchecked and triumphant, many honorable men sought and found virtues in him. And Mussolini made the trains run on time, and Vichy collaborated for the good of France, and whatever else Stalin was, he was strong. Strength and success—they are above morality, above criticism. It seems, then, that it is not what you do, but how you do it and what you call it. Is there a check in men, deep in them, that stops or punishes? There doesn’t seem to be. The only punishment is for failure. In effect no crime is committed unless a criminal is caught.” ? John Steinbeck, The Winter of Our Discontent

A modern-day parable of moral degeneration presented itself to me shortly after finishing the Steinbeck novel. I happened to stumble across a documentary about the Fyre Festival fraud on Netflix. The protagonist of this illustration of discontent and delusion was Billy McFarland. He is representative of the modern-day Ethan Hawley, except with no redeeming qualities or conscience.

He conned investors, entertainers, super models, the media, employees, and gullible millennials. His ultimate purpose was no different than Ethan Hawley’s, to be wealthy and admired by his peers. His outrageously criminal exploits were detailed in the documentary as he lied, falsified, and conducted a ponzi scheme until it all blew up in a shocking display of hubristic folly. The story is a reflection of our shallow, narcissistic, gullible, low IQ society.

What leaps off the screen is how businesses are created out of thin air delivering no value to society. It’s all smoke, mirrors, and superficial virtue signaling designed to lure intellectual lightweights to pretend they are a mover and shaker in their social media driven world. The entire festival was designed to promote some ridiculous music booking app. These frivolous social media-based companies are built upon false narratives, self-absorbed millennials, easy money, and celebrity worship. They have zero value.

After watching how easily young people could be lured into handing over tens of thousands of dollars to this shyster because he paid some super models to do a bikini video and tweet falsehoods about the fake festival, you realize how they can believe socialism can work. Alexandrea Ocasio-Cortez is a perfect role model for these dullards and sycophants. Young people appear incapable of thinking for themselves, critically assessing situations, or going against the crowd. They want to be told what to believe and what to do.

Of course, this sickness is not confined to only young people. Our entire society is permeated with greed, narcissism and lemming-like behavior. Keeping up with the Kardashians has replaced keeping up with the Joneses. Ethan Hawley’s desire for status and respect among his peers in small town America during the 1950s is no different than the social climbing happening in our high-tech social media crazed world of today. Human nature does not change.

The Netflix documentary brought a term to my attention I had not heard before – “influencers”. The shallowness and trivial nature of our culture is captured perfectly by the essence of the importance of “influencers” to marketing products and events.  The Fyre Festival was promoted on Instagram by “social media influencers” including socialite and model Kendall Jenner, Bella Hadid, and model Emily Ratajkowski, who did not disclose they had been paid to do so.

“In business and in politics a man must carve and maul his way through men to get to be King of the Mountain. Once there, he can be great and kind–but he must get there first.” ? John Steinbeck, The Winter of Our Discontent

Rather than make up our own minds about what we like, what we wear, where we eat, or what entertainment we enjoy, we need to be influenced into our decisions by famous people who are famous for being famous. These “influencers” generate their influential power through the number of social media followers they have accumulated by posting pictures of themselves in their underwear, leaked sex tapes, nude selfies, or generally being attractive.

Most of them are low IQ mouth breathers who can’t do basic math or write a comprehensible paragraph. But those 36DD breasts and pouty lips classify them as a grade A influencer. I can’t decide whether these narcissistic icons are more pathetic or the feeble-minded wretches who are actually influenced by these vacuous bimbos. Moral degeneration of society seems to have reached a new low.

Billy McFarland used any means necessary to maul his way to the top. He figured if he pulled off this spectacular social media extravaganza, his new music app demand would skyrocket and he would become a superstar music business mogul like Jay-Z. As his lies and debt continued to pile up, he double downed and used his dynamic personality to convince naïve rich women into “investing” millions into his doomed to failure venture.

Ultimately, thousands of suckers landed on a Caribbean island expecting luxurious accommodations and dozens of A list entertainers, but experienced mass confusion, flimsy tent accommodations with soaked mattresses, little to no food, and a canceled concert as unpaid bands pulled out. The disaster was reported in real time through the same social media that promoted this festival farce.

“In poverty she is envious. In riches she may be a snob. Money does not change the sickness, only the symptoms” ? John Steinbeck, The Winter of Our Discontent

In the case of Billy McFarland we know the consequences of his actions. Lawsuits totaling $100 million were filed against him. He was charged with the Federal crime of wire fraud and convicted. He is currently serving six years in a Federal prison and was ordered to forfeit $26 million. Based on the warped personality I witnessed in the documentary, he will resume scamming people the second he walks out of that prison, and more suckers will eagerly hand him their money. You can’t cure stupid.

The future of fictional character Ethan Hawley is left to your imagination. He had been a moral upstanding citizen who faced a crisis of conscience and fell prey to the darker side of his nature. His boss had been deported and his best friend was dead. At the end of the novel he was left with ill-gotten wealth, a loving wife, a son who felt no guilt in cheating, and a daughter who saved his life.

I want to believe Ethan spent the rest of his life redeeming himself through his actions by doing good for the town, helping his friends achieve success, teaching his son right from wrong, using his wealth to benefit humanity, and proving to his daughter his life was worth saving. Ethan’s struggle is the existential crisis we all face as human beings. The love of money is the root of all evil. Whether we are poor, middle class or rich, when our priorities become warped by greed, narcissism, envy, or worldly desires, it only leads to discontent.

We see the discontent revealed by the billionaire crowd who rig markets to pillage more of the nation’s wealth. We see it among corrupt politicians being bought off by crooked corporate CEOs. We see it when media pundits broadcast fake news to push their agenda. We see it exhibited by the blatant coup attempt against a duly elected president by arrogant treasonous men who consider themselves above the law. We see it play out in office politics all over America. We see it with cheating on our taxes or lying to our spouses. We see our youth plagiarizing and cheating on tests. It seems we are a society of scammers, liars, and dishonest discontents.

Steinbeck was not one for happy endings. He pondered morality and the human condition and found it wanting. A battle between the good and evil is fought within the conscience of every human being. An inner dialogue takes place regarding every moral decision we make. The continuation of a civilized society is dependent upon more human beings choosing the path of good versus the path of evil.

We can be the most technologically advanced civilization in history, but if we allow moral degeneration to dominate our culture, our civilization will be doomed. It feels as if our society is leaning towards the dark side and this realization is leading to an epic showdown between good and evil. We are truly experiencing a winter of discontent. The winner of this battle will determine the future course of our country.

“We can shoot rockets into space but we can’t cure anger or discontent.” ? John Steinbeck, The Winter of Our Discontent

Published:2/24/2019 3:40:51 PM
[Markets] The AI Road To Serfdom?

Authored by Robert Skidelsky via Project Syndicate,

 Should we trust the conventional economic narrative according to which machines inevitably raise workers' living standards?

Surveys from round the world show that people want secure jobs. At the same time, they have always dreamed of a life free from toil. The “rise of the robots” has made the tension between these impulses palpable.

Estimates of job losses in the near future due to automation range from 9% to 47%, and jobs themselves are becoming ever more precarious. Yet automation also promises relief from most forms of enforced work, bringing closer to reality Aristotle’s extraordinary prediction that all needed work would one day be carried out by “mechanical slaves,” leaving humans free to live the “good life.” So the age-old question arises again: are machines a threat to humans or a means of emancipating them?

In principle, there need be no contradiction. Automating part of human labor should enable people to work less for more pay, as has been happening since the Industrial Revolution. Hours of work have fallen and real incomes have risen, even as the world’s population increased sevenfold, thanks to the increased productivity of machine-enhanced labor. In rich countries, productivity – output per hour worked – is 25 times higher than it was in 1831. The world has become steadily wealthier with fewer man-hours of work needed to produce that wealth.

Why should this benign process not continue? Where is the serpent in the garden? Most economists would say it is imaginary. People, like novice chess players, see only the first move, not the consequences of it. The first move is that workers in a particular sector are replaced by machines, like the Luddite weavers who lost their jobs to power looms in the nineteenth century. In David Ricardo’s chilling phrase, they become “redundant.”

But what happens next? The price of clothes falls, because more can be produced at the same cost. So people can buy more clothes, and a greater variety of clothes, as well as other items they could not have afforded before. Jobs are created to meet the shift in demand, replacing the original jobs lost, and if productivity growth continues, hours of work can fall as well.

Notice that, in this rosy scenario, no trade unions, minimum wages, job protections, or schemes of redistribution are needed to raise workers’ real (inflation-adjusted) income. Rising wages are an automatic effect of the fall in the cost of goods. Provided there is no downward pressure on money wages from increased competition for work, the automatic effect of technological innovation is to raise the standard of living.

This is the famous argument of Friedrich Hayek against any attempt by governments or central banks to stabilize the price level. In any technologically progressive economy, prices should fall except in a few niche markets. Businessmen don’t need low inflation to expand production. They need only the prospect of more sales. “Dearness” of goods is a sign of technological stagnation.

But our chess novice raises two important questions:

“If automation is not confined to a single industry, but spreads to others, won’t more and more jobs become redundant?

And won’t the increased competition for the remaining jobs force down pay, offsetting and even reversing the gains from cheapness?”

Human beings, the economist replies, will not be replaced, but complemented. Automated systems, whether or not in robot form, will enhance, not destroy, the value of human work, just as a human plus a good computer can still beat the best computer at chess. Of course, humans will have to be “up-skilled.” This will take time, and it will need to be continuous. But once up-skilling is in train, there is no reason to expect any net loss of jobs. And because the value of the jobs will have been enhanced, real incomes will continue to rise. Rather than fearing the machines, humans should relax and enjoy the ride to a glorious future.

Besides, the economist will add, machines cannot replace many jobs requiring person-to-person contact, physical dexterity, or non-routine decision-making, at least not any time soon. So there will always be a place for humans in any future pattern of work.

Ignore for a moment, the horrendous costs involved in this wholesale re-direction of human work. The question is which jobs are most at risk in which sectors. According to MIT economist David Autor, automation will substitutefor more routinized occupations and complement high-skill, non-routine jobs. Whereas the effects on low-skill jobs will remain relatively unaffected, medium-skill jobs will gradually disappear, while demand for high-skill jobs will rise. “Lovely jobs” at the top and “lousy jobs” at the bottom, as LSE economists Maarten Goos and Alan Manning described it. The frontier of technology stops at what is irreducibly human.

But a future patterned along the lines suggested by Autor has a disturbingly dystopian implication. It is easy to see why lovely human jobs will remain and become even more prized. Exceptional talent will always command a premium. But is it true that lousy jobs will be confined to those with minimal skills? How long will it take those headed for redundancy to up-skill sufficiently to complement the ever-improving machines? And, pending their up-skilling, won’t they swell the competition for lousy jobs? How many generations will have to be sacrificed to fulfil the promise of automation? Science fiction has raced ahead of economic analysis to imagine a future in which a tiny minority of rich rentiers enjoy the almost unlimited services of a minimally-paid majority.

The optimist says: leave it to the market to forge a new, superior equilibrium, as it always has.

The pessimist says: without collective action to control the pace and type of innovation, a new serfdom beckons.

But while the need for policy intervention to channel automation to human advantage is beyond question, the real serpent in the garden is philosophical and ethical blindness. “A society can be said to be decadent,” wrote the Czech philosopher Jan Patocka, “if it so functions as to encourage a decadent life, a life addicted to what is inhuman by its very nature.”

It is not human jobs that are at risk from the rise of the robots. It is humanity itself.

Published:2/24/2019 3:06:57 PM
[Markets] Karl Lagerfeld Leaves Part Of $195M Fortune To His Famous Cat

As the fashion world reels from the loss of Karl Lagerfeld - Chanel's creative director since 1983, many have been left wondering exactly how much of his estimated $195 million to $300 million fortune he left his beloved cat, Choupette - a celebrity pet with 235,000 Instagram followers and over 50,000 followers on Twitter. 

Lagerfeld told Numéro last year that the the six-year-old Birman would inherit a portion of his wealth, "Among others," adding "Don't worry, there is enough for everyone." 

"If something happens to me, the person who will take care of her will not be in misery," he said in a 2015 interview. 

Already used to a pampered life, Choupette had two personal maids, ate dinners of caviar and chicken pâté at the table off of designer dishes, and traveled on private jets. -Fortune


A post shared by Choupette Lagerfeld (@choupettesdiary) on


A post shared by Choupette Lagerfeld (@choupettesdiary) on

And while Choupette stands to set a new record for cat-heirs (the current record held by a cat named Blackie, who inherited 7 million pounds ($9.15 million) in 1988 from his British owner, Lagerfeld's cat has also raked in millions from two modeling jobs; one for German automaker Opel Corsa's 2015 calendar, and another for a Japanese beauty product. 

For those wondering if Choupette will be unable to receive the inheritance given that France, where the pair resided, doesn’t allow money to be passed down to pets, as Lagerfeld explained to Numéro, “Well it’s lucky I’m not French then.”

Lagerfeld is a German citizen. And as CBS reports, German law does allow animals to be the beneficiaries of inherited wealth. -Fortune

And while Choupette stands to become the world's richest cat, the title for richest animal in history is held by German Shepherd (from Germany) Gunther IV - who inherited his fortune from German countess Carlotta Libenstein upon her death in 1991

When it comes to self-made felines, however, nobody can hold a candle to Grumpy Cat, worth an estimated $99.5 million after the internet sensation inspired a 2014 movie, books and other merchandise. 

Published:2/24/2019 8:07:59 AM
[World] [Ilya Somin] Why Trump's Emergency Declaration is Illegal

The strongest legal argument against Trump's attempt to use emergency powers to build the wall is that declaring an emergency does not authorize him to spend money and condemn property for that purpose. But he also lacks grounds to declare an emergency in the first place.

The strongest legal argument raised in the various lawsuits against President Trump's attempt to use emergency powers to build his border wall is that declaring an emergency does not authorize him to spend money and condemn private property to build the wall. That's the conventional wisdom among most legal scholars and commentators. But it is also important to recognize that it is illegal to for Trump to declare a "national emergency" over this issue in the first place. That point is important for reasons that go far beyond the the specific case of the border wall. If the president can declare an emergency and tap a vast range of special emergency powers anytime he wants for any reason he wants, that makes a hash of the whole concept of an emergency, raises serious constitutional problems, and creates a dangerous concentration of power in the hands of a single person.

It makes much more sense to interpret the National Emergencies Act as only allowing an emergency declaration in a situation where an emergency actually exists - defined as some sudden crisis that cannot be addressed swiftly enough through ordinary political processes. By that interpretation, the situation at the border doesn't even come close to qualifying.

Why the President Cannot Just Declare a "National Emergency" Whenever he Wants

The relevant section of the NEA, 50 USC Section 1621, says that "With respect to Acts of Congress authorizing the exercise, during the period of a national emergency, of any special or extraordinary power, the President is authorized to declare such national emergency." The Act does not define what counts as a "national emergency." But the fact that president is authorized to declare one does not mean he can do so at any time for any reason. It makes much more sense to interpret the Act as allowing the president to declare a legal state of emergency only in situations where an emergency actually exists.

The whole point of emergency powers is to enable the government to respond to a sudden crisis that cannot be addressed fast enough by ordinary political processes, not to give the president a blank check to use that authority whenever it might be politically convenient. One of the most basic rules of legal interpretation is that words used in laws must be understood in terms of their "ordinary meaning." The ordinary meaning of "emergency" is a sudden crisis of some sort, not just any issue of any kind.

If the term "national emergency" is interpreted broadly enough to allow the president to declare one anytime he wants, that would make Section 1621 unconstitutional. Declaring a national emergency allows the president to exercise a wide range of powers that normally belong to Congress, including spending money and imposing regulations on private parties. The "nondelegation" doctrine restricts Congress' ability to delegate its powers to another branch of government. For many years, the Supreme Court has taken a very permissive approach to delegation. All the Court requires is for the delegation to be constrained by an "intelligible principle." But allowing the president to tap congressional powers by declaring an emergency for any reason he wants runs afoul of even that weak restriction. There can be no "intelligible principle" when the whole question is entirely left up to executive discretion.

At the very least, interpreting "national emergency" to give total discretion to the president raises serious constitutional problems. And the Supreme Court has repeatedly ruled that judges must try hard to avoid interpreting statutes in ways that risk rendering them unconstitutional. The most famous recent example is NFIB v. Sebelius, where Chief Justice John Roberts famously reinterpreted the Obamacare individual health insurance mandate as a tax in order to save it from unconstitutionality, even though he admitted that was not the "most natural reading" of the law. He concluded that courts must adopt any available "reasonable" interpretation of a statute that would make it constitutional, even if it is not actually the best interpretation.

I am no great fan of this "avoidance canon." But as long as the Supreme Court requires federal judges to follow it, they must interpret "national emergency" in a way that doesn't give the president unconstrained discretion to declare one anytime he wants. Interpreting "emergency" to mean something like "sudden crisis" is at least a "reasonable" interpretation of the word, and it neatly avoids any possible constitutional problems.

Ironically, conservatives and libertarians are the ones who have long argued for stronger enforcement of the nondelegation doctrine, while most liberals have generally been hostile to the idea. Trump's national emergency declaration might perhaps lead the latter to reconsider their position.

Judges may face difficult decisions in situations where it is hard to tell whether the problem at hand really is a suddenly emerging crisis or not. But difficult borderline questions are common in judicial decision-making, particularly when interpreting imprecise terms like "emergency." When it comes to laws intended to trigger dangerous powers that circumvent the normal political process, it makes sense to put the burden of proof on the executive to show that a genuine emergency actually exists.

But even if courts should defer to the president's judgment in relatively close cases, that does not mean they should give him a blank check to declare an emergency anytime he wants. The current situation is not a close case at all.

The Situation at the Border is Not a Sudden Crisis - and therefore Cannot be Declared a National Emergency

If a "national emergency" can only be declared in the event of a sudden crisis, Trump's declaration clearly doesn't qualify. Quite simply, there is no crisis at the border. To the contrary, crime and terrorism risks in the border area are very low, and the number of illegal border crossings has been dropping. The vast majority of undocumented immigration is a result of visa overstays, not illegal border crossings at all. Trump also cites the flow of illegal drugs as a justification for the declaration. But 80 to 90 percent such drugs are brought in through legal ports of entry that would not be affected by his proposed wall.

Moreover, it is implausible to claim that the president had declare an emergency because there is no time for ordinary legislative processes to work. To the contrary, Congress has been considering Trump's demand for a wall for over two years now. The issue is not that they haven't had time to authorize one, but that they simply disagree with Trump about the need for it. Disagreement between the legislature and the executive is not an emergency. It's a normal part of our system of separation of powers. If the president can't get Congress to pass the laws he wants, that doesn't justify circumventing it by declaring an "emergency."

The above assumes that current immigration restrictions and the War on Drugs are beneficial rather than harmful. I myself oppose both. Most of the real problems at the border arise from the grave injustices caused by these policies. But even observers more sympathetic to status quo policies than I am should be able to recognize that Trump's emergency declaration does not address any sudden crisis. Even Trump himself seems to understand that. He admits he "didn't need to do this" and only declared a national emergency because he'd "rather" build the wall "much faster" than Congress is willing to authorize.

The claim that the border situation is an emergency is also belied by the nature of Trump's proposed remedy for the supposed problem. Even setting aside delays likely to be caused legal challenges, the wall will probably take years to build. Any problem for which the wall is a plausible solution is by definition not an emergency. To claim otherwise is much like saying that we can put out a raging fire by building a new fire station over the course of several years.

The administration can argue that there is an emergency because illegal border crossings and drug flows still persist and are unlikely to be completely eliminated anytime soon, if ever. But by that standard, there is an emergency any time any federal law is not perfectly enforced and some violations continue to occur. And that's true of almost every law on the books.

For example, surveys show that over 50 percent of adult Americans admit to violating federal laws banning possession of marijuana. Only a small fraction of them have ever been caught or prosecuted. Can the president declare a national emergency and start spending unauthorized money and condemning property to go after pot smokers?

If Trump's desire to build a wall qualifies as an emergency, then pretty much anything does. The president would have unlimited power to declare any real or imagined problem an emergency, and thereby tap a wide range of emergency powers.

The Perils of Setting a Dangerous Precedent

If courts conclude that the president can declare any emergency for virtually any reason he wants, it would set a dangerous precedent that goes far beyond wall-building. The National Emergencies Act allows the president to use an emergency declaration to trigger a wide range of powers, including such extremely dangerous ones as shutting down electronic media (potentially including the internet), and even testing chemical and biological weapons on unwilling human subjects.

Even the wall-building situation is itself deeply problematic. After all, Trump is claiming not just the authority to spend money on the wall, but also the power to use eminent domain to seize the property of thousands of people. If he can do that to build a border wall, other presidents can do the same thing to take property for a wide range of other purposes.

No one person - especially a politician - can be trusted with such vast, nearly unconstrained power. Conservatives who may be comfortable trusting Trump with it are unlikely to be so happy when the next liberal Democratic president inherits the same authority and uses it to promote left-wing causes.

Some suggest we need not worry too much about setting a precedent, because there have already been numerous questionable emergency declarations, including some that have lasted for many years.

I won't try to go through all of the previous 58 emergency declarations issued since the NEA was enacted in 1976. But virtually all of them did in fact involve crises that emerged suddenly and at least plausibly required a swift response that did not leave time for ordinary political processes to react quickly enough. All or nearly all were also invoked to take measures to address the problem quickly, not ones like Trump's wall, that would take years to have any effect. And none involved the president appropriating and seizing private property for a project Congress had repeatedly refused to support on the scale the president wanted, as is the case with the wall.

It is admittedly problematic that many previous emergencies have lasted for years, without any additional congressional authorization. The NEA does not impose any time limit on an emergency declaration. So one can potentially go on indefinitely, if the president wants it to.

The NEA states that a declaration can be ended by Congress if it passes a resolution disapproving it, as congressional Democrats are now attempting to do. But any such resolution is subject to veto by the president. And he can almost always count on sufficient support from his own party to prevent his veto from being overridden by the necessary two-thirds majority in both houses of Congress.

But the failure of the NEA to effectively limit the duration of emergency declarations does not mean it also imposes no constraints on their initation. The difficulty of terminating an emergency once it has been declared makes it all the more important to enforce legal constraints on declaring one in the first place, to ensure these powers cannot be used unless there is an actual emergency.

It is certainly possible that some previous emergency declarations were legally dubious. Trump is far from the first president to abuse his authority. But the fact that some of his predecessors may have acted illegally is no reason to let Trump get away with it, too. To the contrary, it is all the more reason to crack down on such abuses of power, so they will not be repeated.

Published:2/23/2019 5:30:00 PM
[Markets] The State Expands Its Responsibilities In Order To Expand Its Power

Authored by Aayush Priyank via The Mises Institute,

Many moviegoers might recognize the following quotation: “with great power comes great responsibility.”

Reality, however, is the exact opposite of what the quote describes.

In reality, it is responsibility that precedes power.

In a corporation, for instance, when you’re hired you are told your responsibilities and the powers granted to you are those that are necessary for you to accomplish your responsibility.

In John’s family, John’s father demands that everyone stay out of the kitchen while he cooks, lest they distract him. It is not because John’s father has the power to keep everyone out of the kitchen that he has accepted the responsibility of cooking; it is because he is responsible for cooking that he has the power to keep everyone out of the kitchen.

A vast number of self-help books focus on self-responsibility. This is no coincidence. It is only by accepting responsibility for our lives that we can acquire power over our lives. On the other hand, by blaming others for our conditions, we forfeit our responsibility, and consequently, our power.

Responsibility is important not just because it provides power but also because, as psychologist Jordan Peterson has often remarked, most people find the meaning of their lives through responsibility.

Examining American history, it is evident that the expansion of government powers has been a direct result of the government’s theft of the responsibilities of the individual.

There is a rather straightforward argument that is consistently presented by the government in order to justify its theft of responsibilities that rightfully belong to others.

The argument begins by pointing out a problem that exists. Then the argument says that our lives would be better if the problem didn’t exist. The conclusion the government reaches is that since it would be better for the problem not to exist, the government should be responsible for removing it.

Take any governmental expansion as an example.

For example, the Federal Reserve justifies itself in part by noting economic crises are bad and shouldn’t happen. It is then claimed that governments, through their central banks, must be responsible for ensuring that these crises don’t happen. Vast powers are then granted to central banks who attempt to carry out their “responsibilities.”

Similarly, Social Security resulted from the government accepting responsibility of economic security for retirees and other specific groups of people. By doing so, it appropriated to itself the responsibility that belongs to individuals, families, churches, and other private organizations.

Medicare, unemployment benefits, food stamps, and the recent attempts at universal health care, aim to do the same.

Such theft of responsibility is disguised, and often even accepted, as virtuous. After all, providing solutions to problems is something that corporations do as well, don’t they? Yet the difference lies in the conditions set forth.

On the other hand, when dealing with a corporation, one can acquire the solution to a problem (food to solve hunger, insurance to solve risk of medical issues, and so forth) at a certain specific price. Moreover, rights, responsibilities — and the powers that come with them — are specifically listed and explained.

Governments, however, take on a variety of responsibilities as a justification for greatly expanding powers - claiming these powers are necessary to fulfill these new responsibilities. These powers, however, usually become unlimited, bloated, and expensive. There is no true legal contract between the government and the individuals for whom the government is “responsible” for. Thus, there is no way of holding the government accountable should it fail to keep up its end of the bargain.

Ultimately, the list of “responsibilities” continually grows, but the list of powers grows even faster.

The unconditional manner in which the government offers ‘help’ and seizes an individual’s responsibility serves only to steal the individual’s power over his own life and erode away that which provides him meaning.

Published:2/23/2019 1:31:24 PM
[Markets] Schiffting To Phase 2: The Mueller Report 'Disappointment' Will Be Just The Beginning

James Howard Kunstler notes that the #Resistance has been losing bigly in recent days as each new “bombshell” it manufactures turns out only to reveal its modus operandi, which is that the end justifies the means - the end being to evict the wicked Mr. Trump from office and the means being dishonesty and bad faith in its use of the government’s prosecutorial machinery.

The New York Times has a Friday op-ed, The Mueller Report Is Coming. Here’s What to Expect, declaring, “A concise report will probably act a a ‘road map’ to investigation for the Democratic House — and to further criminal investigation by other prosecutors.”

Translation: prepare to be disappointed by Mr. Mueller’s report and microwave a giant tub of popcorn for an extravaganza of sequels and re-boots. Beware of what you wish for. If the baton is passed to House committee chairs Jerrold Nadler, Maxine Waters, and Elijah Cummings, then in Act Two of the show, the country will be treated to something like the Spanish Inquisition as performed by Moe, Larry, and Curly.

But, as The Wall Street Journal's Kimberley Strassel notes, there’s been no more reliable regurgitator of fantastical Trump-Russia collusion theories than Democratic Rep. Adam Schiff. So when the House Intelligence Committee chairman sits down to describe a “new phase” of the Trump investigation, pay attention. These are the fever swamps into which we will descend after Robert Mueller’s probe.

The collusionists need a “new phase” as signs grow that the special counsel won’t help realize their reveries of a Donald Trump takedown. They had said Mr. Mueller would provide all the answers. Now that it seems they won’t like his answers, Democrats and media insist that any report will likely prove “anticlimactic” and “inconclusive.” “This is merely the end of Chapter 1,” said Renato Mariotti, a CNN legal “analyst.”

Mr. Schiff turned this week to a dependable scribe—the Washington Post’s David Ignatius—to lay out the next chapter of the penny dreadful. Mr. Ignatius was the original conduit for the leak about former national security adviser Mike Flynn’s conversations with a Russian ambassador, and the far-fetched claims that Mr. Flynn had violated the Logan Act of 1799. Mr. Schiff has now dictated to Mr. Ignatius a whole new collusion theory. Forget Carter Page, Paul Manafort, George Papadopoulos—whoever. The real Trump-Russia canoodling rests in “Trump’s finances.” The future president was “doing business with Russia” and “seeking Kremlin help.”

So, no apologies. No acknowledgment that Mr. Schiff & Co. for years have pushed fake stories that accused innocent men and women of being Russian agents. No relieved hope that the country might finally put this behind us. Just a smooth transition—using Russia as a hook—into Mr. Trump’s finances. Mueller who?

What’s mind-boggling is that reporters would continue to take Mr. Schiff seriously, given his extraordinary record of incorrect and misleading pronouncements. This is the man who, on March 22, 2017, helped launch full-blown hysteria when he said on “Meet the Press” that his committee already had the goods on Trump-Russia collusion.

“I can’t go into the particulars, but there is more than circumstantial evidence now,” Mr. Schiff declared then. Almost two years later, he’s provided no such evidence and stopped making the claim—undoubtedly because, as the Senate Intelligence Committee has said publicly, no such evidence has been found.

At an open House Intelligence Committee hearing on March 20, 2017, Mr. Schiff stated as fact numerous crazy accusations from the infamous Steele dossier—giving them early currency and credence. He claimed that former Trump campaign aide Carter Page secretly met with a Vladimir Putin crony and was offered the brokerage of a 19% share in a Russian company. That Trump campaign manager Paul Manafort tapped Mr. Page as a go-between. That the Russians offered the Trump campaign damaging documents on Hillary Clinton in return for a blind eye to Moscow’s Ukraine policy. Mr. Schiff has never acknowledged that all these allegations have been debunked or remain unproved.

There was Mr. Schiff’s role in plumping the discredited January BuzzFeed story claiming Mr. Mueller had evidence the president directed his former personal lawyer Michael Cohen to lie to Congress. The special counsel’s office issued a rare statement denying the report. There was Mr. Schiff’s theory that the mysterious phone calls Donald Trump Jr. placed before his 2016 meeting with Russians at Trump Tower were to Candidate Trump. Senate Intel shot that down. And don’t forget Mr. Schiff’s February 2018 memo claiming the Steele dossier “did not inform” the FBI probe, because the bureau didn’t obtain it until long after the probe’s start. Testimony from Justice Department officials shot that one down, too.

With a track record like this, who wouldn’t believe Mr. Schiff’s new claim, in the Ignatius interview, that the key to collusion rests in Trump finances—in particular something to do with Deutsche Bank ? But hold on. Where did we first hear that Deutsche Bank theory? That’s right. See pages 64 and 117 of the wild House testimony of Glenn Simpson—head of Fusion GPS, the organization behind the Steele dossier. It’s right there, stuffed in between Mr. Simpson’s musings that Ivanka Trump might be involved with a “Russian Central Asian organized crime nexus,” that there is something nefarious happening on the “island of St. Martin in the Caribbean,” and that Roger Stone is part of a “Turkey-Russia” plot.

Mr. Schiff is taking his cue for Phase 2 of his investigation from the same Democrat-hired opposition-research group that launched the failed Phase 1.

At the start of all the Russia craziness, Mr. Schiff had a choice: maintain the bipartisan integrity of his committee by working with Republicans to find honest answers, or take on the role of resident conspiracy theorist. He chose his path. The rest of us should know better than to follow him.

Meanwhile, as Jim Kunstler continues,  ths antics of Waters, Schiff et al., may be eclipsed by the now inevitable inquiry around the misdeeds carried out by public officials in Act I of the show: the Russia Collusion Ruse. Based just on the current Andy McCabe book tour, there will be an awful lot to get to, and it is liable to be far more compelling than the nonsense conjured up by the Three Stooges. Mr. McCabe, in his quest to hand off the hot potato of culpability to his former colleagues, and to sell enough books to pay his lawyers’ retainers, has neatly laid out the case for his orchestrating a coup d’etat within the FBI.

It’s an ugly story, and it’s all out there now, like so much spaghetti hurled against the wall, and it won’t be ignored. There are many other spaghetti wads already plastered on that wall ranging from Hillary Clinton’s Fusion GPS hijinks, to Loretta Lynn’s written assurances to the Clinton campaign that the email server matter would be dropped, to the rather complete failure of the FISA process, and much much more that needs to be ventilated in a court of law.

I suspect that Barack Obama and his White House confidantes will enter the picture, too, sooner later, and to the great dismay of his partisans who do not want to see his legacy tarnished. Whatever your view of all these dark events, it would be pretty awful for the country to have to see him in a witness chair, but it may be unavoidable. Ditto Hillary, who is liable to go all Captain Queeg-y when she finally has to answer for her campaign’s turpitudes.

Most of this cast of characters has seemingly gone-to-ground in recent months, laying low, staying out of the news, probably spending much of their time conferring with their attorneys - Brennan, Clapper, Comey, et al, all keeping their traps shut in recent days as Andy McCabe takes his hangdog road-show around the Cable Networks and the NPR fluff chamber, spelling out the “stress” that prompted the FBI’s desperate attempt to cover its ass following the unbelievable 2016 election results.

I don’t pretend to know what the new Attorney General William Barr might do. He must realize that if he lets all this slide, the institutional damage will be permanent and severe. He is reputed to be a good friend of Special Prosecutor Mueller. Mr. Mueller’s reputation as the straightest of straight arrows seems at odds with the actual exercise of his office: generating rinky-dink “process” crimes against bit-players in the story, often via malicious prosecutorial tactics. The likely truth is that he was brought into the scene to protect the very characters who misused the terrible powers of the FBI and the Department of Justice. His investigation has been hermetically sealed against leakage. For all I or anyone else knows, he has spent some time preparing a case against the very officers who cooked up the Russia story in the first place. Perhaps not a high-percentage bet, but there it is for consideration.

It’s going to be an interesting month. Have you forgotten that General Michael Flynn will be returning to Judge Emmet Sullivan’s courtroom after three months in the doghouse that the judge sent him to for the purpose of reconsidering his guilty plea? Perhaps Gen. Flynn rediscovered that he has a spine this winter and will venture into a trial of the Mickey Mouse charge against him: that, as incoming National Security Advisor to the President, he had preliminary discussions with the Russian ambassador — in all other transitions-of-power, a completely normal procedure — and supposedly lied about it to the FBI. To the very people orchestrating a coup against his boss, the chief executive.

Published:2/22/2019 1:24:01 PM
[Politics] RIDICULOUS: Iowa bill attacks homeschoolers with MANDATORY home inspections Democrats in Iowa are attacking homeschooling in a new bill that would call for mandatory health and safety inspections for all families who don’t report to their school districts: CBN NEWS – . . . Published:2/21/2019 2:17:05 PM
[Politics] RIDICULOUS: Iowa bill attacks homeschoolers with MANDATORY home inspections Democrats in Iowa are attacking homeschooling in a new bill that would call for mandatory health and safety inspections for all families who don’t report to their school districts: CBN NEWS – . . . Published:2/21/2019 2:17:05 PM
[Markets] "The Berkshire Trade": How Deutsche Bank Conspired To Conceal A $1.6 Billion Loss

On a day when Frankfurt's most problematic lender was already in the headlines  for its internal deliberations about how to shield itself from the operational and reputational blowback should the President of the United States default on $340 million in loans, a team of investigative reporters from the Wall Street Journal stunned readers by publishing a fascinating, if embarrassing for the German lender, story about a losing bond trade that cost the bank some $1.6 billion over ten years, and would have never been disclosed had it not been for some impressive financial sleuthing.


According to the WSJ, not only did Deutsche magnify its losses by waffling over what to do about the trade, but senior managers at the bank also signed off on efforts to try and conceal losses from regulators and the public by shuffling what insiders at the bank nicknamed "the Berkshire Trade" off of the bank's trading books and concealing it in the opaque "non-core operations unit" - aka Deutsche's "bad bank," a sort of Pet Cemetary for the bank's most toxic assets. Because the trade involved illiquid municipal bonds, the bank had a lot of leeway in how to value the position and whether to even disclose it (it didn't). But when insiders started to question the bank's internal figures, and managers were finally forced to recokn with the magnitude of the losses, panic apparently set in, and attention immediately shifted to how the bank could cover it up. Soon, KPMG, the bank's auditor, also started asking questions, and the bank hatched a plan to "reclassify" the trade to free up reserve capital - though it was scuttled by legal.

Eventually, the bank arrived at a "Godfather"-style solution: Moving all its toxic assets to the "bad bank."

Around that time, Deutsche Bank’s financial auditors from KPMG LLP raised questions about whether the bank had set aside sufficient reserves for the bond positions, according to people involved in the matter. In December 2011, Deutsche Bank managers reassured KPMG, partly through a 14-page white paper. The paper, reviewed by The Wall Street Journal, argued that the bank was doing a good job surveying the market and estimating municipal-bond recovery and default probabilities. A KPMG spokesman declined to comment.

Within months, the valuation debates sparked an internal bank investigation. Some executives hatched “Project Marla,” a plan to reclassify the bond investment as a “financial guarantee,” eliminating its day-to-day price volatility on the bank’s books. The bank would move the bond portfolio out of its trading book and into loans and receivables. Legal and accounting objections inside the bank scuttled the plan.

In the fall of 2012, an assessment by Deutsche Bank of other Berkshire-insured municipal holdings suggested the bank’s valuation was off-base. The bank boosted reserves to about $161 million at year-end.

Late that year, Deutsche Bank unveiled a so-called bad bank, called the noncore operations unit, to wind down or sell positions that were troubled or expensive to maintain. It contained hard-to-sell assets including the Cosmopolitan Las Vegas casino, structured real-estate loans and many opaque derivative positions. The municipal-bond investment went onto the pile.

When the position was finally liquidated in 2016, the resulting loss was nearly four times its entire 2018 profit - and the biggest loss in the bank's history. And - most shocking of all -  neither the bank's auditors, nor regulators, nor management forced the bank to disclose it to the public and its shareholders aside from some casual mentions.

The bet, a package of municipal bonds and associated derivatives that the bank bought during the runup to the financial crisis, was referred to as "the Berkshire Trade" by insiders because, in March 2008, the bank bought $150 million in additional default protection from Berkshire Hathaway as a hedge.

WSJ's account of the investment is based on interviews with more than a dozen insiders and hundreds of pages of documents related to bank valuation policies. Despite all of that research, the reporters weren't able to pinpoint the exact nature of the "Berkshire Trade".

Though they offered a few hints: Back in 2007, while Greg "I am short your house" Lippman was putting on the big housing-market short that would one day make him famous, Deutsche was buying a portfolio of muni bonds that reads like a laundry list of some of the most regrettable muni-bond market blowups (though, of course, hindsight is 2020): New Jersey public transit, California public schools, public works in Puerto Rico.

In 2007, Deutsche Bank bought the roughly $7.8 billion portfolio of 500 municipal bonds, which funded schools in California, public works in Puerto Rico and transportation projects in New Jersey, among hundreds of other uses. The bonds were insured by specialized “monoline” insurers to protect the bank against defaults by the issuers.

Then the financial crisis took hold, sowing concerns about whether municipalities would make good on their bond obligations—and whether insurers would be strong enough to cover potential defaults.

The trade, which was soaking up hundreds of millions in capital every quarter, eventually became a major headache for former DB CEO John Cryan.

On May 17, 2016, top Deutsche Bank executives met in Frankfurt, Germany, for an update on the noncore unit. The biggest obstacle to lessening risk was the municipal-bond portfolio. It was tying up at least $400 million in capital that could have been used elsewhere, and getting worse, according to internal estimates. Executives including then-CEO John Cryan wanted the position gone by the end of June, when the bank would close its books on the second quarter.

Mr. Cryan privately fumed about the position, citing it as a prime example of trades that tied Deutsche Bank’s hands and demanded precious capital and attention from traders, lawyers and accountants long after any hope of profit had evaporated, according to people involved in discussions about the position.

That summer, the bank finally dumped the position. On its second-quarter earnings call that July, Mr. Cryan referred obliquely to the transaction. “In early July, we successfully unwound a particularly long-dated and complicated structured trade, which was the largest single legacy trade” in the noncore unit, he said. He didn’t specify the amount of the loss.

When the position was liquidated and the bank started a discussion with regulators about whether it should restate past quarterly results, it was eventually decided that no revisions were necessary.

Bank executives, the supervisory board’s audit committee and external advisers all were involved in the decision not to restate financial results, and the bank shared results of the review with regulators, said one person briefed on the process.

Setting aside the fact that the WSJ has exposed bank executives - including the now-departed Cryan - dissembling in their efforts to conceal the losses from public scrutiny, the story may also shed some light on Deutsche's involvement in all of those interest-rate and FX-rigging scandals: Deutsche can't trade its way out of a paper bag.

Published:2/20/2019 4:42:13 PM
[Markets] Illinois Considering "Asset Transfers" To Pensions: Be Afraid

Submitted by Mark Glennon of Wirepoints

Governor JB Pritzker’s administration has now made clear it will seriously consider the latest idea to address Illinois’ pension crisis – transferring public assets directly to state pensions. It recently announced the formation of a task force on the subject.

At its core, the concept is exceptionally simple. In practice, however, it’s exceptionally subject to smoke and mirrors and would further obscure a pension system that’s already far too opaque. More importantly, asset transfers do nothing to improve the state’s overall fiscal health.

Just convey ownership of some public assets to the pension, for free, in addition to the cash contributions taxpayers make now. That’s all this is about. Maybe the Illinois Lottery or Illinois Tollway for state pensions. Maybe Midway Airport or its water system for Chicago pensions. Those are examples of assets that have been mentioned that might be handed over.

Illinois state pensions are officially reported to have assets about $130 billion less than what they need to have on hand to pay for pension benefits already earned. Turn over ownership of the tollway and some other assets and, voila, the thinking goes, that shortfall would shrink by whatever the transferred asset is worth.

The first problem should be obvious – the state, as a whole, would be no better off. Whatever assets the state owns – which are your assets as taxpayers – would simply be moved over to the pension funds for the sole purpose of covering benefit obligations. But the pensions are really just a unit of government because Illinois courts have made clear that the sponsoring unit of government is liable directly to pensioners if pension assets ever fall short. So, pensions might be made more secure by an asset transfer, but the government’s overall balance sheet remains the same.

Not true, I’ve heard some proponents of asset transfers say. They claim there are certain public assets where the value of the asset can only be fully unlocked through a transfer to a pension. Just selling or leasing the asset to some third party, they say, wouldn’t work. I’ll believe that when I see an example.

If you’re wondering at this point whether accounting shenanigans might be at play, you’re right to be concerned. Some valuation would have to be placed on the asset transferred in order to understand a pension’s true position. But public assets don’t have clear market values. What’s the Illinois Lottery really worth, for example? Experts will have different opinions, but the temptation will be to inflate the value in order to make pension financial statements look better.

And how on earth will actuaries decide what rate of return to assume on those assets? Currently, Illinois pensions assume about 7% per year. That’s already extremely controversial, with Nobel economists being the harshest critics. This will make heads explode in the actuary world.

Over time, the value of the asset will change. The lottery’s value, for example, will drop markedly if Illinois expands other forms of gambling as rapidly as planned. Does anybody really expect pensions to honestly report that changing value, given their sordid history distorting their position with phony numbers on things like discount rates and mortality projections?

And even if honest valuations are used, another temptation will be to transfer assets that are on the books at lower valuations. That would improve a government’s reported balance sheet when it’s valued fairly in the pension after transfer, but the government’s position wouldn’t really improve at all.

In the private sector, where asset transfers to pensions are sometimes done, that accounting trick is the whole point – take an asset that’s been heavily depreciated to less than fair value and give it to the pension at fair value, which magically improves the consolidated balance sheet. That’s a sensible tactic for a private company to improve its reported position, but for governments, from a taxpayer’s viewpoint, it doesn’t change the economic realities.

How ’bout we just transfer the Thompson Center to the pensions for $500 billion and call it a day, a reader asked? Sorry, won’t work.

What about management and control of a public asset by a pension? Would you really want a pension managing Midway Airport, for example? No, advocates of asset transfers say, the whole transaction would be set up like a triple net lease, where the governmental unit would continue to be in control. Only the cash flow would be diverted to the pension.

But think about that and all kinds of questions are apparent. If the city truly kept control, it would have every incentive to reduce charges for parking, landing and gate fees, which is how airports make money. They’d be sure to cover operational expenses, but nothing would truly be left for the pension, making the whole deal unfeasible. If, on the other hand, the pension could determine those charges, well, heaven forbid that.

The complexity of asset transfers would be mind-boggling for major things like airports, water and sewer systems. They are tied up by layers of mortgages and covenants protecting bondholders. Disentangling them, if that’s possible at all, would be a matter few officeholders or taxpayers would ever understand.

Other questions are endless. Ask them and one thing will come to mind – Chicago’s disastrous parking meter deal. In that case, a public asset was transferred not for pensions but to cover city operating expenses, but the concept is similar, and similar risks of having a bad deal foisted on the public should be apparent.

If this is getting confusing, take a look at the attached example. It’s from a company promoting the idea of asset transfers – Colliers International, an investment manager and real estate services company. It puts the concept in glowing terms, a “brilliant strategy,” using as an example the transfer of an office building used by an Arizona town to it’s underfunded pension.

Read that, and you’ll understand why the concept is getting attention. But ask yourself whether town residents are really better off because of the transaction. They owned the office building. It was worth what it was worth. They used it to pay their pension. Total assets and total liabilities for the town and its pension, combined together, didn’t change.

Our view on this is the same as our view about other ways to throw money at pensions. Don’t do it unless and until the pension system is reformed. Otherwise, Illinoisans will see that their assets are being tossed into a bottomless, corrupt pit. Don’t do it all unless the economic consequences and future reporting will be transparent and certain (which is probably impossible for most assets). Don’t just give away the assets. Demand reform concessions from current workers in Tier 1, who can negotiate collectively, and Tier 1 is where all unfunded liabilities are.

The Pritzker Administration has shown no interest in any of that.

Prepare for smoke and mirrors.

Published:2/19/2019 10:41:13 PM
[World] BOOK REVIEW: 'Unexampled Courage' by Richard Gergel


By Richard Gergel

Sarah Crichton Books/ Farrar, Straus and Giroux, $17, 324 pages

"When Sergeant Isaac Woodard stepped onto the Greyhound bus in Augusta, Georgia on the evening of ... Published:2/19/2019 7:07:18 PM

[Markets] Redbook Index Confirms December Retail Collapse

Submitted by Mish Shedlock of MishTalk

Some economists were in disbelief regarding the huge collapse in retail sales in December. Other indicators now confirm.

Here is a tweet on the subject.

That chart is weekly. Ideally, we need to see monthly and it wasn't posted.


The Johnson Redbook Index is a proprietary indicator of growth in retail sales, and provides advanced estimates of trends in retail sales ahead of official releases and company reports in an easy-to-read four-page report. The weekly indicator is made public every Tuesday morning, with clients receiving notice via conference call, e-mail or fax prior to public release.

The Johnson Redbook Retail Sales Monthly is a comprehensive report of same-store sales data reported monthly by general merchandise and apparel retailers. Analysis is given on current month sales, year-on-year, quarterly and annual sales, historical sales data and company rankings. Retailers are tracked across categories: Apparel Specialty, Books, Toy & Hobby, Department, Discount, Footwear, Furniture, Drug, Home Improvement, Home Furnishings, Electronic, Jewelry, Sporting Goods, and Miscellaneous. The Johnson Redbook Same-store Sales Index (SSI), an index of year-on-year same-store sales growth is reported in each edition.

Shockingly Weak Retail Sales

Redbook ties in with my report Shockingly Weak Retail Sales: Down 1.2% in December, Sharpest Decline Since 2009

And its not just retail sales either.

Other Confirming Indicators

  1. Autos: Surge in Auto Loan Delinquencies: Auto Loans in High Gear
  2. Credit Card Stress: Household Debt Up 18 Consecutive Quarters to a New Record, Card Stress Rising
  3. Falling Imports: Trade Deficit Shrinks in November Primarily Due to Falling Imports
  4. Industrial Production: Industrial Production Dives, Wiping Out a Strong December and Then Some

Very Recessionary

Add it all up and it looks very recessionary. And the EU is already there. Eurozone Recession: Right Here, Right Now!

There is no reason to believe the US will be immune to a global slowdown. People thought that China would decouple in 2008. It didn't. The US won't either.

Published:2/19/2019 10:06:36 AM
[Markets] $3 Trillion In New Liabilities Are About To Blindside Corporate Balance Sheets

Now that we're 10 years into a debt fueled, low interest rate "recovery" and back to record levels of debt across the board, corporate balance sheets are about to be blindsided with even more new liabilities at arguably the worst time possible. A massive $3 trillion in corporate liabilities is about to show up on balance sheets for the first time ever as a result of a new corporate accounting rule that went into effect on January 1. 

In 2019, companies are going to be required to record the cost of renting assets used in operations, like office space, equipment, planes and cars, on their balance sheet. Previously, these expenses had been buried in the footnotes of financial statements. Only leases that culminated in a purchase of the asset needed to be accounted for otherwise. 

"It's going to affect all companies' leverage. They will have more liabilities on their books than they had previously," Sheri Wyatt, a partner at accounting firm PricewaterhouseCoopers, said. 

Morgan Stanley has estimated at the consumer discretionary sector will be impacted the most, and that the retail sector's leverage ratio will balloon from 1.2x to an astounding 3.4x. 

In total, U.S. public companies are committed to $3 trillion in operating leases, according to data from the International Accounting Standards Board. As a result, retailers, restaurants, airlines and shipping companies that lease properties, airplanes, cars and ships will all be affected. 

But instead of just letting the new leverage "count", and in keeping with the "ignorance is bliss" attitude we've adopted over the last several decades in the financial sector, the report suggests that analysts and investors will instead just change the way they think about leverage ratios in certain sectors to exclude the impact of the new debt. 

For years, analysts had been capitalizing leases by multiplying the annual rent expense by eight to try and estimate remaining lease payments. But these estimates are likely going to look very different from the numbers that companies will be forced to put on their balance sheets. 

Todd Castagno, equity strategist at Morgan Stanley, told CNBC: "I do think people will have to adapt to new metrics – and they may be surprised. The liabilities and assets that companies report may look very different from the ad hoc estimates that people have used in the past. Those very common metrics that people look at to value equities, to look at performance, to screen for high quality stocks, all those ratios are going to change."

The bottom line is simple: the "central bankers' bubble", as defined by TCW last year, is about to hit never before seen levels...

... and the result will be... more of the same as central banks are forced to monetize even more debt to keep interest rates from rising to a level that sends the entire house of cards tumbling down.

Published:2/17/2019 2:55:31 PM
[Markets] Furious New Yorkers Threaten To Boycott Amazon If It Leaves

Nothing can make New Yorkers happy: first, they demand that Amazon abandon its plans for a Long Island City HQ2, and now that Jeff Bezos has complied with their demands, they are threatening to boycott the online retailer.

An angry Long Island City apartment building owner of the type profiled here yesterday, called for a nationwide boycott of Amazon and its products after the tech giant pulled out of its plan to build part of its second headquarters in Queens.

Sam Musovic had invested over a $1 million in his property, anticipating overnight riches from the economic boost that HQ2 was expected to bring, according to a statement released Friday. Amazon said it would have created 25,000 jobs in the area, paying an average of $150,000 a year.

However, as the tragicomic statement continues, Musovic made the investment "only for Amazon to stand him up on Valentine’s day — and leave him with nothing but the bill and a broken heart", according to Fox News.

Graffiti painted on a sidewalk by someone opposed to the location of an Amazon headquarters in Long Island City

Having "lost" hundreds of thousands in unbooked real-estate "profits" that until Thursday were dancing merrily inside his head, Musovic, who in addition to being a landlord is also a restauranteur, started a petition to boycott Amazon that is being circulated among Queens residents and business owners. He also intends to take legal action against the tech giant, according to the statement. “Musovic and his fellow business and apartment building owners are weighing their legal options,” it said, although it was unclear why the object of his ire is Amazon and not, say, progressive New York politicians who made it clear to Bezos that his company would not be welcome in Long Island City.

A scheduled protest outside Amazon Books in Midtown Manhattan took place on Friday afternoon, and a handful of people showed up.

Several months after Amazon announced it planned to spend $2.5 billion building its LIE HQ2 building, spawning a project that NYC mayor Bill de Blasio said would pay for the $2.8 billion in tax rebates and incentives "many times over", the deal sparked intense opposition from vocal critics such as Democratic lawmaker Alexandria Ocasio-Cortez, who represents parts of Queens. In an interview with NBC News Thursday, Amazon’s Head of Policy Communications Jodi Seth slammed Ocasio-Cortez and other opponents of the deal. "If you talk to Alexandria Ocasio-Cortez, it's 'Never Amazon,'" she said.

Exasperated by the political pushback, Seth said explained that "looking at the opposition and the timeline we decided we don't want to work in this environment in the long term."

Meanwhile, willing to take full credit for the loss of some 25,000 jobs, Ocasio-Cortez took a victory lap on hearing of Amazon’s decision and targeted the company’s CEO Jeff Bezos, incidentally one of president Donald Trump's harshest critics. “Anything is possible: today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon’s corporate greed, its worker exploitation, and the power of the richest man in the world,” she tweeted Thursday, unable or unwilling to realize that by owning this particular fiasco, she may have doomed her political career.

And just to make it clear who is truly responsible for the deal collapse, NY Governor Cuomo blasted Ocasio-Cortez and other lawmakers who opposed the deal. A small group of politicians “put their own narrow political interests above their community,” he said, in a statement released Thursday.

Cuomo added that “poll after poll showed overwhelmingly supported bringing Amazon to Long Island City - the state's economic future and the best interests of the people of this state.” He then lashed out at the New York State Senate, which "has done tremendous damage," and "should be held accountable for this lost economic opportunity."

However, as the liberal discord escalated, only chaos ensued, and Cuomo’s statement was at stark odds with mayor de Blasio’s initial response to the news, which criticized Amazon. “We gave Amazon the opportunity to be a good neighbor and do business in the greatest city in the world. Instead of working with the community, Amazon threw away that opportunity,” he said, in a statement released Thursday afternoon.

Then on Friday, speaking to WNYC public radio, de Blasio doubled down, saying "here’s Bezos and here’s Amazon, the definition of 1 percent. Look how little regard there was for everyday people. And it just dispels the notion that these big corporations are willing to be good citizens and good neighbors."

"It’s disrespectful to the people of NYC to get a call after months of attempting to build a productive partnership on behalf of this city, to get a call out of the blue saying, ‘See ya, we’re taking our ball and we’re going home,'" de Blasio added.

On Thursday evening, de Blasio told reporters that he was stunned by Amazon’s decision. The mayor said that 48 hours before the announcement, he spoke with a senior company executive who gave no indication that there was a problem with the deal. But Thursday morning, he got a call from an executive just as news started to come out that the deal was dead.

"I was flabbergasted," he told reporters in Boston, where he was taking part in a forum at Harvard's Kennedy School. "I said, 'Why on earth after all the effort we all put in would you simply walk away?'"

Yes, rejection is never, pleasant, even for a socialist like de Blasio.

Meanwhile, signaling much more trouble ahead for New York's tax incentives, opposition against the HQ2 tax breaks had been mounting since the deal was announced in November. In December, Amazon execs were grilled and jeered at a New York City Council meeting over the tech giant’s headquarters plan.

In pulling out, Amazon said it isn't looking for a replacement location "at this time." It said it plans to spread the technology jobs that were slated for New York to other offices around the U.S. and Canada, including Chicago, Toronto and Austin, Texas. It will also expand its existing New York offices, which already have about 5,000 employees.

As for Sam Musovic, whose dreams of overnight riches crumbled when some liberals wanted to virtue signal that they are even greater liberals than some other liberals, good luck in your lawsuit against the world's richest man and world's most valuable company.

Published:2/15/2019 6:13:22 PM
[Markets] Nomi Prins: Get Used To "The Powell Put"

Authored by Nomi Prins via The Daily Reckoning,

In the land of the Federal Reserve and its market-manipulating mechanisms, there’s now an unofficial market term called the “Powell Put” or the “Powell Pivot.”

It is in direct reference to Fed chairman Jerome Powell. Before he became chairman, Wall Street referred to prior heads’ policies with terms like the “Greenspan Put” the “Bernanke Put” and the “Yellen Put.”

In layman’s terms, what the term means is that if the markets fall by too much, the Fed will swoop in and try to save the day, the month, or the year. A “put” in options terminology is insurance against a drop in prices. Nowadays, the “Powell Put” is the market’s insurance that the Fed will act to stimulate the markets if necessary.

Markets had been waiting for it to materialize. But Powell had previously talked about the need to raise rates to give the Fed “enough ammunition to fight the next crisis.” The size of the Fed’s balance sheet would also have to be reduced enough to provide it enough room to grow if needed.

Markets began to worry the Powell Put might never materialize when he raised interest rates in December, when the market was in the middle of a severe correction (that nearly culminated in a bear market). He also said the balance sheet reductions, or quantitative tightening, would run on “autopilot.”

Markets tanked on his comments. But then on Jan. 4, after stocks fell nearly 20%, the “Powell Put” finally materialized.

In comments addressing the American Economic Association, Powell said he was “prepared to adjust policy quickly and flexibly.”

And about the balance sheet reduction policy that was on autopilot in November, he said

“We wouldn’t hesitate to change it.

Powell has subsequently emphasized the need for “patience.” The Dow has continued to rally behind his newfound dovishness. In fact, this January was the best January in 30 years. If the rally continues, the market could soon be testing its early October highs.

What this means is that the Fed isn’t going to raise rates anytime soon. As my colleague Jim Rickards has explained, “patience” isn’t just a word. It’s a signal to markets that the Fed will not be raising rates anytime soon, and that it will give them notice when it is.

The Fed is also unlikely to reduce the size of its balance sheet in a bold way, as long as economic headwinds from around the world continue. That in turn, means dark money will remain available to boost markets.

There are two main ways the Federal Reserve can unleash dark money into the financial system. One is by keeping interest rates (or the cost of money) low or at zero percent. The other is through quantitative easing (QE) or bond-purchasing, where the Fed creates money electronically and uses it to give to banks to buy Treasury or mortgage bonds from them.

Reducing the cost of money, or interest rates to zero, was done for the first time by the Fed in the wake of the financial crisis. The Fed did this supposedly as an emergency measure to inject money into the system because banks had stopped lending. In addition, QE was enacted because interest rate policy wasn’t effective enough. Again, supposedly, it was supposed to be an emergency measure.

But we saw how the stock market reacted when Powell said QT would run on autopilot. Now the Fed is ready to finalize plans that would leave the balance sheet at a much higher level than it previously envisioned. Again, that means additional support for markets.

In the latest development, as Brian Maher discussed in yesterday’sDaily Reckoning, Federal Reserve Bank of San Francisco President Mary Daly suggests that the Fed could decide to use its balance sheet as a routine part of how it guides the economy, not just as a last-ditch measure to deploy in emergencies.

That means what was once supposed to be an emergency measure could become just another regular policy tool if normal interest rate policy isn’t enough to stimulate a non-responsive economy. We’ll have to wait and see if this idea gains traction within the Fed. Either way, reducing the balance sheet to “normal” levels is no longer a priority for the Fed.

But it’s not just the Fed that is putting additional tightening on hold. Central banks around the globe have been re-calibrating their policies to reflect the weaker economic environment.

As one Wall Street Journal article recently reported, “Central bankers have geared their messages toward pausing on tightening steps rather than imminently launching new stimulus.”

Central banks from South Korea, Malaysia, Indonesia and Canada, who all raised rates last year, are now questioning such plans. The Bank of Japan and European Central Bank also indicated last week that their negative rates are here to stay for the foreseeable future.

The truth is it’s all about the $21 trillion of dark money fabricated by, and dispersed from, the world’s major central banks. The volatility periods, including last year’s nearly 20% correction, are related to the fear that dark money supplies will go away.

These factors will keep sparking intermittent fear and volatility this year — but dark money collusion will not be going anywhere. While there will be some minor rate hikes here and there, and mild tweaking of massive asset books, the overall story will remain the same. You should expect major central banks to end the year, on average, with asset books in total size right where they started.

Once again, that means dark money will continue to be available to markets.

The fact is, dark money is the #1 secret life force of today’s rigged financial markets. It drives whole markets up and down. It’s the reason for today’s financial bubbles.

On Wall Street, knowledge of and access to dark money means trillions of dollars per year flowing in and around global stock, bond and derivatives markets.

I learned this firsthand from my career on Wall Street. My first full year working on Wall Street was in 1987. I wasn’t talking about “dark money” or central bank collusion back then. I was just starting out.

Eventually, I would uncover how the dark money system works, how it has corrupted our financial system and encouraged greed to the point of crisis like in 2008. When I moved abroad to create and run the analytics department at Bear Stearns London as senior managing director, I got my first look at how dark money flows and its effects cross borders.

That dark money goes to the biggest private banks and financial institutions first. From there, it spreads out in seemingly infinite directions affecting different financial assets in different ways.

Yet these dark money flows stretch around the world according to a pattern of power, influence and, of course, wealth for select groups. To be a part of the dark money elite means to have control over many.

These is not built upon conspiracy theories. To the contrary, alliances make perfect sense and operate publicly. Even better, their exclusive dealings and the consequences that follow are foreseeable — but only if you understand how the system works and follow the dark money flows.

Dark money rules the world, and it could keep the bull market running longer than most people expect, even though the eventual turnaround could be ugly.

Published:2/15/2019 5:43:17 PM
[Markets] Niall Ferguson Says Bitcoin Is "An Option On Digital Gold"

Authored by Helen Partz via

Niall Ferguson, British economic and financial historian, believes that Bitcoin (BTC) is “an option an digital gold,” as he said in a interview with a blockchain magazine Breaker Mag on Feb. 13.

image courtesy of CoinTelegraph

Ferguson, a world famous historian and author fourteen books such as The Ascent of Money, declared that Bitcoin itself is “only money in a very limited sense,” stressing that the oldest cryptocurrency is incapable of being money as a means of payment due to massive volatility.

However, in near future, Bitcoin’s main function will be serving as a type of insurance, Ferguson stated, explaining that it is an asset that is hard to confiscate, and anyone might hold private keysthe same way the European wealthy used to hoard gold jewelry and precious stones.

While Ferguson said that it is clear that the money of future will be digital, he still expressed scepticism about stablecoins, which are digital currencies that are designed to provide minimum volatility and pegged to fiat currencies, commodities or algorithms.

Ferguson stated that fiat currencies have indeed performed very well in recent years in terms of inflation. In this context, Ferguson said that building a substitute for something that has been doing well since its inception in the 1970s is “not an obviously winning strategy.” He said:

“Stablecoin builders should remember that Bitcoin is an unusual kind of asset, which isn’t closely correlated to other asset classes. Investors like that idiosyncrasy.”

Regarding the future of money, Ferguson expressed hope that the global community will adopt a universal payment system that treats everyone equally, from the “0.1 percent” to the “huge class” of people who are outside the financial system, and have to rely on cash and payday loans. Ferguson also expressed concerns about huge centralized entities that might gain control over customer transactions:

“My nightmare would be that AmazonGoogle, or Facebook creates some hugely popular version of a digital dollar at which point every transaction is going to be monitored by the network platforms’ big data and [artificial intelligence] AI systems, to an even greater extent than is already true.”

Earlier today, Mike Novogratz, a former Goldman Sachs partner and founder of crypto merchant bank Galaxy Digitalargued that Bitcoin is going to be a digital gold, claiming that it will be sovereign money.

Published:2/15/2019 11:13:20 AM
[Markets] Turkish Man Sentenced To Read & Summarize Erdogan's Biography For Insulting Him


An Istanbul court sentenced 75-year-old Ali Sahin, who was accused of insulting Turkish President Recep Tayyip Erdogan, to read and summarize 24 books, including an Erdogan biography, the Oda TV news website reported on Sunday.

Sahin was investigated by an Istanbul prosecutor for allegedly insulting Erdogan in a coffeehouse, a charge he denied and claimed to be slander.

The man was questioned by the police then released on probation.

During a visit to the probation bureau, Sahin learned that he had been sentenced to read and write summaries of 24 books listed by the Istanbul 8th Criminal Court of Peace.

The list included, besides several Turkish and international literary classics, Islamist and pro-Erdogan publications by people such as Faruk Köse, a columnist for a daily with radical Islamist views, and pro-government journalists Abdulkadir Selvi and Turgay Güler as well as “The Birth of a Leader,” a biographical work about Erdogan.

“My lawyer has objected to the decision. Nevertheless, I’ll procure these books and start reading them. I’m 75. I don’t want to deal with stuff like this,” Sahin said.

Several jurists told Oda TV that the court’s decision goes against European human rights legislation and relevant provisions of the Turkish Constitution in that it compels a person to read publications with political narratives that he doesn’t believe in, a clear violation of the principles of freedom of belief and respect for private life.

Published:2/15/2019 4:09:24 AM
[Markets] A California School Teacher Speaks Out: "Americans, We Need To Wake Up"

Via Jim Quinn's Burning Platform blog,

Sent by P2

Shared on Facebook by a teacher in California who sees firsthand the destruction of America.

“Nine hundred teachers just got laid off from the Los Angeles Unified School District. They are $650,000 over their annual budget. The following comments by an English teacher help to explain one area that looms large over California’s educational crisis. I hope each person receiving this mail will read it carefully, all the way to the end.

It is sad what is happening to our great country, all because our politicians are afraid they will miss out on a vote. What a travesty!

This English teacher has phrased it the best I’ve seen yet and it should make everyone think, be you Democrat, Republican or Independent.

From a California school teacher...

As you listen to the news about the student protests over illegal immigration, there are some things that you should be aware of: I am in charge of the English-as-a-second-language department at a large southern California high school which is designated a Title-1 school, meaning that its students average in the lower socio-economic and income levels.

Most of the schools you are hearing about are Compton, South Gate High, Bell Gardens, Huntington Park, etc., where their students are protesting – these are also Title-1 schools.

Title-1 schools are on the free-breakfast and free-lunch program. When I say free breakfast, I’m not talking about a glass of milk and a roll. But a full breakfast and cereal bar with fruits and juices that would make the Marriott proud.

The waste of this food is monumental, with trays and trays of it being dumped in the trash uneaten. (Our tax dollars at work!)

I estimate that well over 50% of these students are obese or at least moderately overweight. About 75% or more have cell phones.

The school also provides day care centers for the unwed teenage pregnant girls (some as young as 13) so they can attend class without the inconvenience of having to arrange for babysitters or having family watch their kids (More of our tax dollars at work!)

I was ordered to spend $700,000 on my department, or risk losing funding for the upcoming year even though there was little need for anything.

My budget was already substantial, but I ended up buying new computers for the Computer Learning Center, half of which, one month later, were carved with graffiti by the appreciative students who obviously feel humbled and grateful to have a free education in America. (More and more of our tax dollars at work!)

I have had to intervene several times for young substitute teachers whose classes consist of many illegal immigrant students here in the country less than 3 months, who raised so much hell with the female teachers, calling them putas (whores) and throwing things, that the teachers were in tears.

Free medical care, free education, free food, free day care, etc., etc., etc. Is it any wonder they feel entitled not only to be in this country, but also to demand rights, privileges and entitlements?

To those who want to point out how much these illegal immigrants contribute to our society, because they happen to like their gardener and/or housekeeper, and they like to pay less for tomatoes, I say:

Spend some time in the real world of illegal immigration and see the true costs. Higher insurance, medical facilities closing, higher medical costs, more crime, lower standards of education in our schools, overcrowding, new diseases, etc., etc., etc. For me, I’ll pay more for tomatoes.

Americans, we need to wake up. The guest worker program will be a disaster because we won’t have the guts to enforce it. Does anyone in their right mind really think they will voluntarily leave and return?

It does, however, have everything to do with culture: A third-world culture that does not value education, that accepts children getting pregnant and dropping out of school by age 15, and that refuses to assimilate, plus an American culture that has become so weak and worried about “political correctness”, that we don’t have the will to do what is needed.

If this makes your blood boil, as it did mine, forward this to everyone you know including your Congressman and Senators.

Cheap labor? Isn’t that what the whole immigration issue is about? Business doesn’t want to pay a decent wage. Consumers don’t want expensive produce. Government will tell you “Americans don’t want the jobs”.

But the bottom line is cheap labor. The phrase “cheap labor” is a myth, a farce, and a lie. There is no such thing as “cheap labor”.

Take, for example, an illegal alien with a wife and five children. He takes a job for $5.00 or $6.00/hour. At that wage, with six dependents, he pays no income tax, yet at the end of the year, if he files an income tax return, he gets an “earned income credit” of up to $3,200 free.


1- He qualifies for Section-8 housing and subsidized rent;

2- He qualifies for food stamps;

3- He qualifies for free (no deductible, no co-pay) health care;

4- His children get free breakfasts and lunches at school;

5- He requires bilingual teachers and books;

6- He qualifies for relief from high energy bills;

7- If they are, or become aged, blind or disabled, they qualify for SSI;

8- Once qualified for SSI they can qualify for Medicare (All of this at taxpayer’s {our} expense);

9- He doesn’t worry about car insurance, life insurance, or homeowner’s insurance;

10- Taxpayers provide Spanish language signs, bulletins and printed material;

11- He and his family receive the equivalent of $20.00 to $30.00/hour in benefits;

12- Working Americans are lucky to have $5.00 or $6.00/hour left after paying their bills and his;

13- The American taxpayers also pays for increased crime, graffiti and trash clean-up.

14- Free Child Care (i.e., free babysitting from 6 AM – 6 PM

15- Free ‘mommy makeovers’ after having their children ( includes: tummy tuck and breast lift)

Cheap labor? Yeah right! Wake up people!

These are the questions we should be addressing to the Presidential candidates for either party. We must take action or we will all go down the drain because a few don’t care.

And if you think this is bad, just wait until a Democrat becomes President and the redistribution of wealth becomes the norm in this ex-Democracy. The estimated annual cost now, for state, local and federal, is nearly $400 billion dollars a year.

Published:2/12/2019 8:27:09 PM
[World] BOOK REVIEW: 'Spy Pilot' by Francis Gary Powers Jr. and Keith Dunnavant


By Francis Gary Powers Jr. and Keith Dunnavant

Foreword by Sergei Khrushchev

Prometheus Books, $25, 336 pages

Freed from a Soviet prison after months of captivity, U-2 pilot Francis Gary Powers was stunned to find that ... Published:2/12/2019 6:57:12 PM

[Markets] Being An Economist Means Never Having To Say Deflation

Authored by Jeffrey Snider via Alhambra Investment Partners,

In January 2017, there was a lot of praise for Goldman Sachs especially in London. This stood in obvious contrast to another global peer being savaged. While Deutsche Bank couldn’t pull its name out of the sewer, GS’s London unit was heralded for standing up when the market needed it.

Brexit was a fascinating story in ways that had absolutely nothing to do with the politics. You look on any market chart and you can easily pick out when the vote happened. It was as much about pounds and LIBOR as it was the European Union.

Uncertainty is a liquidity killer. There is both a common sense reason as well as purely mathematical. If as a dealer you don’t know what you don’t know, you can’t deal. In terms of how balance sheets are actually put together, uncertainty is something like vol approaching infinity. Sheer paralysis; every position far too expansive and expensive to consider.

This is especially vindictive in the context of global funding; dealers depend on each other (incestuous) to lay off the risks of conducting regular functions. That’s what made 2008 (and the other Euro$ squeezes) so pernicious; the tendency of one bank to pull back immediately weakens the whole system. Redundancies, or what are thought to be redundancies, become bottlenecks.

It takes a whole lot to stand in front of uncertainty and fill the void (or what central banks are supposed to do, but can’t). In the two weeks before the Brexit referendum in late June 2016, the close election indicated a wildly unpredictable outcome. Liquidity started to become scarce.

For money dealers, if you do provide funding where do you lay off risk? Or do you take on risk yourself?

The cross-market nature of our product set allows us to offer better liquidity to clients than if we were simply showing a price and trying to find the exact offset in the market. If we see greater depth in the forwards market than the rates market, we may choose to hedge a client forward trade with a rates trade. Warehousing this basis risk between the two markets allows us to offer the best liquidity to clients and minimise our execution footprint.

I’ll translate for Beth Hammack, at the time she gave this quote Goldman’s head of global repo and short-term macro. Goldman took on the risks of funding uncertainty (warehouse) because they saw an opportunity in doing so. Even after Brexit, Goldman was providing dollar liquidity in London absorbing by some accounts massive risk (some reported with DV01 of £1 million) to do so.

Mrs. Hammack chalked it up to her unit’s creativity and more expansive mandate. In end, the “bank” used its balance sheet capacities because they were betting on reflation. Whatever ultimately the consequences of Brexit, a booming global economy would make up any difference. Time was a key component, as one dealer counterparty (borrower) admitted.

A senior member of the UK bank’s treasury team credits Goldman’s proactive approach, willingness to provide capital – particularly for the cross-currency swaps – and the set-up of its short-term macro group for the success of the trades.

For that they were celebrated – in January 2017. As noted several times last week, things are quite different in February 2019 for Goldman. The willingness to provide balance sheet capacities in these sorts of FICC maneuvers has suddenly disappeared. What changed between then and now?

Reflation, obviously. How many times over the last three months of 2018 did dollar-starved counterparties look to Goldman for a reasonable lifeline? How many times did the “bank” get creative and instead set up the short-term macro group for expensive missteps? Too many, clearly.

Mrs. Hammack was promoted for her efforts, moved upstairs long before whatever specifically might have gone wrong in December. Now the firm’s global Treasurer, she is also co-chair of the Firmwide Finance Committee. Having obtained a degree from Stanford in Quantitative Economics, she fits right in.

Not only does she sit in a very high position within her firm, Mrs. Hammack had been named the Chair of the Treasury Borrowing Advisory Committee (TBAC). This latter group is made up of Wall Street bankers who advise the US Treasury department as to its funding and debt servicing requirements.

About two weeks ago, in her capacity as Chair Mrs. Hammack wrote to Treasury Secretary Mnuchin reporting on the committee’s recent work. It’s the usual stuff; strong economy but a lot of debt. It’s a long report, but I stand by my summary. The usual Economist talking points.

What worries the TBAC the most is, because of the strong economy, there may not be enough demand for UST’s. Yes, she wrote this letter not even two weeks ago.

The presenting member estimated borrowing needs to exceed $12 Trillion without factoring in the possibility of a recession which would pose a unique challenge for Treasury over the coming decade. Additionally, given stagnation in international reserves, there is likely an increased need for this debt to be financed domestically. This blue sky discussion, in the context of the optimal debt model, focused on the need to expand demand, while preserving the key tenets of regular and predictable issuance at the lowest cost to taxpayers over time.

China is selling, for reasons she very obviously doesn’t understand, the US economy will still be booming, and so the Secretary has quite the problem on his hands. It is, apparently, always reflation for Economists.

A recession would certainly pose a unique problem, but not to the Treasury Department’s debt function. This is the very thing that the interest rates have nowhere to go but up crowd never seem to register; financial participants, including Goldman Sachs at times like these, are heavy into buying and hoarding UST’s because the US government’s fiscal problems are way, way off over the horizon.

Whether the federal government ever is held to account for its massive accumulated debt is just too far away to matter right now. The call from BONY Mellon could be tomorrow. You better have collateral on hand before the phone ever starts ringing. It seems like someone who ran global repo for a major bank would appreciate the real logistics of the repo (and derivative) books at major banks. Then again, Stanford degree in Quantitative Economics.

There is, however, an often serious disconnect between “running” the repo desk and actually running the repo desk. I’ve run across this disparity quite a lot; big bank management is very often made up of either formal Economists or those who are dazzled by the quant capabilities of formal Economists. Traders, those who see the real world, and are held to account for being creative under an expansive mandate when reflation “unexpectedly” disappears, might end up doing something altogether different.

In other words, a senior official at Goldman is openly worried about demand for UST’s when in every likelihood the desks at Goldman are going to (keep) fill(ing) it. Mrs. Hammack steadfastly adheres to reflation, actually way beyond reflation to this unbelievably booming economy of her specific description. Who was it that was hedging deflation/recession risks while she was writing this report? The very bank burned on her reflation.

Long before the federal government ever has to worry about running out of bidders for its paper, it is going to have to deal with the economic fallout of still another episode where (global) monetary capacities have been neutralized by the same expectations for recovery and growth falling apart. That’s political not financing risk. Economists are the last to figure this out. Even long after the banks have equalized to a very different perception. 

Published:2/12/2019 5:55:07 PM
[Markets] Is Michelle Obama Going To Run For President In 2020?

Authored by Michael Snyder via The End of The American Dream blog,

When she made a surprise appearance at the Grammy Awards on Sunday night, the entire auditorium went into a “spontaneous shrieking hysterical meltdown” when she began to speak.

She is the most admired woman in America by a very wide margin, and she is married to the most admired man in America. She released her critically-acclaimed memoir “Becoming” in November, and here we are in February and it is still the best selling book on Amazon. Her national book tour has been filling sports stadiums all over the nation, and Democrats all across America are buzzing about the possibility that Michelle Obama could run for president in 2020.

But she has always insisted that she will never do it. In fact, she has made statements like this one time after time…

“I’ve never had the passion for politics. I just happened to be married to somebody who has the passion for politics, and he drug me kicking and screaming into this arena.”

So that is the end of the matter, right?

Unfortunately, in politics you can never trust what people say, and it is much more important to watch what they do.

In recent months, Michelle Obama has been put center stage time after time while her husband has faded into the background. Suddenly, Michelle Obama seems like she is the biggest rock star in America, and there are only two reasons why this would be happening.

Either she wants to capitalize on her fame and make as much money as possible, or she is secretly plotting to run for president of the United States.

And it is entirely possible that she won’t run. Ultimately, all of the motivational pablum in her book and her national tour could be setting the stage for her to become the next Oprah. She definitely doesn’t seem content to drift quietly into retirement, and it is quite clear that she wants to do something.

Without a doubt, a career in television would be appealing, but my gut tells me that she has her eyes on an even bigger prize.

I have a feeling that events are being carefully orchestrated for her to become the “reluctant hero” that will step in to save the day for the Democrats in 2020. And judging by the reaction at the Grammy Awards last night, the left would get behind her in a heartbeat...

At last night’s Grammy Awards in Los Angeles, host Alicia Keys brought a quartet of very famous women onto the stage and introduced them one-by-one to the crowd.

Lady Gaga, Jennifer Lopez and Jada Pinkett Smith all got varying degrees of warm ovations.

But the fourth lady sent the whole place into spontaneous shrieking hysterical meltdown.

In fact, NBC News reported that she received a “hero’s welcome” and that she cut off the applause once it reached 25 seconds…

Many in the audience didn’t immediately seem to pick up on Obama’s appearance, but she was quickly interrupted when she began speaking, making it only as far as “From the Motown records I wore out on the South Side …” before the crowd stood and loudly cheered for 25 seconds.

“All right — we got a show to do,” she said as she tried to wave the audience to quiet down.

No other Democrat that is running for president or that is thinking of running for president can elicit that sort of passionate response.

And let us not forget that Michelle Obama’s book is outselling every other political book in modern history, including all of the books written by her husband. The following comes from CNN

The inspirational memoir by the former first lady has been on sale for more than two months, yet it is still No. 1 on Amazon’s constantly updated list of best-selling books.

Amazon said “Becoming” enjoyed the longest streak at No. 1 for any book since “Fifty Shades of Grey” came out in 2012.

No political tome or public figure’s memoir has ranked No. 1 for as long as “Becoming,” according to data the company provided to CNN Business.

I just checked, and “Becoming” is still number one right now.

That is an incredible achievement.

Even if Michelle Obama does not want to run for president, top Democrats may really start twisting her arm as we get deeper into this election season. Because even though more than 20 Democrats may ultimately jump into the race, all of them are losers.

The one guy who has a little bit of buzz around him is Beto O’Rourke, and he thought that it would be a good idea to hold a rally on the border on the same day when Trump was holding one. Well, only a few hundred people showed up for Beto, but tens of thousands showed up for Trump

“There has never been anything like this in the history of our country. We have to understand that. There has never been. If you would say as an example, that tonight 69,000 people signed up to be here. Now the arena holds 8,000. And thank you, fire department. They got in about 10,000. Thank you, fire department. Appreciate it. But if you want to really see something, go outside. Tens of thousands of people are watching screens outside.

“And we were all challenged by a young man who lost an election to Ted Cruz. And then they said you know what? Hey, you are supposed to win in order to run. By the way, we, I, we, I’m 1 for 1. Think of it. We had one election. We won. Now we’re gonna be 2 for all and everything’s gonna be perfect. But a young man who has got very little going for himself except he has a great first name. He challenged us. So we have let’s say 35,000 people tonight. And he has 200 people, 300 people. Not too good.”

“What I would do is, I would say, that may be the end of this presidential bid.”

If you are going to win a presidential election, it really helps to be a rock star, and Trump is a rock star.

The Democrats need their own rock star, and the only one that fits the bill is Michelle Obama.

At this point, many Democrats deeply dislike Hillary Clinton, but they remember the Obama years very fondly. When Barack Obama left office, he had a 59 percent approval rating, and that number is much higher than anything Trump has been able to achieve over the last year…

Obama left office with a 59 percent approval rating and a 37 percent disapproval rating, according to Gallup.

In late January, the Gallup poll ratings for President Trump were the exact inverse of Obama’s numbers — 59 percent disapproval and 37 percent approval.

If Michelle Obama decides to run, she will win the Democratic nomination.

And without a doubt, she would be Donald Trump’s toughest potential opponent in 2020 by a very wide margin.

But will she do it?

Only time will tell, but the calls for her to run are starting to become louder with each passing day.

Published:2/12/2019 5:28:27 PM
[Markets] New Mexico Sheriffs Refuse To Enforce New 'Unconstitutional' Gun Control Bills

Authored by 'Dagny Taggart' via The Organic Prepper blog,

New Mexico has a new governor, and she really doesn’t like guns.

Michelle Lujan Grisham, a Democrat, was sworn into office on January 1, replacing pro-gun Republican Susana Martinez.

In early December, the National Rifle Association (NRA) warned the citizens of New Mexico to expect “unprecedented attacks” on their Constitutional rights.

While the New Mexico Legislature will not convene for its 60-day Regular Session until January 15, lawmakers can start prefiling bills on December 17.  You will see unprecedented attacks on your Second Amendment rights from the word go.  Your NRA-ILA will alert you to bill numbers and provide links to the content of legislation as it becomes available.  But in the meantime, we want to share with you what we already know is coming.

Expect anti-gun politicians to introduce a slew of so-called “common-sense gun measures” — a misleading phrase that gun control activists use in hopes that the public and the media will avoid questioning the bills’ enforceability, efficacy, intrusiveness or necessity. (source)

Unfortunately, the NRA’s prediction was correct.

Democrats in New Mexico’s state legislature are already rushing to expand gun control.

As of the time of this writing, six bills have been filed.

Here’s a summary of each of the six bills.

House Bill 8:  This “universal background check” legislation, sponsored by Representative Debra Sarinana, would ban all private firearms sales between law-abiding individuals.

The state House approved HB 8 last week, which aims to make it a misdemeanor crime to sell or transfer a gun in a private transaction without a background check performed by a third party. A Senate committee has passed their own version of the bill, slammed by gun rights groups, in a party-line vote. (source)

House Bill 35: This bill, sponsored by Representative Miguel Garcia, would require gun dealers to pay a $200 fee so that the New Mexico could screen every gun coming into their inventory for “potential theft.”

House Bill 40: Also sponsored by Representative Miguel Garcia, this legislation would require criminal records checks on private firearms sales at gun shows. Gun grabbers tend to see gun shows as a particular threat, even though studies show that they are not a source of guns used by criminals. This bill – and HB 8 – would ban many or all private gun sales, and set the stage for a registry of gun owners.

Perhaps the most disturbing of the six bills is House Bill 83.

Have you heard of “red flag” gun confiscation laws?

Officially called Extreme Risk Protection Orders (ERPO), “red flag” laws permit police, healthcare providers, or family members to petition a state court to order the temporary removal of firearms from a person who may present a danger to others or themselves. To date, fourteen states and the District of Columbia have red flag laws.

Here’s a chilling explanation of what House Bill 83 would allow.

Under section 5, any law enforcement personnel can ask a court to issue an order stripping any New Mexican of his Second, Fourth, Fifth, and Fourteenth Amendment rights. It wouldn’t even take an “ex parte” secret court proceeding; the request could be made by E-MAIL.

Under section 6, an angry ex-girlfriend can convene a “secret court” (ex parte proceeding) to strip a gun owner of his Second, Fourth, Fifth, and Fourteenth Amendment rights — without giving the gun owner the opportunity to tell his side of the story to the “secret court.” (source)

In October 2018, Maryland’s red flag law went into effect. Less than a month later, the law claimed its first victim.

Gary J. Willis, a 61-year-old Maryland resident, was killed by police when they showed up at his home at 5 am to serve him with a court order requiring that he surrender his guns.

Anne Arundel County Police said Willis answered the door with a gun in his hand. He initially put the gun down by the door, but “became irate” when officers began to serve him with the order and picked up the gun again, police said.

Sgt. Jacklyn Davis, a police spokeswoman, said “A fight ensued over the gun.” Police claim that as one of the officers struggled to take the gun from Willis, the gun fired but did not strike anyone. Then, the other officer fatally shot Willis, who died at the scene. Neither officer was injured.

Davis said she did not know who had sought the protective order against Willis.

But Michele Willis, the victim’s niece, said this was a case of “family being family.” (source)

From October 1 to December 31, 302 petitions were filed across the state. A majority of the red flag orders were filed by family members or household members, primarily about mental health concerns, with others being placed by law enforcement officials or health professionals, according to the Associated Press. Less than half reached a final stage in which the accused was not allowed to have a gun for at least a year.

House Bill 87: This legislation would impose a gun ban on persons committing crimes as minor as damage to property. It expands the state’s “prohibited person” firearm law by incorporating federal firearm disqualifications. For example, it would prohibit individuals convicted of certain domestic violence misdemeanor crimes or who are subject to a domestic violence protective order from purchasing or possessing a firearm, with violations being a criminal offense. But, the bill goes beyond the prohibited categories in federal law in significant ways, as the NRA explains:

The state law definition of “household member” – unlike federal law – specifically includes a person who is or has been a continuing personal relationship, which applies to dating or intimate partners who have never lived together. The bill would include, as firearm-prohibiting offenses, nonviolent misdemeanors with no physical contact between the parties (like harassment by telephone or email, or criminal damage to the property or jointly owned property of a “household member”). Unlike federal law, this bill would require anyone subject to a protective order to surrender any firearms they own, possess, or control to law enforcement within 48 hours of the order. Not only does this bill impose a mandatory surrender, it authorizes law enforcement to seize any guns that are in plain sight or are discovered pursuant to a lawful search. Similar legislation had passed the Legislature in 2017 but was vetoed by Gov. Susana Martinez. Significantly, the 2017 legislation contained other options for affected parties to comply with the firearm surrender requirement, including storing their guns with licensed firearm dealers, or transferring the guns to a qualified third party. These key alternatives are not contained in this bill. (source)

House Bill 130: This bill would potentially make criminals of people who keep loaded firearms for self-defense. Sponsored by Representative Linda Trujillo, if signed into law, gun owners would be held criminally and civilly liable if a child gains unsupervised access to an unsecured firearm. But as the NRA points out, “New Mexico already has a first-degree felony child abuse statute on the books to hold adults accountable for putting children’s lives or health at risk in any manner. The tools exist to charge and prosecute parents or guardians in appropriate cases. Education is the key to protecting gun owners and their kids, not a state mandate on how one stores a firearm in his or her home.”

These bills are facing opposition from a powerful force: the Sheriffs.

Thankfully, most of New Mexico’s sheriffs are opposed to these gun control bills. Of the 33 sheriffs in the state, 29 have voiced disapproval of the package of anti-gun legislation by issuing a declaration through the state sheriffs’ association, stating that the “rush to react to the violence by proposing controls on guns is ill-conceived and is truly a distraction to the real problems proliferating violence in our counties and our state.”

CBS 7 spoke with Lea County Sheriff Corey Helton, who explained why he objects to the proposed legislation.

“You’re just taking guns out of law-abiding citizen’s hands. This is not going to affect the criminals out there. They’re going to be able to get guns and they do not follow the law.” Helton added that there are enough effective laws on the books and these new measures are either redundant or unconstitutional.

“I’m proud to say I’m a constitutional sheriff and I’m just not going to enforce an unconstitutional law,” Helton said.

“My oath prevents me from doing that.”

Big 2 News also spoke with Sheriff Helton about the proposed laws:

Similar gun control measures are going to spread like wildfire across America.

Did you catch what Caleb Califano, the reporter, says at the end of that video? He mentions that Helton said, “these introduced gun control bills are a trend that will continue, not just in New Mexico, but all around the country.”

Speaking of that, in Texas – of all places – red flag gun confiscation legislation may be coming, according to a February 6 alert posted by Gun Owners of America.

Governor Abbott announced his “emergency” agenda items Tuesday and included school safety with an emphasis on “mental health.” While no bills have been specified yet, this could easily include items such as “red flag” type legislation that we have been fighting all across the country that allows for gun confiscation simply because a judge decides that you might misuse them in the future. (source)

Recently, Washington state introduced bills for some of the strictest gun laws in the country, and a few law enforcement officers there publicly vowed not to enforce the new unconstitutional gun laws. In The REAL Resistance: Sheriffs in Washington State REFUSE to Enforce Unconstitutional Gun Laws, Daisy Luther made a powerful point:

Legally speaking, our county sheriffs are the last line of defense in the battle for gun rights.

As we have stated before, unconstitutional gun law ideas seem to spread from one state to another like some kind of insidious virus.

This is just the beginning.

H/T to

Published:2/12/2019 3:56:20 PM
[worldNews] Hungarian scientists protest against government plans to streamline Academy Hungarian scientists held books above their heads as they protested on Tuesday against government plans to reorganize the Hungarian Academy of Sciences' research and funding to try to reap more economic benefits.
Published:2/12/2019 10:57:17 AM
[Markets] Making Globalism Great Again - Did Trump Fold To The Deep State?

Authored by CJ Hopkins via The Unz Review,

Maybe Donald Trump isn’t as stupid as I thought. I’d hate to have to admit that publicly, but it does kind of seem like he has put one over on the liberal corporate media this time. Scanning the recent Trump-related news, I couldn’t help but notice a significant decline in the number of references to Weimar, Germany, Adolf Hitler, and “the brink of fascism” that America has supposedly been teetering on since Hillary Clinton lost the election. I googled around pretty well, I think, but I couldn’t find a single editorial warning that Trump is about to summarily cancel the U.S. Constitution, dissolve Congress, and proclaim himself Führer. Nor did I see any mention of Auschwitz, or any other Nazi stuff … which is weird, considering that the Hitler hysteria has been a standard feature of the official narrative we’ve been subjected to for the last two years.

So how did Trump finally get the liberal corporate media to stop calling him a fascist? He did that by acting like a fascist (i.e., like a “normal” president). Which is to say he did the bidding of the deep state goons and corporate mandarins that manage the global capitalist empire … the smiley, happy, democracy-spreading, post-fascist version of fascism we live under.

I’m referring, of course, to Venezuela, which is one of a handful of uncooperative countries that are not playing ball with global capitalism and which haven’t been “regime changed” yet. Trump green-lit the attempted coup purportedly being staged by the Venezuelan “opposition,” but which is obviously a U.S. operation, or, rather, a global capitalist operation. As soon as he did, the corporate media immediately suspended calling him a fascist, and comparing him to Adolf Hitler, and so on, and started spewing out blatant propaganda supporting his effort to overthrow the elected government of a sovereign country.

Overthrowing the governments of sovereign countries, destroying their economies, stealing their gold, and otherwise bringing them into the fold of the global capitalist “international community” is not exactly what most folks thought Trump meant by “Make America Great Again.” Many Americans have never been to Venezuela, or Syria, or anywhere else the global capitalist empire has been ruthlessly restructuring since shortly after the end of the Cold War. They have not been lying awake at night worrying about Venezuelan democracy, or Syrian democracy, or Ukrainian democracy.

This is not because Americans are a heartless people, or an ignorant or a selfish people. It is because, well, it is because they are Americans (or, rather, because they believe they are Americans), and thus are more interested in the problems of Americans than in the problems of people in faraway lands that have nothing whatsoever to do with America. Notwithstanding what the corporate media will tell you, Americans elected Donald Trump, a preposterous, self-aggrandizing ass clown, not because they were latent Nazis, or because they were brainwashed by Russian hackers, but, primarily, because they wanted to believe that he sincerely cared about America, and was going to try to “make it great again” (whatever that was supposed to mean, exactly).

Unfortunately, there is no America. There is nothing to make great again. “America” is a fiction, a fantasy, a nostalgia that hucksters like Donald Trump (and other, marginally less buffoonish hucksters) use to sell whatever they are selling … themselves, wars, cars, whatever. What there is, in reality, instead of America, is a supranational global capitalist empire, a decentralized, interdependent network of global corporations, financial institutions, national governments, intelligence agencies, supranational governmental entities, military forces, media, and so on. If that sounds far-fetched or conspiratorial, look at what is going on in Venezuela.

The entire global capitalist empire is working in concert to force the elected president of the country out of office. The US, the UK, Canada, France, Germany, Spain, Austria, Denmark, Poland, the Netherlands, Israel, Brazil, Peru, Chile, and Argentina have officially recognized Juan Guaido as the legitimate president of Venezuela, in spite of the fact that no one elected him. Only the empire’s official evil enemies (i.e., Russia, China, Iran, Syria, Cuba, and other uncooperative countries) are objecting to this “democratic” coup. The global financial system (i.e., banks) has frozen (i.e., stolen) Venezuela’s assets, and is attempting to transfer them to Guaido so he can buy the Venezuelan military. The corporate media are hammering out the official narrative like a Goebbelsian piano in an effort to convince the general public that all this has something to do with democracy. You would have to be a total moron or hopelessly brainwashed not to recognize what is happening.

What is happening has nothing to do with America … the “America” that Americans believe they live in and that many of them want to “make great again.” What is happening is exactly what has been happening around the world since the end of the Cold War, albeit most dramatically in the Middle East. The de facto global capitalist empire is restructuring the planet with virtual impunity. It is methodically eliminating any and all impediments to the hegemony of global capitalism, and the privatization and commodification of everything.

Venezuela is one of these impediments. Overthrowing its government has nothing to do with America, or the lives of actual Americans. “America” is not to going conquer Venezuela and plant an American flag on its soil. “America” is not going to steal its oil, ship it “home,” and parcel it out to “Americans” in their pickups in the parking lot of Walmart.

What what about those American oil corporations? They want that Venezuelan oil, don’t they? Well, sure they do, but here’s the thing … there are no “American” oil corporations. Corporations, especially multi-billion dollar transnational corporations (e.g., Chevron, ExxonMobil, et al.) have no nationalities, nor any real allegiances, other than to their major shareholders. Chevron, for example, whose major shareholders are asset management and mutual fund companies like Black Rock, The Vanguard Group, SSgA Funds Management, Geode Capital Management, Wellington Management, and other transnational, multi-trillion dollar outfits. Do you really believe that being nominally headquartered in Boston or New York makes these companies “American,” or that Deutsche Bank is a “German” bank, or that BP is a “British” company?

And Venezuela is just the most recent blatant example of the empire in action. Ask yourself, honestly, what have the “American” regime change ops throughout the Greater Middle East done for any actual Americans, other than get a lot of them killed? Oh, and how about those bailouts for all those transnational “American” investment banks? Or the billions “America” provides to Israel? Someone please explain how enriching the shareholders of transnational corporations like Raytheon, Boeing, and Lockheed Martin by selling billions in weapons to Saudi Arabian Islamists is benefiting “the American people.” How much of that Saudi money are you seeing? And, wait, I’ve got another one for you. Call up your friendly 401K manager, ask how your Pfizer shares are doing, then compare that to what you’re paying some “American” insurance corporation to not really cover you.

For the last two-hundred years or so, we have been conditioned to think of ourselves as the citizens of a collection of sovereign nation states, as “Americans,” “Germans,” “Greeks,” and so on. There are no more sovereign nation states. Global capitalism has done away with them. Which is why we are experiencing a “neo-nationalist” backlash. Trump, Brexit, the so-called “new populism” … these are the death throes of national sovereignty, like the thrashing of a suffocating fish before you whack it and drop it in the cooler. The battle is over, but the fish doesn’t know that. It didn’t even realize there was a battle until it suddenly got jerked up out of the water.

In any event, here we are, at the advent of the global capitalist empire. We are not going back to the 19th Century, nor even to the early 20th Century. Neither Donald Trump nor anyone else is going to “Make America Great Again.” Global capitalism will continue to remake the world into one gigantic marketplace where we work ourselves to death at bullshit jobs in order to buy things we don’t need, accumulating debts we can never pay back, the interest on which will further enrich the global capitalist ruling classes, who, as you may have noticed, are preparing for the future by purchasing luxury underground bunkers and post-apocalyptic compounds in New Zealand. That, and militarizing the police, who they will need to maintain “public order” … you know, like they are doing in France at the moment, by beating, blinding, and hideously maiming those Gilets Jaunes (i.e., Yellow Vest) protesters that the corporate media are doing their best to demonize and/or render invisible.

Or, who knows, Americans (and other Western consumers) might take a page from those Yellow Vests, set aside their political differences (or at least ignore their hatred of each other long enough to actually try to achieve something), and focus their anger at the politicians and corporations that actually run the empire, as opposed to, you know, illegal immigrants and imaginary legions of Nazis and Russians. In the immortal words of General Buck Turgidson, “I’m not saying we wouldn’t get our hair mussed,” but, heck, it might be worth a try, especially since, the way things are going, we are probably going end up out there anyway.

Published:2/11/2019 8:51:04 PM
[World] [Eugene Volokh] Court Reverses Order That Barred Former Church Member from Saying Anything About Pastor

The order, entered under the Illinois Stalking No Contact Order Act, barred Chester Wilk from "communicating, publishing or communicating in any form any writing naming or regarding [Pastor Eric Flood], his family or any employee, staff or member of the congregation of South Park Church in Park Ridge."

In Flood v. Wilk, decided Thursday by the Appellate Court of Illinois, a trial court had found that respondent Wilk had engaged in stalking of petitioner Flood—who had been Wilk's pastor at South Park Church—and issued an injunction under the Illinois Stalking No-Contact Order Act. That injunction, among other things, barred respondent from

communicating, publishing or communicating in any form any writing naming or regarding [petitioner], his family or any employee, staff or member of the congregation of South Park Church in Park Ridge.

The Appellate Court held—in my view, correctly—that this provision violates the First Amendment:

"[C]ontent-based laws, which target speech based on its communicative content, are presumed to be invalid." People v. Relerford, 2017 IL 121094, ¶ 32. When they silence protected speech, as this one does, they must survive the rigors of strict scrutiny. Few content-based restrictions ever do. "Government regulation of speech is content-based if a law applies to particular speech because of the topic discussed or the idea or message conveyed."

Since the trial court's order in the instant case targeted respondent's speech based on its subject matter—the church or its members—it would be considered a content-based restriction and presumptively prohibited. An injunction that prohibits respondent from writing anything at all about his pastor or any other member of his church congregation—whether flattering or unflattering, fact or opinion, innocuous or significant, and regardless of the medium of communication—certainly would not be that rare case that survives strict scrutiny. It is all but impossible to imagine a factual record that would justify this blanket restriction on respondent's speech. Paragraph (b)(5) of the order is substantially and obviously overbroad, and it violates respondent's first-amendment right to free speech.

Our supreme court has noted that "the United States Supreme Court has recognized that certain 'historic and traditional' categories of expression do not fall within the protections of the first amendment, and content-based restrictions with regard to those recognized categories of speech gave been upheld." ... For instance, defamatory statements concerning petitioner would not be protected.

Similarly, threats made by respondent against the church or its congregants clearly would not be protected speech. "'True threats' encompass those statements where the speaker means to communicate a serious expression of an intent to commit an act of unlawful violence to a particular individual or group of individuals." ...

In the case at bar, respondent's writings directed at petitioner and his church demonstrated that he viewed himself as the recipient of "Divine Intervention" and had a "responsibility to use [his] accurate and supernatural information" to prove that "there is a God in heaven and a devil in hell." Respondent's writings also established that he viewed petitioner as "influenced by the devil" and as a "tool of the devil" and further established that he believed there was "spiritual warfare between good and evil" (emphases omitted) and that he was "compelled to fulfill [his] destiny which was predicted since [he] was a child."

Respondent also included handwritten notes on several of his writings, telling petitioner on one: "By now you should realize that I am not walking away from this matter. I hope you realize your mistake and do the right thing" and stating on another: "Do you realize that what you did was 9 years ago and I still have not given up on what you did?" Petitioner testified that these communications had occurred for 10 years and were increasing in frequency and that, when he received these communications, he feared for his safety and for the safety of his congregants. While the language used by respondent may not have been an explicit threat to harm petitioner, the context of respondent's communications shows the passage of a long period of time since the perceived slight; an escalation in the communications; references to "spiritual warfare between good and evil," where respondent was identifying himself as "good" and petitioner as "evil"; respondent's belief that he was "compelled to fulfill" his prophesied "destiny"; and the fact that petitioner—the listener—had a reaction of fear for his safety and for the safety of his congregants.

"[S]peech or writing used as an integral part of conduct in violation of a valid criminal statute" is [also] not constitutionally protected. Giboney v. Empire Storage & Ice Co., 336 U.S. 490, 498 (1949). " 'Where speech is an integral part of unlawful conduct, it has no constitutional protection.' " [But t]o fit within this narrow exception, this prohibited speech must be in furtherance of a separate crime—a crime other than the speech itself and one that the constitution allows the legislature to punish. An example would be a ban on advertising child pornography. The advertising itself is speech, but it is an "integral part" of the act of child pornography, a separate crime that may be validly prohibited, and because of that proximate link between the advertising speech and the separate crime, that speech may be prohibited, as well.

Here, the prohibited speech must be an integral part of the unlawful stalking in order to be unprotected. However, in this case, the trial court did not expressly find that respondent's comments rose to the level of posing a "true threat" to the physical safety of petitioner and his congregants. But without this link between the unprotected speech and a separate crime, the exception would swallow the first amendment whole: it would give the legislature free rein to criminalize protected speech, then permit the courts to find that speech unprotected simply because the legislature criminalized it. Our supreme court rejected exactly this misuse of the exception in Relerford, when the court found that the exception does not permit the legislature (or a court) to prohibit speech simply because it is distressing....

[There is] much conduct that is prohibited under the trial court's order that would be considered constitutionally protected. For instance, a letter to the editor that was published in the local newspaper would be prohibited under the order, yet it would be constitutionally protected. The trial court may not enjoin respondent from criticizing petitioner or his church, even though petitioner finds that criticism distressing. That criticism, circulated in respondent's leaflets, books, and other written media, is the principal target of the speech injunction in paragraph (b)(5) of the order. Respondent's speech, however, is protected by the first amendment, and any written criticism by respondent would be constitutionally protected.

Respondent's speech does not lose its protected status simply because it is distressing to petitioner. As Relerford emphasized, distressing speech is ubiquitous and unavoidable, both in everyday social interactions and when we are debating the topics of public concern at the core of the first amendment's protections. A business owner, for example, may well be distressed by speech criticizing his environmental practices, fearing that the speech could lead to a financially devastating boycott. However, that does not permit the legislature or a court to silence his critics.

Respondent has every right to criticize petitioner's ministry and his church more broadly. He has every right to argue that they have betrayed their commitments to marriage and family that the Christian faith requires of them. Respondent has every right to voice his opinion that his marriage would have survived if those commitments had been in place to support the marriage.

While the Act itself contains an exemption providing that "[s]talking does not include an exercise of the right to free speech or assembly that is otherwise lawful," the injunctive relief drafted by the trial court does not make clear that it applies only to otherwise unprotected speech, and by its broad terms, it would therefore prohibit constitutionally protected speech. Such content-based regulation "will be upheld only if necessary to serve a compelling governmental interest and narrowly drawn to achieve that end."

In the case at bar, as noted, the injunctive relief awarded by the trial court was broadly drafted to cover situations that would encompass constitutionally protected speech without any obvious rationale or factual basis for its scope. We therefore vacate that portion of the trial court's order in paragraph (b)(5) that states: "Respondent is prohibited from communicating, publishing or communicating in any form any writing naming or regarding [petitioner], his family, or any employee, staff or member of the congregation of South Park Church in Park Ridge, IL."

Respondent's proselytizing has no doubt distressed petitioner. Petitioner alleged in his petition that it has "raise[d] questions" among some of the letters' recipients about his own "credibility" and that of the church and that responding to their concerns has been, in his view, "an unwanted distraction and excessive waste of time." However, we cannot silence respondent when he is voicing protected criticism, no matter how much time, energy, or distress it costs petitioner. Even less can we silence respondent on the ground that his criticisms of petitioner may have gained some traction—as if we can shield petitioner from the need to answer allegations that, in the minds of some individuals, really do demand answers. That is viewpoint discrimination. See McCullen v. Coakley, 134 S. Ct. 2518, 2532-33 (2014) (speech prohibition that "favors one side in [a] *** debate" is viewpoint discrimination, "an egregious form of content discrimination" (Internal quotation marks omitted.)).

If you're interested in more details about respondent's past speech, which led to the order, here's an excerpt, though you might want to read the whole opinion:

On August 17, 2017, petitioner filed a petition alleging that there had been a significant increase in unwanted contact in the last two months by respondent towards petitioner that had caused increased anxiety to the staff of the church, the congregation, and the neighborhood. The petition set forth details of three separate incidents occurring between June 27 and August 6, 2017, all of which occurred at South Park Church. The first incident occurred on June 27, 2017, and consisted of respondent visiting the office of the church, where the staff "had previously been advised not to allow [him] entrance to the building." The receptionist notified a staff member, who went outside and asked respondent to leave. After giving the staff member a copy of his book, respondent left.

The second incident occurred on Sunday, July 2, 2017, and consisted of respondent distributing disparaging letters on the windshields of automobiles in the parking lot of South Park Church during one of its morning services. The next morning, petitioner reported the incident to the Park Ridge police.

The third incident occurred on Sunday, August 6, 2017, and consisted of respondent again distributing disparaging letters on the windshields of automobiles in the parking lot of South Park Church during its second worship service. A church member observed respondent distributing these letters and informed a staff member, who asked respondent to leave. In response, respondent "declared he had a right to be there until the staff person said she would call police."

In addition to the three specified incidents, the petition contained a "History" section detailing respondent's alleged conduct. In this section, petitioner alleged that "[respondent] has been attacking my reputation and the reputation of South Park Church (among many other people and organizations) for ten years. A letter was sent to [respondent] from the leadership of South Park Church in February, 2007, stating the following: 'Please do not call, visit, or write additional letters to us regarding the issues mentioned above.' Yet erratic contact has persisted for a decade." Petitioner alleged that this activity included (1) "[s]ending letters repeatedly to addresses of current and former members of South Park Church found in an old church directory," (2) "[s]ending unwanted emails to South Park Church staff with content parallel to his letters," (3) "[g]oing door to door to neighbors of South Park Church to deliver letters," (4) "[r]epeatedly asking for appointments with [petitioner] even though he [was] repeatedly told no and asked to cease all contact," and (5) "[d]istributing flyers in the parking lots of Walgreens at Devon/Talcott and Mariano's [at] Cumberland/Higgins."

As an example of one of the fliers in evidence that respondent distributed, one bears the heading "South Park Church and [petitioner] is a corrupt church which needs to be thoroughly exposed. Here's why." The flier claims that petitioner "is a disgrace to Christianity" because he refused to suggest marital counseling when respondent's wife left him after 40 years of marriage.

Respondent repeatedly referred to petitioner and his church as "corrupt" and used petitioner's conduct as an example of "how the devil gets into churches." For instance, in an August 6, 2017, letter, respondent stated that, due to petitioner's actions, respondent "was compelled to write and publish the book entitled, 'The devil's intervention into healthcare, politics, churches, courts and families.' " (Emphasis omitted.) Respondent also stated that petitioner "cannot be that stupid but he sure can be that influenced by the devil according to the Bible."

Respondent also explained how, as a child, "[he] had [his] entire future completely outlined in fine detail with over 20 predictions well over 60 years in advance with 100% accuracy and never once wrong." Respondent believed that the family friend who provided these predictions was his "guardian angel sent by God" and that "God gave [him] a glimpse into [his] future and a responsibility to use [his] accurate and supernatural information so [he] could realize that there is a God in heaven and a devil in hell."

These same sentiments appear in a July 2, 2017, letter, in which respondent also notes, with respect to the predictions: "I could not have gotten such fine detailed predictions without Divine Intervention, and I can back up every word I say here with a polygraph test. *** I received a gift which I can use to destroy any atheist in a debate with scientific proof that should satisfy the most hard-nosed scientist. I will challenge any atheist and I will clean their clock big time. That is if any is willing to challenge me. What I will be using is called the Science of Probability. Unfortunately some of our pastors have blinders on and can't see it. Maybe this message will open their eyes as I am compelled to fulfill my destiny which was predicted since I was a child. And believe me it will happen!" (Emphasis in original.)

On December 13, 2009, respondent sent a letter to "the entire staff at South Park Community Church," which included as enclosures correspondence between respondent and a California court, where respondent was apparently engaged in court proceedings concerning his estranged wife. One enclosure was entitled "Cover Letter" and included bullet points refuting his wife Ardith's claims: "1) Regarding Ardith's concern of my going to California"; "2) Regarding Ardith being fearful of me as having a mental illness"; "3) Regarding Ardith claiming I am talking about fulfilling prophesies"; "4) Ardith alleges that I said she is 'possessed' by the devil"; "5) Ardith alleged that I would 'fix' her"; "6) Ardith and her daughters keep insisting I am egotistical and narcissistic"; "7) Ardith alleges that I am Delusional"; "8) Ardith noted that South Park Church 'banned' me from going there"; "9) Regarding being 'unloved' by [respondent]"; "10) Regarding Ardith's accusations about [respondent] swearing"; and "11) [Respondent] claiming the devil is influencing the family." This communication to the California court also noted that one of respondent's daughters had obtained a restraining order against respondent, claiming that she "could not sleep nights and felt intimidated by her dad." The "family history" portion of the communication ended by stating: "The real message to be gotten here is that this is spiritual warfare between GOOD and EVIL. The facts speak for themselves in the eyes of God and reasonable minded people." (Emphasis in original.)

The petition also contained a section entitled "Effects of the Incidents on Petitioner," which provided that "[s]taff members and church members have expressed increased concern for the reputation of the church and increased anxiety about keeping our congregation safe. My family, our staff, and our church leaders are concerned for their own well-being as well as that of our congregation. The obsessive nature of the criticism makes us fear a future elevated response by [respondent] that could cause disruption of ministry or worse." Petitioner further alleged that "[t]here are many untrue statements made in the letters that discredit me. Though many people disregard the letters due to their bizarre and ranting nature, it also raises questions among others that undermine my credibility." Finally, petitioner alleged that "[e]very letter and visit by [respondent] is an unwanted distraction and excessive waste of time as we answer questions and respond to concerns."

Published:2/11/2019 5:50:36 PM
[Markets] "Get Over It!" Pepe Escobar Warns The 21st Century Will Be Asian

Authored by Pepe Escobar via The Asia Times,

The greatest merit of Parag Khanna’s new book, The Future is Asian, is to accessibly tell the story of a historical inevitability – with the extra bonus of an Asian point of view. This is not only a very good public service, it also blows out of the water countless tomes by Western “experts” pontificating about Asia from an air-con cubicle in Washington.

Asia hands from the West tend to be extremely protective of their extra-territoriality. In my case, I moved to Asia in 1994, and Singapore was my first base. In time I found out – along with some of my colleagues at Asia Times – nothing would ever compare to following the ever-developing, larger than life Asian miracle on the spot.

Khanna has always been in the thick of the action. Born in India, he then moved to the UAE, the West, and is now a resident in Singapore. Years ago we spent a jolly good time in New York swapping Asia on-the-road stories; he’s a cool conversationalist. His Connectography is a must read.

Khanna found a very special niche to “sell” Asia to the Western establishment as a strategic adviser – and is very careful not to ruffle feathers. Barack Obama, for instance, is only guilty of “half-heartedness”. When you get praise from Graham Allison, who passes for a Thucydides authority in the US but would have major trouble understanding Italian master Luciano Canfora’s Tucidide: La Menzogna, La Colpa, L’Esilio, you know that Khanna has done his homework.

Of course, there are a few problems. It’s a bit problematic to coin Singapore “the unofficial capital of Asia”. There’s no better place to strategically follow China than Hong Kong. And as a melting pot, Bangkok, now truly cosmopolitan, is way more dynamic, creative and, let’s face it, funkier.

In 1997 I published a book in Brazil titled 21st: The Asian Century, based on three years of non-stop on-the-road reporting. It came out only a few days before the Hong Kong handover and the collapse of the baht that sparked the Asian financial crisis – so the book’s argument might have been seen as passé. Not really; once the crisis was over, the development push by the Asian tigers was overtaken by China. And 10 years later, slightly before the Western-made global financial crisis, the road to the Asian Century was more than self-evident.

Khanna hits all the right tones and multiple overtones stating the case that the Asian century “will…” begin when Asia crystallizes into a whole greater than "the sum of its many parts”. It’s already happening, and it’s a wise choice to set the point of no return towards an Asia-led new world order at the first Belt and Road Initiative (BRI) summit in May 2017 in Beijing.

Yet throughout the book Khanna feels the need to take immense pain showing frightened Anglo-American readers that China won’t lead the Asian future; there will be no “Chinese tianxia, or harmonious global system guided by Chinese Confucian principles”.

And that offers room for references to the push by the US and its allies to “deter China”, or the push by “Japan, India, Australia and Vietnam” to “counter China aggression”. Not to mention credit to the pathetic notion of “clash of civilizations”. But, on a whole, Khanna nails it.

“By joining BRI, other Asian countries have tacitly recognized China as a global power – but the bar for hegemony is very high.”

No East and West

Within the scope of an article, and not a book, it’s possible to show that this epic story is not about hegemony, but connectivity.

First of all, there’s no East and West; as Edward Said has shown, this is essentially inherited from Eurocentrism and colonialism, starting way back when the Ancient Greeks situated the western borders of Asia in the eastern Mediterranean.

Asia, the term, comes from the ancient Assyrian assu – which means rising sun. A clear distinction between East and West was stamped by the end of the 3rd century, at the time of Diocletian, when the Roman empire was cut in half following a meridian from Dalmatia to Cyrenaica, a partition confirmed at the death of Theodosius 1 in 395 AD.

The East then organized itself around Constantinople while the West was divided and regarded as Europe, a distinct unity under Charlemagne (800 AD). What’s interesting is that in contrast with China – self-defined as the center of the world – neither the Roman Empire nor Islam saw themselves as such, admitting the existence of other quite populated worlds: China and India.

The notion of a “continent” only came up in the 16th century, based on the tri-partition Europe-Asia-Africa made by the Greeks in the Eastern Mediterranean, adopted by Judaism, Christianity and Islam, and ratified by the “discovery” of the New World: the Americas. So once again, “continent” is a Western invention.

Eurasia is essentially a giant, elliptical, unified space. Crack geographers tend to see it to the north – from Central Asia up to the northwest of India – as the realm of caravan routes, Silk Roads, cosmopolitan oases, steppes and deserts crisscrossed by nomads.

To the south, it’s a sort of monsoon “shawl” draped over a unique ocean; maritime routes through straits; and cosmopolitan ports and warehouses.

Southeast Asia enjoys a unique status, squeezed in a historical and cultural pincer movement between two major forces, constituted in an independent manner from one another as two major civilizations; India to the west and China to the northeast.

The inner logic of all this immense space is mutation, trade exchanges, and migrations. So Eurasia is essentially unified as two major “on the move” spaces; continental and steppe (on horseback), plus maritime (via navigation). Historically, between these two corridors, we find the creative hubs of civilizations and more durable empires: China, the Indian world, Persia/Iran, the Arab world, the Byzantine-Ottoman empire.

Hard node of history

In one of his exceptional books, French geographer Christian Grataloup conclusively shows how Eurasia is a geo-historic entity – exhibiting a “system of inter-relations from one end to another”. Yes, it’s all about connectivity, as the Chinese are stressing with the New Silk Roads or BRI.

Already by the 15th century, every society in Eurasia exhibited the same presence of cities, writing, monetary exchange. So it’s possible to conceive a common history, from the Mediterranean to Japan, for over two millennia. Grataloup’s intuition is breathtaking. “This is the hard node of world history”.

Historically, it’s all about the confluence of eastern routes in the north, the Silk Roads at the center, and southern routes, mostly the Spice Route. In the central segment of the major axis, decisive innovations occurred; the first villages, the first forms of agriculture, writing, the birth of the State. As the great Mongol caravan empire, built around the Silk Roads in the 13th century, fractured, while societies in the extremities of Eurasia developed maritime power.

Khanna offers myriad details on the key fact; that the Eurasian space is finally being rearranged, rebuilt via economic development, along transversal axes configured as economic corridors; the result of a modernization process that started in Japan in the second half of the 19th century to expand to all of East and Southeast Asia, then China, and finally India. The genius of the BRI project is to make it happen.

The Chinese ambition to be the economic leader of the Eurasia ensemble – by land and by sea – is a unique development in the region’s history, combining the continental approach of the Mongol empire of the steppes, or the Russia empire, with the maritime approach of the West, especially via the British Empire.

But contrary to Western imperialism, it’s all based on economy and culture. So, China will have a lot of work mastering the art of soft power. Time though is on the BRI side; the horizon is 2049 – not profits in the next quarter. Maritime routes in the north like the Arctic Silk Road, and via the South China Sea and Indian Ocean to the south, will envelop Eurasia, which will articulate itself in the center over high-speed rail and highway corridors of the New Silk Roads and the upgraded Trans-Siberian links.

They call it Euro-Asia in Beijing, and they call it Greater Eurasia in Moscow. The whole process is historically inexorable, already forging the future – call it Asian or Eurasian.

Published:2/10/2019 10:47:11 PM
[Markets] Why MMT (Ultimately) Doesn't Matter

Authored by Peter Earle via The American Institute for Economic Research,

Last year, internet searches for Modern Monetary Theory (MMT) numbered approximately 100 per month; in the years and decades before that, the weekly total searches numbered mostly in single digits. Yet in the first few weeks of this year, searches have topped 100 per day and seem to be on an uptrend. People who’ve never heard the term “chartalism” are speaking — and acting — as if a new and groundbreaking discovery has been made; “a new kind of science” in the realm of economics, situated neatly upon the doorsill of a new decade. It’s perplexing to see a theory which holds that governments can’t really go broke because they can always create more currency capture imaginations, if still largely on the periphery of discourse.

For years, Austrian School perspectives have been taken to task for failing to “predict” (which, in fact, they have and continue to). Yet MMT not only doesn’t predict anything; it fails to explain the state of nature better than existing, prevailing models. Social science, like its physical counterpart, advances by virtue of two key determinants: phenomenological explanations which are demonstrably superior to existing ones, and funerals. Even neoclassical economists, regularly critical of Austrian, monetarist and other views, hold that — as has been demonstrated in every era, within every culture, and upon every continent — bad monetary and/or fiscal policies ultimately result in economic breakdown and destitution.

Whether the rapid decline and ultimate disappearance of the individual propensity to hold a fiat currency are purely monetary, entirely psychological, or a combination of the two, the circumstances leading to it reappears consistently throughout history. Every one of the scores of known cases of hyperinflation dating back over 700 years bears witness to a reckless, breakneck campaign of money creation preceding it.

Blaming psychology for hyperinflationary episodes also, and far more ominously, hints at the same conclusion which virtually all collectivist governments come to after their starry-eyed schemes initially fail: that human nature, not the hubris that attends attempts to overthrow the fundamentals of supply and demand, is at fault. And thus that human beings, and not policy, needforceful readjustment.

Holding that inflation — of either the ‘vanilla’ or hyper- varieties — is overwhelmingly the product of wars or exogenous events is also wholly misleading. It is always and only the political reaction to exogenous events which determines economic outcomes.

Such an approach also bypasses the issue of the garden variety of inflationary outbreak. To be sure, while it would surely not be as ruinous nor as fast-acting as classic hyperinflation, a rise in inflation to a “mere” 8%, 15%, or 20% per annum would have a sizably adverse impact upon individuals living on fixed incomes, financial markets, and general economic calculation: the functioning of firms, markets for goods and services, and the financial choices of families, communities, and organizations.

Furthermore, MMT is invariably (and almost exclusively) invoked proximate to incomprehensibly expensive government program proposals: a so-called Jobs Guarantee (estimated cost approaching, and likely exceeding, $1T per year), “Medicare for All” (estimated cost: $32T over ten years), and a “Green New Deal” (estimated costs ranging from $7T to $13T to $49T to implement).

(Also: considering that MMT contemplates a “closed loop” whereby money is created and later taxed away, it is likely that any practical implementation will necessarily subsume cashlesseconomy diktats.)

Add to all of this the bunker mentality of many MMT proponents, who frequently refuse to discuss the assumptions upon which MMT operates by dismissing those who question them as disingenuous – and there is more than enough reason to suspect that MMT is not new, far from scientific, and explains nothing. It is at best a scientistic vehicle that exists only to provide an academic imprimatur for unlimited government spending.

Yet I’m not worried about MMT.

Actually, I am - a little. History demonstrates that betting against the willingness of people - Americans, specifically, who have the greatest record of fawning over political and economic views which defenestrate the very basis of the prosperity which gives both the leisure time and technological reach to permit intellectual flights of fancy - to embrace that which flies in the face of demonstrable evidence, is a sucker's bet.

One of the major dangers of powerful states - indeed, states in general - is that with a single vote or the stroke of a pen a lot of damage can be done. But any pain will only be temporary.

It comes down to one word: Bitcoin. Actually, I should be more specific: crypto.

At this very moment, there are hundreds of independent teams of developers in dorm rooms, garages, basements, apartments, rented offices, and other such locations working on both subtle tweaks to existing cryptocurrency issues and wholly new coins and assets: thousands, maybe tens of thousands of individuals, all over the world, silently but inexorably expanding the bounds within which individuals can extricate and divorce their personal lives from the inimical policy implementations of expanding states.

At ten years old, the list of places where Bitcoin — and crypto more generally — has been the single bulwark between people and utter ruin grows annually. As long ago as 2013, Bitcoin (then less than $100) surged as individuals banked in Cyprus used it to escape the bank levy — a ploy in which politicians explicitly sought to seize private deposits in order to paper over their policy errors and banks’ losses owing to them.

All across Africa, South America, and Asia — and regardless of Bitcoin's exchange rate at the time — the unbanked have, owing to the ubiquity of mobile and cell phone ownership, been able to engage in saving, consuming, remittances and entrepreneurialism despite previously insurmountable sanctions, financial surveillance, and fees associated with transfers, banking, etc.

In ZimbabweVenezuelaTurkey, and anywhere else that economic hardships have surfaced — over time, or overnight — Bitcoin and crypto more generally have given individuals the opportunity to safeguard their economic liberty and in some cases their very lives. In places where economic life is viable but burdensome, cryptocurrency access provides an outlet.

Time may prove this incorrect, but at present MMT seems to be little more than a pernicious, academically-garbed attempt to overcome the unwelcome (and repeatedly evinced) fact that governments are as tied to economic limits as firms and individuals are. But a more fundamental truth precedes this: if implemented, and whether at that time Bitcoin, another crypto issue, or another, yet-undiscovered innovation has surfaced, liberty will always find a way to triumph — even when the utopian plans of authoritarian regimes are briefly in control.

Published:2/9/2019 6:38:31 PM
[Markets] "There's A Lot Of Big Stuff Going On Right Now" - Observations On The "Purely Absurd" Markets

Authored by Jeffrey Snider via Alhambra Investment Partners,

Big Things: The Hoard Gets Bigger

I’ve observed a lot that’s purely absurd the last eleven years, trying hard to write up as much of it as I can. It’s worth the effort in terms of education but also to reveal what’s really going on. The catalog is too long to republish here in its entirety.

One of the most ridiculous anecdotes, however, was pieced together in March 2016. The dollar world was a smoldering wreck, and because of that global bond yields were still falling. Liquidity hedging was prevalent as anyone might honestly expect.

As a consequence, US primary dealers were hoarding UST’s coupons and bills. Their reported (net) holdings of these most prized instruments so very clearly rise and fall with each deflation/reflation cycle.

But there is no such thing according to the Fed narrative. There cannot be because four QE’s caused so much “money” to be “printed” something like that would be unthinkable – if it was ever the real thing it would reveal the whole corrupt nature of moneyless monetary policy. It didn’t matter the global downturn and how the US economy was pushed right up to the edge of recession, there was no liquidity problem in dollars they all said.

How, then, to explain what dealers were doing with all those UST’s?

As the world’s biggest bond dealers — including banks such as Bank of America Corp., Goldman Sachs Group Inc. and JPMorgan — struggled to get rid of the burgeoning pile of debt, the premium for the newest, easiest-to-trade Treasuries soared to the highest since 2011. The firms’ efforts to hedge all the Treasuries collecting on their balance sheets also roiled the futures market and a crucial corner of the financial system where traders lend and borrow securities overnight. [emphasis added]

The first business of any dealer is to warehouse securities; to purchase them in the primary market and then sell them off over time to brokerage customers. It is these dealers who buy at the federal government’s auctions in order to then distribute the bonds, bills, and notes out to the investing public.

That, of course, means they have to hold those bonds on balance sheet while the process plays out. It seems plausible that if the public doesn’t want to buy what’s being warehoused, including US government paper, the dealers will reluctantly have to hang on to, and finance, that paper.

But this was March 2016. The idea that dealers were in any way struggling to place UST’s was so very blatant nonsense. At the time I noted in reply:

The story has problems on both ends; to start with, why are dealers supposedly buying up UST inventory that they will only get stuck with? That has never been a money dealing function, as if there is ever great imbalance it is for dealers to manage but largely get out of the way and let price action take care of it. In other words, primary dealers would likely have been only buying enough to maintain orderly markets, not so much that they suddenly became bloated warehouse units of unhedged risk. It strains credibility already.

The second part is even worse. These banks are supposed to have had trouble selling UST’s during a period when everyone was buying them?

If anything, demand for treasuries was overwhelming. Dealers holding such a large portion back meant only one thing – a conscious choice about their own books. But QE and Janet Yellen’s “resilient” financial system. 

That’s why dealer holdings follow the rhythm of the Euro$ squeezes. When it gets bad, they purposefully hold on to what’s in inventory because of perceived liquidity risks arising from all the other things dealers do (repo and FX just the start). After Bear, AIG, Lehman, et al, nobody’s going to be so unprepared for when BONY Mellon comes calling for collateral.

As noted during last December’s chaos, this dealer hoarding took on absolutely immense proportions. It’s like nothing we’d seen before, even during 2008 (admittedly, dealers were still learning about the downside of illiquidity and prudent matching leading up to that big week in September). As of last week, Jan 30, reported holdings (therefore hoarding) surpassed the record set the week of Christmas (when every market was a huge mess, except UST’s).

Are primary dealers having trouble selling their accumulated stock again? Of course not. Global bond markets are on fire, even more so than stocks. There is huge demand for pristine collateral types.

Not only that, both the eurodollar futures and UST curves exhibit absolutely brutal liquidity hedging going on. While everyone is fixated on UST 2s10s, the space between the 12-month bill and 5-year note has gone bananas – during the exact same timeframe dealer hoarding skyrocketed.

Sorry Bill Dudley, massive liquidity risks everywhere – and therefore an overwhelming number of potential buyers for what dealers are holding but won’t sell. Record hoarding. Even more hoarding to start February 2019.

Falling LIBOR and bond yields, confused and dazed central bankers, greater distortions to the major curves; as I wrote yesterday:

What does it say about the state of the world when those hugely contradictory expectations are being fulfilled? Rate cuts, official rate cuts, may be closer than you think.

There’s a lot of big stuff going on right now.

Or, sure, maybe there really is no one to buy all these UST’s piling up on exposed dealer balance sheets. On a totally unrelated note, I’m sure, interesting time for Bill Gross’ retirement announcement.

Published:2/9/2019 4:38:10 PM
[Markets] Venezuela: America's 68th Regime-Change Disaster

Authored by by Medea Benjamin and Nicolas J. S. Davies via,

In his masterpiece, Killing Hope: US Military and C.I.A. Interventions Since World War II, William Blum, who died in December 2018, wrote chapter-length accounts of 55 US regime change operations against countries around the world, from China (1945-1960s) to Haiti (1986-1994). Noam Chomsky’s blurb on the back of the latest edition says simply, “Far and away the best book on the topic.” We agree. If you have not read it, please do. It will give you a clearer context for what is happening in Venezuela today, and a better understanding of the world you are living in.

Since Killing Hope was published in 1995, the US has conducted at least 13 more regime change operations, several of which are still active: Yugoslavia; Afghanistan; Iraq; the 3rd US invasion of Haiti since WWII; Somalia; Honduras; Libya; Syria; Ukraine; Yemen; Iran; Nicaragua; and now Venezuela.

William Blum noted that the US generally prefers what its planners call “low intensity conflict” over full-scale wars. Only in periods of supreme overconfidence has it launched its most devastating and disastrous wars, from Korea and Vietnam to Afghanistan and Iraq. After its war of mass destruction in Iraq, the US reverted to “low intensity conflict” under Obama’s doctrine of covert and proxy war.

Obama conducted even heavier bombing than Bush II, and deployed US special operations forces to 150 countries all over the world, but he made sure that nearly all the bleeding and dying was done by Afghans, Syrians, Iraqis, Somalis, Libyans, Ukrainians, Yemenis and others, not by Americans. What US planners mean by “low intensity conflict” is that it is less intense for Americans.

President Ghani of Afghanistan recently revealed that a staggering 45,000 Afghan security forces have been killed since he took office in 2014, compared with only 72 US and NATO troops. “It shows who has been doing the fighting,” Ghani caustically remarked. This disparity is common to every current US war.

This does not mean that the US is any less committed to trying to overthrowing governments that reject and resist US imperial sovereignty, especially if those countries contain vast oil reserves. It’s no coincidence that two of the main targets of current US regime change operations are Iran and Venezuela, two of the four countries with the largest liquid oil reserves in the world (the others being Saudi Arabia and Iraq).

In practice, “low intensity conflict” involves four tools of regime change: sanctions or economic warfare; propaganda or “information warfare”; covert and proxy war; and aerial bombardment. In Venezuela, the US has used the first and second, with the third and fourth now “on the table” since the first two have created chaos but so far not toppled the government.

The US government has been opposed to Venezuela’s socialist revolution since the time Hugo Chavez was elected in 1998. Unbeknownst to most Americans, Chavez was well loved by poor and working class Venezuelans for his extraordinary array of social programs that lifted millions out of poverty. Between 1996 and 2010, the level of extreme poverty plummeted from 40% to 7%. The government also substantially improved healthcare and education, cutting infant mortality by half, reducing the malnutrition rate from 21% to 5% of the population and eliminating illiteracy. These changes gave Venezuela the lowest level of inequality in the region, based on its Gini coefficient.

Since Chavez’ death in 2013, Venezuela has descended into an economic crisis stemming from a combination of government mismanagement, corruption, sabotage and the precipitous fall in the price of oil. The oil industry provides 95% of Venezuela’s exports, so the first thing Venezuela needed when prices crashed in 2014 was international financing to cover huge shortfalls in the budgets of both the government and the national oil company. The strategic objective of US sanctions is to exacerbate the economic crisis by denying Venezuela access to the US-dominated international financial system to roll over existing debt and obtain new financing.

The blocking of Citgo’s funds in the US also deprives Venezuela of a billion dollars per year in revenue that it previously received from the export, refining and retail sale of gasoline to American drivers. Canadian economist Joe Emersberger has calculated that the new sanctions Trump unleashed in 2017 cost Venezuela $6 billion in just their first year. In sum, US sanctions are designed to “make the economy scream” in Venezuela, exactly as President Nixon described the goal of US sanctions against Chile after its people elected Salvador Allende in 1970.

Alfred De Zayas visited Venezuela as a UN Rapporteur in 2017 and wrote an in-depth report for the UN. He criticized Venezuela’s dependence on oil, poor governance and corruption, but he found that “economic warfare” by the US and its allies were seriously exacerbating the crisis. “Modern-day economic sanctions and blockades are comparable with medieval sieges of towns,” De Zayas wrote. “Twenty-first century sanctions attempt to bring not just a town, but sovereign countries to their knees.” He recommended that the International Criminal Court should investigate US sanctions against Venezuela as crimes against humanity. In a recent interview with the Independent newspaper in the U.K., De Zayas reiterated that US sanctions are killing Venezuelans.

Venezuela’s economy has shrunk by about half since 2014, the greatest contraction of a modern economy in peacetime. The World Health Organization (WHO) reported that the average Venezuelan lost an incredible 24 lb. in body weight in 2017.

Mr. De Zayas’ successor as UN Rapporteur, Idriss Jazairy, issued a statement on January 31st, in which he condemned “coercion” by outside powers as a “violation of all norms of international law.” “Sanctions which can lead to starvation and medical shortages are not the answer to the crisis in Venezuela,” Mr. Jazairy said, “…precipitating an economic and humanitarian crisis…is not a foundation for the peaceful settlement of disputes.”

While Venezuelans face poverty, preventable diseases, malnutrition and open threats of war by US officials, those same US officials and their corporate sponsors are looking at an almost irresistible gold mine if they can bring Venezuela to its knees: a fire sale of its oil industry to foreign oil companies and the privatization of many other sectors of its economy, from hydroelectric power plants to iron, aluminum and, yes, actual gold mines. This is not speculation. It is what the US’s new puppet, Juan Guaido, has reportedly promised his American backers if they can overthrow Venezuela’s elected government and install him in the presidential palace.

Oil industry sources have reported that Guaido has “plans to introduce a new national hydrocarbons law that establishes flexible fiscal and contractual terms for projects adapted to oil prices and the oil investment cycle… A new hydrocarbons agency would be created to offer bidding rounds for projects in natural gas and conventional, heavy and extra-heavy crude.”

The US government claims to be acting in the best interests of the Venezuelan people, but over 80 percent of Venezuelans, including many who don’t support Maduro, are opposed to the crippling economic sanctions, while 86% oppose US or international military intervention.

This generation of Americans has already seen how our government’s endless sanctions, coups and wars have only left country after country mired in violence, poverty and chaos. As the results of these campaigns have become predictably catastrophic for the people of each country targeted, the American officials promoting and carrying them out have a higher and higher bar to meet as they try to answer the obvious question of an increasingly skeptical US and international public:

“How is Venezuela (or Iran or North Korea) different from Iraq, Afghanistan, Libya, Syria and at least 63 other countries where US regime change operations have led only to long-lasting violence and chaos?”

Mexico, Uruguay, the Vatican and many other countries are committed to diplomacy to help the people of Venezuela resolve their political differences and find a peaceful way forward. The most valuable way that the US can help is to stop making the Venezuelan economy and people scream (on all sides), by lifting its sanctions and abandoning its failed and catastrophic regime change operation in Venezuela. But the only things that will force such a radical change in US policy are public outrage, education and organizing, and international solidarity with the people of Venezuela.

*  *  *

“The war is not meant to be won, it is meant to be continuous” – George Orwell

h/t Jim Quinn

Published:2/8/2019 7:36:42 PM
[A Brief History of Seven Killings.] How Marlon James Reimagined African Folklore to Craft His Intoxicating New Fantasy Novel "Literature should be sensual and endlessly sensory," says Man Booker Prize–winning novelist Marlon James. "I like books that make me feel like I’m emerging from a fever." Published:2/8/2019 7:33:00 AM
[Markets] Brandon Smith: A Secular Look At The Destructive Globalist Belief System

Authored by Brandon Smith via,

Over many years of investigating the mechanics of global events and the people behind them I have become perhaps a little obsessed with one particular subject – the source and motivations of evil. This fascination does not stem from a simple morbid curiosity, but a strategic need to understand an enemy. Much like an exterminator needs to understand the behavior of cockroaches to be effective, I seek to understand the behavior and nature of organized evil.

One very important fact that must first be made clear in people's minds is that evil does indeed exist. Establishment propaganda has spent immense time, effort and capital attempting to condition society into believing that evil is nothing more than a social construct – an opinion. Evil is supposedly in the eye of the beholder; a product of religious conditioning. This is a falsehood. Just like concepts of beauty, concepts of evil are actually inherent in our psyches from birth. The “eye of the beholder” is irrelevant.

Two particular areas of human psychology support this fact:

First, as the work of Carl Jung (and by extension anthropologists like Joseph Campbell) exposed, all human beings no matter where in the world they are born, from the most isolated tribe in the Amazon to the largest metropolis in America, carry the same archetypal symbols in their psyche. That is to say, we ALL have the same psychological elements in our minds regardless of environment.

This fact alone is so overwhelming to modern man that some people refuse to even acknowledge it as a possibility. We have been trained like lab rats to see only one path through the maze; we have been told over and over again that everything is “relative”; that each person is entirely a product of environment and that we all start out empty as “blank slates”.

The vicious attacks on Carl Jung by the establishment (including lies that he cooperated with the Nazis) tell me that Jung was very close to the mark. He had stumbled upon something very dangerous to the establishment; something that could derail their conditioning of the public.

Second, the undeniable existence of the human conscience suggests that we are born with an understanding of duality. Meaning, just as Jung discovered, our psyches contain inherent concepts of good and evil that influence our decisions and reactions. Jung referred to evil, or psychologically destructive impulses, as the 'personal shadow' and the 'collective shadow'.

The vast majority of people have an intuitive relationship with good and evil. They feel anxiety when confronted with evil actions or thoughts, and they feel personal guilt when they know they have done something evil to other people. Some might call this a “moral compass”. I would refer to it as part of the soul or spirit.

In any case, there is a contingent of people in the world that do not have it – a small percentage of the population that is born without conscience, or that finds it easy to ignore conscience. We'll get to those people in a moment, but first, we should probably define what evil is.

Evil is first and foremost any action that seeks to destroy, exploit or enslave in the name of personal gain or gratification. Unfortunately, evil actions are often misrepresented as advantageous for the group, thereby making them morally acceptable. The needs of the many supposedly outweigh the needs of the few, and thus evil is rationalized as a means to a “positive end” for the "greater good".

In most cases, however, destructive actions do not end up serving the interests of the majority, and only end up giving more wealth and power to an elitist minority. This is not a coincidence.

Evil begins with the denial of the existence of conscience, or the denial of the existence of choice. Each person is born with a capacity or freedom to choose. We can listen to conscience, or we can ignore it. We can do good, or we can do evil. Evil tells us the choice is relative and that morality is relative; that there is no difference between a good choice and a bad choice, or, that the evil choice is the only choice.

Beyond ignoring conscience, we must also define the motivation that drives evil. Psychology would suggest that destructive self serving actions stem from an obsessive desire to obtain or control things we cannot or should not have. Interestingly, this is also what some religions teach us, but let's stick to a secular examination.

As mentioned earlier, there is a group of people in the world who do not see good and evil the way most of us do. Their psyche functions in a completely different way, without the filter of conscience. These people exhibit the traits of narcissistic sociopaths.  Full blown high level narcissistic sociopaths represent around 1% to 5% of the total human population, and most of them are born, not made by their environment. Also, 5% to 10% of people hold latent traits of either narcissism or sociopathy that generally only rise to the surface in an unstable crisis environment.

I have written extensively on narcissistic sociopaths and the globalist establishment in numerous articles. I have also outlined how such people, contrary to popular belief, are not isolated from one another. They do in fact organize into groups for mutual gain.

There is an ideology or system of belief that argues for the exact opposite of what conscience tells us is “good”, and that system is Luciferianism. In fact, luciferianism appears to be the source influence for most existing destructive "isms" in our society today (including socialism and globalism).  It is my theory that luciferianism is a religion or cult designed by sociopathic narcissists for the benefit of sociopathic narcissists.

It is sometimes difficult to identify the true “sacraments” behind luciferianism because, for one, luciferians refuse to admit that the system is a religion at all. They prefer to call it a philosophy or methodology, at least in public. The system also seems to encourage active disinformation in order to dissuade or mislead non-adherents. The historic term for this religious secrecy is “occultism”. I would call it “elitism”.

There are some foundational beliefs that luciferians do openly admit to. First and foremost, the goal of luciferianism is to attain godhood. That is to say, they believe that SOME human beings have the capacity to become gods through the accumulation of knowledge.

I have written about the insanity of the goal of godhood in the past, outlining how quantum physics and Kurt Godel's Incompleteness Proof make total scientific and mathematical observation and understanding of the universe impossible. But mathematical reality does not stop luciferian circles from destructively chasing that which they cannot have.  By extension, scientific knowledge not tempered by discipline, wisdom and a moral compass can lead to catastrophe.  Material knowledge is invariably abused by those seeking godlike power.

The notion of self-worship is a core trait of sociopathic narcissists; Luciferianism just codifies it as if it is a virtue. Another problem with the idea of becoming a god is that one inevitably develops a desire for followers and worshipers. What is a savior, after all, without a flock? But how does a human being gain a flock and become more a god? Through force or through trickery?

Second, luciferians claim they seek to elevate the power of the individual in general. In the minds of many people this doesn't sound like a negative at all. Even I have argued for the importance of individualism in the midst of societal controls. That said, any ideology can be taken to extremes.

The pursuit of individual gratification can be pushed too far, to the point that the people around us begin to suffer. Because of the elitist nature of luciferianism, they are not necessarily seeking the elevation of ALL individuals, just certain “deserving” individuals. There is a tendency to view non-adherents as “inferior”; stupid people that should be sheared like sheep by those who are chasing a superior dream of personal godhood.

This attitude can also be seen in the common actions of narcissistic sociopaths, who have no qualms about conning or exploiting people around them as resources, feeding off others like parasites. They treat this as an acceptable practice because they see themselves as special; they are destined to achieve more than the ignorant rabble. They are meant to do great things, and their image is meant to be cemented in the foundations of history.

The elitism of luciferianism is hardly hidden. Luciferians claim that they have no interest in converting other people.  Instead, adherents have to be “smart enough” to come to the belief system on their own. However, their goal of influencing the public through social and political spheres is rather evident.

Political gatekeepers, though not openly luciferian, tend to let slip their affiliations at times. Saul Alinsky, a high level leftist organizer and democrat gatekeeper, praises the rebellious Lucifer in the personal acknowledgments of his political manual 'Rules For Radicals', in which he says:

Lest we forget at least an over-the-shoulder acknowledgment to the very first radical: from all our legends, mythology, and history (and who is to know where mythology leaves off and history begins — or which is which), the first radical known to man who rebelled against the establishment and did it so effectively that he at least won his own kingdom — Lucifer.”

Luciferianism is also prevalent in globalist institutions. For example, the UN seems to be highly involved in the ideology through groups like Lucis Trust, a publishing house founded by Alice Bailey, an avid promoter of luciferianism who also owned the Lucifer Publishing Company. Lucis Trust was originally headquartered at the UN building in New York, and still runs a private libraryof occult books out of the UN today.

Former UN directors like Robert Muller were tied closely with Lucis Trust and the work of Alice Baily and openly promote luciferianism. Muller was central to the UN's global education policies for children and formed numerous branch agencies with the intent of global governance. You can read Robert Muller's white papers on the formation of a global government on his website Good Morning World.

Luciferians approach global governance like they do everything else – with heavy propaganda spin. Muller argues that the goal must be pitched to the public through the idea of “protecting the Earth”. In other words, he believed environmentalism was the key to convincing the masses of the need for total centralization of power into the hands of globalist institutions. Luciferian ideals are sugar coated in a host of flowery and noble sounding motifs. But what are they really all about?

Some luciferians adopt a Gnostic stance on the figure of the devil and only claim to appreciate the concept as mythology rather than the devil existing as a literal force.   Some gnostic texts depict Satan as the "good guy" and God the "bad guy" in the story of Genesis; God being a ruthless slave master and the serpent as the "liberator" bringing knowledge of the material world to mankind.  Lucifer is presented as a kind of Prometheus; the titan who stole fire from the gods and gave it to man.

This "Lucifer as heroic savior" narrative is very common.  Manly P. Hall, 33rd Degree Freemason and influential New Age writer is quoted as saying in his collection of writings titled 'The All Seeing Eye':

Lucifer represents the individual intellect and will which rebels against the domination of Nature and attempts to maintain itself contrary to natural impulse. Lucifer, in the form of Venus, is the morning star spoken of in Revelation, which is to be given to those who overcome the world.”

One Luciferian model describes God as an archetypal concept only, a mythological comfort blanket that helps us to face the loneliness of existence. They do not believe a corporeal God figure exists, though, one wonders how they can reconcile the existence of inherent psychological archetypes with that notion? Where did archetypes come from if there is no creative design or intended meaning to humanity?

More discreet Luciferians sometimes argue that the mythological figure of Lucifer is separate from the Christian image of “Satan”. The name “Lucifer” is not mentioned directly in the bible in reference to Satan (though the phrase “morning star”, the direct translation of the word “lucifer” is mentioned in reference to Satan). But this argument seems rather coy and disingenuous to me. For centuries the term Lucifer has been synonymous with the devil in the public consciousness. Luciferians seem to be trying to separate themselves from the negative connotations associated with satanism through a twisted form of wordplay and semantics.

But why would they care?  Unless, of course, they are seeking to influence public consciousness and they realize that it's hard to sell people on satanism, so they want to put a different face on an old and ugly idea.  Satanists often refer to Lucifer and Satan in the same breath as being the same figure. In this documentary, Anton LaVey, a well known representative in satanic and luciferian circles, does exactly that.

LaVey seems to be treated as an annoyance by the more marketing conscious luciferian groups. I suspect that his public bluntness about what luciferian beliefs actually involve is seen as too honest. These people believe in secrecy and initiation.  They don't like their darker side on display for the whole world to see and to judge.

A direct antithesis to someone like Anton LaVey would be Michael Aquino, a military intelligence officer specializing in psychological warfare who was a member of LaVey's satanic church but left to start his own more marketable Temple Of Set. Aquino is best known for a tactical thesis on psychological warfare he wrote with General Paul Vallely (credited in the paper as "Paul E Valley") called 'From Psyop To Mind War'. The thesis outlines the use of propaganda and other strategies to turn a target population against itself, to either destroy that population or control it more easily without ever having to use outright military force.

Aquino's Mind War showcases the luciferian belief in "magic", but not magic in the way popular culture understands it.  Luciferians believe in the power of magic words and symbols in the form of psychological key phrases and archetypes.  That is to say, they have adopted the use of archetypal psychology, but where psychologists like Carl Jung used archetypal psychology to heal people with mental and emotional illnesses, luciferians use archetypes to manipulate and control public thought.

This is often done through popular culture and films.  Truthstream Media has produced an excellent documentary on this subject that I highly recommend.

There are more obvious examples such as Ridley Scott's Blade Runner, in which androids rebel against their slave master and creator and eventually murder him.  Then there is more subversive entertainment like Netflix's Series Of Unfortunate Events, which starts out as a fun comedic children's tale but ends with a display of essentially every aspect of luciferian belief right down to elitism as a necessary practice, moral relativism, an unhelpful and controlling god figure surrounded by sycophants, and even a serpent carrying an apple containing the "knowledge" to save the protagonists from a horrible fate.

The duplicity of luciferianism alone should be enough to make people wary of its promises and arguments. Humanity has spent the better part of 2000 years trying to remove the influences of secretive occult elitism (the high priest class) from our political and social structures. Yet, these people are relentless in their desire for power.

Regardless of the positive spin that luciferians adopt for their ideology, the fruits of their activities speak much louder than propaganda. Through their efforts towards globalism, what I see is a cancerous desire for control over civilization and of every aspect of human thought. I also see a perversion of nature as they seek to obtain what they call “godhood”. Transhumanism and genetic tampering carry all the hallmarks of the luciferian ideal. Regardless of one's religious affiliations, it is hard to find anything of value in their system. Everything about it is an affront to inherent conscience. It can only become acceptable to the majority through deception.

If you have to lie about the motives of your philosophy in order to get people to adopt your philosophy, then your philosophy must be dangerously incomplete or outright cataclysmic.

*  *  *

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Published:2/7/2019 11:26:24 PM
[Markets] "They're Running Out Of Options" - Farm Bankruptcies Surge To 10-Year High As Trade War Bites

The Farm Belt helped cement President Trump's historic electoral triumph over Hillary Clinton. But even before Trump started his trade war with China nearly one year ago, Trump's protectionist bent has added to the collective woes of farmers, who were already struggling with low prices for corn, soy beans and other agricultural commodities.

China's decision to purchase millions of soybeans (after orders ground to halt late last year following another round of tariffs) offered some relief to soybean producers who were teetering on the brink even with President Trump's farm bailout money in hand. But even if negotiations result in a lasting agreement, it might not be enough to save hundreds of American family farms from collapsing into bankruptcy, as the Wall Street Journal pointed out in a story published Wednesday.


According to a WSJ analysis of federal data, the number of farmers filing for bankruptcy has climbed to its highest level in a decade...


...driven by a lasting slump in agricultural commodity prices due in large part to the rise of rival producers like Brazil and Russia.

Bankruptcies in three regions covering major farm states last year rose to the highest level in at least 10 years. The Seventh Circuit Court of Appeals, which includes Illinois, Indiana and Wisconsin, had double the bankruptcies in 2018 compared with 2008. In the Eighth Circuit, which includes states from North Dakota to Arkansas, bankruptcies swelled 96%. The 10th Circuit, which covers Kansas and other states, last year had 59% more bankruptcies than a decade earlier.

And Trump's trade wars - not just with China, but more broadly - aren't helping.

Trade disputes under the Trump administration with major buyers of U.S. farm goods, such as China and Mexico, have further roiled agricultural markets and pressured farmers’ incomes. Prices for soybeans and hogs plummeted after those countries retaliated against U.S. steel and aluminum tariffs by imposing duties on U.S. products like oilseeds and pork, slashing shipments to big buyers.

Low milk prices are driving dairy farmers out of business in a market that’s also struggling with retaliatory tariffs on U.S. cheese from Mexico and China. Tariffs on U.S. pork have helped contribute to a record buildup in U.S. meat supplies, leading to lower prices for beef and chicken.

Because of this, the level of farm debt is approaching levels last seen in the 1980s.


The stress on American farmers is also affecting agribusinesses giants like Archer Daniels Midland, Bunge and Cargill, who are feeling the heat even as lower crop prices translate into less-expensive raw materials for the commodity buyers.

What's worse is that even after working side jobs to try and make ends meet, some farmers are still winding up more than $1 million in debt.

Mr. Duensing has managed to keep farming, hiring himself out to plant crops for other farmers for extra income and borrowing from an investment group at an interest rate twice as high as offered by traditional lenders. Despite selling some land and equipment, Mr. Duensing remains more than $1 million in debt.

"I’ve been through several dips in 40 years," said Mr. Duensing. "This one here is gonna kick my butt."

Even more shocking than the number of bankruptcies, the number of farms that continue to operate while losing money has risen to more than half of all farms, even as the level of productivity has never been higher.

More than half of U.S. farm households lost money farming in recent years, according to the USDA, which estimated that median farm income for U.S. farm households was negative $1,548 in 2018. Farm incomes have slid despite record productivity on American farms, because oversupply drives down commodity prices.

And bankers who lend to farms warn that there will likely be more bankruptcies to come as more producers "are running out of options."

Agricultural lenders, bankruptcy attorneys and farm advisers warn further bankruptcies are in the offing as more farmers shed assets and get deeper in debt, and banks deny the funds needed to plant a crop this spring.

"We are seeing producers who are running out of options," said Tim Koch, senior vice president at Omaha, Neb.-based Farm Credit Services of America, which lends to farmers and ranchers in Iowa, Nebraska, South Dakota and Wyoming.

Perhaps the only silver lining - if you can even call it that - is that bankruptcy lawyers in states where farms are prevalent are doing their best business in years.

Mounting stress in the Farm Belt has meant big, if somber, business for the region’s bankruptcy attorneys. In Wichita, Kan., the firm of bankruptcy attorney David Prelle Eron filed 10 farm bankruptcies in 2018, the most it has ever handled in one year. Wade Pittman, a bankruptcy attorney based in Madison, Wis., said his firm filed about 20 farm bankruptcies last year, ahead of past years, and he said he expects the numbers to continue to rise as milk prices remain stagnant.

Joe Peiffer, a Cedar Rapids, Iowa-based attorney, said his office is the busiest—and most profitable—it has ever been. Just before Christmas, he sent letters to eight farmers declining to represent them because he didn’t have sufficient staff to handle their cases promptly. He is doubling his office space and interviewing new attorneys to join the firm.

One factor driving bankruptcies is tighter lending standards, said Mr. Peiffer, including at agricultural banks, which are under pressure from regulators to exercise greater caution over their farm-loan portfolios.

"I’m dealing with people on century farms who may be losing them," said Mr. Peiffer, whose own father sold his farm in the late 1980s.

One anecdote featured in the story recalls the rash of suicides among NYC cab drivers, who have struggled to pay the hefty loans attached to their taxi medallions thanks to the rise of Uber, Lyft and other ride sharing apps.

Darrell Crapp, the fifth-generation owner of a hog and cattle farm in Lancaster, Wis., returned to his home one day with a queasy feeling in his stomach, only to find his wife unconscious on their bathroom floor. She had swallowed a handful of pills. She survived, but Crapp attributed the incident to financial stressors as their farm teetered on the brink of bankruptcy.

It was a Sunday in April 2017 when a queasy feeling in Darrell Crapp’s stomach sent him rushing home. He found his wife, Diana, lying crumpled on the floor of their Lancaster, Wis., bathroom. She had swallowed a handful of pills.

Overwhelmed with debt and with little prospect of turning a profit that year, the Crapps knew BMO Harris Bank NA wouldn’t lend them money to plant. The bank had frozen the farm’s checking account.

Mrs. Crapp managed the fifth-generation corn, cattle and hog farm’s books. She had stayed up nights drafting dozens of budgets to try to stave off disaster, including 30-day, 60-day and 90-day budgets.

"It was too much for her," Mr. Crapp, 63, said of his wife, who survived the incident.

Crapp Farms filed for chapter 11 bankruptcy the next month, with a total debt of $36 million.

After filing for bankruptcy, the last of Crapp's land, a 197-acre patch that was homesteaded by his ancestors in the 1860s, will be auctioned off in the near future.

And after all that, Crapp may still need to declare Chapter 12 bankruptcy, a personal bankruptcy provision available to farmers and fishermen, to wipe his remaining debts.

"We haven’t won very many battles," said Mr. Crapp. "The bank pretty much owns us."

Unfortunately for American farmers hoping to reclaim the market share they've lost during the trade war with China, even if Trump can strike a trade deal with the Chinese that mandates purchases of US agricultural products - which the Chinese have already pledged to do - there's still another wrinkle: Japan recently signed a revamped version of the TPP that will offer preferential treatment to Australia, New Zealand and other rivals to American farmers, potentially sealing off another market from US agricultural products.

Published:2/7/2019 10:26:37 PM
[Markets] Homo Credulus: "He'll Go Along With Almost Anything"

Authored by Joel Bowman via,

Man: He’ll go along with just about anything.

Given the right circumstances... a little programing... and enough time for it all to marinate in his soft, mammalian brain... there is almost nothing Homo Credulus will not learn to embrace.

Don’t believe us?

Take a look at the historical record; you’ll soon wonder how we ever got this far.

Sure, you’ll discover gizmos and flying contraptions… art and agriculture… music and mathematics. You’ll witness spectacular scientific breakthroughs, the number “0” and a man’s footprint on the moon. You’ll also find automobiles with so many cup holders, you won’t know where to holster your oversized 7/11 Big Gulp.

But you’ll also scratch you head. Perhaps you’ll even weep. And if you think hard enough, you’ll put a few things to serious question…

“Central banks?” “Modern democracy?” “The Rosie O'Donnell Show?”

How has mankind survived such atrocities? Self inflicted, no less! And why, moreover, does he rush so earnestly to repeat and replay his worst mistakes?

Don’t be too hard on yourself, Dear Reader. After all, repetition is nothing new…

You’ll recall that it was the Greeks who first gave the world democracy – from the Greek, demokratía, literally “Rule by 'People'”. (And yes, it was those very same Greeks who put their own beloved Socrates to death… by a majority vote of 140-361.)

Today, democracy is a cherished tenet of “the West.” It is woven into the civic religion, sewn into the social fabric. Men march off eagerly to fight for it, to proselytize it … and to die in forgotten ditches defending it.

At least, that’s what they believe they’re doing. As usual, the poor saps have been duped. Herewith, a little historical context…

The phrase “Making the world safe for democracy” was actually a marketing slogan, coined back in the 1910s, as a way to sell “The Great War” to America. Weary from their own disastrous Civil War just a few decades earlier, in which hundreds of thousands gave up the ghost, Americans were mostly inward looking at the time. That is to say, they wanted little to do with what they largely saw as a “European affair.”

Polls might have indicated no appetite for battle… but the nation’s politicians were nonetheless starved for military misadventure. They sensed big profits abroad, both in manufacturing armaments and making onerous bank loans to foreign lands. Sure, “the nation” would have to fill tank and trench with warm young bodies… but very few soldiers would carry senatorial surnames along with their rifles.

And so, after a public relations campaign of truly epic proportions, America marched off to war… wrapped in the delusion they had freshly been sold.

Eddie Bernays, the man who coined the phrase and, thus, peddled the war to America, made a fortune for his efforts. He was even invited by Woodrow Wilson to attend the Paris Peace Conference, in 1919, as a show of gratitude for his services.

There, Bernays learned the full impact of his “democracy” slogan. An obviously bright fellow, the surreal experience caused him to think…

If people will line up to kill one another under influence of a mere marketing campaign… they could surely be convinced to do, say and buy just about anything!

Bernays was right. In fact, he wrote a series of books, detailing his insights. They included Crystallizing Public Opinion (1923), A Public Relations Counsel (1927) and a neat little number titled Propaganda(1928), in which Bernays laid out the blueprint for mass social and psychological manipulation.

The collected works went on to become a huge success… and the favorite of none other than Joseph Goebbles, Reich Minister for Propaganda in Nazi Germany between 1933-45.

Bernays himself, writing in his 1965 autobiography, recalls a dinner at home in 1933 where…

Karl von Wiegand, foreign correspondent of the Hearst newspapers, an old hand at interpreting Europe and just returned from Germany, was telling us about Goebbels and his propaganda plans to consolidate Nazi power. Goebbels had shown Wiegand his propaganda library, the best Wiegand had ever seen. Goebbels, said Wiegand, was using my book Crystallizing Public Opinion as a basis for his destructive campaign against the Jews of Germany. This shocked me. [...] Obviously the attack on the Jews of Germany was no emotional outburst of the Nazis, but a deliberate, planned campaign.

It is indeed chilling to think of such a heinous undertaking as being engineered, blueprinted, premeditated and carried out according to some kind of script. And yet, there it is… in Bernays’ own words, the “Father of Propaganda.”

Having acquired somewhat of a tainted reputation-by-association, propaganda, itself, underwent a “strategic rebranding” after WWII. But make no mistake, the very same métier thrives to this day, under the more socially palatable designation, “Public Relations.”

Still, a ruse by any other name…

“Could we be so stupid again?” wonders the gentle reader. “Might the mob still be swayed by what Charles Mackay termed ‘extraordinary popular delusions and the madness of crowds?’”

Why, of course! That’s the nature of the mob!

Whether in love, finance, politics or any other matter, man is ever wont to be convinced, assured, persuaded, often against his own best interests. Few are the absurdities in which he will not take refuge, invest his hard-earned capital or squander his morality.

All he needs is a good story, something to arrest his imagination and cauterize his capacity for reason. A distraction from his lonely, quotidian existence.

That, and a few crumbs to pass his lips.

The Roman poet, Juvenal, recognized as much when he mocked the panem et circenses (bread and circuses) stratagem almost two millennia ago. In his Satire X, he referred to the Annona (a kind of grain dole) and the famous circus games, held in the Colosseum and elsewhere, as designed to keep the unthinking population fed and happy.

Look around you today, Dear Reader. What do you see, two millennia later, in the Year of Their Lord, 2019 AD?

Stadium sports matches… food stamp programs… and of course, the greatest bread and circuses show ever, modern representative democracy…

Now, as then, the show goes on!

*  *  *

Clearly, there are many strange things afoot in the world. Distortions of markets, distortions of culture. It’s wise to wonder what’s going to happen, and to take advantage of growth while also being prepared for crisis. How will you protect yourself in the next crisis? See our PDF guide that will show you exactly how. Click here to download it now.

Published:2/6/2019 7:49:06 PM
[Markets] Grave Of Karl Marx Smashed In "Appaling" Hammer Attack

While the neo-socialist ideas of AOC, Elizabeth Warren and Bernie Sanders have taken America's left by storm in recent days, not everyone seems enamored with the idea of wealth redistribution in general, and its founding father, Karl Marx, in particular.

The tomb of iconic German philosopher/genocidal demagogue (depending on one's point of view) Karl Marx, located at London’s Highgate cemetery, will "never be the same again" after it was vandalized in a hammer attack, the Guardian reports. The vandal damaged a marble plaque which was taken from Marx’s original 1883 gravestone and incorporated into the 1954 monument.

Friends of Highgate Cemetery Trust published a twitter image showing the damaged marble plaque which honors Marx and some of his family members, including his wife. The damage to the lettering of Marx’s name can be clearly seen.

Trust CEO, Ian Dungavell, lashed out at the unidentified grave assailants, describing the attack as "an appalling thing to do" and warning that the tomb would be permanently scarred.

Dungavell told the Guardian  that no matter what people thought of Marx’s philosophy, the hammer attack was an act of inhumanity, as "this is a grave of his wife, his own grave and other members of his family." He also condemned the attack as a “particularly selfish act,” and said that it was not a random attack, insisting it was "deliberately targeted against Karl Marx", as if that wasn't obvious.

It is unclear when the incident occurred. The damage was first noticed on Monday afternoon, but Dungavell said images posted on social media suggest it could have occurred early last week or before. “Just looking at social media posts from people who have visited, if you squint you can see that the damage was visible in some of those photographs,” he said.

The cost of the damage has yet to be estimated. Dungavell said: “I’m hoping we will be able to get a specialist stone conservator to consolidate the white marble and then if we can get the lead lettering back it might be that you don’t notice it.”

The destruction of the grave sparked outrage on Twitter, with supporters of the communist legend calling for an appeal to be set up. As RT notes, Europeans took the assaults especially hard, with left-wing Guardian journalist Owen Jones and children’s author and Corbynista, Michael Rosen, asking people to donate money to help with the costs of potential repair work.

The police were notified and are expected to begin an investigation.

The cemetery will be discussing repairing the uninsured memorial with its owners the Marx Grave Trust. It will also talk to the trust about the possibility of installing CCTV around the monument.

Dungavell said: “We might do a security review with the Marx Grave Trust and speak to the police about what should happen about any recommendations they may have." He pointed out that the Marx memorial has been repeatedly damaged since it was installed.

"It has attracted great controversy over the years. It has had paint daubed all over it. It has had people chanting at it, the bronze bust on the top has been dragged off with ropes, and there was even a pipe bomb set off in January 1970 that damaged the front face of it."

He added: “That’s the only consolation – he hasn’t been forgotten about.”

Of course, cynics would note that if there ever was an opportunity to share the repair costs among the broader population, this is it.

Published:2/6/2019 2:18:00 AM
[Markets] Meotti: The Pope's Stubborn Silence On The Persecution Of Christians

Authored by Giulio Meotti via The Gatestone Institute,

  • Unfortunately, Pope Francis's stance on Islam seems to be coming from a fantasy world.

  • "Authentic Islam and the proper reading of the Koran are opposed to every form of violence", the Pope claimed, not quite accurately. It is as if all of the Pope's efforts have been directed to exonerating Islam from any of its responsibilities. He seems to have been doing this even more than observant Muslims -- such as Egypt's President Abdel Fattah el-Sisi, American author and physician M. Zuhdi Jasser, former Kuwaiti Information Minister Sami Abdullatif Al-Nesf, French-Algerian author Razika Adnani, Paris-based Tunisian philosopher Youssef Seddik, Jordanian journalist Yosef Alawnah, and Moroccan author Rachid Aylal, among many others -- have been doing.

  • "Pope Francis could in no way be ignorant of the heavy problems caused by the expansion... at the very heart of the Christian domain... Let us note this again... the last religion that arrived in Europe has an intrinsic impediment to integrating into the European framework that is fundamentally Judeo-Christian..." – Boualem Sansal, Algerian author, in his best-selling book "2084."

  • Pope Francis now faces the potential risk of a Christian world physically swallowed by the Muslim crescent -- as on the Vatican logo chosen for the Pope's upcoming trip to Morocco. It is time the appeasement is replaced.

The persecution of Christians is now an international crisis. Unfortunately, Pope Francis's stance on Islam seems to be coming from a fantasy world. (Photo by Giulio Origlia/Getty Images)

4,305 Christians were killed simply because their Christian faith in 2018. This is the dramatic number contained in the new "World Watch List 2019" just compiled by the non-governmental organization Open Doors. It reveals that in 2018, there were 1,000 more Christian victims -- 25% more -- than the year before, when there were 3,066.

These days, 245 million Christians in the world are apparently persecuted simply for their faith. Last November, The organization Aid to the Church in Need released its "Religious Freedom Report" for 2018 and reached the a similar conclusion: 300 million Christians were subjected to violence. Christianity, despite stiff competition, has been called "the most persecuted religion in the world".

In March 2019, Pope Francis will travel to Morocco, a country also listed in the Open Doors' watch list. Unfortunately, Pope Francis's stance on Islam seems to be coming from a fantasy world. The persecution of Christians is now an international crisis. Consider what happened to Christians in the Muslim world during just the last couple of months. A policeman was killed trying to defuse a bomb outside a Coptic church in Egypt. Before that, seven Christians were murdered by religious extremists during a pilgrimage. Then a mass grave was discovered in Libya containing the remains of 34 Ethiopian Christians killed by jihadists affiliated with the Islamic State. The Iranian regime, in severe new crackdowns, arrested more than 109 Christians. The Pakistani Christian Asia Bibi, three months after being exonerated for "blasphemy"and released from death row, still lives as a "prisoner": her former neighbors still want to put her to death. In Mosul, which was Iraq's center for Christians, there was a "Christmas without Christians", and in Iraq in general, 80% of the Christians have disappeared.

Cardinal Louis Raphael Sako, Patriarch of Babylon of the Chaldeans and head of the Chaldean Catholic Church, recently provided some numbers for the persecution of Christians in Iraq: "61 churches have been bombed, 1,224 Christians were killed, 23.000 houses and real estate of the Christians have been seized". The patriarch reminded the world of the policy of the Islamic State, which gave "three options to Christians": conversion to Islam, payment of a special tax or the forced and immediate abandonment of their land. "Otherwise they would have been killed." In this way, 120,000 Christians were expelled.

"The stubborn silence of European leaders on the question of religions, Islam in particular, astonishes and disappoints", wrote the Algerian novelist Boualem Sansal recently.

"Their attitude is simply irresponsible, suicidal, and even the current context marked by [a] dizzying expansion... It's like living at the foot of an angry volcano and not understanding that it is preparing to erupt".

Sansal, who has been threatened with death by Islamists in France, as in Algeria, wrote "2084", a best-seller. In it, he writes that Pope Francis's stance on the Muslim world is similar to that of the Western leaders:

"Pope Francis could in no way be ignorant of the heavy problems caused by the expansion of radical Islam in the world and at the very heart of the Christian domain... Let us note this again... the last religion that arrived in Europe, has an intrinsic impediment to integrating into the European fundamentally Judeo-Christian framework, even if this referent, over the past centuries, has eroded."

Pope Francis did manage to explain that the "idea of conquest" is integral to Islam as a religion, but quickly added that one might interpret Christianity the same way. "Authentic Islam and the proper reading of the Koran are opposed to every form of violence", the Pope claimed, not quite accurately. He also not quite accurately remarked that "Islam is a religion of peace, one which is compatible with respect for human rights and peaceful coexistence." It is as if all of the Pope's efforts have been directed to exonerating Islam from any of its responsibilities. He seems to have been doing this even more than observant Muslims -- such as Egypt's President Abdel Fattah el-Sisi, American author and physician M. Zuhdi Jasser, former Kuwaiti Information Minister Sami Abdullatif Al-Nesf, French-Algerian author Razika Adnani, Paris-based Tunisian philosopher Youssef Seddik, Jordanian journalist Yosef Alawnah and Moroccan author Rachid Aylal, among many others -- have been doing.

The dramatic persecution of Christians in the Islamic world highlights a Western paradox: "Since their victory in the Second World War, Westerners have brought great benefits to all of humanity", wrote Renaud Girard in Le Figaro.

"Scientifically, they shared their great inventions, such as penicillin or the Internet. Human rights and democracy are far from being applied everywhere in the world, but they are the only reference for governance that exists internationally. It is undeniable that, under the impulse of Westerners, vast political, technical, health and social successes have been achieved in two generations. But there is one area where the planet has undeniably regressed since 1945 and where Western responsibility is obvious. It is the freedom of conscience and religion... By refraining from defending Christians in the East, the West made a twofold strategic error: it gave a signal of weakness by abandoning its ideological friends; it has renounced its creed".

"In the eyes of Western governments and the media", noted another report on persecution of Christians compiled by Aid to the Church in Need. "religious freedom is slipping down the human rights priority rankings, being eclipsed by issues of gender, sexuality and race".

"Political correctness does not want to know anything about the ongoing persecution and suppression of Christianity and so it is being ignored in an almost sinister way", Bishop Manfred Scheuer of Linz, in Upper Austria, recently said.

This eclipse is even more dramatic, as everybody knows that Christianity is at the risk of "extinction" in the Middle East, noted the Archbishop of Canterbury Justin Welby:

"Hundreds of thousands have been forced from their homes. Many have been killed, enslaved and persecuted or forcibly converted. Even those who remain ask the question, 'Why stay?' The Christian population of Iraq, for instance, is less than half what it was in 2003 and their churches, houses and businesses have been damaged or destroyed. The Syrian Christian population has halved since 2010. As a result, across the region Christian communities that were the foundation of the universal Church now face the threat of imminent extinction."

The West has betrayed its Christians friends in the East (such as here and here). The West might well ask: What are the Vatican and the Pope doing to fight this new religious persecution?

Criticism has already come from the Catholic world. "Just as he has little anxiety about the wave of church closings, Francis seems to have little anxiety about the Islamization of Europe", wrote the US Catholic columnist William Kilpatrick.

"Indeed, as evidenced by his encouragement of mass migration, he seems to have no objection to Islamization. Either because he truly believes the false narrative that Islam is a religion of peace, or because he believes that the self-fulfilling prophecy strategy will create a more moderate Islam, Francis seems to be at peace with the fact that Islam is spreading rapidly. Whether Francis has been misinformed about Islam or whether he has adopted a strategy of misinformation, he is taking a huge gamble—not only with his own life, but with the lives of millions".

There are now entire areas in Syria cleansed of their historical Christians. Pope Francis recently received a letter from a Franciscan priest in Syria, Father Hanna Jallouf, the Patriarch of Knayeh, a village close to Idlib, the stronghold of anti-Assad Islamist rebels. "Christians in this land are like lambs among the wolves", Jallouf wrote.

"The fundamentalists have devastated our cemeteries, they have prevented us from celebrating liturgies outside the church, stripping us of the external signs of our faith: crosses, bells, statues as well as our religious habit."

If the Pope does not want to receive more letters like that, he will need show courage and tackle one of the most urgent persecutions of our time.

Pope Benedict XVI, in his address at Regensburg, said what no Pope had ever dared to say before -- that there is a specific link between violence and Islam. To illustrate his case, Benedict cited a 14th-century dialogue between a Byzantine Christian emperor, Manuel II Paleologus, and a Persian scholar, about the concept of violence in Islam: "Show me just what Muhammad brought that was new, and there you will find things.. .such as his command to spread by the sword the faith he preached", Benedict quoted the emperor as saying to his Muslim interlocutor.

Another Pope, John Paul II, also expressed concerns. During a meeting in 1992, Mgr Mauro Longhi, who, while still a student, often accompanied the late Pope on hiking trips says, John Paul II told of an "Islamist invasion" of Europe.

"The Pope told me: 'Tell this to those whom you will meet in the Church of the third millennium. I see the Church afflicted by a mortal wound. More profound, more painful than those of this millennium,' referring to Communism and Nazi totalitarianism. 'It is called Islamism. They will invade Europe. I have seen the hordes come from the West to the East,' and then told to me each country one by one: from Morocco to Libya to Egypt, and so on till the East.

"The Holy Father added: 'They will invade Europe, Europe will be like a basement, old relics, shadows, cobwebs. Family heirlooms. You, the Church of the third millennium, must contain the invasion. Not with armies, armies will not be enough, but with your faith, lived with integrity."

John Paul II's vision resembles a continuation of Islam's historic campaign in the Christian lands: "In 637, the Islamic army seized Jerusalem, twice holy, then the heart of the entire Middle East, the historic center of Christianity", wrote the Algerian novelist Boualem Sansal. He went on to describe "the irresistible progression of Islam to the West: the Judeo-Christian North Africa, which immediately converted; Catholic Spain, which was annexed at the beginning of the VIII century; Byzantium, which they took in 1453; [then] to Vienna, which they besieged in 1529...".

Pope Francis now faces the potential risk of a Christian world physically swallowed by the Muslim crescent -- as on the Vatican logo chosen for the Pope's upcoming trip to Morocco. It is time the appeasement is replaced.

Published:2/6/2019 1:15:12 AM
[Markets] How An Italian Debt Crisis Could Take Down The EU

Plagued by another run of bank bailouts and simmering tensions between the partners in its ruling coalition, Italy's brief reprieve following the detente between its populist rulers and angry bureaucrats in Brussels is already beginning to fade. As Bloomberg reminded us on Monday, Italy's $1.7 trillion pile of public debt - the third largest sovereign debt pool in Europe - is threatening to set off a chain reaction that could hammer banks from Rome, to Madrid, to Frankfurt - and beyond.


Just the mention of the precarity of Italian debt markets "can induce a shudder of financial fear like no other" in bureaucrats and businessmen alike - particularly after Italy's economy slid into a recession during Q4.


While much of Italy's debt burden is held by its banks and private citizens, lenders outside of Italy are holding some 425 billion euros ($486 billion) in public and private debt.


The Bloomberg analysis of Italy's financial foibles follows more reports that Italy's ruling coalition between the anti-immigrant, pro-business League and the vaguely left-wing populist Five-Star Movement has become increasingly strained. Per BBG, the two parties are fighting a battle on two fronts over the construction of a high speed Alpine rail and a legal case involving League leader Matteo Salvini over his refusal to let the Dicotti migrant ship to dock in an Italian port last summer.

After M5S intimated that it could support the investigation, the League warned that such a move would be tantamount to "blackmail" against Salvini, whose lieutenants have been pushing for him to take advantage of the party's rising poll numbers and push for early elections later this year. However, Salvini has rebuffed these demands, warning that there's nothing stopping Italian President Sergio Mattarella from calling for a new coalition instead of new elections.

On the other hand, the League is growing increasingly weary of the "Citizens' Income", one of the boldest proposals included in Italy's 2019 budget, which calls for a guaranteed subsidy for all Italians under the poverty line, provided they can prove they are looking for work.

On Monday, Luigi Di Maio and Prime Minister Giuseppe Conte presented the first of the cards that will carry the income during a ceremony that Salvini decided to skip, according to BBG. As many as 5 million Italians could be eligible for the microchip-embedded cards.

"We’ll be injecting 8 billion euros ($9.2 billion) into the real economy every year - people will be able to spend those 8 billion," Di Maio said, at one point channeling Albert Einstein, saying those who claim something is impossible should leave those who are actually doing it alone.

However, the plan has irked business owners, who constitute some of the League's most reliable supporters.

Circling back to the threat posed by Italian debt, BBG's analysis showed that French banks are the most exposed, as BNP Paribas and Credit Agricole own retail banking units in Italy.


To keep operating without massive budget cuts (something neither party in the ruling coalition has shown any sign of supporting) Italy must sell 400 billion euros ($457 billion) of debt per year. But since Italy's banks hold so much of the country's debt, declines in the price of Italian bonds inevitably hurts the shares of Italian banks, and also forces them to hold more capital on their books to ensure liquidity from the ECB. This creates the potential for a negative feedback loop known as the "doom loop".

Put another way, "a government crisis could drag down the banking system or a banking crisis could suck in the government."


And while NPLs held by Italian banks have declined in recent years (as no fewer than seven Italian banks have required bailouts in the past three years)...


...A genuine crisis would exhaust the lending capacity of the European Stability Mechanism (some 410 billion euros or $470 billion) in just a year. With ECB President Mario Draghi set to depart later this year, and German Chancellor Angela Merkel's power on the wane, if the populists don't manage to generate the economic growth that they have argued will be unleashed by their stimulus programs, it's not outside the realm of possibility that the crisis that tears apart the EU and eurozone is centered in Rome.

Published:2/5/2019 3:39:36 AM
[Markets] Escobar: MAGA Misses The Eurasia Train

Authored by Pepe Escobar via,

While China and Russia solidify their economic and political alliance, the U.S. is missing an historic chance to join a multilateral world, instead clinging to military empire...

We should know by now that the heart of the 21stCentury Great Game is the myriad layers of the battle between the United States and the partnership of Russia and China.

Even the U.S. National Defense Strategy says so: “The central challenge to U.S. prosperity and security is the reemergence of long-term, strategic competition by … revisionist powers.” The recently published assessment on U.S. defense implications of China’s global expansionsays so too.

The clash will frame the emergence of a possibly new, post-ideological, strategic world order amidst an extremely volatile unpredictability in which peace is war and an accident may spark a nuclear confrontation.

The U.S. vs. Russia and China will keep challenging the West’s obsession in deriding “illiberalism,” a fearful, rhetorical exercise that equates Russian democracy with China’s one party rule, Iran’s demo-theocracy and Turkey’s neo-Ottoman revival.

It’s immaterial that Russia’s economy is one-tenth of China’s. From boosting trade that bypasses the U.S. dollar, to increasing joint military exercises, the Russia-China symbiosis is poised to advance beyond political and ideological affinities.

China badly needs Russian know-how in its military industry. Beijing will turn this knowledge into plenty of dual use, civilian-military innovations.

The long game indicates Russia and China will break down language and cultural barriers to lead Eurasian integration against American economic hegemony backed by military might.

One could say the Eurasian century is already upon us. The era of the West shaping the world at will (a mere blip of history) is already over. This is despite Western elite denials and fulminations against the so-called “morally reprehensible,” “forces of instability” and “existential threats.”

Standard Chartered, the British financial services company, using a mix of purchasing power exchange rates and GDP growth, has projected that the top five economies in 2030 will be China, the U.S., India, Japan and Russia. These will be followed by Germany, Indonesia, Brazil, Turkey and the UK. Asia will extend its middle class as they are slowly killed off across the West.

Hop on the Trans-Eurasia Express

A case can be made that Beijing’s elites are fascinated at how Russia, in less than two decades, has returned to semi-superpower status after the devastation of the Yeltsin years.

That happened to a large extent due to science and technology. The most graphic example is the unmatched, state-of-the-art weaponry unveiled by President Vladimir Putin in his March 1, 2018speech.

In practice, Russia and China will be advancing the alignment of China’s New Silk Roads, or Belt and Road Initiative (BRI), with Russia’s Eurasia Economic Union (EAEU).

There’s ample potential for a Trans-Eurasia Express network of land and maritime transport corridors to be up and running by the middle of next decade, including, for instance, road and railway bridges connecting China with Russia across the Heilongjiang River.

Heilongjiang or Amur River separating China and Russia. (Wikimedia)

Following serious trilateral talks involving Russia, India and Iran last November, closer attention is being paid to the International North-South Transportation Corridor (INSTC), a 7,200-km long lane mixing sea and rail routes essentially linking the Indian Ocean with the Persian Gulf through Iran and Russia and further on down the road, to Europe.

Imagine cargo transiting from all over India to the Iranian port of Bandar Abbas, then overland to Bandar Anzali, an Iranian port on the Caspian Sea, and then on to the Russian southern port of Astrakhan, and after that to Europe by rail. From New Delhi’s point of view, that means shipping costs reduced by up to 40 percent, and Mumbai-to-Moscow in only 20 days.

Down the line, INSTC will merge with BRI – as in Chinese-led corridors linked with the India-Iran-Russia route into a global transport network. 

This is happening just as Japan is looking at the Trans-Siberian Railway – which will be upgraded throughout the next decade – to improve its connections with Russia, China and the Koreas. Japan is now a top investor in Russia and at the same time very much interested in a Korea peace deal. That would free Tokyo from massive defense spending conditioned by Washington’s rules. The EAEU free trade agreements with ASEAN can be added to that.

Especially over these past four years, Russia has also learned how to attract Chinese investment and wealth, aware that Beijing’s system mass-produces virtually everything and knows how to market it globally, while Moscow needs to fight every block in the book dreamed up by Washington.

The Huawei-Venezuela “Axis of Evil

Metal Truss Railroad Bridge (Kama River, near Perm city). Early color photograph from Russia, created by Sergei Mikhailovich Prokudin-Gorskii as part of his work to document the Russian Empire from 1909 to 1915. (Wikimedia)

While Washington remains a bipartisan prisoner to the Russophobic Platonic cave – where Cold War shadows on the wall are taken as reality – MAGA is missing the train to Eurasia.

A many-headed hydra, MAGA, stripped to the bone, could be read as a non-ideological antidote to the Empire’s global adventurism. Trump, in his non-strategic, shambolic way, proposed at least in theory the return to a social contract in the U.S. MAGA in theory would translate into jobs, opportunities for small businesses, low taxes and no more foreign wars.

It’s nostalgia for the 1950s and 60s before the Vietnam quagmire and before “Made in the USA” was slowly and deliberately dismantled. What’s left are tens of trillions of national debt; a quadrillion in derivatives; the Deep State running amok; and a lot of pumped up fear of evil Russians, devious Chinese, Persian mullahs, the troika of tyranny, the Belt and Road, Huawei, and illegal aliens.

More than a Hobbesian “war of all against all” or carping about the “Western rules-based system” being under attack, the fear is actually of the strategic challenge posed by Russia and China, which seeks a return to rule by international law.

MAGA would thrive if hitched to a ride on the Eurasia integration train: more jobs and more business opportunities instead of more foreign wars. Yet MAGA won’t happen – to a large extent because what really makes Trump tick is his policy of energy dominance to decisively interfere with Russia and China’s development.

The Pentagon and the “intel community” pushed the Trump administration to go after Huawei, branded as a nest of spies, while pressuring key allies Germany, Japan and Italy to follow. Germany and Japan permit the U.S. to control the key nodes in the extremities of Eurasia. Italy is essentially a large NATO base.

The U.S. Department of Justice requested the extradition of Huawei CFO Meng Wanzhou from Canada last Tuesday, adding a notch to the Trump administration’s geopolitical tactic of “blunt force trauma.” 

Add to it that Huawei – based in Shenzhen and owned by its workers as shareholders – is killing Apple across Asia and in most latitudes across the Global South. The real the battle is over 5G, in which China aims to upstage the U.S., while upgrading capacity and production quality.

The digital economy in China is already larger than the GDP of France or the UK. It’s based on the BATX companies (Baidu, Alibaba, Tencent, Xiaomi), Didi (the Chinese Uber), e-commerce giant and Huawei. These Big Seven are a state within a civilization – an ecosystem they’ve constructed themselves, investing fortunes in big data, artificial intelligence (AI) and the internet. American giants – Facebook, Instagram, Twitter and Google – are absent from this enormous market.

Moreover, Huawei’s sophisticated encryption system in telecom equipment prevents interception by the NSA. That helps account for its extreme popularity all across the Global South, in contrast to the Five Eyes (U.S., UK, Canada, Australia, New Zealand) electronic espionage network.

The economic war on Huawei is also directly connected to the expansion of BRI across 70 Asian, European and African nations, constituting a Eurasia-wide network of commerce, investment and infrastructure able to turn geopolitical and geo-economic relations, as we know them, upside down.

Greater Eurasia Beckons

Whatever China does won’t alter the Deep State’s obsession about “an aggression against our vital interests,” as stated by the National Defense Strategy. The dominant Pentagon narrative in years to come will be about China “intending to impose, in the short term, its hegemony in the Indo-Pacific region, and catch the United States off-guard in order to achieve future global pre-eminence.” This is mixed with a belief that Russia wants to “crush NATO” and “sabotage the democratic process in Crimea and Eastern Ukraine.”

The Karakoram Highway connecting China and Pakistan, sometimes referred to as the Eighth Wonder of the World.(Wikimedia)

During my recent travels along the northern part of the China-Pakistan Economic Corridor (CPEC), I saw once again how China is upgrading highways, building dams, railways and bridges that are useful not only for its own economic expansion but also for its neighbors’ development. Compare it to U.S. wars – as in Iraq and Libya – where dams, railways and bridges are destroyed.

Russian diplomacy is all but winning the New Cold War — as diagnosed by Prof. Stephen Cohen in his latest book, War with Russia: From Putin and Ukraine to Trump and Russiagate.

Moscow mixes serious warnings with diverse strategies, such as resurrecting the South Stream gas pipeline to supply Europe as an extension of Turk Stream after the Trump administration also furiously opposed the Nord Stream 2 pipeline with sanctions on Russia. Meanwhile, Moscow ramps up energy exports to China.

The advance of the Belt and Road Initiative is linked to Russian security and energy exports, including the Northern Sea Route, as an alternative future transportation corridor to Central Asia. Russia emerges then as the top security guarantee for Eurasian trade and economic integration.

Last month in Moscow, I discussed Greater Eurasia– by now established as the overarching concept of Russian foreign policy – with top Russian analysts. They told me Putin is on board. He referred to Eurasia recently as “not a chessboard or a geopolitical playground, but our peaceful and prosperous home.”

Needless to say, U.S. think tanks dismiss the idea as “abortive”. They ignore Prof. Sergey Karaganov, who as early as mid-2017 was arguing that Greater Eurasia could serve as a platform for “a trilateral dialogue on global problems and international strategic stability between Russia, the United States and China.”

As much as the Beltway may refuse it, “The center of gravity of global trade is now shifting from the high seas toward the vast continental interior of Eurasia.”

Beijing Skirts the Dollar

Beijing is realizing it can’t meet its geo-economic goals on energy, security, and trade without bypassing the U.S. dollar.

According to the IMF, 62 percent of global central bank reserves were still held in U.S. dollars by the second quarter of 2018. Around 43 per cent of international transactions on SWIFT are still in U.S. dollars. Even as China, in 2018, was the single largest contributor to global GDP growth, at 27.2 percent, the yuan still only accounts for 1 percent of international payments, and 1.8 per cent of all reserve assets held by central banks.

It takes time, but change is on the way. China’s cross-border payment network for yuan transactions was launched less than four years ago. Integration between the Russian Mir payment system and Chinese Union Pay appears inevitable.

Bye Bye Drs. K and Zbig

Russia and China are developing the ultimate nightmare for those former shamans of U.S. foreign policy, Henry Kissinger and the late Zbigniew “Grand Chessboard” Brzezinski.

Back in 1972 Kissinger was the mastermind – with logistical help from Pakistan – of the Nixon moment in China. That was classic Divide and Rule, separating China from the USSR. Two years ago, before Trump’s inauguration, Dr. K’s advice dispensed at Trump Tower meetings consisted of a modified Divide and Rule: the seduction of Russia to contain China.

The Kissinger doctrine rules that, geopolitically, the U.S. is just “an island off the shores of the large landmass of Eurasia.” Domination “by a single power of either of Eurasia’s two principal spheres – Europe or Asia – remains a good definition of strategic danger for America, Cold War or no Cold War,” as Kissinger said. “For such a grouping would have the capacity to outstrip America economically and, in the end, militarily.”

The Zbig doctrine ran along similar lines. The objectives were to prevent collusion and maintain security among the EU-NATO vassals; keep tributaries pliant; keep the barbarians (a.k.a. Russians and allies) from coming together; most of all prevent the emergence of a hostile coalition (as in today’s Russia-China alliance) capable of challenging U.S. hegemony; and submit Germany, Russia, Japan, Iran, and China to permanent Divide and Rule.

Thus the despair of the current National Security Strategy, forecasting China displacing the United States “to achieve global preeminence in the future,” through BRI’s supra-continental reach.

The “policy” to counteract such “threats” is sanctions, sanctions, and more unilateral sanctions, coupled with an inflation of absurd notions peddled across the Beltway – such as that Russia is aiding and abetting the re-conquest of the Arab world by Persia. Also that Beijing will ditch the “paper tiger” “Made in China 2025” plan for its major upgrade in global, high-tech manufacturing just because Trump hates it.

Once in a blue moon a U.S. report actually gets it right, such as in Beijing speeding up an array of BRI projects; as a modified Sun Tzu tactic deployed by President Xi Jinping.

At the June 2016 Shangri-La Dialogue in Singapore, Professor Xiang Lanxin, director of the Centre of One Belt and One Road Studies at the China National Institute for SCO International Exchange and Judicial Cooperation, defined BRI as an avenue to a “post-Westphalian world.” The journey is just beginning; a new geopolitical and economic era is at hand. And the U.S. is being left behind at the station.

Published:2/4/2019 11:09:34 PM
[Markets] Why The War On Conspiracy Theories Is Bad Public Policy

Authored by Kevin Barrett via The Unz Review,

On January 25 2018 YouTube unleashed the latest salvo in the war on conspiracy theoriessaying “we’ll begin reducing recommendations of borderline content and content that could misinform users in harmful ways—such as videos promoting a phony miracle cure for a serious illness, claiming the earth is flat, or making blatantly false claims about historic events like 9/11.”

At first glance that sounds reasonable. Nobody wants YouTube or anyone else to recommend bad information. And almost everyone agrees that phony miracle cures, flat earthism, and blatantly false claims about 9/11 and other historical events are undesirable.

But if we stop and seriously consider those words, we notice a couple of problems.

First, the word “recommend” is not just misleading but mendacious. YouTube obviously doesn’t really recommend anything. When it says it does, it is lying.

When you watch YouTube videos, the YouTube search engine algorithm displays links to other videos that you are likely to be interested in. These obviously do not constitute “recommendations” by YouTube itself, which exercises no editorial oversight over content posted by users. (Or at least it didn’t until it joined the war on conspiracy theories.)

The second and larger problem is that while there may be near-universal agreement among reasonable people that flat-earthism is wrong, there is only modest agreement regarding which health approaches constitute “phony miracle cures” and which do not.

Far less is there any agreement on “claims about 9/11 and other historical events.” (Thus far the only real attempt to forge an informed consensus about 9/11 is the 9/11 Consensus Panel’s study—but it seems unlikely that YouTube will be using the Consensus Panel to determine which videos to “recommend”!)

YouTube’s policy shift is the latest symptom of a larger movement by Western elites to - as Obama’s Information Czar Cass Sunstein put it - “disable the purveyors of conspiracy theories.” Sunstein and co-author Adrian Vermeule’s 2008 paper “Conspiracy Theories,” critiqued by David Ray Griffin in 2010 and developed into a 2016 book, represents a panicked reaction to the success of the 9/11 truth movement. (By 2006, 36% of Americans thought it likely that 9/11 was an inside job designed to launch wars in the Middle East, according to a Scripps poll.)

Sunstein and Vermuele begin their abstract:

Many millions of people hold (sic) conspiracy theories; they believe that powerful people have worked together in order to withhold the truth about some important practice or some terrible event. A recent example is the belief, widespread in some parts of the world, that the attacks of 9/11 were carried out not by Al Qaeda, but by Israel or the United States. Those who subscribe to conspiracy theories may create serious risks, including risks of violence, and the existence of such theories raises significant challenges for policy and law.

Sunstein argues that conspiracy theories (i.e. the 9/11 truth movement) are so dangerous that some day they may have to be banned by law. While awaiting that day, or perhaps in preparation for it, the government should “disable the purveyors of conspiracy theories” through various techniques including “cognitive infiltration” of 9/11 truth groups. Such “cognitive infiltration,” Sunstein writes, could have various aims including the promotion of “beneficial cognitive diversity” within the truth movement.

What sort of “cognitive diversity” would Cass Sunstein consider “beneficial”? Perhaps 9/11 truth groups that had been “cognitively infiltrated” by spooks posing as flat-earthers would harbor that sort of “beneficial” diversity? That would explain the plethora of expensive, high-production-values flat earth videos that have been blasted at the 9/11 truth community since 2008.

Why does Sunstein think “conspiracy theories” are so dangerous they need to be suppressed by government infiltrators, and perhaps eventually outlawed—which would necessitate revoking the First Amendment? Obviously conspiracism must present some extraordinary threat. So what might that threat be? Oddly, he never explains. Instead he briefly mentions, in vapidly nebulous terms, about “serious risks including the risk of violence.” But he presents no serious evidence that 9/11 truth causes violence. Nor does he explain what the other “serious risks” could possibly be.

Why did such highly accomplished academicians as Sunstein and Vermuele produce such an unhinged, incoherent, poorly-supported screed? How could Harvard and the University of Chicago publish such nonsense? Why would it be deemed worthy of development into a book? Why did the authors identify an alleged problem, present no evidence that it even is a problem, yet advocate outrageously illegal and unconstitutional government action to solve the non-problem?

The too-obvious answer, of course, is that they must realize that 9/11 was in fact a US-Israeli false flag operation. The 9/11 truth movement, in that case, would be a threat not because it is wrong, but because it is right. To the extent that Americans know or suspect the truth, the US government will undoubtedly find it harder to pursue various “national security” objectives. Ergo, 9/11 “conspiracy theories” are a threat to national security, and extreme measures are required to combat them. But since we can’t just burn the First Amendment overnight, we must instead take a gradual and covert “boil the frog” approach, featuring plenty of cointelpro-style infiltration and misdirection. “Cognitive infiltration” of internet platforms to stop the conspiracy contagion would also fit the bill.

It is quite possible, perhaps even likely, that Sunstein and Vermeule are indeed well-informed and Machievellian. But it is also conceivable that they are, at least when it comes to 9/11 and “conspiracy theories,” as muddle-headed as they appear. Their irrational panic could be an example of the bad thinking that emerges from groups that reflexively reject dissent. (Another, larger example of this kind of bad thinking comes to mind: America’s disastrous post-9/11 policies.)

The counterintuitive truth is that embracing and carefully listening to radical dissenters is in fact good policy, whether you are a government, a corporation, or any other kind of group. Ignoring or suppressing dissent produces muddled, superficial thinking and bad decisions. Surprisingly, this turns out to be the case even when the dissenters are wrong.

Scientific evidence for the value of dissent is beautifully summarized in Charlan Nemeth’s In Defense of Troublemakers: The Power of Dissent in Life and Business (Basic Books, 2018). Nemeth, a psychology professor at UC-Berkeley, summarizes decades of research on group dynamics showing that groups that feature passionate, radical dissent deliberate better, reach better conclusions, and take better actions than those that do not—even when the dissenter is wrong.

Nemeth begins with a case where dissent would likely have saved lives: the crash of United Airlines Flight 173 in December, 1978. As the plane neared its Portland destination, the possibility of a problem with the landing gear arose. The captain focused on trying to determine the condition of the landing gear as the plane circled the airport. Typical air crew group dynamics, in which the whole crew defers to the captain, led to a groupthink bubble in which nobody spoke up as the needle on the fuel gauge approached “E.” Had the crew included even one natural “troublemaker”—the kind of aviator who joins Pilots for 9/11 truth—there almost certainly would have been more divergent thinking. Someone would have spoken up about the fuel issue, and a tragic crash would have been averted.

Since 9/11, American decision-making elites have entered the same kind of bubble and engaged in the same kind of groupthink. For them, no serious dissent on such issues as what really happened on 9/11, and whether a “war on terror” makes sense, is permitted. The predictable result has been bad thinking and worse decisions. From the vantage point of Sunstein and Vermeule, deep inside the bubble, the potentially bubble-popping, consensus-shredding threat of 9/11 truth must appear radically destabilizing. To even consider the possibility that the 9/11 truthers are right might set off a stampede of critical reflection that would radically undermine the entire set of policies pursued for the past 17 years. This prospect may so terrify Sunstein and Vermeule that it paralyzes their ability to think. Talk about “crippled epistemology”!

Do Sunstein and Vermeule really think their program for suppressing “conspiracy theories” will be beneficial? Do YouTube’s decision-makers really believe that tweaking their algorithms to support the official story will protect us from bad information? If so, they are all doubly wrong.

First, they are wrong in their unexamined assumption that 9/11 truth and “conspiracy theories” in general are “blatantly false.” No honest person with critical thinking skills who weighs the merits of the best work on both sides of the question can possibly avoid the realization that the 9/11 truth movement is right. The same is true regarding the serial assassinations of America’s best leaders during the 1960s. Many other “conspiracy theories,” perhaps the majority of the best-known ones, are also likely true, as readers of Ron Unz’s American Pravda series are discovering.

Second, and less obviously, those who would suppress conspiracy theories are wrong even in their belief that suppressing false conspiracy theories is good public policy. As Nemeth shows, social science is unambiguous in its finding that any group featuring at least one passionate, radical dissenter will deliberate better, reach sounder conclusions, and act more effectively than it would have without the dissenter. This holds even if the dissenter is wrong—even wildly wrong.

The overabundance of slick, hypnotic flat earth videos, if they are indeed weaponized cointelpro strikes against the truth movement, may be unfortunate. But the existence of the occasional flat earther may be more beneficial than harmful. The findings summarized by Nemeth suggest that a science study group with one flat earther among the students would probably learn geography and astronomy better than they would have without the madly passionate dissenter.

We could at least partially solve the real problem—bad groupthink—through promoting genuinely beneficial cognitive diversity. YouTube algorithms should indeed be tweaked to puncture the groupthink bubbles that emerge based on user preferences. Someone who watches lots of 9/11 truther videos should indeed be exposed to dissent, in the form of the best arguments on the other side of the issue—not that there are any very good ones, as I have discovered after spending 15 years searching for them!

But the same goes for those who watch videos that explicitly or implicitly accept the official story. Anyone who watches more than a few pro-official-story videos (and this would include almost all mainstream coverage of anything related to 9/11 and the “war on terror”) should get YouTube “suggestions” for such videos as September 11: The New Pearl Harbor9/11 Mysteries, and the work of Architects and Engineers for 9/11 Truth. Exposure to even those “truthers” who are more passionate than critical or well-informed would benefit people who believe the official story, according to Nemeth’s research, by stimulating them to deliberate more thoughtfully and to question facile assumptions.

The same goes for other issues and perspectives. Fox News viewers should get “suggestions” for good material, especially passionate dissent, from the left side of the political spectrum. MSNBC viewers should get “suggestions” for good material from the right. Both groups should get “suggestions” to look at genuinely independent, alternative media brimming with passionate dissidents—outlets like the Unz Review!

Unfortunately things are moving in the opposite direction. YouTube’s effort to make “conspiracy videos” invisible is being pushed by powerful lobbies, especially the Zionist lobby, which seems dedicated to singlehandedly destroying the Western tradition of freedom of expression.

Nemeth and colleagues’ findings that “conspiracy theories” and other forms of passionate dissent are not just beneficial, but in fact an invaluable resource, are apparently unknown to the anti-conspiracy-theory cottage industry that has metastasized in the bowels of the Western academy. The brand-new bible of the academic anti-conspiracy-theory industry is Conspiracy Theories and the People Who Believe Them (Oxford University Press, 2019).

Editor Joseph Uscinski’s introduction begins by listing alleged dangers of conspiracism:

“In democracies, conspiracy theories can drive majorities to make horrible decisions backed by the use of legitimate force. Conspiracy beliefs can conversely encourage abstention. Those who believe the system is rigged will be less willing to take part in it. Conspiracy theories form the basis for some people’s medical decisions; this can be dangerous not only for them but for others as well. For a select few believers, conspiracy theories are instructions to use violence.”

Uscinski is certainly right that conspiracy theories can incite “horrible decisions” to use “legitimate force” and “violence.” Every major American foreign war since 1846 has been sold to the public by an official theory, backed by a frenetic media campaign, of a foreign conspiracy to attack the United States. And all of these Official Conspiracy Theories (OCTs)—including the theory that Mexico conspired to invade the United States in 1846, that Spain conspired to sink the USS Maine in 1898, that Germany conspired with Mexico to invade the United States in 1917, that Japan conspired unbeknownst to peace-seeking US leaders to attack Pearl Harbor in 1941, that North Vietnam conspired to attack the US Navy in the Gulf of Tonkin in 1964, and that 19 Arabs backed by Afghanistan, Iraq, Iran, and everybody else Israel doesn’t like conspired to attack the US in 2001—were false or deceptive.

Well over 100 million people have been killed in the violence unleashed by these and other Official Conspiracy Theories. Had the passionate dissenters been heeded, and the truths they told about who really conspires to create war-trigger public relations stunts been understood, none of those hundred-million-plus murders need have happened.

Though Conspiracy Theories and the People Who Believe Them generally pathologizes the conspiracy theories of dissidents while ignoring the vastly more harmful theories of official propagandists, its 31 essays include several that question that outlook. In “What We Mean When We Say ‘Conspiracy Theory’ Jesse Walker, books editor of Reason Magazine, exposes the bias that permeates the field, pointing out that many official conspiracy theories, including several about Osama Bin Laden and 9/11-anthrax, were at least as ludicrously false and delusional as anything believed by marginalized dissidents.

In “Media Marginalization of Racial Minorities: ‘Conspiracy Theorists’ in U.S. Ghettos and on the ‘Arab Street’” Martin Orr and Gina Husting go one step further: “The epithet ‘conspiracy theorist’ is used to tarnish those who challenge authority and power. Often, it is tinged with racial undertones: it is used to demean whole groups of people in the news and to silence, stigmatize, or belittle foreign and minority voices.” (p.82) Unfortunately, though Orr and Husting devote a whole section of their article to “Conspiracy Theories in the Muslim World” and defend Muslim conspiracists against the likes of Thomas Friedman, they never squarely face the fact that the reason roughly 80% of Muslims believe 9/11 was an inside job is because the preponderance of evidence supports that interpretation.

Another relatively sensible essay is M R.X. Dentith’s “Conspiracy Theories and Philosophy,” which ably deconstructs the most basic fallacy permeating the whole field of conspiracy theory research: the a priori assumption that a “conspiracy theory” must be false or at least dubious: “If certain scholars (i.e. the majority represented in this book! –KB) want to make a special case for conspiracy theories, then it is reasonable for the rest of us to ask whether we are playing fair with our terminology, or whether we have baked into our definitions the answers to our research programs.” (p.104). Unfortunately, a few pages later editor Joseph Uscinski sticks his fingers in his ears and plays deaf and dumb, claiming that “the establishment is right far more often than conspiracy theories, largely because their methods are reliable. When conspiracy theorists are right, it is by chance.” He adds that conspiracy theories will inevitably “occasionally lead to disaster” (whatever that means). (p.110).

I hope Uscinski finds the time to read Nemeth’s In Defense of Troublemakers and consider the evidence that passionate dissent is helpful, not harmful. And I hope he will look into the issues Ron Unz addresses in his American Pravda series.

Then again, if he does, he may find himself among those of us exiled from the academy and publishing in The Unz Review.

Published:2/4/2019 10:40:15 PM
[World] [Eugene Volokh] And a Welcome to Our New Coblogger Keith Whittington

I'm also delighted to report that Prof. Keith Whittington, William Nelson Cromwell Professor of Politics at Princeton University will be joining us as a coblogger. He is the author of, among other books, Speak Freely: Why Universities Must Defend Free Speech, Constitutional Construction: Divided Powers and Constitutional Meaning, and Constitutional Interpretation: Textual Meaning, Original Intent, and Judicial Review, and Political Foundations of Judicial Supremacy: The Presidency, the Supreme Court, and Constitutional Leadership in U.S. History. As you can tell, he does constitutional law and constitutional history; I'm very much looking forward to his posts!

Published:2/4/2019 10:11:24 PM
[Markets] More Alarm Bells As Banks Report Tightening Lending Standards While Loan Demand Slides

The latest alarm signal that the US economy is on collision course with a recession came after today's release of the latest Senior Loan Officer Opinion Survey (SLOOS) by the Federal Reserve, which was conducted for bank lending activity during the fourth quarter of last year, and which reported a double whammy of tightening lending standards and terms for commercial and industrial loans on one hand, and weaker demand for those loans on the other. Even more concerning is that banks also reported weaker demand for both commercial and residential real estate loans, echoing the softer housing data in recent months.

This tightening in C&I lending standards coupled with sharp declines loan demand, especially for mortgage and auto loans, is shown below.

Here are the details via Goldman:

  • 20% of banks surveyed reportedly widened spreads of loan rates over the cost of funds for large- and medium-sized firms, while 16% narrowed spreads. 14% of banks surveyed reported higher premiums charged on riskier loans, while 4% reported lower premiums. Other terms, such as loan covenants and collateralization requirements, remained largely unchanged. Demand for loans reportedly weakened on balance.
  • Relative to the last survey, standards on commercial real estate (CRE) loans tightened on net over the fourth quarter of the year. On net, 17% of banks reported tightening credit standards on loans secured by multifamily residential properties, while 13% of banks on net reported tightening standards for construction and land development loans. As above, banks reported that demand for CRE loans across a broad range of categories moderately weakened on net.
  • Banks reported that lending standards for residential mortgage loans remained largely unchanged on net in 2018Q4 relative to the prior quarter. However, this benign environment was largely as a result of slumping demand for credit, as banks reported weaker demand across all surveyed residential loan categories, including home equity lines of credit.
  • While banks reported that lending standards on consumer installment loans and autos remained largely unchanged, banks reported that lending standards for credit cards had tightened slightly. Here too demand - for all categories of consumer loans - was moderately weaker, while respondent willingness to make consumer installment loans tumbled to the lowest value since the financial crisis.

Finally, and most concerning of all, is that in their response to special questions on their 2019 outlook, assuming that economic activity continues to be in line with consensus forecasts, banks reported they plan to tighten lending standards somewhat for C&I loans, commercial real estate loans, and residential mortgage loans, in other words the most important credit would become even more difficult to attain. As a result, or perhaps due to the slowdown in the economy, banks also expect demand for C&I, CRE, and residential mortgage loans to weaken somewhat in 2019.

Banks also reported expecting delinquencies and charge-offs to increase somewhat on C&I, CRE, and residential mortgage loans; as Bloomberg's Andrew Cinko muses "if America was heading toward an economic contraction that would be a typical expectation. But this doesn't seem to be the case for the foreseeable future. So what gives?"

Perhaps "what gives" is that the economy is not nearly as strong as consensus would make it appear, and behind closed door, loan officers are already batting down the hatches and preparing for a recession. 

* * *

Here would be a good time to remind readers that according to a Reuters investigation conducted in mid-December, when looking behind headline numbers showing healthy loan books, "problems appear to be cropping up in areas such as home-equity lines of credit, commercial real estate and credit cards" according to federal data reviewed by the wire service and interviews with bank execs.

Worse, banks are also starting to aggressively cut relationships with customers who seem too risky, which is to be expected: after all financial conditions in the real economy, if not the markets which just enjoyed the best January since 1987, are getting ever tighter as short-term rates remain sticky high and the result will be a waterfall of defaults sooner or later. Here are the all too clear signs which Reuters found that banks are starting to prepare for the next recession by slashing and/or limiting risky loan exposure:

  • First, nearly half of the applications from customers with low credit scores were rejected in the four months ending in October, compared with 43 percent in the year-ago period, according to a survey released by the Federal Reserve Bank of New York.
  • Second, banks shuttered 7 percent of existing accounts, particularly among subprime borrowers, the highest rate since the Fed started conducting surveys in 2013.
  • Third, home-equity lines of credit declined 8 percent across the industry, with growth slowing in areas such as credit cards and commercial-and-industrial loans, the survey showed.

Then there are the bank-specific signs, starting with Capital One - one of the biggest U.S. card lenders - which is restricting how much it lends to each customer even as it aggressively recruits new ones, CEO Richard Fairbank said last December.

We have been more cautious in the extension of credit, initial credit lines, the broad-based credit line increase programs," he said. "At this point in the cycle, we’re going to hold back on that option a bit."

Regional banks have become more cautious lately as well, as they avoid financing riskier projects like early-stage construction loans and properties without pre-lease agreements (here traders vividly recall the OZK commercial real estate repricing fiasco that sent the stock crashing). New Jersey’s OceanFirst Bank also pulled back on refinancing transactions that let customers cash out on their debt, and has started reducing exposure to industrial loans, CEO Chris Maher told Reuters.

“In a downturn, industrial property is extremely illiquid,” he said. “If you don’t want it and it’s not needed it could be almost valueless.”

What happens next?

While a recession is looking increasingly likely, especially as it becomes a self-fulfilling prophecy with banks slashing loans resulting in even slower velocity of money, while demand for credit shrinks in response to tighter loan standards and hitting economic growth, the only question whether a recession is a 2019 or 2020 event, bankers and analysts remain optimistic that the next recession will look much more like the 2001 tech bubble bursting than the 2007-09 global financial crisis.

We wonder why they are so confident, and statements such as this one from Flagship Bank CFO Schornack will hardly instill confidence:

“I lived through the pain of the last recession. We are much more prudent today in how we underwrite deals.”

We disagree, and as evidence we present Exhibit A: the shock write down that Bank OZK took on its commercial real estate, which nobody in the market had expected. As for banks being more "solid", let's remove the $1.5 trillion buffer in excess reserves that provides an ocean of artificial liquidity, and see just how stable banks are then. After all, it is this $1.5 trillion in excess reserves that prompt Powell to capitulate and tell the markets he is willing to slowdown or even pause the Fed's balance sheet shrinkage.

Published:2/4/2019 5:36:24 PM
[Markets] “I Have Never Experienced This Kind Of Immoral Behavior From A Bank In My Entire Life": Goldman Slammed In Latest CDS Scandal

Not a month seems to pass any more without a major bank or hedge fund getting in hot water for using CDS in a way that was never intended, and now it's Goldman's turn, again.

Three months ago, when the loan market was freezing up,  Goldman struck an unusual deal with a group of hedge funds to offload a buyout loan from its books, saving the bank and the funds from potential losses. What was odd, is that Goldman was also serving as the underwriter to the company issuing the loans...while at the same time arrenging a "kicker" to loan buyers by having them bet on the potential insolvency of its own client.

Now, this bizarre arrangement is at the center of a lawsuit accusing the Wall Street giant of gorging on fees while also exposing the acquirer in the buyout, United Natural Foods, to hedge-fund sharks who stand to reap major profits if the company collapses as a result of the incremental debt: according to Bloomberg, United Natural had hired Goldman Sachs for the takeover and is now demanding at least $52 million - and potentially much more - from the bank.

Worse, the distributor of natural and organic foods, specialty foods is absolutely furious at the bank that until recently was its strategic advisor:

“I have never experienced this kind of egregious and immoral behavior from a bank in my entire life,” United Natural Chief Executive Officer Steve Spinner told Bloomberg in an interview after his company filed the suit Wednesday in a state court in New York. Goldman, which until that moment had been retained by United Natural, vowed to vigorously fight the case, calling it "entirely without merit."

As hinted above, Wall Street's latest drama once again revolves around the increasingly dysfunctional credit-default swaps market, where hedge funds and others wager on the ability of companies to keep up with their borrowings, only the traditional role of CDS as bankruptcy hedges has long ago given way to more "creative" applications. Indeed, as Bloomberg notes, "again and again, the contracts have played strange roles in debt transactions, sometimes straining allies or encouraging unlikely alliances."

According to the lawsuit, Goldman adjusted the terms on a $2 billion financing deal in a way that allowed hedge funds to reap a windfall from their CDS bets, as first reported by Bloomberg in October. United Natural said it initially heeded Goldman's advice, agreeing to the changes so it could complete the takeover of grocery chain Supervalu.

Where things got complicated, is that Goldman enlisted the help of hedge funds that had been betting on Supervalu’s demise. Those funds now stand to benefit if United Natural struggles to repay. That was just the beginning: United Natural also alleges that the bank unfairly withheld fees, burdened it with additional interest expenses and relied on “scare tactics” by a senior banker to back it into a corner.

In the beginning it was nothing but rainbows and roses: United Natural, which is a supplier to Whole Foods, announced the $2.9 billion Supervalu acquisition in July, and with the market soaring and credit and loan spreads near all time tights, not a cloud appeared on the horizon. And, as so often happens, the company announced that Goldman Sachs would act as lead underwriter to sell the billions in debt needed to fund the deal. But just a few months later, as equities first tumbled and shortly thereafter credit markets - especially in the leveraged loan market - froze up, the investment bank faced the prospect of being saddled with millions in losses unless it found a way to offload the loan from its books.

Meanwhile, hedge funds were facing major losses too after having bet against Supervalu’s debt by loading up on CDS, but the company’s sale threatened to create a situation known as an orphaned CDS contract, a situation similar to the infamous McClatchy fiasco (one which we profiled extensively in "Orphan CDS, Manufactured Credit Events, Insufficient Deliverables: What The Hell Is Going On In The CDS Market?"). Because new debt being issued to purchase Supervalu would have paid down the grocer’s obligations, it could have made swaps linked to Supervalu effectively worthless - referencing an entity with no significant borrowings - even as the default risk of the purchaser, United Natural, soared. However, due to the specific nature of the CDS contract, there was no continuity in tracking the referenced entity, as such those who were betting on a Supervalu default would end up with nothing, even if the successor company did eventually file for bankruptcy.

It is here that Goldman had an "epiphany", one which would kill two birds with one stone.

The key was to restore the value of the roughly $470 million of net CDS wagers linked to Supervalu’s debt. While the cost of the Supervalu derivatives had plunged through most of last year, by tweaking the loan docs to make Supervalu a co-borrower on the new financing, Goldman sparked a surge in the value of the swaps.

That, along with several other concessions, not only rescued hedge funds from getting wiped out on their SVU CDS, but more importantly, helped Goldman fill its order book for the loan and eliminate its exposure risk.

And while Goldman was the clear winner here, helping a couple of millionaire credit PMs avoid major losses for 2018 while avoiding taking a loss on its buyout loan exposure, United Natural claims that Goldman left it exposed to a group of lenders whose interests are at odds with its own and who are motivated to create roadblocks aimed at forcing a default so that they can notch further gains in the CDS market.

That may be difficult to prove, especially since Goldman can claim that without the contract fudge, the deal may never have been funded. Still, United Natural alleges that it never received a final list of funds participating in the loans and, had it known, would’ve raised concerns, even though without making the concessions to hedge funds, Goldman would have struggled to place the deal.

United Natural meanwhile claims that it went along with the changes after warnings from Stephan Feldgoise, who helps oversee Goldman’s mergers business in the Americas. The bank allegedly warned that if the company didn’t adjust the terms, it might “scare off” investors, trigger “blowback” from its own shareholders and “things would get ugly.”

What Goldman apparently did not explain is that the one entity most on the hook - in terms of both P&L and reputation - was Goldman. Which is why Feldgoise and Bank of America, to co-lead arranger on the loan, are also named as defendants.

As Bloomberg concludes, it’s another twist in Feldgoise’s time at Goldman Sachs, which ironically, included a stint as chairman of the firm’s global fairness committee. Curiously, in mid-2017, division chiefs announced he would be departing the bank, stepping down from his post in senior management to become an advisory director. Yet he’s still at the bank, now in a heated battle with a client for whom he’s handled various deals. That said, with the millions in fees from the United Natural-Supervalu deal, at least Feldgoise's tenure at Goldman is secure. Worst case, he can always get a job at one of the many hedge funds that made a killing on SVU CDS thanks to the Goldman fudge.

Published:2/3/2019 5:32:33 PM
[Markets] Unrest In France: No End In Sight

Authored by Guy Millière via The Gatestone Institute,

  • The third group is extremely large: it is the rest of the population. The upper class treat them as regrettable dead weight and expect nothing from them except silence and submission. Its members often have a hard time making ends meet. They pay taxes but can see that a growing portion is being used to subsidize the very people who drove them out of their suburban homes.

  • For the moment, Macron does not seem to want to recognize that these people even exist.

  • When Macron lowered the taxes of the wealthiest but increased the taxes of these "peripherals" by means of a fuel tax, it was seen as the last straw -- in addition to his arrogant condescension.

  • "Today, most of those who protest do not attack the police. But instead of acting to bring down the violence, the police are receiving orders pushing them to be very violent. I do not blame the police. I blame those who give them orders". — Xavier Lemoine, the mayor of Montfermeil, a city in the Eastern suburbs of Paris where the 2005 riots were extremely destructive,

Police scuffle with a yellow vest protester on December 18, 2018 in Biarritz, France. (Photo by Gari Garaialde/Getty Images)

Saturday, January 26th 2019. "Yellow vests" protests were being organized in the main cities of France. Mobilization was not weakening. Support from the population had decreased slightly but was still huge (60%-70%, according to polls). The main slogan has remained the same since November 17, 2018: "Macron must resign". In December, another slogan was added: "Citizens' initiative referendum".

The government and French President Emmanuel Macron have been doing everything they can to crush the movement. They have tried insults, defamation and have said the demonstrators were both "seditious people" wishing to overthrow the institutions and fascist "brown shirts". On December 31, Macron described them, as "hateful crowds". The presence of some anti-Semites led a government spokesman (incorrectly) to describe the entire movement as "anti-Semitic".

The Minister of the Interior, Christophe Castaner, ordered the police to resort to a degree of violence not seen since the time of the Algerian war (1954-62). During the two last decades in France, other riots have taken place many times. In 2005, for instance, when the whole country was subjected to arson and riots for weeks, the number of wounded rioters remained low. But violence has consequences. In just the last few weeks, 1,700 protesters were wounded, some seriously. Nineteen lost an eye; four lost a hand. Although French police officers do not use lethal weapons, they do use rubber ball launchers and often fire at protesters' faces -- a target prohibited by the current rules of engagement. The French are also the onlypolice force in Europe to use Sting-Ball grenades.

Macron has never treated protesters as people who have legitimate claims, so he has never paid attention to their claims. He only agreed to suspend the additional fuel tax, which was to have been begun in January, and to grant a slight increase in the minimum wage -- all of which he did only after weeks of protests.

Journalists say that Macron thought the movement would fade away after the end-of-year break; that police violence and desperation would induce the demonstrators to resign themselves to their fates, and that the support of the general population would collapse. Nothing of the sort took place.

It is clear that Macron does not want to meet the main demands of the protesters; that he will not resign, and that he refuses to accept a citizens' initiative referendum. He has apparently decided that if he dissolved the national assembly and called for legislative elections to end the crisis -- as President Charles de Gaulle did it to put an end to an uprising in May 1968, as allowed by the French Constitution -- he would suffer a scathing defeat. He can see that an overwhelming majority of the French people reject him, so apparently he has determined to seek a way out:

Macron called for a "great national debate" to address the problems facing the country. It soon became clear, however, that the "great debate" would be unconventional, to say the least.

Macron wrote a letter to all French citizens inviting them to "participate", but saying explicitly that the "debate" would not change anything, that the government would continue in exactly the same direction ("I have not forgotten that I was elected on a project, on major orientations to which I remain faithful."), and that everything that was done by the government since June 2017 would remain unchanged ("We will not go back on the measures we have taken").

He then entrusted organizing the "debate" and drafting its conclusions to two members of the government, and requested that "registers of grievances" be made available to the public in all town halls.

Macron then launched the "debate" by meeting mayors of many cities, but not in public. He seems to have been concerned that if he organized meetings open to the public, he would be immediately chased away by crowds.

The first two meetings took place in small cities (with 2000-3000 inhabitants), and with mayors whom the organizers -- chosen by Macron -- allowed to come. The organizers also selected the questions to be asked, then sent them to Macron to be answered at the meeting.

The day before each meeting, the selected city was placed under the administration of legions of police. All access roads to the city were closed, and anyone found wearing a yellow vest or carrying one in his car was fined. All protests in the city were flatly forbidden. The police made sure that the road used by Macron's convoy to reach the city was empty of any human presence for several hours before the convoy arrived.

Television news channels were asked to broadcast the entire meetings, which lasted six to seven hours. Only a few journalists, also selected by Macron, had permission to attend.

Several commentators stressed that pretending to "debate" is nonsense, and that entrusting the organization of the "debate" and the drafting of its conclusions to members of the government, and the way the meetings were organized, clearly show that these performances are a sham.

Some commentators pointed out that the term "register of grievances" has not been used since the time of absolute monarchy, that mayors are treated as waxworks and that placing the cities Macron visits in a state of siege is unworthy of a democracy.

A French economist, Nicolas Lecaussin, who grew up in Romania, wrote that these meetings reminded him of those in Romania during communism.

The author Éric Zemmour said that Macron is desperately trying to save his presidency but that the attempt will be useless:

"Macron has lost all legitimacy. His presidency is dead... For three months the country stopped economically; and Emmanuel M