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[World] Ending Obama EPA's Ban on Alaska's Pebble Mine Is Right for American Energy

Ned Mamula and Catrina Rorke

The Environmental Protection Agency is again drawing the ire of environmentalists, this time by lifting an Obama-era ban on development of Alaska’s Pebble Mine. It’s part of a dramatic pivot driven by the Trump administration, with rule changes, proposals and executive orders all intended to realign U.S. public lands policy with the White House’s development-minded approach.

If the changes are implemented successfully, the administration has the opportunity to create much-needed jobs in the western half of the country. And if the Pebble Mine is any example, it could finally unchain the United States from what has been a dangerous dependency on critical mineral imports.

The proposed Pebble Mine in southwestern Alaska would bring to market 6.44 billion metric tons of copper, gold, molybdenum and silver, four commodities in the group known as “critical and strategic minerals.” These minerals are critical for the manufacture of goods as varied as medical devices, agricultural products, and electronics, and contribute to industries that added $2.78 trillion to gross domestic product last year. Critical and strategic minerals get their designation because they’re not just economically vital; they’re also essential to national defense. The Pentagon maintains 37 mineral commodities as part of the Defense National Stockpile.

Informed, data-driven consideration of our mineral resources would allow the United States to better reconcile its economic needs with its devotion to environmental protection.

As recently as 1990, the United States was the world’s largest producer of mineral resources. Geologically speaking, we’re rich. The American West hosts one of the largest, most diverse and most unusually concentrated mineral belts in the world, extending from Colorado to the Pacific Ocean. That geological terrain hosts world-class deposits of chromium, copper, fluorine, gold, molybdenum, platinum and uranium, to name just a few.

But quite a different trend has emerged over the last three decades. Earlier this year, the U.S. Geological Survey reported that, of 88 important minerals they track, the United States is more than 25 percent import-dependent for 62 of them. For 20 of those minerals, the United States is 100 percent reliant on imports. Many of those 20 key minerals are absolutely critical to the economy and national defense.

The risks are underscored when one considers just how reliant the country has become on imports specifically from Russia and China. China, by far the world’s largest source of minerals, has already used its rare earth mineral wealth as a diplomatic weapon. As Chinese statesman Deng Xiaoping said in 1992: “The Middle East has its oil, China has rare earth.”

Resources can be powerful economic weapons. Consider the 1973 Arab Oil Embargo, prompted by international support for Israel in the Yom Kippur War. In retaliation, Arab countries cut production and prohibited exports to a number of countries. Oil prices more than quadrupled, consumers and corporations had trouble accessing supplies and the global economy raced toward recession. Only after significant concessions were made by the United States and its allies was the embargo lifted by the oil cartel.

The embargo pushed industry and government agencies to launch ambitious research and resource development programs that developed new technologies and unleashed our current fossil-fuel abundance. We shouldn’t wait for a similar precipitous event involving critical minerals. Quite simply, U.S. minerals policy needs to return to its founding in the “conservation ethic.”

In his memoir, Gifford Pinchot, the founding chief of the U.S. Forest Service, defined conservation as “the wise use of the earth and its resources for the lasting good of men.” In the last few decades, lands policy has instead tipped toward “preservation” — the view that resources have more inherent value than productive value. The tangible results of this shift, in terms of exploring and mining minerals, have been excessively long permitting timelines, land withdrawals and capitulation to environmental opposition. Federal lands management agencies are failing in their obligation to be wise stewards of the public domain.

Solutions are in the pipeline. The president has launched an ambitious new approach to resources and Congress isn’t far behind. Earlier this year, members of the Nevada and Idaho congressional delegations introduced in both chambers the National Strategic and Critical Minerals Production Act, which would charge the Interior and Agriculture departments with more efficiently developing critical and strategic minerals on federal lands. More substantive policy reforms to expand domestic minerals mining and production could and should follow. Informed, data-driven consideration of our mineral resources would allow the United States to better reconcile its economic needs with its devotion to environmental protection.

America is blessed with expansive mineral deposits and a more secure mineral future is within reach. Conscientious policy reforms to cultivate a smaller, less intrusive and more focused government minerals policy can successfully reconcile economic growth with environmental protection, empower the marketplace and shift the United States away from over-reliance on imports of critical and strategic minerals, especially from China and Russia.

Ned Mamula is an adjunct scholar with the Cato Institute; Catrina Rorke is a senior fellow with the R Street Institute.
Published:5/26/2017 7:23:07 AM
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[News] Body Slamming Congressional Candidate Wins Election, Apologizes to Reporter in Victory Speech Republican Greg Gianforte defeated Democrat Ron Quist in Montana’s special election Published:5/26/2017 7:23:06 AM
[56eb5348-1511-4a06-b4cc-ccbe2113d697] 'Fixer Upper's' Chip Gaines to write memoir about 'so many dumb things' he's done Chip Gaines has made a lot of "dumb things" in his life and he wants you to learn from his mistakes. Published:5/26/2017 7:23:06 AM
[B+] Wall Street Throws Up On OPEC: Barclays Sees "No Light At The End Of The Tunnel"; MS Cuts WTI Price Target

Oil bulls were unhappy with yesterday's OPEC announcement, which disappointed by adding nothing to the 9 month supply cut extension announcement which had already been leaked and largely priced in while leaving key questions unanswered, including what it has planned for the long-term.

The broader Wall Street commentary was similarly downbeat: “To say that yesterday’s performance was disappointing for bulls is an understatement,” Tamas Varga, analyst at PVM Oil Associates wrote in an emailed report. “It is, however, not a foregone conclusion that the trend is definitely turning. The question now is whether yesterday’s sharp drop in oil prices was a panic long-liquidation or the technical picture is now firmly turning bearish."

Barclay's analyst Michael Cohen captured the mood best with a note overnight titled "No light at the end of the tunnel:, in which he writes that "OPEC and several non-OPEC countries finalized plans to extend production cuts for an additional nine months (through Q1 2018) without specifically articulating an exit strategy. During the press conference, Saudi Energy Minister Khalid Al-Falih expressed confidence in the plan to extend the cuts through Q1 2018, saying that inventories would fall below the five-year average before year-end, but cuts should remain in place during Q1 2018 due to seasonal demand weakness, which we highlighted yesterday (OPEC’s Vienna Meeting: Intermission, May 24, 2017).  By our calculations, if half of the supply deficit is applied to OECD stocks, we do not see the inventory level approaching the five-year average by this timeframe."

This is exactly what we warned about in "The Math Behind OPEC's Revised Production Cut Still Does Not Work."

Below we excerpt some other of the key highlights from MS, which was clearly soured on the outlook for oil prices after OPEC's meeting:

  • OPEC may still be underestimating shale. Saudi Oil Minister Khalid Al-Falih made several comments that highlighted an interpretation contrary to our thinking about the state of the US shale industry.
  • Cost inflation is not yet an issue for US E&Ps. The first comment related to “significant cost inflation” that has hit the industry this year. This belief runs counter to reports from many US E&Ps and the oilfield service companies during their Q1 earnings calls (Figure 3). Those that are experiencing cost inflation have been able to mitigate total well costs through further efficiency gains.
  • Most US E&Ps are still drilling their core acreage. The second comment was that as activity ramps up, producers are moving into more expensive shales, which runs counter to E&P reports that the industry has several years of tier 1 (low breakeven) drilling inventory.
  • The US oil and gas sector is focused on growth and will slow when prices dictate. The third comment related to a "hope" that shale producers would moderate production. US E&Ps will moderate activity only if prices constrain activity. At current price levels, many producers will continue to meet or exceed their 2017 production guidance.
  • The extension should afford some price stability over the next nine months, allowing US producers to move forward with 2017 and even 2018 development plans. During Q1 2017, many E&Ps used $50 oil to provide guidance for 2017. In our view, producers will not diverge from guidance unless prices are significantly below this level ($40-45) for a sustained period.
  • The JMMC will monitor country production levels and recommended adjustments if necessary. As we highlighted yesterday, the JMMC is the new mechanism to make recommendations and will be meeting on a bi-monthly basis to discuss the progress of the deal. This new function adds additional uncertainty to what balances will look like over the coming months. If prices fall or rise too much, the JMMC may propose actions to re-stabilize prices.
  • The recasting of a new producer group, "NOPEC," which includes 24 countries that account for around 60% of production.  Russian energy minister Novak and Saudi Minister Al Falih took pains to highlight that through regular interaction the group can promote “healthy markets.”  Furthermore, the countries are “better poised to approach challenges that might lie ahead.”
  • Equatorial Guinea has joined OPEC. This will end up being an accounting change. We expect its almost 300 kb/d of output to decline next year.

Next, Barclays' implications and outlook:

Market balance implications:  If OPEC is taken at its word and maintains 100% compliance over the summer, the balances would likely be 500-600  kb/d tighter than what we currently assume, and this would coincide with an inventory draw that presents upside risk to our $56/b forecast in 2H17 and 1Q18 and downside risk to our forecast in the remainder of 2018 assuming no further changes to OPEC output. For now, we maintain our forecast, as other prevailing factors would likely offset further oil price appreciation, such as accelerated US tight oil growth and demand destruction that would occur as prices increase. We will publish an update to our comprehensive market balance in our upcoming Blue Drum monthly publication. We are already calling for US liquids production to grow 1.2 mb/d from Q4 2016 to Q4 2017 and an additional 1 mb/d from Q4 2017 to Q4 2018.  With this agreement, there is scope for output to move even higher over the next 18 months.


The implication of OPEC’s action creates a situation that will force it gradually to exit its market management mode. Minister Al Falih tried to assuage fears that it has an exit strategy in mind by saying it will cross that bridge when it comes to it in November 2017 and next year. In our view, the more accelerated declines we will see in stocks in the coming quarters and the floor OPEC has provided for the coming nine months are likely to result in aggressive growth in US tight oil, which we are already forecasting, and OPEC is likely to struggle to find a big enough hole to fit its incremental supply, keeping the proverbial light at the end of the tunnel out of reach for longer than just the first quarter of 2018.

* * *

Separately, in a just as disappointed note released overnight by another recent oil bull, Morgan Stanley's Martijn Rats, the commodity analyst echoed what Goldman said yesterday, and lowered its year end oil price forecast from $60 to $55 because while "OPEC's extended cut will likely lead to stock draws in 2Q/3Q and provide some oil price support, when this agreement ends, and coincides with strong shale growth, the market looks oversupplied again. This has become our expectation for 2018, and we lower price forecasts as a result."

Other higlights:

OPEC chooses the lesser of two evils: In recent weeks, OPEC found itself faced with a difficult choice: extend the production cuts to bring down bloated inventories, or end the cuts to prevent further loss of market share. The experience of the 1980s has shown that the latter can become as problematic as the former. Clearly, OPEC decided for the former, but it is storing up problems for 2018, in our view.


Near-term we see inventories drawing and providing support for oil prices: Global oil inventories finally started drawing in March, at a rate of ~0.9 mb/d based on monthly data. Weekly data suggests this has continued in April and May. With demand getting a seasonal tailwind, and OPEC extending its cuts, we expect inventory draws to accelerate in 3Q. Altogether, we estimate that global stocks will fall by ~100 million bbl in the balance of the year. Although these draws are smaller and are coming later than we once expected, this should nevertheless provide some price support in coming months. We forecast WTI to end 2017 at $55/bbl, down from our previous forecast of $60/bbl.



But the outlook for 2018 is starting to look troublesome End of OPEC agreement + Strong shale growth = Loose market: We do not expect that OPEC will extend its output cuts much beyond 1Q. By historical standards, that would be an unusually long period of output restraint. However, non-OPEC production has already returned to year-on-year growth and is set to accelerate in 2018, driven by shale. When the end of the OPEC production cuts meet strong shale growth, the market is almost certainly oversupplied again. As a result, we lower our end-2018 WTI price forecast to $55/bbl, from $60/bbl before, although we could still see lower prices at some point during 2018.


All of this has implications for long-term prices too: Our previous long-term price forecast of ~$70/bbl for WTI by 2019/20 was based on our estimate that ~1.5 mb/d of 2020 demand would need to be supplied by projects that have not been sanctioned yet, but that have break-even oil prices around that level. However, with stronger shale growth, slightly weaker demand and some additional cost deflation, the reliance on this 1.5 mb/d has almost entirely been wiped out. We still see 1.6 mb/d of 2020 demand that needs to come from projects with break-evens of $55-65/bbl, so we lower our end-2020 WTI forecast to $60/bbl.


How long until OPEC is back to the drawing board, or at least jawboning, of even more cuts, and even longer production halts? The answer: not long at all, as this hit moments ago from Reuters:

Published:5/26/2017 7:23:06 AM
[Entertainment] Melania Trumps' Style Secrets, Decoded With 5 Simple Rules ESC: Melania TrumpFirst lady fashion changes with each administration, but if Melania Trump's wardrobe is one thing, it's consistent. That's not to say her style hasn't...
Published:5/26/2017 7:23:06 AM
[Uncategorized] Morning Joe Creates Mock Anti-Republican TV Ad Predictable: Republicans pretty much want to kill granny and children. Published:5/26/2017 7:23:06 AM
[Top Picks] Fear and loathing in Montana

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The post Fear and loathing in Montana appeared first on Hot Air.

Published:5/26/2017 7:23:06 AM
[Science] Joe Scarborough: Trump's NATO speech is a 'love note' to Putin "The entire world is watching and most importantly, Vladimir Putin is watching. It seemed like yesterday was his love note to Vladimir Putin... Published:5/26/2017 7:23:06 AM
[Markets] Need to Know: This top-heavy rally is built on 5 big tech stocks, but here’s why that’s not a worry Traders look content to let the S&P 500 nab a solid weekly gain, though not everyone is happy as a three-day break draws oh-so-close. One complaint is just a few tech giants are powering the rally. Today’s call tackles that topic.
Published:5/26/2017 7:23:05 AM
[topics:events/wimbledon-tennis] Blaze rages on court at Wimbledon tennis club Published:5/26/2017 7:23:05 AM
[Markets] Gold at three-week high after Trump talks about North Korea with Japan's Abe Gold at three-week high after Trump talks about North Korea with Japan's Abe Published:5/26/2017 7:23:05 AM
[Plants & Animals ] Dog DNA influences face shape A study of dog DNA has revealed a genetic mutation linked to flat face shapes such as those seen in pugs and bulldogs. Published:5/26/2017 7:23:05 AM
[Entertainment] Gal Gadot glitters at the 'Wonder Woman' world premiere And she met up with the OG Wonder Woman, Lynda Carter.
Published:5/26/2017 6:57:06 AM
[c48290fd-11a5-4a75-8405-27d4ea653a26] David Letterman: Trump representing America 'makes me sick' David Letterman said knowing President Trump is representing America abroad makes him "sick." Published:5/26/2017 6:57:06 AM
[American people of German descent] Trump Slams "Very Bad" Germans For Selling Millions Of Cars In US: "We Will Stop This"

A day after Trump stunned his fellow NATO leaders, shoving one of them out of the way for a photo-op and demanding that they "must do more" to offset defense costs which are mostly borne by the US, Trump lobbed another bomb at the European center-right consensus by renewing his attacks on the German auto industry during a closed door meeting with two high-ranking European Union officials, according to a report in German magazine Der Spiegel, that was picked up by Bloomberg and CNBC.

Citing unidentified attendees, Spiegel quoted Trump as saying that “the Germans are bad, very bad” and adding “look at the millions of cars that they sell in the U.S. Terrible. We’re going to stop that.” The comments were said to have been made during a closed-door meeting with the EU President Jean-Claude Juncker and the European Council President Donald Tusk, who reportedly both stood up for Germany, according to CNBC.

Trump administration officials immediately went into damage-control mode, even as Juncker said the reports of the comment in question had been exaggerated. National Economic Council Director and former Goldman Sachs President Gary Cohn clarified that the US has concerns with the US-German trade balance, not with Germany itself.

"He said they’re very bad on trade, but he doesn’t have a problem with Germany. He said his dad is from Germany. He said, ‘I don’t have a problem Germany, I have a problem with German trade'," according to Bloomberg.

The German trade surplus rose to a record €235 billion ($284 billion) last year, while the US trade deficit widened in January to its highest level since March 2012. Excluding the EU, Germany is the third largest exporter in the world, after China and the US.

Shares of German automakers were down slightly in Frankfurt trading following Trump’s comments, which apparently reminded investors of his January threat to slap BMW AG with a 35% tariff.

Trump reportedly tried to negotiate a bilateral trade deal with German Chancellor Angela Merkel when she visited Washington in March, according to CNBC. But Merkel insisted that all trade deals with the EU must be made unilaterally.

Following his meeting with Merkel back in March, Trump claimed that the Germans owe “vast sums of money” to NATO, and that the US “must be paid more” for the defense services it provides to Germany.

To be sure, Trump wasn't the first U.S. leader to complain that most NATO nations, including Germany, weren’t meeting the alliance’s goal that members spend 2% of their GDP on defense. Germany spends about 1.2% currently.

In fact, none other than President Barack Obama in 2016 said in an interview with The Atlantic about his foreign policy doctrine that “free riders aggravate me.”

Published:5/26/2017 6:57:06 AM
[Laughter is the Best Medicine] Thoughts from the ammo line (Scott Johnson) Ammo Grrrll has posses on some widely applicable advice: USE EXTREME CAUTION! She writes: No, my dear friends, that is not a warning which must be legally appended to the New York Times, Washington Post, or Red Star of the North Tribune, to prevent you from taking any information therein with anything but a grain of salt substitute. I have recently been on yet another long road trip from Arizona Published:5/26/2017 6:57:05 AM
[Quick Takes] Students Want Prof Fired for Objecting to Kicking White People Off Campus for a Day “Day Of Absence” Published:5/26/2017 6:57:05 AM
[Markets] Big Lots' stock soars 8% premarket after Q1 results, raised outlook Big Lots' stock soars 8% premarket after Q1 results, raised outlook Published:5/26/2017 6:57:05 AM
[Politics] Unfriended: Mark Zuckerberg’s pitch for ‘universal basic income’ But at least Bernie will approve! Published:5/26/2017 6:57:05 AM
[Markets] Stock Futures Fall Ahead of Revision to First-Quarter U.S. Economic Growth Stock futures point to a lower open on Friday with the S&P 500 and Nasdaq on track to snap a six-day winning streak and retreat from records. Published:5/26/2017 6:57:05 AM
[Markets] The Wall Street Journal: Gold gets a lift from fresh North Korea jitters Gold prices tried for back-to-back gains Friday as a fresh round of geopolitical jitters, this time pinned to North Korea, offset generally gold-negative sentiment this week stemming from expectations for higher interest rates.
Published:5/26/2017 6:57:05 AM
[Materials Science ] Self-healing catalyst films for hydrogen production Chemists at the Centre for Electrochemical Sciences at Ruhr-Universität Bochum have developed a catalyst with self-healing properties. Under the challenging conditions of water electrolysis for hydrogen production, the catalyst material regenerates itself, as long as the components required for this are present in the electrolyte solution. A team involving Stefan Barwe, Prof Dr Wolfgang Schuhmann and Dr Edgar Ventosa from the Bochum Chair of Analytical Chemistry reports on this in the journal Angewandte Chemie International Edition. The work took place as part of the cluster of excellence Resolv. Published:5/26/2017 6:57:05 AM
[CHKP] Palo Alto Networks: Getting Back To Growth Published:5/26/2017 6:24:42 AM
[topics:people/jeremy-corbyn] Jeremy Corbyn: I am not being unpatriotic by questioning British foreign wars after Manchester attack Published:5/26/2017 6:24:42 AM
[2s10s] Global Rally Fizzles After "OPEC Shock" In "Slow Risk-Off Session"

S&P futures were fractionally lower from yesterday's record high as European stocks declined and Asian stocks were mixed, pressured by yesterday's 5% plunge in crude after OPEC unexpectedly "failed to surprise" markets, and announced the bare minimum supply cut extension that was expected by oil traders, who in turn puked long positions.

It wasn't just oil: it has been a slow risk-off session as Bloomberg phrased it, ahead of the long weekend for U.S. and U.K. markets, with the key carry pair, USD/JPY breaking below 111.00 as the USD continues to weakens, while the GBP tumbled 0.5%, after the latest poll shows Tory lead narrowing. As futures declined, fixed income markets ground higher as the 2s10s hits flattest level YTD. European equity markets open lower led by oil related stocks after yesterday’s heavy sell-off in oil. Automakers also weaker after possible Trump comments on German car exports. Gold well supported amid general risk-off.

Most of the early attention, however, was on the market's reaction to yesterday's oil selloff. “To say that yesterday’s performance was disappointing for bulls is an understatement,” Tamas Varga, analyst at PVM Oil Associates wrote in an emailed report quoted by Bloomberg. “It is, however, not a foregone conclusion that the trend is definitely turning. The question now is whether yesterday’s sharp drop in oil prices was a panic long-liquidation or the technical picture is now firmly turning bearish.”

Stocks from Tokyo to Europe were dragged down by oil producers as oil headed for a weekly loss after falling the most in three weeks on Thursday as OPEC’s move to prolong supply cuts for nine months disappointed investors hoping for more. 

“Markets ultimately found the renewed deal among OPEC and friends underwhelming,” Cole Akeson, a strategist at Sberbank CIB in Moscow, wrote in a note. “Essentially, the market consensus seems to have come around to a view that regardless of what effect on global inventories the deal may have for now, OPEC and its partners have little insight as to what to do later on.”

Before this week’s deal, oil had climbed back above $51 a barrel after Saudi Arabia and non-OPEC member Russia rallied support from the Organization of Petroleum Exporting Countries and other nations to extend the supply pact into 2018. However, as the chart below shows, that proved to be too optimstic for a market which no longer will buy simple on OPEC jawboning, but demands results.

With oil in the spotlight, Japan’s Topix index slipped 0.6%, trimming its weekly advance to 0.6%. Australia’s S&P/ASX 200 Index fell 0.7 percent, with BHP Billiton Ltd. dropping 2 percent.  South Korea’s Kospi rose 0.5 percent to another record. The index is up 2.9 percent for the week, the biggest gain in two months. Hong Kong’s Hang Seng Index was flat, keeping its weekly gain at 1.8 percent, while the Shanghai Composite increased 0.1 percent.

The Stoxx Europe 600 Index dropped 0.4% with oil and gas producers falling 1.2%. S&P 500 futures were little changed, after rising 0.4% on Thursday to new all time highs driven by a narrow basket of tech stocks.

Elsewhere, as discussed last night, the British pound tumbled over 0.5% to $1.2861 and looked set for its biggest one-day slide in over three weeks and steepest one-week decline since early April, after a poll showed the Conservative party lead narrowed after the Manchester attack, and as investors in Asia sold the currency after U.K.’s first-quarter economic growth missed estimates. The poll results come less than two weeks before the June 8 general election.

"With this kind of momentum and almost two weeks to go until the vote, not only is this not going to be the breeze that May anticipated when she called the snap election last month, it could yet turn into a humiliating defeat for the Conservative leader and her party," said Craig Erlam, senior market analyst at OANDA.  "Coming on the back of losses yesterday, it's turning into a rotten end to the week for the pound."

Elsewhere, confirming that the reason for the sharp spike in the Yuan over the past two days, the biggest move since January, was direct government intervention, overnight Bloomberg reported that China is considering changes to the way it calculates the yuan’s daily reference rate against the dollar "to reduce exchange-rate volatility while undermining efforts to increase the role of market forces" in Asia’s largest economy. Policy makers may add a “counter-cyclical factor” to the yuan’s daily fixing, according to a government statement on Friday. Analysts said the change would give authorities more control over the fixing and restrain the influence of market pricing.

Overnight, both the onshore and offshore yuan rose to three-month highs on continued speculation the Chinese government will continue to support the currency and stock markets. The currency advanced for a second day on talk state-backed funds were propping up Chinese assets Thursday following Moody’s downgrade of China’s credit rating.

In currencies, the Bloomberg Dollar Spot Index fell 0.1 percent, poised for a second week of declines. The pound slid 0.5 percent to $1.2875 (see above). The yen rose 0.7 percent to 111.11 per dollar, after dropping 0.3 percent on Thursday. The euro strengthened 0.2 percent to $1.1227

After its sharp drop on Thursday, oil edged higher in early trading but remained on the back foot after tumbling 5% in the previous session. On Thursday in Vienna, the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC producers agreed to extend a pledge to cut around 1.8 million barrels per day (bpd) until the end of the first quarter of 2018 - disappointing investors betting on longer or larger curbs.

Friday economic data include annualized GDP, durable goods orders and University of Michigan indexes.

Bulletin Headline Summary from RanSquawk

  • European equities enter the North American crossover lower as energy names underperform following yesterday's OPEC announcement
  • GBP has been placed under pressure after the latest polling data shows the race for Downing Street getting closer
  • Looking ahead, highlights include US GDP, Durables and Uni. Of Michigan

Market Snapshot

  • S&P 500 futures down 0.1% to 2,411.55
  • STOXX Europe 600 down 0.4% to 390.42
  • MXAP up 0.01% to 152.86
  • MXAPJ down 0.08% to 499.83
  • Nikkei down 0.6% to 19,686.84
  • Topix down 0.6% to 1,569.42
  • Hang Seng Index up 0.03% to 25,639.27
  • Shanghai Composite up 0.07% to 3,110.06
  • Sensex up 0.8% to 30,983.82
  • Australia S&P/ASX 200 down 0.7% to 5,751.66
  • Kospi up 0.5% to 2,355.30
  • German 10Y yield fell 1.4 bps to 0.348%
  • Euro up 0.1% to 1.1225 per US$
  • Brent futures up 0.8% to $51.84/bbl
  • Italian 10Y yield fell 1.9 bps to 1.826%
  • Spanish 10Y yield fell 2.2 bps to 1.562%
  • Brent futures up 0.8% to $51.84/bbl
  • Gold spot up 0.8% to $1,265.34
  • U.S. Dollar Index down 0.1% to 97.11

Top overnight news

  • Political uncertainty in the U.K. rose after the race between the ruling Conservative party and opposing Labour party narrowed, raising prospects that the Tory majority will be smaller than expected and this could have implications on the Brexit process.
  • The Federal Reserve is ‘very close’ to where it needs to be on policy and shouldn’t be thinking in terms of major increases in the policy rate, St. Louis Fed President James Bullard tells reporters in Tokyo
  • Focus on U.S. President Donald Trump’s G-7 summit visit which will involve debates on climate change, free trade, terrorism and security
  • China is considering changes to the way it calculates the yuan’s daily reference rate against the dollar, a move that’s likely to reduce exchange-rate volatility while undermining efforts to increase the role of market forces in Asia’s largest economy
  • The OPEC’s historic pact to extend oil supply cuts has left markets guessing on the group’s long term plans and its exit strategy

Asia equity markets traded mixed as the region failed to take the baton from another record setting day on Wall St, with oil names dampened following the weakness across the energy complex. This saw commodity-related sectors in ASX 200 (-0.7%) underperform as they felt the brunt of the 5% declines in crude prices due to disappointment from the OPEC output extension deal. A firmer JPY kept the Nikkei 225 (-0.3%) subdued, while Hang Seng (Unch.) and Shanghai Comp. (+0.2%) traded choppy amid a reserved liquidity operation by the PBoC and continued pessimistic comments from Moody's following the recent sovereign rating downgrade. 10yr JGBs traded higher amid a downbeat risk tone, while the BoJ were also present in the market under its bond buying operation for JPY 750b1n of JGBs in the belly to super-long end. Moody's stated that China growth will slow, while it added that China may lose Al rating if there are signs debt keeps increasing and debt surpasses expectations.

Top Asian News

  • Taiwan’s Economy Grew 2.6% Y/y in 1Q; Survey Est. +2.6%
  • China Confirms It’s Considering Changing Yuan Fixing Formula
  • Vanguard to Triple Shanghai Staff by Year-End as China Opens
  • SBI Said to Pick BofA, Deutsche Bank for $2 Billion Offering
  • Incoming Philippine BSP Governor Discusses His Plans: Q&A
  • China Money Funneled to Far-Flung Homes Flags Bubble Trouble
  • Hong Kong Dollar Heads for Biggest Weekly Drop Since Early 2016

European equities trade with modest losses, largely stemming from the disappointed/scepticism amongst investors over OPEC's decision to only extend the current output cut by 9-months. Following this announcement crude prices slipped, WTI hitting a low of USD 48.21, subsequently large energy names felt the brunt of this. Although, crude prices have seen a modest reprieve this morning with WTI consolidating above USD 49. Across credit markets, EGB's have been kept afloat with support from FTQ flow, upside in bunds has met resistance at the 161.55 area, a breach may see a move to the 18th May highs situated at 162.02. As we approach month-end, Citi expect healthy extensions for European and UK bonds, with OATs set to benefit the most.

Top European News

  • Retirement Savings Gap Is Seen Climbing to $400 Trillion by 2050
  • EU to Demand Full ECJ Jurisdiction on Rights Post-Brexit: Doc.
  • Italian Manufacturing Morale Falls Amid Concerns Over Recovery
  • Portugal Asks to Make EU9.7b Early Repayment to IMF: IGCP
  • Barclays Bid to Cut Africa Stake Still With S. Africa Regulator
  • Restaurant Group Surges Most in 9 Months on ‘Reassuring’ Update

In currencies, GBP has been pressured with market attention being placed on the most recent polls which have shown a narrowing lead for PM May and her Conservative party over the Labour party. As such, GBP has tripped below 1.2900 to eye up support layered in around 1.2850-1.2844, a break through this could see a test to the May 4th low at 1.2831. USD-index continued to ease as one of the more dovish FOMC speakers, Bullard sounded the alarm over the path of inflation, most of this seen against the JPY, which has run through support at 111.50. Elsewhere, the slip in commodities pressures AUD yet again, this continues to drive AUD/NZD lower which is now hovering around 3-month lows, given that NZD has remained firm in the wake of New Zealand's strong budget position.

In commodities, WTI and Brent crude futures have staged a modest recovery from yesterday's lows to enter the North American crossover modestly higher with the usual value-buyers entering the market amid no new developments on the fundamental side since yesterday's OPEC-inspired sell-off. In terms of newsflow for the complex, things have remained relatively light as markets take a breather from yesterday. In metals markets, Gold has seen mild support with the safe-haven asset underpinned amid a cautious risk tone, which also kept copper subdued.

Looking at the day ahead now, the focus will be on the US this afternoon where there are a number of important releases due. First up is the second estimate of Q1 GDP where the consensus is for an upward revision in growth to +0.9% qoq from +0.7%.  Our US colleagues expect a small upward revision to +0.8% qoq. Importantly for growth in the current quarter we’ll also receive the April durable and capital goods orders report where the consensus is for a weak headline durable goods  orders print to be offset by a healthy gain in both ex-transportation orders (+0.4% mom expected) and core capex orders (+0.5% mom expected). Also due out  this afternoon is the final May University of Michigan consumer sentiment print where it’s worth keeping an eye on the various inflation expectations indicators too.

US Event Calendar

  • 8:30am: GDP Annualized QoQ, est. 0.9%, prior 0.7%; Personal Consumption, est. 0.4%, prior 0.3%; GDP Price Index, est. 2.3%, prior 2.3%; Core PCE QoQ, est. 2.0%, prior 2.0%
  • 8:30am: Durable Goods Orders, est. -1.5%, prior 0.9%, revised 1.7%; Durables Ex Transportation, est. 0.4%, prior 0.0%, revised 0.8%
    • Cap Goods Orders Nondef Ex Air, est. 0.5%, prior 0.5%; Cap Goods Ship Nondef Ex Air, est. 0.5%, prior 0.5%, revised 0.3%
  • 10am: U. of Mich. Sentiment, est. 97.5, prior 97.7
    • U. of Mich. Current Conditions, prior 112.7
    • U. of Mich. Expectations, prior 88.1
    • U. of Mich. 1 Yr Inflation, prior 2.6%
    • U. of Mich. 5-10 Yr Inflation, prior 2.3%

DB's Jim Reid concludes the overnight wrap

With markets already with one eye on the long weekend holidays in the US and UK it’s not been the most inspiring last 24 hours. Really it has been all about Oil after prices fell sharply yesterday in the wake of OPEC and non-OPEC producers agreeing to extend the production cut deal by 9 months into 2018. That was pretty much as guided to although the disappointment reflected in the price action appeared to be twofold with cuts not being deepened and no new producers joining the pact. It did however appear that there was some optionality left open for cuts being extended beyond the additional 9 months should prices decline. It was also noted that the importance of the five-year rolling average of OECD inventory was cemented and our commodity strategists highlight that this helps solidify their expectations that output controls will eventually be extended at least until the end of 2018, and more likely than not into 2019 (you can find more details in their report here

After touching a high of $52.00/bbl yesterday morning, post the headlines WTI proceeded to tumble and finished the day down -4.79% at $48.90/bbl and back to the lowest level in a week. It was also the third biggest daily decline this year. This morning it is down another -0.90% too. The biggest impact on other asset classes yesterday was Oil-sensitive currencies with the likes of the Russian Ruble (-0.90%), Norwegian Krone (-0.79%) and Canadian Dollar (-0.57%) all weaker.

That was really the extent of the excitement in markets though. Given the holidays in Europe volumes were thin and price action was pretty benign as a result (Stoxx 600 ending -0.06%). Meanwhile it was business as usual for US equity markets again where – despite the energy sector doing its best to weigh on broader indices – the S&P 500 (+0.44%) rose for the sixth consecutive session and in doing so notched up yet another record high. The longest consecutive winning streak for the S&P this year came in February when it rose for seven sessions on the trot. Some better than expected results in the retail sector, namely from Best Buy and PVH, appeared to be the driving force yesterday while the VIX also finished the day lower and closed below 10.00 (at 9.99) for the first time in over 2 weeks. In fact it’s now closed below that level 3 times this year, including yesterday. From 1990-2016, it had actually only closed below 10 on a total of 9 occasions.

There was a similar lack of excitement in Treasuries yesterday where yields finished the day little changed after spending much of the session in a tight range. We did hear from the Fed and specifically from Governor Lael Brainard who said that she is encouraged by a brightening global economic outlook and that downside risks from certain economies appear to be fading. Brainard has previously been one of the most dovish Fed officials for what it’s worth.

While we’re on the Fed, it’s worth highlighting that yesterday our US economists made some small timing changes to their Fed call for the rest of the year in light of Wednesday’s FOMC minutes. They note that if the Fed intends to begin reducing its holdings of Treasury and MBS securities this year, then policymakers are likely to announce a change in their reinvestment policy at the conclusion of the September 20 FOMC meeting. The details of this policy should be made known well in advance – most likely after the June meeting (press conference and/or minutes). The team go on to say that given the committee’s concerns about a subsequent over-tightening of financial conditions once the process of reinvestment tapering begins, it is unlikely that the Fed will raise the fed funds rate at the same time that they announce a change in reinvestment policy. As a result the team has now shifted their view of a June and September hike to a June and December hike, with the Fed staying put at the September meeting.

Elsewhere, President Trump’s overseas tour continues with Trump yesterday causing some ripples at the NATO summit after criticising allies for “chronic underfunding”. Meanwhile the travel ban is back in focus overnight after the US attorney general said that the White House will appeal its latest courtroom defeat in the US Supreme Court. Also worth pointing out is the Washington Post reporting that investigators are now focusing on Trump’s son-in-law and advisor Jared Kushner in connection with the Russia-Election investigation. Kushner was said to have held meetings with Russia in December, however it remains to be seen if this is the person of interest that was mentioned in press reports (like Washington Post) last week.

In Asia this morning it’s been a much more mixed start for major bourses. While the Nikkei (-0.35%), and ASX (-0.65%) are down, mostly as a result of weakness in the energy sector, the Shanghai Comp and Hang Seng are flat and the Kospi (+0.48%) has edged higher. US equity futures are also little changed. Meanwhile the big mover in FX this morning is Sterling which is down -0.42% versus the Dollar after a YouGov poll for the Times (conducted over 24-25 May) showed the Conservatives as holding just a 5% lead over Labour at 43% to 38%. That is the smallest lead for the Tories since May became PM back in July  last year. The last YouGov poll (18-19 May) showed the Conservatives as holding a 9% lead at 44% to 35%. Other opinion polls showed a lead for the Tories of as much 12-13% just over a week ago, so it’s worth keeping an eye on this trend over the next week or two. The other news to highlight from overnight is the PBoC announcing that it is planning a change in the formula behind the daily yuan fixing to include a ‘counter-cyclical adjustment factor’. The suggestion is that it’ll dampen the impact of big swings. There has been little change in either the onshore or offshore yuan following that news. Finally inflation data in Japan this morning didn’t throw up any real surprises with headline (+0.4% yoy), core (+0.3% yoy) and core-core (+0.0% yoy) rates all up slightly versus March and more or less matching expectations.

In terms of yesterday’s economic data, in the US the advance goods trade balance reading in April revealed a slightly wider than expected deficit of $67.6bn. Away from that initial jobless claims continue to hover at multi-decade lows after printing at 234k for last week. The four-week average is now at 235k. Meanwhile the Kansas City Fed’s manufacturing activity index for May edged up 1pt to +8 (vs. +9 expected) with the details showing that both new orders and employment were a little firmer which is in contrast to the data we saw in the Richmond Fed’s survey. The other data was the April wholesale inventories print which came in at -0.3% mom and will likely result in downward pressure on some of the GDP trackers. In Europe the only data came from the UK where Q1 GDP was revised down to +0.2% qoq from +0.3% with the big negative contribution coming from net trade.

Looking at the day ahead now, with no data of significance due out in Europe this morning the focus will be on the US this afternoon where there are a number of important releases due. First up is the second estimate of Q1 GDP where the consensus is for an upward revision in growth to +0.9% qoq from +0.7%.  Our US colleagues expect a small upward revision to +0.8% qoq. Importantly for growth in the current quarter we’ll also receive the April durable and capital goods orders report where the consensus is for a weak headline durable goods  orders print to be offset by a healthy gain in both ex-transportation orders (+0.4% mom expected) and core capex orders (+0.5% mom expected). Also due out  this afternoon is the final May University of Michigan consumer sentiment print where it’s worth keeping an eye on the various inflation expectations indicators too.

Away from the data there isn’t much central bank speak to highlight but it’s worth keeping an eye on the G7 summit where Trump, May, Macron and Merkel are gathering. That meeting concludes on Saturday with closing press conferences due to take place so we’ll have a recap in Monday’s EMR of any important snippets. Fingers crossed we’ll also be opening Monday  on the back of an FA Cup final win for Arsenal tomorrow. We need one positive to come away from what has otherwise been a fairly depressing season for Arsenal fans.

Published:5/26/2017 6:24:42 AM
[Science] Trump told European officials that Germans are 'very bad' on trade President Trump told European officials in Brussels that the Germans are "very bad" on trade, the president's top economic aide confirmed... Published:5/26/2017 6:24:42 AM
[Comic books] A dive into Wonder Woman’s feminist (and not-so-feminist) history
A dive into Wonder Woman’s feminist (and not-so-feminist) history

DURING World War II, as Superman and Batman arose as mainstream pop symbols of strength and morality, the publisher that became DC Comics needed an antidote to what a Harvard psychologist called superhero comic books’ worst crime: “blood­curdling masculinity.” Turns out that psychologist, William Moulton Marston, had a plan to combat such a crime — […]
Published:5/26/2017 6:24:42 AM
[Baron Trump] The First Lady of Israel’s Gift to Melania Trump Was Truly Touching FLOTUS and Baron will share the timeless, universal book Published:5/26/2017 6:24:42 AM
[Markets] Best Buy is capitalizing on troubles at Sears and HHGregg in one particular category Best Buy’s appliance sales were helped by troubles with Sears, as well as store closures from HHGregg, which has filed for bankruptcy
Published:5/26/2017 6:24:42 AM
[Energy & Green Tech ] Taiwan's 'forest bus' charms passengers With moss-covered seats and an explosion of lush plants and flowers throughout its interior the "forest bus" offers a fragrant leafy ride for passengers used to crammed public transport in Taiwan's capital. Published:5/26/2017 6:24:42 AM
[] The Morning Report 5/26/17 Good morning, kids. Well, it looks like Greg Gianforte's alleged "body slam" against Guardian propagandist Ben Jacobs had no ill effects on his campaign as he handily defeated Rob Quist for Ryan Zinke's Montana House Seat. Of note, this... Published:5/26/2017 6:24:42 AM
[topics:organisations/conservative-party] Who should I vote for? UK General Election manifestos at a glance  Published:5/26/2017 5:55:44 AM
[World] Trump meeting with G-7 leaders after going on offensive TAORMINA, Italy (AP) — In the Middle East, President Donald Trump was feted with pageantry, the leaders of Saudi Arabia and Israel seemingly in competition to outdo the other with the warmth of their welcomes and the depth of their pledges of cooperation. Published:5/26/2017 5:55:43 AM
[Columns] The Shows of Yesteryear

This morning I drove to work listening to the new Beatles Channel on Sirius XM. When I arrived at the office I read articles about the fortieth anniversary of Star Wars, and about its eighth sequel, which premieres in December, and skimmed a review of a movie based on a show about attractive lifeguards that ran from 1989 to 2001. On Twitter people were joking about potential plotlines for a sequel to Top Gun, from 1986. I listened to cuts from the soundtrack of a Netflix original series devoted to evoking the sensibility of my elementary school years. Before starting this column I looked up from the computer and watched on television President Trump, a man whose campaign slogan evoked past greatness, whose visage has been associated with wealth and success for decades, who was himself a part of the 1980s culture that we continually recycle.

The post The Shows of Yesteryear appeared first on Washington Free Beacon.

Published:5/26/2017 5:55:42 AM
[Tech] Highlights from Google I/O 2017 to look out for this coming year Computing is evolving from a mobile first to an AI first approach. Published:5/26/2017 5:55:42 AM
[Markets] Record run for U.S. stocks hangs in the balance ahead of holiday weekend U.S. stocks were poised for a slightly weaker start the open on Friday, ahead of data including durable goods and a long holiday weekend that could keep some investors on the sidelines. Published:5/26/2017 5:55:42 AM
[worldNews] 'Challenging' talks expected as Trump, other G7 leaders meet TAORMINA, Italy (Reuters) - Talks between U.S. President Donald Trump and other leaders of the world's rich nations at the G7 summit on Friday were expected to be "robust" and "challenging" after he had lambasted NATO allies and condemned German trade policies a day earlier.
Published:5/26/2017 5:55:42 AM
[Markets] When Bill Gates and Mark Zuckerberg sound the same dire warning about the future of American jobs, it’s time to listen The founders of Microsoft and Facebook have cautionary words for the Class of 2017.
Published:5/26/2017 5:55:42 AM
[Science] Trump claims 'millions of jobs' in US were saved because of his foreign trip President Trump claimed Friday "millions of jobs" in the United States have been saved because of his foreign trip, which has taken him f... Published:5/26/2017 5:55:42 AM
[Ecology ] DNA research provides new hope for a bird on the brink In a fresh bid to save the southern black-throated finch from extinction, researchers are turning to a novel analysis of DNA to help plot a path to survival. Already extinct in NSW, this woodland species is endangered in Queensland, having lost 80 per cent of its range in the last 30 years. Under current development plans for its last stronghold, the Galilee basin, it's predicted to lose a further 57 per cent of its remaining habitat. Published:5/26/2017 5:55:42 AM
[Myers Briggs] What Kind of Traveler You Are, Based on Your Myers-Briggs Type Each MBTI personality approaches exploring the world uniquely. Published:5/26/2017 5:55:42 AM
[TC] Nintendo shares hit 8-year high as cult title Monster Hunter is announced for Switch  Nintendo is unleasing a monster title on the Switch — quite literally — after Capcom revealed plans to bring its Monster Hunter franchise to the console with the upcoming Monster Hunter XX title. (That’s “double cross” not “XX,” by the way.) While it might not be mainstream in the West, Monster Hunter is a huge franchise in Japan. Where do we start? Read More
Published:5/26/2017 5:23:40 AM
[topics:places/greater-manchester] Everything we know about Manchester suicide bomber Salman Abedi Published:5/26/2017 5:23:40 AM
[Markets] The unexpected places people are traveling to this summer This year, more tourists are looking beyond London and Paris.
Published:5/26/2017 5:23:40 AM
[Entertainment] Khloe Kardashian Filed for Divorce 1 Year Ago: Inside Her New Normal Without Lamar Odom Lamar Odom, Khloe KardashianExactly one year ago today, Khloe Kardashian filed for divorce from Lamar Odom--for the second time. The 32-year-old cited, once again, "irreconcilable differences" as the reason...
Published:5/26/2017 5:23:40 AM
[nj politics] NJ Politics Digest: 470,000 in NJ Could Lose Health Coverage Roundup of daily news. Published:5/26/2017 5:23:40 AM
[American people of German descent] Republican Gianforte Wins Montana Special Election Despite Assault Charge

Political pundits were closely watching last night's special election in Montana for two reasons: to see if there is an anti-Trump sentiment shift in this hard-line republican state, and whether the "body slamming" scandal that sent shockwaves just one day prior would cost Republican frontrunner Greg Gianforte the election.

The results emerged early on Friday morning, when Republican Greg Gianforte, a wealthy technology executive who had urged voters to send him to Congress to help Trump, was projected to win Thursday's special election for Montana’s lone House seat with about 50% of the vote, while challenger Democrat Rob Quist had 44% at the time of the call, according to the Montana secretary of State's website. Quist, a banjo player and first-time candidate, had focused his campaign on criticism of the Republican effort to repeal and replace former President Barack Obama's healthcare law.

Gianforte’s victory came only hours after a shocking physical altercation with Guardian reported Ben Jacobs, whose audio was recorded and disseminated, led to the local sheriff filing a misdemeanor assault charge against the republican. Gianforte is scheduled to appear in county court sometime before June 7—the charge carries a maximum fine of $500 or a prison term of no more than six months.

And while the news blanketed the news and prompted three major Montana papers to pull their endorsement of Gianforte, the Republican was buoyed by how many voters sent in their ballots early, making their choice before the altercation. According to Reuters, it was unclear if Gianforte's assault had an impact on the vote. More than a third of the state's registered voters had already submitted ballots before it happened, state election officials said, and some Gianforte supporters shrugged off the charges or said they did not believe published accounts.

"I feel like, it's all just propaganda, you know what I mean, it's hard for me to believe anything the media tells me," said Nathaniel Trumper, who cast a vote for Gianforte at a polling station in Helena.

The assault occurred as Jacobs tried to ask Gianforte about healthcare, according to an audio tape. Fox News Channel reporter Alicia Acuna, who was preparing to interview Gianforte, said the candidate "grabbed Jacobs by the neck with both hands and slammed him to the ground."

Speaking to cheering supporters in Bozeman after his win, Gianforte apologized for the incident and said he was not proud of his actions. "I should not have responded the way I did, and for that I'm sorry," Gianforte said. "I should not have treated that reporter that way."

Gianforte specifically addressed his apology to Jacobs. "Last night I made a mistake," he said, adding: "I'm sorry, Mr Ben Jacobs."

The victory will calm Republicans who had grown restless with the rapidly tightening race in what had been a safe Republican seat for years. And it deals a blow to Democrats who had hoped to frame a victory as a rebuke of President Trump that would give them a shot of momentum ahead of the 2018 midterms.

Meanwhile, Quist, who raised more than $6 million for his upstart bid, said the experience gave him insight into the economic struggles some people face. He campaigned last weekend with U.S. Senator Bernie Sanders of Vermont, who won the state's 2016 Democratic presidential primary against Hillary Clinton.

As for the consequences of Gianforte's bodyslamming of Jacobs, the republican could face additional, more serious charges once prosecutors review the evidence, Gallatin County Attorney Marty Lambert told Reuters.

Gianforte has two weeks to enter a plea to the misdemeanor citation issued by the Gallatin County Sheriff's Office, according to Lambert, who said he would likely review the case before then to decide whether it should be treated as a felony offense, which would supersede the current charge. "There's always the possibility that when we get the case and the details, that we might look differently at the charging decision," Lambert said.

Republican National Committee Chairwoman Ronna McDaniel called Gianforte's apology "a good first step toward redemption" and said she hoped he "continues to work toward righting his wrong." Gianforte will take the House seat vacated when Trump named Ryan Zinke as secretary of the interior. Trump and Vice President Mike Pence recorded robocalls to voters on Gianforte's behalf, and Republican groups poured millions into ads criticizing Quist for property tax liens and unpaid debts, which Quist said stemmed from a botched gallbladder surgery.

Published:5/26/2017 5:23:39 AM
[World] Europe Markets: European stocks struggle as oil, auto shares pull back European stocks fell Friday, putting the regional benchmark on track for a weekly decline, with oil and gas shares pulled lower on disappointment stemming from OPEC’s agreement to extend production cuts.
Published:5/26/2017 5:23:39 AM
[topics:things/consumer-affairs] Britain's spiralizing obsession is killing pasta sales Published:5/26/2017 4:56:21 AM
[World] Trump meeting with G-7 leaders after going on offensive TAORMINA, Italy (AP) — In the Middle East, President Donald Trump was feted with pageantry, the leaders of Saudi Arabia and Israel seemingly in competition to outdo the other with the warmth of their welcomes and the depth of their pledges of cooperation. Published:5/26/2017 4:56:21 AM
[Barack Obama] FBI Refuses To Hand Over "Comey Memos" To Congress

House Oversight Committee Chairman Jason Chaffetz said today that the FBI had decided to withhold documents, including memos, notes, summaries, and recordings, requested by his committee in regards to the ongoing Russia probe. This was revealed in a letter sent by Chaffetz to the FBI responding to the agency’s decision to withhold documents requested by the Committee on May 16, 2017.

The FBI's denial to cooperate is presented below:

According to a statement by the Oversight Committee, "Chaffetz requested memos, notes, summaries, and recordings to assist in the Committee’s investigation of the FBI’s independence, and which are outside the scope of the Special Counsel’s investigation."

The documents are due June 8, 2017, but that may not happen as it appears the FBI is suddenly unwilling to cooperate.  

As Chaffetz elaborates, after a New York Times report that former Federal Bureau of  Investigation Director James Corney memorialized the content of phone calls and meetings with the President in a series of memoranda, he requested those memoranda and any related notes, summaries, and recordings. The FBI is withholding those documents, citing to the appointment of Robert Mueller as Special Prosecutor. According to a letter from your staff: "In light of this development and other considerations [the Bureau] is undertaking appropriate consultation to ensure all relevant interest implicated by your request are properly evaluated.

The letter states:

“The Committee has its own, Constitutionally-based prerogative to conduct investigations. But the Committee in no way wants to impede or interfere with the Special Counsel’s ability to conduct his investigation.  In fact, the Committee’s investigation will complement the work of the Special Counsel. Whereas the Special Counsel is conducting a criminal or counterintelligence investigation that will occur largely behind closed doors, the Committee’s work will shed light on matters of high public interest, regardless of whether there is evidence of criminal conduct.


“The focus of the Committee’s investigation is the independence of the FBI, including conversations between the President and Comey and the process by which Comey was removed from his role as director.  The records being withheld are central to those questions, even more so in light of Comey’s decision not to testify before the Committee at this time.”


“I am seeking to better understand Comey’s communications with the White House and Attorney General in such a way that does not implicate the Special Counsel’s work.”

As Chaffetz concludes, "Congress and the American public have a right and a duty to examine this issue independently of the Special Counsel's investigation. I trust and hope you understand this and make the right decision-to produce these documents to the Committee immediately and on a voluntary basis."

The American public is certainly looking forward to the FBI's release of the full content of the Comey's memos, not only those relating to his meetings with Trump, but just as importantly, with Loretta Lynch, as well as Barack Obama and/or Hillary Clinton.

Full text of Chairman Chaffetz letter can be viewed here.
Full text of FBI letter can be viewed here.

Published:5/26/2017 4:56:20 AM
[Markets] Currencies: Pound slides after poll shows Conservatives’ lead shrinking; dollar stumbles The pound fell to below $1.29 after a poll showed the Conservative Party’s lead ahead of next month’s election is slipping. Meanwhile, the dollar is weaker ahead of a clutch of data.
Published:5/26/2017 4:56:20 AM
[Archaeology & Fossils ] How dinosaurs may have evolved into birds Tohoku University researchers and their international collaborators have identified a possible genetic mechanism underlying the evolution of birds, according to a recently published study in Nature Communications. Published:5/26/2017 4:56:20 AM
[World] Trump meeting with G-7 leaders after going on offensive TAORMINA, Italy (AP) — In the Middle East, President Donald Trump was feted with pageantry, the leaders of Saudi Arabia and Israel seemingly in competition to outdo the other with the warmth of their welcomes and the depth of their pledges of cooperation. Published:5/26/2017 4:22:43 AM
[Education] Raspberry Pi Foundation and CoderDojo to code club together  The Raspberry Pi Foundation has announced it’s merging with another code club charity, Dublin-based CoderDojo. The aim is to advance shared goals around furthering the march of computing education for young people. Read More
Published:5/26/2017 4:22:43 AM
[Bear Market] Investing Wisdoms... Spot What's Missing

Authored by Lance Roberts via,

Over the last 30-years, I have endeavored to learn from my own mistakes and, trust me, I have paid plenty of “stupid-tax” along the way. However, it is only from making mistakes, that we learn how to become a better investor, advisor or portfolio manager.

The following is a listing of investing tips, axioms and market wisdoms from some of the great investors of our time. Importantly, as you review these wisdoms, compare how these investing legends approach investing as compared to your methodologies, those of your advisor or what you are told daily by the media.

Can you spot what’s missing?

12 Market Wisdoms From Gerald Loeb

1. The most important single factor in shaping security markets is public psychology.

2. To make money in the stock market you either have to be ahead of the crowd or very sure they are going in the same direction for some time to come.

3. Accepting losses is the most important single investment device to insure safety of capital.

4. The difference between the investor who year in and year out procures for himself a final net profit, and the one who is usually in the red, is not entirely a question of superior selection of stocks or superior timing. Rather, it is also a case of knowing how to capitalize successes and curtail failures.

5. One useful fact to remember is that the most important indications are made in the early stages of a broad market move. Nine times out of ten the leaders of an advance are the stocks that make new highs ahead of the averages.

6. There is a saying, “A picture is worth a thousand words.” One might paraphrase this by saying a profit is worth more than endless alibis or explanations. . . prices and trends are really the best and simplest “indicators” you can find.

7. Profits can be made safely only when the opportunity is available and not just because they happen to be desired or needed.

8. Willingness and ability to hold funds uninvested while awaiting real opportunities is a key to success in the battle for investment survival.-

9. In addition to many other contributing factors of inflation or deflation, a very great factor is the psychological. The fact that people think prices are going to advance or decline very much contributes to their movement, and the very momentum of the trend itself tends to perpetuate itself.

10. Most people, especially investors, try to get a certain percentage return, and actually secure a minus yield when properly calculated over the years. Speculators risk less and have a better chance of getting something, in my opinion.

11. I feel all relevant factors, important and otherwise, are registered in the market’s behavior, and, in addition, the action of the market itself can be expected under most circumstances to stimulate buying or selling in a manner consistent enough to allow reasonably accurate forecasting of news in advance of its actual occurrence.

12. You don’t need analysts in a bull market, and you don’t want them in a bear market

Jesse Livermore’s Trading Rules Written in 1940

1. Nothing new ever occurs in the business of speculating or investing in securities and commodities.

2. Money cannot consistently be made trading every day or every week during the year.

3. Don’t trust your own opinion and back your judgment until the action of the market itself confirms your opinion.

4. Markets are never wrong – opinions often are.

5. The real money made in speculating has been in commitments showing in profit right from the start.

6. As long as a stock is acting right, and the market is right, do not be in a hurry to take profits.

7. One should never permit speculative ventures to run into investments.

8. The money lost by speculation alone is small compared with the gigantic sums lost by so-called investors who have let their investments ride.

9. Never buy a stock because it has had a big decline from its previous high.

10. Never sell a stock because it seems high-priced.

11. I become a buyer as soon as a stock makes a new high on its movement after having had a normal reaction.

12. Never average losses.

13. The human side of every person is the greatest enemy of the average investor or speculator.

14. Wishful thinking must be banished.

15. Big movements take time to develop.

16. It is not good to be too curious about all the reasons behind price movements.

17. It is much easier to watch a few than many.

18. If you cannot make money out of the leading active issues, you are not going to make money out of the stock market as a whole.

19. The leaders of today may not be the leaders of two years from now.

20. Do not become completely bearish or bullish on the whole market because one stock in some particular group has plainly reversed its course from the general trend.

21. Few people ever make money on tips. Beware of inside information. If there was easy money lying around, no one would be forcing it into your pocket.

21 Rules Of Paul Tudor Jones

1. When you are trading size, you have to get out when the market lets you out, not when you want to get out.

2. Never play macho with the market and don’t over trade.

3. If I have positions going against me, I get out; if they are going for me, I keep them.

4. I will keep cutting my position size down as I have losing trades.

5. Don’t ever average losers.

6. Decrease your trading volume when you are trading poorly; increase your volume when you are trading well.

7. Never trade in situations you don’t have control.

8. If you have a losing position that is making you uncomfortable, get out. Because you can always get back in.

9. Don’t be too concerned about where you got into a position.

10. The most important rule of trading is to play great defense, not offense.

11. Don’t be a hero. Don’t have an ego.

12. I consider myself a premier market opportunist.

13. I believe the very best money is to be made at market turns.

14. Everything gets destroyed a hundred times faster than it is built up.

15. Markets move sharply when they move.

16. When I trade, I don’t just use a price stop, I also use a time stop.

17. Don’t focus on making money; focus on protecting what you have.

18. You always want to be with whatever the predominant trend is.

19. My metric for everything I look at is the 200-day moving average of closing prices.

20. At the end of the day, your job is to buy what goes up and to sell what goes down so really who gives a damn about PE’s?

21. I look for opportunities with tremendously skewed reward-risk opportunities.

 Bernard Baruch’s 10 Investing Rules

1. Don’t speculate unless you can make it a full-time job.

2. Beware of barbers, beauticians, waiters — of anyone — bringing gifts of “inside” information or “tips.”

3. Before you buy a security, find out everything you can about the company, its management, and competitors, its earnings and possibilities for growth.

4. Don’t try to buy at the bottom and sell at the top. This can’t be done — except by liars.

5. Learn how to take your losses quickly and cleanly. Don’t expect to be right all the time. If you have made a mistake, cut your losses as quickly as possible.

6. Don’t buy too many different securities. Better have only a few investments which can be watched.

7. Make a periodic reappraisal of all your investments to see whether changing developments have altered their prospects.

8. Study your tax position to know when you can sell to greatest advantage.

9. Always keep a good part of your capital in a cash reserve. Never invest all your funds.

10. Don’t try to be a jack of all investments. Stick to the field you know best.

 James P. Arthur Huprich’s Market Truisms And Axioms

1. Commandment #1: “Thou Shall Not Trade Against the Trend.”

2. Portfolios heavy with underperforming stocks rarely outperform the stock market!

3. There is nothing new on Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again, mostly due to human nature.

4. Sell when you can, not when you have to.

5. Bulls make money, bears make money, and “pigs” get slaughtered.

6. We can’t control the stock market. The very best we can do is to try to understand what the stock market is trying to tell us.

7. Understanding mass psychology is just as important as understanding fundamentals and economics.

8. Learn to take losses quickly, don’t expect to be right all the time, and learn from your mistakes.

9. Don’t think you can consistently buy at the bottom or sell at the top. This can rarely be consistently done.

10. When trading, remain objective. Don’t have a preconceived idea or prejudice. Said another way, “the great names in Trading all have the same trait: An ability to shift on a dime when the shifting time comes.”

11. Any dead fish can go with the flow. Yet, it takes a strong fish to swim against the flow. In other words, what seems “hard” at the time is usually, over time, right.

12. Even the best looking chart can fall apart for no apparent reason. Thus, never fall in love with a position but instead remain vigilant in managing risk and expectations. Use volume as a confirming guidepost.

13. When trading, if a stock doesn’t perform as expected within a short time period, either close it out or tighten your stop-loss point.

14. As long as a stock is acting right and the market is “in-gear,” don’t be in a hurry to take a profit on the whole positions. Scale out instead.

15. Never let a profitable trade turn into a loss, and never let an initial trading position turn into a long-term one because it is at a loss.

16. Don’t buy a stock simply because it has had a big decline from its high and is now a “better value;” wait for the market to recognize “value” first.

17. Don’t average trading losses, meaning don’t put “good” money after “bad.” Adding to a losing position will lead to ruin. Ask the Nobel Laureates of Long-Term Capital Management.

18. Human emotion is a big enemy of the average investor and trader. Be patient and unemotional. There are periods where traders don’t need to trade.

19. Wishful thinking can be detrimental to your financial wealth.

20. Don’t make investment or trading decisions based on tips. Tips are something you leave for good service.

21. Where there is smoke, there is fire, or there is never just one cockroach: In other words, bad news is usually not a one-time event, more usually follows.

22. Realize that a loss in the stock market is part of the investment process. The key is not letting it turn into a big one as this could devastate a portfolio.

23. Said another way, “It’s not the ones that you sell that keep going up that matter. It’s the one that you don’t sell that keeps going down that does.”

24. Your odds of success improve when you buy stocks when the technical pattern confirms the fundamental opinion.

25. As many participants have come to realize from 1999 to 2010, during which the S&P 500 has made no upside progress, you can lose money even in the “best companies” if your timing is wrong. Yet, if the technical pattern dictates, you can make money on a short-term basis even in stocks that have a “mixed” fundamental opinion.

26. To the best of your ability, try to keep your priorities in line. Don’t let the “greed factor” that Wall Street can generate outweigh other just as important areas of your life. Balance the physical, mental, spiritual, relational, and financial needs of life.

27. Technical analysis is a windsock, not a crystal ball. It is a skill that improves with experience and study. Always be a student, there is always someone smarter than you!

James Montier’s 7 Immutable Laws Of Investing

1. Always insist on a margin of safety

2. This time is never different

3. Be patient and wait for the fat pitch

4. Be contrarian

5. Risk is the permanent loss of capital, never a number

6. Be leery of leverage

7. Never invest in something you don’t understand

But, did you spot what was missing?

Every day the media continues to push the narrative of passive investing, indexing and “buy and hold.” Yet while these methods are good for Wall Street, as it keeps your money invested at all times for a fee, it is not necessarily good for your future investment outcomes. 

You will notice that not one of the investing greats in history ever had “buy and hold” as a rule.

So, the next time that someone tells you the “only way to invest” is to buy and index and just hold on for the long-term, you just might want to ask yourself what would a “great investor” actually do. More importantly, you should ask yourself, or the person telling you, “WHY?”

The ones listed here are not alone. There numerous investors and portfolio managers that are revered for the knowledge and success. While we idolize these individuals for their respective “genius,” we can also save ourselves time and money by learning from their wisdom and their experiences. Their wisdom was NOT inherited, but was birthed out of years of mistakes, miscalculations, and trial-and-error. Most importantly, what separates these individuals from all others was their ability to learn from those mistakes, adapt, and capitalize on that knowledge in the future.

Experience is an expensive commodity to acquire, which is why it is always cheaper to learn from the mistakes of others.

Importantly, you will notice that many of the same lessons are repeated throughout. This is because there are only a few basic “truths” of investing that all of the great investors have learned over time. I hope you will find the lessons as beneficial as I have over the years and incorporate them into your own practices.

Published:5/26/2017 4:22:43 AM
[Quantum Physics ] Study takes step toward mass-producible quantum computers Quantum computers are experimental devices that offer large speedups on some computational problems. One promising approach to building them involves harnessing nanometer-scale atomic defects in diamond materials. Published:5/26/2017 4:22:43 AM
[Markets] From birth to college: How to budget for having kids Having a child can upend your household finances. Here’s what to expect and how to budget for baby and beyond.
Published:5/26/2017 4:22:43 AM
[topics:things/uk-weather] UK weather: Britain roasts in record temperatures before thundery showers ruin bank holiday Published:5/26/2017 4:22:43 AM
[World] Mark Hulbert: Gold bulls can expect more bad luck Optimism even as gold prices slump is a bearish sign, writes Mark Hulbert.
Published:5/26/2017 4:22:43 AM
[China] Around The World In 80 (Crazy) Taxes

Remember the last time you had an interesting conversation about tax?  But once in a blue moon even taxes can raise a chuckle.

In an attempt to prove taxes can – very occasionally – be fun, Howlader & Co. put together a list of the 80 weirdest taxes past and present from around the world.

From a pro-smoking tax in the Hubei province of China to a tax deduction for exceptional trees in Hawaii, there’s a few eyebrow raisers in here. See below for details:

Courtesy of: Howlader & Co

Published:5/26/2017 3:55:09 AM
[topics:organisations/conservative-party] Tory plan to balance budget by mid-2020s 'could require tax rises' Published:5/26/2017 3:55:09 AM
[Asia] Payment firm Soft Space raises $5M to expand in Southeast Asia and Japan  Soft Space, a payment provider in Southeast Asia, has close its $5 million Series A as it looks to expand across the region, and potentially into Japan. Kuala Lumpur, Malaysia-based Soft Space works with large enterprise customers, typically banks, to offer customized solutions for mobile payment, both at point-of-sale and other parts of the process. Typically these solutions are white-labeled. Read More
Published:5/26/2017 3:55:09 AM
[World] Friday's HOT MIC Join us all day, every day. Published:5/26/2017 3:55:09 AM
[ATW] OPEC Decision Slammed Drillers Published:5/26/2017 3:21:43 AM
[worldNews] UK security minister says no specific threat to public this weekend LONDON (Reuters) - British emergency services are prepared for possible attacks on public events over an upcoming holiday weekend but have no information on specific threats after Monday's bomb attack in Manchester which killed 22, a government minister said.
Published:5/26/2017 3:21:43 AM
[topics:people/donald-trump] Who is Rex Tillerson? The US Secretary of State who is visiting London today Published:5/26/2017 3:21:43 AM
[Markets] The Wall Street Journal: European diplomats unhappy Trump didn’t support key NATO defense provision Heading into this week’s NATO meeting, allies said they had hoped Trump would put to rest worries raised during the campaign that American support for Europe was conditional.
Published:5/26/2017 3:21:43 AM
[Comedy] War Room

When a group of people in a room get turnt on the same subject and it pisses everyone in the room off

Bruh last night I had a major war room in my hotel room

Published:5/26/2017 2:41:57 AM
[Entertainment] backronym: Word of the Day backronym: an existing word turned into an acronym by creating an apt phrase whose initial letters match the word, as to help remember it or offer a theory of its origin. Published:5/26/2017 2:41:57 AM
[Environment ] Paris climate commitment 'crippling' to US growth: White House US compliance with its commitments under the Paris Agreement on climate change would be "crippling" to growth, the White House said Friday. Published:5/26/2017 2:41:57 AM
[Hizb ut-Tahrir] Censoring You To "Protect" You

Authored by Douglas Murray via The Strategic Culture Foundation,

  • The editor of The Vanguard at Portland State University decided that it was more important to cover up a story than to break it, more important to evade truths than to expose them, and more important to treat students -- and the wider world -- as children rather than thinking sentient adults able to make up their own minds.
  • That students such as Andy Ngo exist is reason for considerable optimism. So long as there are even a few people left who are willing to ask the questions that need asking and willing to tell people about the answers they hear -- however uncomfortable they may seem right now -- all cannot possibly be lost.
  • Indeed, it is imaginable, that with examples such as this, students in America could be reminded not only that truth will always triumph over lies, but that the current trend of ignorance and censorship might one day soon begin to be turned around.

In the culture-wars currently rocking US campuses, the enemies of free speech have plenty of tools on their side. Many of these would appear to be advantages. For instance the employment of violence, thuggery and intimidation against those who disagree are generally effective ways to prevent people hearing things you do not want them to hear. As are the subtler but more regularly employed tactics for shutting people down, such a "no-platforming" people or getting them disinvited after they have been invited, should the speaker's views not accord 100% with those of their would-be censors. As also noted in this space before, many of the people who campaign to limit what American students can learn also have the short-term advantage of being willing to lie without compunction and cover over facts whenever they emerge.

The important point here, however, is that word "short-term". In the long run, those who wish to cover over a contrary opinion, or even inconvenient facts, are unlikely to succeed. Adults tend to be capable of more discernment and initiative than the aspirant-nannies believe them to be, and the effects will always tend to show. Take, for example, events in Portland, Oregon, last month.

In April, a gathering took place at the Portland State University. The occasion was billed as an interfaith panel and was given the title, "Challenging Misperceptions." As this is an era when perceptions, as well as misperceptions, of religion are perhaps unusually common, there might be some sense in holding such a discussion, even in the knowledge that it is likely to be hampered -- as interfaith get-togethers usually are -- by the necessity of dwelling on things that do not matter and focussing attention away from all things that do. Thus, by the end of an average interfaith event, it can generally be agreed upon that there are certain dietary laws that certain religions have in common, some agreement on the existence of historical figures and an insistence that religion is the answer to most problems of our world. Fortunately, at Portland, there were some people in the audience who appear to have been happy to avoid this sort of boilerplate.

A young woman raised her hand and asked the Muslim student on the panel about a specific verse in the Koran which would appear to approve killing non-Muslims (Possible verses might have included Qur'an: 8:12; 22:19-22; 2:191-193; 9.5; 9:29). The Muslim student replied:

"I can confidently tell you, when the Koran says an innocent life, it means an innocent life, regardless of the faith, the race, like, whatever you can think about as a characteristic."

This had the potential to develop into an interesting, or at the very least, an interestingly evasive answer. And so a young student there, named Andy Ngo, who also worked for the university's student newspaper, The Vanguard, got out his phone and began recording. The Muslim student on the panel went on to say:

"And some, this, that you're referring to, killing non-Muslims, that [to be a non-believer] is only considered a crime when the country's law, the country is based on Koranic law – that means there is no other law than the Koran. In that case, you're given the liberty to leave the country, you can go in a different country, I'm not gonna sugarcoat it. So you can go in a different country, but in a Muslim country, in a country based on the Koranic laws, disbelieving, or being an infidel, is not allowed so you will be given the choice [to leave]."

All of this is an admirably more complete answer than tends to be given at such affairs. All of this is also theologically strong. Speaking about the attitudes of the Islamic faith towards apostasy a few years ago, no less an authority than Yusuf al-Qaradawi said that if Muslims had got rid of the punishments for apostasy, "Islam would not exist today". It is a striking admission, and one which would appear to suggest an awareness that the religion's innate appeal is not as great as is often alleged.

The young reporter who captured this segment of video proceeded to share it on his Twitter account. This is the sort of thing journalists often do if they are at a public event and someone says something of interest. The alternatives (that journalists hope never to attend anything interesting, or attend events that are interesting but choose to keep their discoveries private) are not models for success in the profession.

In the days immediately following the event, a couple of websites picked up the story. Shortly afterwards, Andy Ngo was called in for a meeting at his student newspaper and told by the editor-in-chief that his behaviour was "predatory" and "reckless" and that he had put the life of the Muslim student and that student's family at risk. So far as anyone knows, nothing has happened to either the Muslim student or his family. Despite much flame-fanning by "Defenders of Minorities", America does not seem to be in the middle of a lynching season for religious minorities, even though these moralists often appear to wish it otherwise. Nevertheless, "health and safety" and "minimising harm" are, as Mark Steyn has observed, the new "shut up". Where once someone would invite you just to "shut up", today they can appeal to the possibility that a non-existent lynch-mob might show up to murder anyone whose cause the censor of the day happens to be trying to protect.

At any rate, while the Muslim student and his family are, of course, fine, the young journalist who reported his words was fired. The editor of The Vanguard at Portland State University decided that it was more important to cover up a story than to break it, more important to evade truths than to expose them, and more important to treat Portland students -- and the wider world -- as children rather than thinking adults able to make up their own minds.

The account of The Vanguard is a typical display of student cowardice and American academic dishonour. The report, nevertheless, should also stand as a demonstration of American hope. That students such as Andy Ngo exist is reason for considerable optimism. So long as there are even a few people left who are willing to ask the questions that need asking and willing to tell people about the answers they hear -- however uncomfortable they may seem right now -- all cannot possibly be lost. Indeed, it is imaginable, that with examples such as his, students in America could be reminded not only that truth will always triumph over lies, but that the current trend of ignorance and censorship might one day soon begin to be turned around.

Published:5/26/2017 2:41:57 AM
[Markets] Darrell Delamaide's Political Capital: Do childless leaders mean the death of Europe? Some commentators wonder if European civilization is doomed because most of its leaders are childless, writes Darrell Delamaide.
Published:5/26/2017 2:41:57 AM
[Climate News] No, Santer et al. have not refuted Scott Pruitt Guest essay by Leo Goldstein The MSM is actively promoting a new piece of dubious “climate science”: the article Tropospheric Warming Over The Past Two Decades doi:10.1038/s41598-017-02520-7, by B. Santer et al., published in Nature Scientific Reports on May 24. For well-known reasons, Santer et al decided to debate not scientists, but Scott Pruitt, the new… Published:5/26/2017 2:00:32 AM
[Fundings & Exits] Funding for real estate challenger Spruce shows New York’s startup scene is thriving  Spruce, a new startup looking to speed up the mortgage, has raised $4.5 million in its series A financing from Bessemer Venture Partners, Omidyar Network, and Third Prime Capital along with a slew of private angel investors. Founded by two former employees of the robo-advisory wealth management company Betterment, the new startup is notable for a few reasons. First, it’s yet another… Read More
Published:5/26/2017 2:00:31 AM
[structure:news/uk-news] Manchester attack latest: Fears Salman Abedi made second bomb as police launch new raids Published:5/26/2017 2:00:30 AM
[topics:organisations/islamic-state] How Manchester bomber Salman Abedi took his twisted revenge out of 'love for Islam' after being radicalised by Isil preacher Published:5/26/2017 1:25:14 AM
[Science] Matt Drudge wants 'that Montana Gianforte guy alone in a room with Paul Ryan' The Drudge Report editor and founder had a little fun with the Montana Republican's impending victory. Published:5/26/2017 1:25:13 AM
[Alternative currencies] A New Financial System Is Being Born

Authored by Mike Krieger via Liberty Blitzkrieg blog,

If Bitcoin blew you away when you first discovered it, and continues to do so to this day, Spiral Dynamics can help explain why. Bitcoin was an expression in the physical world of the newly emergent leading-edge integral level consciousness. It drew lessons from history and attempted to take the best of orange and green worldviews and incorporate them into an entirely new form of money. We see the clear presence of free markets and individualism, as well as the intentional separation of the system from dominator hierarchies (bureaucratic government meddling), which had corrupted all money before it. Its greenness is evident in the fact that by design no individual or company controls the network. Global, decentralized, revolutionary technology. This is perhaps the perfect example of integral consciousness operating on our planet at this time from an economics standpoint, and why it has captured the imagination of so many, while at the same time being violently rejected by so many others.


From February’s post: Why Increased Consciousness is the Only Path Forward

Although I had heard about it much earlier, I didn’t truly start investigating Bitcoin until the summer of 2012. The more I learned the more my mind was blown away, and for a while I couldn’t think about anything else. What truly solidified its real world usefulness to me was when I discovered it had been used by Wikileaks to accept payments in the midst of a financial services blockade against the renegade publisher. This realization inspired my first Bitcoin related post in August 2012 titled, Bitcoin: A Way to Fight Back Against the Financial Terrorists? 

In that piece, I linked to a Forbes article that detailed the revolutionary events taking place. We learned:

Following a massive release of secret U.S. diplomatic cables in November 2010, donations to WikiLeaks were blocked by Bank of America, VISA, MasterCard, PayPal and Western Union on December 7th, 2010. Although private companies certainly have a right to select which transactions to process or not, the political environment produced less than a fair and objective decision. It was coordinated pressure exerted in a politicized climate by the U.S. government and it won’t be the last time that we see this type of pressure.


Fortunately, there is way around this and other financial blockades with a global payment method immune to political pressure and monetary censorship.


On its public bitcoin address, Wikileaks has taken in over $32,000 equivalent in more than 1,100 separate bitcoin donations throughout the blockade (1BTC = $10.00). But these amounts may be significantly higher, because it does not even include the individually-generated bitcoin addresses that WikiLeaks provides for donors upon request.

I knew right then and there that Bitcoin had the potential to change the world. My passion for Bitcoin was always framed by my ten years working in the financial industry. Many of us who lived through the 2008 crisis knew the financial system was dead. We knew it was corrupt, archaic and terminal, so many of us began bracing for what might come next. We did what we thought made sense at the time, which included buying precious metals like gold and silver given their historic track record of protecting wealth in periods of paradigm-shifting financial disruption. Others took more extreme measures to protect themselves from the end of the financial system, but a small group forward thinking geeks decided to do something much better. They decided to build an alternative.

Thus, Bitcoin was born and early adopters in the field of technology immediately began to build on top of it. As soon as I realized what was happening much of the “doom and gloom” that had enveloped my thinking began to lift. I now knew that even if the financial system crashed and burned tomorrow, the early stages of a new and far more honest financial system were already in place. The emergence of Bitcoin literally changed my life for the better as it allowed me to emerge from a cave of gloom and become optimistic about our long-term future. While I knew the path would be long and hard since the current entrenched interests wouldn’t give up without a fight, I could see a very bright light at the end of the tunnel, and the continued development in this space has been extraordinary to watch ever since.

The global financial system as it stands completely archaic and corrupt. It enriches the wrong types of people for the wrong sort of behavior, and is entirely extractive and parasitic by design.  If there’s sector in the economy that needs a total redesign and reboot for the sake of humanity, it’s the financial system.

Being involved in the crypto world for the past five years has been a breath of fresh air and a shot of adrenaline to my system. Traditional markets are a rigged snooze-fest by comparison, grotesque financial Potemkin villages designed to make overly indebted, predatory economies look good. What I find so fascinating about the current environment is that many of the dreams we all read about in the very early days of Bitcoin are starting to be implemented and designed, slowly but surely. For those of you who still have a difficult time conceptualizing exactly what’s happening in the space, I think the following tweet may help.

On that note, I want to talk about more than just Bitcoin, which I see as the reserve currency of the crypto world. Beyond Bitcoin, a lot of the buzz in the space right now revolves around a burgeoning phenomenon known as ICOs, or Initial Coin Offerings. So what are ICOs?

Yesterday, TechCrunch published an interesting piece on the topic. Here are a few keys points:  

Because this editor was still confused (I’m not proud), I talked yesterday with Stan Miroshnik, a UC Berkeley grad with an MBA from MIT who today runs L.A.-based Argon Group, one of the first digital finance-focused investment banks. Miroshnik nicely answered an array of questions about ICOs, including how these things get staged, how companies establish a value for their offerings, and more. If you’re still trying to get a handle of this latest investing trend, too, read on.


TC: ICOs are everywhere suddenly.  When was the first ICO staged?


SM:  You have to go back to around 2013, when Mastercoin, a protocol on top the bitcoin blockchain, raised $500,000. Then you had a number of other milestone token sales, such as Ethereum in 2014, then the DAO, or Decentralized Autonomous Organization, which was built on the Ethereum blockchain and that stored and transmitted Ether and Ethereum-based assets and that raised the equivalent of $150 million last year.


Momentum began to build after that, as a smaller group of [these offerings] grew in size, and by last fall, some companies were raising millions of dollars in minutes. That really kind of made people stand up and wonder if this is a new funding mechanism.

TC: How many ICOs have there been to date?


SM: There were 64 last year that collectively raised $103 million, excluding the DAO. So far this year, we’ve seen 25 offerings raise a bit more than $163 million, and we’re on track to see more than $210 million raised by the end of June.


TC: So how do these ICOs work, practically speaking?


SM: There’s a cadence to these things. You do the prep-work and get your project to a natural technical milestone. Then you pre-announce when you’re planning to have a token sale, describing some of the terms, and telling a story of the project and its goals. You publish a white paper and disclosure and give people a chance to read it and comment. There are also usually threads that develop on Reddit, Bitcointalk, Slack, Telegram and elsewhere, where people actively debate the merits of the product. Then, on the landing page on the aforementioned date, there’s typically a tool that enables purchasers to acquire the tokens in exchange for bitcoin or ether.


TC: Is there a concern that U.S. regulators will crack down on these ICOs?


SM: Lawyers are relying on case law that defines what a security is. The most well-known case is the “Howey Test,” created by the Supreme Court for determining whether certain transactions qualify as investment contracts. If they do, then those transactions are considered securities and are subject to certain disclosure and registration requirements. When tokens are structured basically as the sale of a service or product, they’re designed to make sure the various prongs of the test are not triggered.


TC: What types of companies are primarily using ICOs?


SM: It’s still a financing mechanism that’s very organic to the blockchain community.


It all started with protocols like Ethereum raising funding through this mechanism, and it has stayed close to related projects, like the distributed storage company Storj and Civic, a company that provides identify through the blockchain and is announcing its token sale this Thursday. A lot of these founders and token buyers are part of bitcoin forums and Reddit, and that’s why [certain companies] are able to raise these large sums fairly quickly; they’re reaching out to thought leaders and getting their support and generating buzz about their projects. It’s  basically the open source community, now with an open-source funding mechanism.


TC: What happens when people want to sell the tokens they’ve bought?


SM: Well, first, you can use them in a company’s ecosystem. With Storj, maybe you buy storage. You can also accumulate these tokens over time, as a bet that with more enterprise demand for storage capacity, the coins will become more valuable, after which you can sell your tokens to someone else who needs to purchase storage space.

There are also a number of cryptocurrency exchanges where these tokens trade. In the case of Storj, you can sell or buy on Poloniex or Bittrex.


TC: Should VCs be nervous about ICOs? You mention Civic, which is staging an ICO. Civic has also raised some venture capital previously. But plenty of other companies seem to be skipping the VC part.


SM: To some degree they should, but we’ve also talked with a lot of very smart VCs who are looking at this space, including August Capital, Tim and Adam Draper, Blockchain Capital. Many are doing the work to understand how to be involved and active in the space and the fundamental value of these protocols. Union Square Ventures has said it now has a mandate from its LPs to hold these assets.


For companies that raise funds through a token sale and that have had traditional angel or venture rounds previously, for example, their equity investors get to skip one or two rounds of dilution, which is great; it means their returns are hyper-levered.

There are two points I want to emphasize from the above. First, just how early we are in the development of this area. The numbers are absolutely tiny at this point despite all the hype. Recall that in 2017, we’ve seen 25 offerings raise a bit more than $163 million. That’s an infinitesimally small number in the scheme of things, thus room for growth is massive. That being said, people considering getting involved in this space as a buyer of ICOs need to be extraordinarily careful.

Investing in general is risky and challenging, but putting money into an ICO adds several other layers of complexity and risk. First, as noted above these things are not equity investments since they aren’t allowed to be under current regulations. Therefore, you’re not simply investing in a startup, which is always extremely risky, but you’re making a bet that the token itself is useful and will accrue in value over time. Therefore, not only do you need to be right about the success of the business or product itself, but the token also must have a real value-creating purpose to succeed in the long-run. Many people will not understand this and think they are buying into the equity of the underlying businesses, which sets up a perfect environment for fraudsters. You also need to bear in minds there’s a ton of Bitcoin liquidity that is flooding around the space given the massive run its had. Most early Bitcoin adopters and investors are very passionate and dedicated to this space. They don’t want to sell coin for dollars, but want to put it in new projects to keep the broader ecosystem growing. I think this is a fantastic thing, but it also means there’s a lot of crypto currency sloshing around trying to find a home.

Despite the risks, I think the emergence of the burgeoning token market is a game-changing and extraordinarily empowering development. The only thing preventing the crypto-coin world from rapidly displacing the middlemen and bureaucrats of the traditional financial system are the barriers around the traditional financial world. While we’d like to think these barriers are there to protect the little people, we all know that the SEC and other such regulatory bodies largely exist to protect the rich and powerful and secure their moat.

We saw this under Obama’s Mary Jo White, and we will surely see it under Trump’s pick Jay Clayton, who seems to have all sorts of conflicts, including a wife who works at Goldman Sachs. The SEC doesn’t protect the people, but as long as it pretends to, it can continue to function as a gatekeeper for financial oligarchs and slow down the pace of displacement of the dying financial system with the new parallel one currently being created.

All of that is fine I suppose, and innovation in the crypto world will continue until one day we will actually see equity offerings in startups to regular people as opposed to just allocations to the wealthiest clients of brokerage firms. The innovation in this space has the potential to flatten the world of investing in a meaningful and powerful way, starting today with tokens, but ultimately in many other ways as well. It’s gonna take time, but it’ll happen.

At this point, I just want to briefly address the common retort that “governments will never let this happen,” which I get all the time. Here’s what I had to say about it yesterday on Twitter, and I don’t really have much to say beyond this.

To conclude, I’d like to dedicate this post to all the brilliant geeks and the dynamic entrepreneurs pushing hard every day to realize this incredible dream of a decentralized future. A future that breaks down barriers, removes middlemen and empowers humanity to take its next evolutionary leap forward. You are the ones creating this brand new world brimming with potential and optimism, and I want to thank for all you have done and continue to do.

Published:5/26/2017 1:25:13 AM
[Markets] Asia Markets: Nikkei slips below 20,000, Aussie stocks also fall on weak oil prices Underperformance has become the norm of late, with Japan’s Nikkei Stock Average stalling just below 20,000, a level it hasn’t reached since December 2015.
Published:5/26/2017 1:25:13 AM
[topics:places/australia] Ben & Jerry's bans two scoops of the same flavour in Australia in protest over gay marriage Published:5/26/2017 1:00:29 AM
[Politics] Rob Quist Dealt Blistering Defeat in Montana Special Election

Democrat Rob Quist, a banjo-playing political newcomer who settled a nearly ten-year tax debt just months before launching his campaign, was defeated in Thursday's special election to fill Montana's vacant seat in the House of Representatives, according to the Associated Press.

Election watchers began to call the race for Republican Greg Gianforte early on Friday morning with Quist trailing by around 7 percent of the vote with nearly 70 percent of the precincts reporting. The AP called the race for Gianforte shorty after.

The post Rob Quist Dealt Blistering Defeat in Montana Special Election appeared first on Washington Free Beacon.

Published:5/26/2017 1:00:28 AM
[Markets] The Wall Street Journal: Trump wants an investigation into leaks over Manchester terror attack The president said leaking sensitive information has been happening for a long time and vowed on Thursday to “get to the bottom of this.”
Published:5/26/2017 1:00:28 AM
[World] Quiet college dropout turned bomber: Who was Salman Abedi? LONDON (AP) — He was quiet and withdrawn, a college dropout who liked soccer — and, some say, showed alarming signs of being radicalized years before he walked into a pop concert at Britain's Manchester Arena and detonated a powerful bomb, killing himself and 22 others. Published:5/26/2017 12:21:54 AM
[INTC] AMD Remains A Better Investment Than Nvidia Published:5/26/2017 12:21:53 AM
[topics:people/philip-hammond] 6000 per cent rise in number of patients stuck on trolleys for 12 hours  Published:5/26/2017 12:21:52 AM
[Apps] Even the world’s largest bitcoin exchange couldn’t handle this week’s cryptocurrency boom  For those operating a bitcoin exchange — where people can buy cryptocoins — you’d imagine that the current surge in value for bitcoin and others like Ethereum’s ether coin is a dream come true. The answer is yes and no. Coinbase, the world’s most funded bitcoin exchange, was dragged offline by the massive increase in interest in the space. Users have… Read More
Published:5/26/2017 12:21:52 AM
[Science] Greg Gianforte apologizes: 'I'm not proud of what happened' Newly elected House Republican Greg Gianforte apologized for his assault against a Guardian reporter early Friday morning, just moments a... Published:5/26/2017 12:21:52 AM
[Markets] The Wall Street Journal: Republican Greg Gianforte wins Montana special election despite assault charge Greg Gianforte, a tech entrepreneur and political novice, wins hotly contested Montana special election, despite facing an 11th-hour charge of assaulting a reporter.
Published:5/26/2017 12:21:52 AM
[World] Facing anxious European leaders, Trump goes on offensive TAORMINA, Italy (AP) — In the Middle East, President Donald Trump was feted with pageantry, the leaders of Saudi Arabia and Israel seemingly in competition to outdo the other with the warmth of their welcomes and the depth of their pledges of cooperation. Published:5/25/2017 11:55:51 PM
[PAID] Trump Sells Out NATO! Well, no, but a Trump speech triggers another overwrought uproar. Published:5/25/2017 11:55:51 PM
[World] Trump under pressure on climate, migration at G7 As G7 nations are expected to urge Trump to remain in the Paris Climate Accord, Republican officials at home are pressuring the president to... Published:5/25/2017 11:55:51 PM
[World] Review of ‘David Jones: Engraver, Soldier, Painter, Poet’ An inspired biography. Published:5/25/2017 11:55:51 PM
[Uncategorized] Montana: Rock’em Sock’em Republican KO’s Nudist Resort Singing Cowboy Democrat (#MTAT) Wins by a neck in steel-cage match for Montana's solo at-large seat. Published:5/25/2017 11:55:51 PM
[Science] Gianforte dashes Democratic hopes, holds on in Montana after assault charge Republicans held onto Montana's only seat in the U.S. House of Representatives Thursday night, even after GOP nominee Greg Gianforte was... Published:5/25/2017 11:55:51 PM
[topics:places/australia] Martina Navratilova urges renaming of Margaret Court Arena following anti gay marriage stance Published:5/25/2017 11:55:51 PM
[World] Facing anxious European leaders, Trump goes on offensive TAORMINA, Italy (AP) — President Donald Trump has faced a much cooler reception in Europe than the welcome he received in the Middle East. Published:5/25/2017 11:24:43 PM
[Entertainment] This Is Us Cast Shares Some Hopefully Fake Spoilers for Season 2 on Red Nose Day This Is UsThis Is Us is getting weird in season two. Or at least that's what it sounds like based on the cast's appearance on NBC's Red Nose Day special. They all gathered together to...
Published:5/25/2017 11:24:42 PM
[Asset forfeiture] Has The Drug War Incentivized Police To Treat Citizens Like Terrorists?

Authored by Duane Norman via Free Market Shooter blog,

A video of a Florida Sheriff making a promo video to scare has been making the rounds recently.  Casey Research recently covered the affair, noting the following quote from Sheriff Grinnell:

“Enjoy looking over your shoulder, constantly wondering if today’s the day we come for you. Enjoy trying to sleep tonight, wondering if tonight’s the night our SWAT team blows your front door off the hinges. We are coming for you.”

The video (reproduced below, with commentary from Casey Research) is as surreal as the above picture implies…

Sheriff Grinnell delivered this message last month while flanked by four combat-ready officers wearing ski masks. It looks like someone from ISIS directed it.


Grinnell’s message was aimed at local drug dealers. You see, Lake County has a serious opioid problem. And like many other places in the US, it’s fighting its drug problem as if it were a war.

…but this is hardly the first time a video like this has been produced, and it likely won’t be the last.  Last year, former Sheriff Clay Higgins, known as the “Cajun John Wayne” in Louisiana, released the below video calling out the “Gremlins” gang, and before his resignation, was known for making many similar videos:

Some notable quotes from Sheriff Higgins:

  • You won’t walk away.  Look at you. Men like us, son, we do Dumbbell presses with weights bigger than you.
  • Young man, I’ll meet you on solid ground, anytime, anywhere. Light or heavy, it makes no difference to me.
  • You will be hunted, you will be tracked. And if you raise your weapon to a man like me, we’ll return fire with superior fire.
  • You don’t like the things I’ve told you tonight?  I’ve got one thing to say – I’m easy to find.

This guy certainly has enough one-liners to be worthy of the “Cajun John Wayne” moniker, but it seems none of the police or community leaders behind him bothered to ask why criminals engage in such violent behavior; they are trying to profit from the obscenely high price of illegal drugs.  And when it comes to profit, the criminals are hardly alone.

Free Market Shooter has covered the problems with Civil Asset Forfeiture in the past…

Martin Armstrong of Armstrong Economics explains how police have every reason to seize assets, largely because these civil asset forfeitures are literally funding police departments:


Between 1989 and 2010, U.S. attorneys seized an estimated $12.6 billion in asset forfeiture cases. The growth rate during that time averaged +19.4% annually. In 2010 alone, the value of assets seized grew by +52.8% from 2009 and was six times greater than the total for 1989. Then by 2014, that number had ballooned to roughly $4.5 billion for the year, making this 35% of the entire number of assets collected from 1989 to 2010 in a single year. According to the FBI, the total amount of goods stolen by criminals in 2014 burglary offenses suffered an estimated $3.9 billion in property losses. This means that the police are now taking more assets than the criminals.

…but if you take a closer look at the forfeitures themselves, you’ll realize just how many of them are related to the war on drugs:

“Thirty-six percent of all local police departments received money, property, or goods from a drug asset forfeiture program during 2002 (table 32). These departments employed 78% of all local police officers. At least 80% of the departments in each population category of 25,000 or more had drug asset forfeiture receipts.”


“There can be few components of law enforcement programmes which actually cost nothing. The asset forfeiture provision of the federal law for crop suppression (relating mainly to cannabis in the State of Kentucky), proved to be such a case, costing the United States Government $13.7 million, but yielding a return of $53 million in 1991, or almost $4 in assets seized for every $1 invested by the Drug Enforcement Administration.”


“The advent of a now common police tactic, called the “reverse sting,” illustrates the shift in priorities from crime control to funding raids. In a reverse sting, an officer attempts to sell drugs to an unsuspecting buyer. The method permits the police to seize the buyer’s cash rather than a seller’s drugs, which have no value to the agency.


“During the past decade, law enforcement agencies increasingly have turned to asset seizures and drug enforcement grants to compensate for budgetary shortfalls, at the expense of other criminal justice goals. We believe the strange shape of the criminal justice system today—the law enforcement agenda that targets assets rather than crime, the 80 percent of seizures that are unaccompanied by any criminal prosecution, the plea bargains that favor drug kingpins and penalize the “mules” without assets to trade, the reverse stings that target drug buyers rather than drug sellers, the overkill in agencies involved even in minor arrests, the massive shift towards federal jurisdiction over local law enforcement - is largely the unplanned by-product of this economic incentive structure.”

So the drug war has created a massive financial incentive for police to seize property from individuals, one that many departments could require to stay afloat.  What do you think happens next?

As Free Market Shooter has covered previously for Single Dude Travel, raids from SWAT teams have become commonplace, with police becoming better armed by the day:

Our nation’s policing system has become profit-driven instead of crime-driven, largely due to the failure of the war on drugs, and the fact that cops have been given surplus military hardware from the armed forces at bargain basement prices. SWAT team raids have gone from a few hundred per year in the 1970s to 50,000 annually, largely because they call SWAT in when “Special Weapons And Tactics” aren’t really needed, such as when apprehending a credit card scammer or raiding an organic farm for the filmiest of reasons. When a SWAT team nearly kills a 19-month old baby with a flashbang grenade, in a raid without the suspect present, how are there no charges filed?

And now that police are all armed to the teeth looking for property to seize, what happens next?  The practice is applied everywhere.  If you look at a report on the “most outlandish SWAT team raids” across the country, you’ll see just how common it is to have a SWAT team called in:

  • Armed agents raid animal shelter in search of baby deer—and kill it.
  • Girl’s home wrongfully raided with flashbangs despite door being open.
  • SWAT team raids DJ’s studio to enforce copyright law.
  • SWAT squad invades private poker game.
  • SWAT team raids man’s home in search of stolen koi fish.
  • Sex toys, condoms and pajamas seized in drug/prostitution SWAT team raid.
  • Peaceful monks arrested in SWAT team action.
  • Feds raid Amish dairy farm—twice—for selling unpasteurized milk.
  • Police unlawfully invade a series of barbershops without warrants.
  • Police forcibly search and detain 19 patrons in gay bar.
  • SWAT team confiscates wood used to make instruments during illegal raid.

So, how do you stop police from treating civilians like they would treat terrorists?  The best place to start is removing the incentive structure that has been created by the war on drugs, which brings us back to Casey Research’s commentary:

Illegalizing something does nothing but create a black market and give people a reason to induce other people to get high. I mean, people have been drinking alcohol for about the last 10,000 years. But it didn’t become a real problem until the Eighteenth Amendment and the Volstead Act passed in 1920. At that point, it financed the mafia.


Laws turn simple bad habits into massive and profitable criminal enterprises.


The government learned absolutely nothing from the failure of alcohol prohibition. What they’re doing with drugs makes an occasional, trivial problem into a national catastrophe…

However, do not expect that to happen anytime soon; again, as Free Market Shooter has covered in the past, new Attorney General Jeff Sessions is adamant about expanding the war on drugs:

And, in case you weren’t aware, this is the same Jeff Sessions who is on the record as being not only against medicinal marijuana, it is the same Jeff Sessions that has stated that marijuana is only slightly less awful than heroin:


     And I am astonished to hear people suggest that we can solve our heroin crisis by legalizing marijuana – so people can trade one life-wrecking dependency for another that’s only slightly less awful.

Then again… it’s not like the prior ten attorney generals did anything but continue the war on drugs.  Remember what Casey said about “massive profitable criminal enterprises”?

Published:5/25/2017 11:24:42 PM
[Opinion] Gianforte leads in Montana special election

By Rich Mitchell

With 43% of return counted, Greg Gianforte is more than 6% ahead of nude dude rancher Quist in his bid to become the only U.S. House representative for the Big Sky State. According to reports just before midnight EDT, the Republican who put a WWE finishing move on an annoying reporter from the EU’s the Guardian, is set to take the win in the heavily conservative Montana. Polls continue to report, but at this time, Gianforte is leading his fake cowboy opponent by more than six points. Gianforte was forced to push a metrosexual reporter to the ground just a day ...

The article Gianforte leads in Montana special election is original content from Conservative Daily News.

Published:5/25/2017 11:24:42 PM
[Science] Trump to face pressure on climate, migration as G7 summit kicks off As G7 nations are expected to urge Trump to remain in the Paris Climate Accord, Republican officials at home are pressuring the president to... Published:5/25/2017 11:24:42 PM
[World] The Beltway Foreign-Policy ‘Blob’ Strikes Back A Washington think tank calls for more of the same failed intervention. Published:5/25/2017 11:24:42 PM
[PAID] Startup's Rocket Reaches Space, but Falls Short of Orbit RocketLab, a startup widely seen as a trailblazer for frequent, ultralow-cost access to space, failed to reach orbit on its first flight. Published:5/25/2017 10:51:52 PM
[Amazon Web Services] Visualizing How The Big 5 Tech Giants Make Their Billions

Hitting record high after record high, tech companies have displaced traditional blue chip companies like Exxon Mobil and Walmart as the most valuable companies in the world.

Here are the latest market valuations for those same five companies:

Together, they are worth $2.9 trillion in market capitalization – and they combined in FY2016 for revenues of $555 billion with a $94 billion bottom line.


Despite all being at the top of the stock market food chain, Visual Capitalist's Jeff Desjardins points out that the companies are at very different stages.

In 2016, Apple experienced its first annual revenue decline since 2001, but the company brought home a profit equal to that of all other four companies combined.

On the other hand, Amazon is becoming a revenue machine with very little margin, while Facebook generates 5x more profit despite far smaller top line numbers.


Each of these companies is pretty unique in how they generate revenue, though there is some overlap:

  • Facebook and Alphabet each make the vast majority of their revenues from advertising (97% and 88%, respectively)
  • Apple makes 63% of their revenue from the iPhone, and another 21% coming from the iPad and Mac lines
  • Amazon makes 90% from its “Product” and “Media” categories, and 9% from AWS
  • Microsoft is diverse: Office (28%), servers (22%), Xbox (11%), Windows (9%), ads (7%), Surface (5%), and other (18%)

What does that look like?


Courtesy of: Visual Capitalist

Lastly, for fun, what if we added all these companies’ revenues together, and categorized them by source?

Note: this isn’t perfect. As an example, Amazon’s fast-growing advertising business gets lumped into their “Other” category.

Hardware, e-commerce, and and advertising make up 76% of all revenues.

Meanwhile, software isn’t the cash cow it used to be, but it does help serve as a means to an end for some companies. For example, Android doesn’t generate any revenue directly, but it does allow more users to buy apps in the Play Store and to search Google via their mobile devices. Likewise, Apple bundles in operating systems with each hardware purchase.

Published:5/25/2017 10:51:52 PM
[Media] D’OH! HuffPo correction highlights constitutional awakening after EPIC ‘punditry fail’

"When progressives meet reality."

The post D’OH! HuffPo correction highlights constitutional awakening after EPIC ‘punditry fail’ appeared first on

Published:5/25/2017 10:51:52 PM
[Science] Hillary Clinton will headline her alma mater's commencement Friday Clinton graduated from the all-women's college in 1969 and went on to attend law school. Published:5/25/2017 10:51:52 PM
[Consumer & Gadgets ] Review: Three devices to talk on your phone while driving Have you ever talked on your phone while driving your car? Published:5/25/2017 10:51:52 PM
[Climate News] No, Santer et al. have not refuted Scott Pruitt Guest essay by Leo Goldstein The MSM is actively promoting a new piece of dubious “climate science”: the article Tropospheric Warming Over The Past Two Decades doi:10.1038/s41598-017-02520-7, by B. Santer et al., published in Nature Scientific Reports on May 24. For well-known reasons, Santer et al decided to debate not scientists, but Scott Pruitt, the new… Published:5/25/2017 10:51:52 PM
[Allegheny County Health Department] Pennsylvania Coroner Says Dying Addicts Keep Morgue Full "Most Nights"

The coroner’s office in Montgomery County, Pennsylvania is literally running out of room for all the bodies that are piling up because of America’s worsening synthetic opioid epidemic, according to

As the story notes, heroin isn’t responsible for these deaths; rather, Synthetic opioids like fentanyl, carfentanil and their many analogues are the chief culprit.

As Triblive reports:


“Lab-created, designer opioids have far outpaced heroin as a killer of addicts, and they've kept the coroner's office full on most nights.


"If this pace continues, I'm not really sure what we're going to do," said Montgomery County, Ohio, coroner Dr. Kent Harshbarger. "We had 13 (bodies) yesterday, and 12 of them were overdoses."


The county’s coroner had to expand his cooler last month because its 36-body capacity wasn’t enough. It now has room for 42 bodies, and the country still occasionally runs out of space.

“It’s full every night.”

Harshbarger even ran out of space one day earlier this year, again because of overdoses, and was forced to send some bodies to a local funeral home for storage. He also occasionally rents refrigerated trailers that can be brought in when deaths spike.

In Allegheny County, health officials, instances of fentanyl-related overdoses surpassed those of heroin for the first time in 2016. Six hundred people overdosed and died in the county last year – most from opioids, said Dr. Karen Hacker, director of the Allegheny County Health Department.

Having surpassed gun homicides for the first time in 2015, the epidemic of heroin and opioid related deaths in the US continues to grow, amid the dismal failure of the 'war on drugs.’ Lawmakers, who have only just begun to wake up to the crisis, have requested more data about the synthetic opioid fentanyl, including how it is trafficked and how many people it has killed.

The ramifications of the crisis stretch far beyond hospitals and morgues: Ohio saw a 13% increase in children in foster care last year, which officials suspect is linked to the growing number of overdose deaths.

Published:5/25/2017 10:20:47 PM
[Markets] Early vote shows tight race in bellwether Montana congressional contest Early vote shows tight race in bellwether Montana congressional contest Published:5/25/2017 10:20:47 PM
[House of Representatives] All eyes on Montana (Paul Mirengoff) The polls closed in Montana closed a little less than an hour ago. Early returns in the congressional race between Fightin’ Greg Gianforte and Singin’ Rob Quist appear to be slightly favorable to Gianforte, the Republican. However, the early counting may be unduly weighted towards early voters — those who voted before Gianforte beat up Reportin’ Ben Jacobs. Thus, it’s way too early to draw any conclusions about how this Published:5/25/2017 10:20:47 PM
[Politics] Montana Special Election results!! GOP thug versus nude colony crooner!!! Yes if you didn’t know that, the Democrat in the Montana special election actually played his guitar at nude colonies. I know. Seriously. Yeah. Anyway. Here are the recent results from the . . . Published:5/25/2017 10:20:47 PM
[Politics] Montana Special Election results!! GOP thug versus nude colony crooner!!! Yes if you didn’t know that, the Democrat in the Montana special election actually played his guitar at nude colonies. I know. Seriously. Yeah. Anyway. Here are the recent results from the . . . Published:5/25/2017 10:20:47 PM
[TC] Crunch Report | Mark Zuckerberg’s Harvard Commencement Speech Mark Zuckerberg gives this year’s Harvard commencement speech, Uber and Lyft are returning to Austin, Ford has some leadership shake-ups and TC Battlefield company Beam (acquired by Microsoft) is now called Mixer. All this on Crunch Report. Read More
Published:5/25/2017 10:20:47 PM
[Science] Mortuary employee under investigation for offering to show inspectors John Glenn's remains: Report Glenn's family had sent his body to the Air Force base to ensure it was kept secure before his burial, but that wasn't the case. Published:5/25/2017 10:20:47 PM
[topics:organisations/islamic-state] What is the anti-terror Prevent programme and why is it controversial? Published:5/25/2017 10:20:47 PM
[World] Mainstream Media Blames President Trump for Greg Gianforte Assault of Reporter

Montana Republican congressional candidate Greg Gianforte reportedly body-slammed a reporter on Wednesday night, and some in the mainstream media have tried to blame the incident on President Trump.

Published:5/25/2017 9:56:41 PM
[A la carte pay television] ESPN And The Bursting Of The Sports Bubble

Authored by William Anderson via The Mises Institute,

When the cable TV sports giant ESPN announced 100 layoffs recently, including letting go a number of high-profile broadcasters, a lot of people took notice, and well they should: things no longer are business as usual in sports broadcasting, and we are not even at the beginning of the end, and maybe not even the end of the beginning.

Like the slow crashing of the retail sector as online purchase firms like Amazon begin their domination, we are seeing a sea change in sports broadcasting and that is going to mean big changes are down the road not only for ESPN, but for all of the sports entities that depend upon the huge payouts that ESPN provides. To put it mildly, a lot of people are about to see their lives change drastically as consumer choices drive sports broadcasting in a new direction.

Enough with the superlatives. What is happening with ESPN, and why is it important? As Clay Travis of the sports website Outkick the Coverage has been writing for more than a year, the main ESPN business plan, the one that brings in the most revenues to the firm, is doomed to near-extinction, and there is nothing ESPN can do about it. Writes Travis:

In the past five years ESPN has lost 11,346,000 subscribers according to Nielsen data.


If you combine that with ESPN2 and ESPNU subscriber losses this means that ESPN has lost over a billion dollars in cable and satellite revenue just in the past five years, an average of $200 million each year. That total of a billion dollars hits ESPN in the pocketbook not just on a yearly basis, but for every year going forward.


It's gone forever.

Since it began to grow in popularity in the late 1970s, cable (and later, satellite) television has offered its customers coverage with “bundles,” that is different payments allow cable subscribers to expand their viewership as payments increase. For example, a “basic” cable subscription would allow the customers to view, say, 15 channels including the ABC-CBS-NBC-PBS lineup plus other channels such as CNN or Fox. A higher-tier subscription would add other channels, including ESPN and its associated channels and others such as The Food Channel or assorted movie channels.

One problem with bundling, of course, is that subscribers will pay for channels that they rarely or do not watch. For example, I have a basic subscription with Direct TV, but maybe watch 10 channels at most, even though dozens are available. (I don’t include ESPN or any of the other sports channels in my monthly package.)

As technology has improved in telecommunications, the ability of providers to further segment packages has meant that cable and satellite subscribers are able to eliminate the channels they don’t want to watch, and that means that many are unhooking from ESPN. Continues Travis:

ESPN is losing 10,000 subscribers every day so far in 2017. In the past six years they have lost 13 million subscribers and that subscriber loss is escalating each year. That's billions of dollars in lost revenue.


Every year for the next five years ESPN is spending more and bringing in less. You don't have to be Warren Buffett to see that's a business problem. 

He goes on to the heart of the matter:

ESPN is spending over eight billion dollars on sporting rights this year and by 2021 I believe they will be losing money regardless of how many people they fire. ESPN can't fire employees into profitability. It's just not possible. These firings are going to become a yearly thing and they still aren't going to prevent the business from dying. 

True, ESPN, as well as all commercial broadcasters, receive advertising revenue, but advertising alone, along with subscriptions from people who choose to purchase ESPN in their cable/satellite packages, will not be enough for the network to meet its obligations to the various organizations it pays for the rights to broadcast their events. From the National Football League (NFL), to the National Hockey League (NHL), to the National Basketball Association (NBA) to the National Collegiate Athletic Association (NCAA), ESPN has paid billions of dollars, money that is funneled into high athlete salaries, not to mention salaries of coaches, university athletic directors, and, indirectly into the building and maintaining of magnificent sports facilities.

The revenues lost to ESPN are lost forever, and even given the rise of smart phones and Internet streaming, the current state of affairs is unsustainable and the sports landscape is going to change, and the changes will be extensive. It is here that Austrian economics gives us insight into how at least some of the changes will proceed.

Carl Menger, who we know as the “founder” of the Austrian school of economics, in his path-breaking book Principles of Economics in 1871 demonstrated conclusively that the value of the factors of production was based not on costs derived from other costs of production, but rather the value of the factors was imputed via the value consumers placed upon the final goods. This view contradicted the standard British classical view that the value of consumption goods was derived from the value of the factors of production, and it placed Menger in the Pantheon of the early Marginalists.

In laying out his theory, Menger used tobacco and the factors used to produce it. If people suddenly stopped using tobacco, he reasoned, then the value of the factors would change quickly relative to their ability to be transferred to other uses. The more specialized the factor, the greater the change in its value. For example, the land on which tobacco is grown would then be used for other purposes, such as growing corn or wheat, or even pasture for cows or sheep. Highly-specialized tools used only for growing or harvesting tobacco, however, would see a steep drop in value and maybe would have to be abandoned altogether.

What does this have to do with the demise of ESPN? As noted earlier, the network pays billions of dollars for rights to broadcast sports events, and it is unlikely that as ESPN loses the revenues that permit it to pay large sums, other networks will be able to take up that slack. That means the organizations that now receive this money are looking at “haircuts” down the road, which includes the NCAA and collegiate athletic teams.

The ESPN funding allows for the network to broadcast a number of collegiate sports events that ordinarily would not rate enough of an audience, and its large payouts also allow for coaches to receive record-high salaries that would not be possible if these programs depended just on ticket sales and other donations. And while it is tempting to say that “ESPN pays for this,” in reality, it is the consumer of cable/satellite television that ultimately decides the size of the ESPN payouts, and consumers are stating their preferences with their checkbooks, and there is nothing ESPN can do about it.

Without cable/satellite subscribers being willing to pay extra for the sports channels, and without the viewership that draws advertisers, ESPN revenues will fall, and that means that the factors that make up the “product” that appears on ESPN broadcasts also are going to lose value, as long as other networks don’t take up the slack (and it is doubtful they will). Thus, one is looking at a long, steady decline and the world of televised sports is going to have to adjust to the new reality.

Unfortunately, as Travis has pointed out many times, ESPN during this ratings slide has taken a hard turn toward the political left, which has further alienated a lot of conservative viewers. Writes Travis:

As ESPN has lost 10,000 cable and satellite subscribers every day in 2017, seen ratings collapse for all original programming, and recently embarked on the firing of 100 employees as part of a desperate cost cutting move to save its business. The network’s sports media defenders have desperately argued that the network’s embrace of far left wing politics has not had any impact on its collapsing viewership. That’s despite the fact that there have been two different studies that have demonstrated Republican voters have abandoned the network’s original programming in the past year.

In that regard, one can argue that ESPN has done what numerous (and especially elite) colleges and universities have done the past several years: create a hostile atmosphere for white male students all the while wanting them to be paid customers. One cannot both seek to offend and attack the same people one wishes to purchase their services without courting disaster, yet higher education and ESPN are doing just that.

To a certain extent, one can argue that both higher education and ESPN have benefited from “bubble” economies, and as consumer choice becomes directed elsewhere, the bubbles burst. As Carl Menger demonstrated, the bursting of the bubbles will mean that some factor owners will have to receive less pay in order to remain employed, while other factors will have to be transferred to other uses altogether or simply become unemployed. All soothing rhetoric aside, the world of sports broadcasting is going to see major changes in the next decade as consumers have their say.

Published:5/25/2017 9:56:39 PM
[Donald Trump] CBS News post-Obama safety alert: Improving economy is unsafe at any speed They try so hard Published:5/25/2017 9:56:39 PM
[Entertainment] Arrow Star Stephen Amell Just Absolutely Crushed it on American Ninja Warrior: Celebrity Edition American Ninja Warrior, Stephen AmellThey don't call him a superhero for nothing. Arrow star Stephen Amell just competed on the celebrity edition of American Ninja Warrior as part of NBC's Red Nose Day broadcast ,...
Published:5/25/2017 9:56:39 PM
[The Blog] Obama: “Despite our best efforts,” Syria turned into a pretty vicious war

"I didn't always have the tools that I want to effect those kinds of changes, but at least we tried."

The post Obama: “Despite our best efforts,” Syria turned into a pretty vicious war appeared first on Hot Air.

Published:5/25/2017 9:56:39 PM
[Science] Mark Zuckerberg to Harvard grads: 'Create a sense of purpose for others' Mark Zuckerberg, co-founder of the world's largest social network and Harvard dropout returned to the university on Thursday to deliver i... Published:5/25/2017 9:56:39 PM
[Entertainment] Women-only ‘Wonder Woman’ screenings for Planned Parenthood? Wonder why they need tax dollars

Wonder Woman's super strength is no match for progressives who want to drag her into promoting Planned Parenthood.

The post Women-only ‘Wonder Woman’ screenings for Planned Parenthood? Wonder why they need tax dollars appeared first on

Published:5/25/2017 9:56:39 PM
[2017 News] Mark Zuckerberg joins Silicon Valley bigwigs in calling for government to give everybody free money Mark Zuckerberg joins Silicon Valley bigwigs in calling for government to give everybody free money. Free means if you’re a freeloader it won’t be your money but if you work it will be your money. We think dorkboy should fund this 100% out of HIS money. Published:5/25/2017 9:56:39 PM
[Markets] Early vote shows tight race in bellwether Montana congressional race Democrat Rob Quist, a folk singer and songwriter who wears a trademark Stetson hat, held the early lead Thursday night in a special congressional election in Montana in which the Republican candidate, Greg Gianforte, became embroiled in a last-minute tempest over his alleged assault of a newspaper reporter.
Published:5/25/2017 9:56:39 PM
[World] Obama Takes Shot at Trump During Berlin Visit: 'We Can't Hide Behind a Wall'

Former President Barack Obama on Thursday took a thinly-veiled shot at his successor for wanting to build a wall along the U.S.-Mexico border.

Published:5/25/2017 9:20:20 PM
[Business] David Rosenberg: "We Probably Will Have A Recession Next Year"

While every investor wishes they had a crystal ball, there’s one thing, says David Rosenberg chief economist at Gluskin Sheff, that has predicted imminent recessions without fail. Speaking at the Strategic Investment Conference in Orlando, Florida, Rosenberg pointed out that since 1950, there have been 13 cycles where the Federal Reserve tightened interest rates… and 10 of them ended in recession. This is also something which BofA's Michael Hartnett pointed out in early March, laying it out concisely on the following chart.

So should we be prepared for another US recession in the near future? That's the question Jonathan Roth asked Rosenberg in the enclosed interview.

“I think what people should be focused on is the shape of the yield curve,” Rosenberg said. “[Every] single inversion of the yield curve, where short-term rates go above long-term interest rates, has presaged a recession—every single time.”

The three times where rate hikes did not lead to recessions, he noted, were due to the Fed stopping short of inverting the yield curve. At the moment, Rosenberg suggested, “the yield curve is flat enough that if the Fed raises rates four more times, that’s all it takes. We probably will have a recession next year.”

Looking at the dot plots shows that more than 50% of all FOMC officials are ready to raise rates four more times going into 2018, so “the risk isn’t necessarily high right now, but it is rising.”

Asked about the possible economic implications of the ongoing problems the Trump administration faces, Rosenberg shrugged off the question. “Here’s what I’m going to forecast with 100% guarantee: that no matter what happens with Donald Trump, the United States will still have a president.” He said that the Comey affair caused all of a one-day plunge in the stock market, “so politics, to me, unless it has a substantive impact on the earnings outlook or the economy, is just short-term noise.”

What’s much more important, Rosenberg said, is the supply side of the economy, an aspect that no one pays enough attention to. “What’s happening in terms of artificial, robotic intelligence and the shared economy… Right now, we’re going through the fourth Industrial Revolution, and it’s having a profound impact on worker anxiety.”

Corporate tax reform is necessary, he conceded, but there are other constraints we have to deal with. For example: “How is it that we have 23 million Americans between 25 and 54, in their prime working age, that are out of the labor force?”

He surmised that “there’s some real structural things happening here that really transcend the need to cut taxes or what’s happening in terms of immigration policy.”

So what are the implications for investors? There’s no doubt we are late cycle, Rosenberg said. “That means you really want to tuck it in.”

For his thoughts on what a late-cycle portfolio should look like and more, watch the full interview below.

Courtesy of Mauldin Economics

Published:5/25/2017 9:20:19 PM
[Politics] Don Lemon FLIPS OUT at Paris Dennard defending Trump from Gianforte assault Don Lemon did not appreciate Paris Dennard attempting to defend Trump from blame in the Gianforte assault last night, and even shut down the show over it. Watch below: I think Lemon . . . Published:5/25/2017 9:20:19 PM
[Politics] Don Lemon FLIPS OUT at Paris Dennard defending Trump from Gianforte assault Don Lemon did not appreciate Paris Dennard attempting to defend Trump from blame in the Gianforte assault last night, and even shut down the show over it. Watch below: I think Lemon . . . Published:5/25/2017 9:20:19 PM
[Entertainment] Second Wives Club Recap: Katie Cazorla's New Business Faces a Major Setback and Shiva Safai Plays Matchmaker for Her Brother Second Wives Club 104, Katie CazorlaIt's not always easy being the boss. Just ask business owner Katie Cazorla who faced a major setback while trying to open her new café, Hi SocieTea, in tonight's episode of...
Published:5/25/2017 9:20:18 PM
[Science] Democrats renew call for suspending Jared Kushner's security clearance The senior adviser and son-in-law of President Trump has been a source of speculation in connection with the Trump-Russia probe for months. Published:5/25/2017 9:20:18 PM
[The Blog] NBC News: Jared Kushner ‘under FBI scrutiny’

"Investigators believe Kushner has significant information relevant to their inquiry..."

The post NBC News: Jared Kushner ‘under FBI scrutiny’ appeared first on Hot Air.

Published:5/25/2017 9:20:18 PM
[Health Care] The CBO’s Analysis of the GOP’s Health Care Bill Is Worthless (John Hinderaker) Yesterday the Congressional Budget Office released an analysis of the current version of the House health care bill that was trumpeted by Democrats because it projected that 23 million people would “lose” their health insurance if the law went into effect. However, as Guy Benson points out, this claim is false, since “the large bulk of those who are said to be ‘losing’ coverage do not currently have coverage.” Further, Published:5/25/2017 9:20:18 PM
[] Thursday Night's ONT Sucks (Note: Montana election thread below) I'm really in an IDGAF mood tonight because of a lot of things, so don't expect a lot out of the ONT, I just don't feel up to coming up with a theme or giving... Published:5/25/2017 9:20:18 PM
[topics:things/corruption] Tony Blair was 'go-between' for Chinese tycoon sought by Interpol as bribe suspect Published:5/25/2017 8:51:34 PM
[World] Memorial Day should honor America's fallen

As president of the American Veterans Center, the organization that produces the National Memorial Day Parade in Washington D.C., I am sometimes questioned as to why we include Confederate reenactors in our timeline of American military history. I reply that we strive to be historically accurate; that the Civil War ... Published:5/25/2017 8:51:33 PM

[United States Politics and Government] In NATO Speech, Trump Is Vague About Mutual Defense Pledge The president promised to “never forsake” allies but lectured NATO members on the need to pay what he said was their fair share of the alliance costs. Published:5/25/2017 8:51:33 PM
[Politics] Political THUG Debbie Wasserman Schultz OPENLY THREATENS police chief on VIDEO!! I am just shocked at this video. Watch it carefully, there are no big explosions, but at the end you see an amazing exchange between a police chief investigating a pretty heinous . . . Published:5/25/2017 8:51:33 PM
[Top Picks] Montana special election: Will Gianforte give Democrats a beating?


The post Montana special election: Will Gianforte give Democrats a beating? appeared first on Hot Air.

Published:5/25/2017 8:51:33 PM
[Bear Market] The Bubble That Could Break The World

Authored by Jim Rickards via The Daily Reckoning blog,

The key to bubble analysis is to look at what’s causing the bubble. If you get the hidden dynamics right, your ability to collect huge profits or avoid losses is greatly improved.

Based on data going back to the 1929 crash, this current bubble looks like a particular kind that can produce large, sudden losses for investors.

The market right now is especially susceptible to a sharp correction, or worse.

Before diving into the best way to play the current bubble dynamics to your advantage, let’s look at the evidence for whether a bubble exists in the first place…

My preferred metric is the Shiller Cyclically Adjusted PE Ratio or CAPE. This particular PE ratio was invented by Nobel Prize-winning economist Robert Shiller of Yale University.

CAPE has several design features that set it apart from the PE ratios touted on Wall Street.

The first is that it uses a rolling ten-year earnings period. This smooths out fluctuations based on temporary psychological, geopolitical, and commodity-linked factors that should not bear on fundamental valuation.


The second feature is that it is backward-looking only. This eliminates the rosy scenario forward-looking earnings projections favored by Wall Street.


The third feature is that that relevant data is available back to 1870, which allows for robust historical comparisons.

The chart below shows the CAPE from 1870 to 2017. Two conclusions emerge immediately. The CAPE today is at the same level as in 1929 just before the crash that started the Great Depression. The second is that the CAPE is higher today than it was just before the Panic of 2008.

Neither data point is definitive proof of a bubble. CAPE was much higher in 2000 when the bubble burst. Neither data point means that the market will crash tomorrow.

But today’s CAPE ratio is 182% of the median ratio of the past 137-years.

Given the mean-reverting nature of stock prices, the ratio is sending up storm warnings even if we cannot be sure exactly where and when the hurricane will come ashore.

This chart shows the Shiller Cyclically Adjusted PE Ratio (CAPE) from 1880-2017. Over this 137-year period, the mean ratio is 16.75, media ratio is 16.12, low is 4.78 (Dec 1920) and high is 44.19 (Dec 1999). Right now the 29.45 ratio is above the level of the Panic of 2008, and about equal to the level of the market crash that started the Great Depression.

With the likelihood of a bubble clear, we can now turn to bubble dynamics. The analysis begins with the fact that there are two distinct types of bubbles...Some bubbles are driven by narrative, and others by cheap credit.

Narrative bubbles and credit bubbles burst for different reasons at different times. The difference is critical in knowing what to look for when you time bubbles, and for understanding who gets hurt when they burst.

A narrative-driven bubble is based on a story, or new paradigm, that justifies abandoning traditional valuation metrics. The most famous case of a narrative bubble is the late 1960s, early 1970s “Nifty Fifty” list of fifty stocks that were considered high growth with nowhere to go but up.

The Nifty Fifty were often referred to as “one decision” stocks because you would just buy them and never sell. No further thought was required. Of course, the Nifty Fifty crashed with the overall market in 1974 and remained in an eight-year bear market until a new bull market began in 1982.

The bubble of the late 1990s is another famous example of a narrative bubble. Investors bid up stock prices without regard to earnings, PE ratios, profits, discounted cash flow or healthy balance sheets.

All that mattered were “eyeballs,” “clicks,” and other superficial internet metrics. The bubble crashed and burned in 2000. The NASDAQ fell from over 5,000 to around 2,000, then took sixteen years to regain that lost ground before recently making new highs. Of course, many companies did not recover their bubble valuations because they went bankrupt, never to be heard from again.

The credit-driven bubble has a different dynamic than a narrative-bubble. If professional investors and brokers can borrow money at 3%, invest in stocks earning 5%, and leverage 3-to-1, they can earn 6% returns on equity plus healthy capital gains that can boost the total return to 10% or higher. Even greater returns are possible using off-balance sheet derivatives.

Credit bubbles don’t need a narrative or a good story. They just need easy money.

A narrative bubble bursts when the story changes. It’s exactly like The Emperor’s New Clothes where loyal subjects go along with the pretense that the emperor is finely dressed until a little boy shouts out that the emperor is actually naked.

Psychology and behavior change in an instant.

When investors realized in 2000 that was not the next Amazon but just a sock-puppet mascot with negative cash flow, the stock crashed 98% in 9 months from IPO to bankruptcy. The sock-puppet had no clothes.

A credit bubble bursts when the credit dries up. The Fed won’t raise interest rates just to pop a bubble — they would rather clean up the mess afterwards that try to guess when a bubble exists in the first place.

But the Fed will raise rates for other reasons, including the illusory Phillips Curve that assumes a tradeoff between low unemployment and high inflation, currency wars, inflation or to move away from the zero bound before the next recession. It doesn’t matter.

Higher rates are a case of “taking away the punch bowl” and can cause a credit bubble to burst.

The other leading cause of bursting credit bubbles is rising credit losses. Higher credit losses can emerge in junk bonds (1989), emerging markets (1998), or commercial real estate (2008).

Credit crack-ups in one sector lead to tightening credit conditions in all sectors and lead in turn to recessions and stock market corrections.

What type of bubble are we in now? What signs should investors look for to gauge when this bubble will burst?

My starting hypothesis is that we are in a credit bubble, not a narrative bubble. There is no dominant story similar to the Nifty Fifty or days. Investors do look at traditional valuation metrics rather than invented substitutes contained in corporate press releases and Wall Street research. But even traditional valuation metrics can turn on a dime when the credit spigot is turned off.

Milton Friedman famously said the monetary policy acts with a lag. The Fed has force-fed the economy easy money with zero rates from 2008 to 2015 and abnormally low rates ever since. Now the effects have emerged.

On top of zero or low rates, the Fed printed almost $4 trillion of new money under its QE programs. Inflation has not appeared in consumer prices, but it has appeared in asset prices. Stocks, bonds, commodities and real estate are all levitating above an ocean of margin loans, student loans, auto loans, credit cards, mortgages, and their derivatives.

Now the Fed is throwing the gears in reverse. They are taking away the punchbowl.

The Fed has raised rates three times in the past sixteen months and is on track to raise them three more times in the next seven months. In addition, the Fed is preparing to do QE in reverse by reducing its balance sheet and contracting the base money supply. This is called quantitative tightening or QT, which I’ve discussed recently.

Credit conditions are already starting to affect the real economy. Student loan losses are skyrocketing, which stands in the way of household formation and geographic mobility for recent graduates. Losses are also soaring on subprime auto loans, which has put a lid on new car sales. As these losses ripple through the economy, mortgages and credit cards will be the next to feel the pinch.

A recession will follow soon.

The stock market is going to correct in the face of rising credit losses and tightening credit conditions.

No one knows exactly when it’ll happen, but the time to prepare is now. Once the market corrects, it’ll be too late to act.

Published:5/25/2017 8:51:33 PM
[Markets] Memorial Day Weekend is No. 1 for fatal traffic accidents This weekend, traffic could hit a new high.
Published:5/25/2017 8:51:33 PM
[The Blog] No, Sean Hannity hasn’t done his last show at Fox News


The post No, Sean Hannity hasn’t done his last show at Fox News appeared first on Hot Air.

Published:5/25/2017 8:19:52 PM
[topics:things/terrorism] Amber Rudd denies police cuts to blame for Manchester terror attack Published:5/25/2017 8:19:52 PM
[Alexi Ratmansky] City Ballet’s Spring Season Confirms: Alexei Ratmansky is a Master Choreographer The five ballets he’s made for NYCB are the cream of the crop. Published:5/25/2017 8:19:52 PM
[Iraq] US On Track To Kill More Syrian Civilians Than Russia For 5th Straight Month

Coalition-led airstrikes in Syria killed a total of 225 civilians between April 23 and May 23, the highest 30-day death toll for U.S.-led forces since the campaign began, Agence France-Presse reported. That's nearly double the number of intended targets: The U.S.-led strikes killed 122 ISIS fighters and eight fighters loyal to the Syrian government, the report said.

The rising tide of civilian deaths attributable to coalition forces suggest that May could be the fifth straight month that civilian deaths from coalition-led strikes outpace the civilian death toll from Russian forces, according to the AFP report and an analysis of data from

Of the 225 civilian deaths, reported to AFP by the Syrian Observatory for Human Rights, 44 were children and 36 were women.

The civilian death toll from Russian strikes has declined since it peaked in January. Meanwhile, deaths from U.S.-led strikes have risen dramatically.

“There has been a very big escalation,” Observatory head Rami Abdel Rahman told AFP.

The previous deadliest 30-day period for U.S.-led forces was between February 23 and March 23 this year, when 220 civilians were killed, Abdel Rahman told AFP.

The past month's deaths brought the overall civilian toll from the coalition campaign to 1,481, among them 319 children, AFP reported.

The coalition launched operations against ISIS in Iraq in August 2014, then expanded them to Syria the following month. The Russian intervention began a year later.

However, the rising tide of casualties relative to intended targets could soon shift as the US Military implements a new strategy ordered by President Trump that's designed to annihilate ISIS in Syria in an effort to prevent foreign fighters from returning home. Defense Secretary Jim Mattis said Trump's order for the military to change up its plans for dealing with ISIS has led to a “tactical shift from shoving ISIS out of safe locations in an attrition fight to surrounding the enemy in their strongholds so we can annihilate ISIS.”

Published:5/25/2017 8:19:52 PM
[Energy] Major Exxon Investor Warns Shareholders Not to Give Into Global Warming Hysteria

An activist-led measure at Exxon Mobil Corp.’s next annual meeting addressing global warming could financially wipe out the company’s largest shareholders, one long-time Exxon shareholder... Read More

The post Major Exxon Investor Warns Shareholders Not to Give Into Global Warming Hysteria appeared first on The Daily Signal.

Published:5/25/2017 8:19:52 PM
[Science] Mike Pence won't comment on Greg Gianforte body-slamming incident Vice President Mike Pence won't be opining on the Republican candidate Greg Gianforte, who has been cited for misdemeanor assault after a... Published:5/25/2017 8:19:52 PM
[2017 News] FBI misses House committee’s deadline for providing Comey’s Trump memos FBI misses House committee’s deadline for providing Comey’s Trump memos. “Consultation” must mean they’re either forging one or Comey is trying to figure out how to get out of it if one doesn’t really exist. In a letter released Thursday, Assistant Director Gregory Brower, in the FBI’s Office of Congressional Affairs, told committee chairman Rep. […] Published:5/25/2017 8:19:52 PM
[Politics] Political THUG Debbie Wasserman Schultz OPENLY THREATENS police chief on VIDEO!! I am just shocked at this video. Watch it carefully, there are no big explosions, but at the end you see an amazing exchange between a police chief investigating a pretty heinous . . . Published:5/25/2017 8:19:52 PM
[US Politics] Bill de Blasio confirms he’ll march in parade with freed FALN terrorist; Sponsors pull support

Knowing this year's parade will honor a terrorist has sponsors on the run, but just try to keep Bill de Blasio away.

The post Bill de Blasio confirms he’ll march in parade with freed FALN terrorist; Sponsors pull support appeared first on

Published:5/25/2017 8:19:52 PM
[World] Dana Loesch on Democrats, Pundits Blaming Trump for Greg Gianforte Assault on Reporter

Following Montana Republican congressional candidate Greg Gianforte's alleged assault of a reporter, some Democrats and pundits are trying to blame the incident on President Trump.

Published:5/25/2017 7:51:46 PM
[Business] As Markets Hit Record Highs, Stock Ownership Is Down (Except For Old & Rich People)

Gallup released a poll Thursday showing that overall stock ownership among US adults remains 8 percentage points below its pre-crisis level. But even as the crisis appears to have scared many Americans away from owning stocks, there are two demographic subgroups where ownership has held firm: Adults aged 65 and older and those with an annual household income of $100,000 or more.

The data is from Gallup’s annual “Economy and Personal Finance” survey, which asks US adults whether they personally or jointly have money invested in the stock market, including in individual stocks and stock-market funds such as 401(k)s and individual retirement accounts (IRAs).

Before the crisis, 62% of US adults said they owned stocks. As of April, that number has dropped to 54% - which is higher than last year’s reading, 52%.

That’s bad news for millennials and Gen Xers, because even though the main indexes halved in value during the aftermath of the crisis, they have since more than made up for those declines by rising to record highs. The S&P 500 is up more than 102% since the day Lehman Brothers declared bankruptcy.

The implications of the data are clear. Here’s Gallup:

“The stock market has performed well in 2017, but proportionately fewer Americans are benefiting from today's bull market than did so in bull markets before the financial crisis. The gains in stock values in recent years seem to have done little to persuade people who may have divested themselves of stocks to get back in the market."


“Nor has the recovery encouraged new investors to join the market. Although young adults are understandably less likely than their elders to own stocks, the percentage of 18- to 29-year-olds investing is down 11 points since before the financial crisis.

While the poorest Americans have definitely borne the brunt of rising inequality, they aren’t driving the decline in stock ownership because equity ownership among low-income people has been low for years.

Instead it’s the middle- and upper-middle-income households that have largely driven the decline.

The aftermath of the crisis also appears to have had a lingering impact on Millennials and Gen Xers, who’ve had to grapple with tepid employment and a student debt load that ballooned to more than $1 trillion during their prime working years.

Rising equity valuations, which have been spurred on by the Federal Reserve and its unprecedented monetary stimulus, have certainly played a role in driving up income inequality in the U.S.

But Gallup noted that the aging of the baby boomer demographic may have also contributed to the disparity in ownership rates. Older workers were in their prime during the boom years of the 1980s and 1990s so it's more likely they had 401(k)s at work, leaving them with above average stock ownership. 

Here’s Gallup’s data.


Published:5/25/2017 7:51:45 PM
[Entertainment] Hailey Baldwin Reveals How Her Dad Stephen Reacted to Her Sexy Maxim Cover: Watch! Stephen Baldwin, InstagramHailey Baldwin is spilling major secrets to E! News. The stunning star walked the red carpet at the annual amfAR charity gala during the 2017 Cannes Film Festival on Thursday. And before...
Published:5/25/2017 7:51:45 PM
[Politics] VIDEO: Krauthammer torches Trump’s NATO speech Krauthammer was not a fan of Trump’s NATO speech today – to say the least – and ripped it apart today on Martha MacCallum’s show as she tried earnestly to defend it. . . . Published:5/25/2017 7:51:45 PM
[topics:things/passengers] Man who started toilet fire on Sharm el-Sheikh flight has sentence more than doubled Published:5/25/2017 7:51:45 PM
[Markets] MarketWatch First Take: Nutanix spikes as bigger customers sign on to hybrid cloud Nutanix Inc. enjoyed a strong quarter of sales growth fueled by an increased number of big-name corporate customers buying into its hybrid-cloud strategy, regaining some of its credence with investors.
Published:5/25/2017 7:51:45 PM
[Uncategorized] FISA Court Reveal: NSA under Obama Illegally Spied on Americans FISA Court: Illegal searches constituted a "very serious Fourth Amendment issue,” yet media reaction subdued. Published:5/25/2017 7:51:45 PM
[Augmented Reality] With new realities to build, Unity positioned to become tech giant  Even so, there are few verticals filled with more utopian dreams than the studios and startups building virtual and augmented reality experiences. While some are looking to craft 3D experiences that integrate into the real world, others are aiming to create massive worlds we can escape to. The one thing many of them have in common, however, is that they are built on a game engine from… Read More
Published:5/25/2017 7:51:45 PM
[Science] DEA chief: 'Marijuana is not medicine' Marijuana is classified the same way as drugs like heroin and LSD. Published:5/25/2017 7:51:45 PM
[News] Black Female Democrats Complain in Open Letter About Lack of DNC Support The signatories decried the DNC's problem with black voters feeling like the party "take[s] them for granted." Published:5/25/2017 7:51:45 PM
[Markets] U.S. Stocks Rise, Buoyed by Consumer Discretionary Sector Consumer-discretionary shares lifted U.S. stock indexes while oil prices slid. The S&P 500 added 0.4%, a fresh closing record. Published:5/25/2017 7:51:45 PM
[] Cosmic, Man: Scientists Speculate That the Great "Cold Spot" in the Universe Might Be the Impact Zone of Another Universe Colliding With Our Own See Wikipedia for background on the cosmic background microwave "Cold Spot." It is, as the name suggests, notably colder than other parts of the universe. Which is interesting, at least to people interested by such things, as the Universe tends... Published:5/25/2017 7:51:45 PM
[World] Tucker Carlson Monologue on Political Violence and the Progressive Left

In his opening remarks tonight, Tucker Carlson denounced Montana Republican congressional candidate Greg Gianforte for body slamming a reporter who tried to ask him a question.

Published:5/25/2017 7:22:58 PM
[Politics] DNC Chair Blames Citizens United for Why Dems Can’t Compete With GOP on Fundraising

The post DNC Chair Blames Citizens United for Why Dems Can’t Compete With GOP on Fundraising appeared first on Washington Free Beacon.

Published:5/25/2017 7:22:55 PM
[American Civil Liberties Union] Unclassified Documents Show Obama Intel Agency Secretly Spied On Americans For Years

Authored by John Solomon and Sara Carter via,

The National Security Agency under former President Barack Obama routinely violated American privacy protections while scouring through overseas intercepts and failed to disclose the extent of the problems until the final days before Donald Trump was elected president last fall, according to once top-secret documents that chronicle some of the most serious constitutional abuses to date by the U.S. intelligence community.

More than 5 percent, or one out of every 20 searches seeking upstream Internet data on Americans inside the NSA’s so-called Section 702 database violated the safeguards Obama and his intelligence chiefs vowed to follow in 2011, according to one classified internal report reviewed by Circa.

The Obama administration self-disclosed the problems at a closed-door hearing Oct. 26 before the Foreign Intelligence Surveillance Court that set off alarm. Trump was elected less than two weeks later.

The normally supportive court censured administration officials, saying the failure to disclose the extent of the violations earlier amounted to an “institutional lack of candor” and that the improper searches constituted a “very serious Fourth Amendment issue,” according to a recently unsealed court document dated April 26, 2017.

The admitted violations undercut one of the primary defenses that the intelligence community and Obama officials have used in recent weeks to justify their snooping into incidental NSA intercepts about Americans.

Circa has reported that there was a three-fold increase in NSA data searches about Americans and a rise in the unmasking of U.S. person’s identities in intelligence reports after Obama loosened the privacy rules in 2011.

Officials like former National Security Adviser Susan Rice have argued their activities were legal under the so-called minimization rule changes Obama made, and that the intelligence agencies were strictly monitored to avoid abuses.

The intelligence court and the NSA’s own internal watchdog found that not to be true.

“Since 2011, NSA’s minimization procedures have prohibited use of U.S.-person identifiers to query the results of upstream Internet collections under Section 702,” the unsealed court ruling declared. “The Oct. 26, 2016 notice informed the court that NSA analysts had been conducting such queries inviolation of that prohibition, with much greater frequency than had been previously disclosed to the Court.”

Speaking Wednesday on Fox News, Sen. Rand Paul (R-KY) said there was an apparent effort under the Obama Administration to increase the number of unmaskings of Americans.

“If we determine this to be true, this is an enormous abuse of power,” Paul said. “This will dwarf all other stories.”


“There are hundreds and hundreds of people,” Paul added.

The American Civil Liberties Union said the newly disclosed violations are some of the most serious to ever be documented and strongly call into question the U.S. intelligence community’s ability to police itself and safeguard American’s privacy as guaranteed by the Constitution’s Fourth Amendment protections against unlawful search and seizure.

“I think what this emphasizes is the shocking lack of oversight of these programs,” said Neema Singh Guliani, the ACLU’s legislative counsel in Washington.


“You have these problems going on for years that only come to the attention of the court late in the game and then it takes additional years to change its practices.


“I think it does call into question all those defenses that we kept hearing, that we always have a robust oversight structure and we have culture of adherence to privacy standards,” she added. “And the headline now is they actually haven’t been in compliacne for years and the FISA court itself says in its opinion is that the NSA suffers from a culture of a lack of candor.”

The NSA acknowledged it self-disclosed the mass violations to the court last fall and that in April it took the extraordinary step of suspending the type of searches that were violating the rules, even deleting prior collected data on Americans to avoid any further violations.

“NSA will no longer collect certain internet communications that merely mention a foreign intelligence target,” the agency said in the statement that was dated April 28 and placed on its Web site without capturing much media or congressional attention.

In question is the collection of what is known as upstream “about data”about an American that is collected even though they were not directly in contact with a foreigner that the NSA was legally allowed to intercept.

The NSA said it doesn’t have the ability to stop collecting ‘about’ information on Americans, “without losing some other important data. ” It, however, said it would stop the practice to “reduce the chance that it would acquire communication of U.S. persons or others who are not in direct contact with a foreign intelligence target.”

The NSA said it also plans to “delete the vast majority of its upstream internet data to further protect the privacy of U.S. person communications.”

Agency officials called the violations “inadvertent compliance lapses.” But the court and IG documents suggest the NSA had not developed a technological way to comply with the rules they had submitted to the court in 2011.

Officials “explained that NSA query compliance is largely maintained through a series of manual checks” and had not “included the proper limiters” to prevent unlawful searches, the NSA internal watchdog reported in a top secret report in January that was just declassified. A new system is being developed now, officials said.

The NSA conducts thousand of searches a year on data involving Americans and the actual numbers of violations were redacted from the documents Circa reviewed.

But a chart in the report showed there three types of violations, the most frequent being 5.2 percent of the time when NSA Section 702 upstream data on U.S. persons was searched.

The inspector general also found  noncompliance between 0.7 percent and 1.4 percent of the time involving NSA activities in which there was a court order to target an American for spying  but the rules were still not followed. Those activities are known as Section 704 and Section 705 spying.

Review | The NSA inspector general’s highly redacted chart showing privacy violations.

The IG report spared few words for the NSA’s efforts before the disclosure to ensure it was complying with practices, some that date to rules issued in 2008 in the final days of the Bush administration and others that Obama put into effect in 2011.

“We found that the Agency controls for monitoring query compliance have not been completely developed,” the inspector general reported, citing problems ranging from missing requirements for documentation to the failure to complete controls that would ensure “query compliance.”

The NSA’s Signal Intelligence Directorate, the nation’s main foreign surveillance arm, wrote a letter back to the IG saying it agreed with the findings and that “corrective action plans” are in the works.

Published:5/25/2017 7:22:55 PM
[Consumer & Gadgets ] Gadgets: Several decisions to be made before selecting new headphones With the summer just about upon us, headphone season is in full force. If you're about to make a new purchase, don't get fooled with fancy marketing, colorful boxes or hype. Instead, consider these features when shopping around (the order of importance depends on you): wireless vs wired, earbuds vs over the ear, cost and sound quality (which would be No. 1 for me). Published:5/25/2017 7:22:55 PM
[topics:people/donald-trump] Jared Kushner 'now a focus in FBI Russia investigation into Trump campaign' Published:5/25/2017 7:22:55 PM
[Health Care] Trump’s Budget Puts Medicaid on a Path to Long-Needed Reform

Medicaid, the huge government health program for the poor and the indigent, is broken. Both the Trump administration’s recent budget submission and the House-passed American... Read More

The post Trump’s Budget Puts Medicaid on a Path to Long-Needed Reform appeared first on The Daily Signal.

Published:5/25/2017 7:22:55 PM
[International events] Huh? Ben & Jerry’s plan to fight for gay marriage in Australia is highly problematic

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The post Huh? Ben & Jerry’s plan to fight for gay marriage in Australia is highly problematic appeared first on

Published:5/25/2017 7:22:55 PM
[Top Picks] Rep. Chaffetz responds to FBI’s refusal to turn over Comey memos

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Published:5/25/2017 7:22:54 PM
[Science] Mark Levin: Sean Hannity should consider suing Media Matters "I would give very serious consideration to suing Media Matters, its board, and its officers," the host proposed Thursday. Published:5/25/2017 7:22:54 PM
[Politics] VIDEO: Krauthammer torches Trump’s NATO speech Krauthammer was not a fan of Trump’s NATO speech today – to say the least – and ripped it apart today on Martha MacCallum’s show as she tried earnestly to defend it. . . . Published:5/25/2017 7:22:54 PM
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[World] Newt Gingrich Slams Leakers Behind Jared Kushner-FBI Report, Manchester Attack Details

Jared Kushner, President Trump’s son-in-law and a senior adviser in the White House, is under FBI scrutiny as part of the investigation into possible collusion between Russia and the Trump campaign, NBC News reported.

Published:5/25/2017 6:49:54 PM
[topics:organisations/facebook] 'She was a lovely quiet, sensitive person': Final victim named as 15-year-old Megan Hurley  Published:5/25/2017 6:49:54 PM
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[Science] Bill would protect state, local authority on drones Bipartisan measure would ensure that the Federal Aviation Administration could not overrule local authorities if they create their own ordin... Published:5/25/2017 6:49:53 PM
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Published:5/25/2017 6:49:53 PM
[Entertainment] Alec Baldwin Set to Reprise His Role as The Boss Baby in Animated Sequel The Boss BabyThis town is big enough for two boss babies! Less than two months after the release of The Boss Baby, Universal Pictures announced that a sequel is officially in the...
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[The Blog] CNN: House GOP, Pence clash over tax-reform plan?

Too early to tell.

The post CNN: House GOP, Pence clash over tax-reform plan? appeared first on Hot Air.

Published:5/25/2017 6:49:53 PM
[Afghanistan] 3 Events, All Tied. Can You See The Trends?

By Chris at

Well done!

To the Donald...

Too true Donald. These guys are filthy rich. In fact, if Justin Bieber lived out there, they'd put him on income support.

Fighting words those. Bow wow, woof, woof. Grrrr!

Disgraceful... this bowing thing. Elect me, and I'll show 'em.

Aaaand.... tamed!

POTUS caught curtseying.

Is that Trump or Hillary bowing? They use the same hair dye, and increasingly there seems little to distinguish them apart. The man is as steely, resolute, and determined as a bowl of yoghurt.

In his Saudi speech the Donald refused to utter the words
“radical Islamic terrorism”. You'll recall that this was a term he had endlessly berated President Obama for failing to use. He went as far as to call Islam “one of the world’s great faiths”. Trump supporters' heads must have exploded.

For everyone else... the brilliance coming from Washington never ceases to disappoint.


For the stock market... here's the iShares US Aerospace & Defence ETF:

A $110 billion weapons deal worth over $350 billion over 10 years which Hillary Trump just signed will have that effect. The establishment rice bowls will be filled after all. Whew! Rumsfeld and Cheney must be relieved.

As for the electorates faith in the political system...

Well, let's see... $350 billion in advanced weaponry to the barbaric, medieval regime that chops of more heads than ISIS.

You tell me.

Intricately Tied to It

Over in Manchester, a Libyan refugee Salman Abedi, after having read a poorly written medieval science fiction book and thus under the delusion of paradise and 40 virgins, blew himself to smithereens, taking with him 22 innocent people who were out enjoying a night's music.

How is this intricately tied?

Last year, I explained the actions and consequences to this question:

"According to a group of human rights organisations, the body count from the wars in Pakistan, Afghanistan, and Iraq – all part of the ridiculously named “war on terror” – stands at over 2 million.

Let’s think about this for a minute. Consider how many close friends and family you have. Let’s put the number at an even 50. Remember also that culturally Muslims have an average of 4 children rather than the European 1.5 average and factor in that a good portion of this group practice polygamy – taking 4 wives and having 16 rather than 4 children – and this number is likely pretty conservative.

For every person killed (and this can be directly or simply as a result of Western intervention) we have therefore a further 50 friends and family. So now we have 2 million multiplied by 50 which is 100 million people. What percentage of those 100 million people blame the West for the death of a loved one? It’s higher than zero, that much I know.

Now some portion of those 100 million people have been invited with open arms into Europe, and we’re not even mentioning soldiers who’ve fought against any of the Western-led military campaigns. Many of them too have made their way into the homelands of the “infidels”.

Imagine for a minute being invited to a party at the home of someone who you believe had a hand in the slaughter of your family. That is unfortunately how many feel. We don’t need to imagine this, we know it because they have told us this.

I’m not making a judgement call here just pointing out the obvious.

European politicians seem to have a shockingly dim understanding of this dynamic, which on it’s own shows a naivety befitting a 5 year old schoolgirl.

You cannot directly, or indirectly, kill two million people, invite their relatives home and expect no blowback. That’s beyond stupid. It’s suicidal."

And then only a month ago, I wrote about what the silent majority is really saying:

"While afraid to say so publicly how many in private think: is it not time to bring in the military, round them all up, put them on a ship with a jammed rudder and aim it at North Africa?"

This number grows each day, and today - just days after this Manchester attack - the number of people thinking these thoughts is exponentially higher than it was at the beginning of the week. This is how trends and consensus form. Ignore it at your peril!

And while I've been explaining behavioural economics and this social dynamic in my little corner of the web, I've been arguing that it will increasingly become mainstream with profound ramifications.

And here we have one such case. It doesn't get much more mainstream than Morrissey himself. Read it carefully.

On a more positive note, I sure hope you're following this.

The Belt and Road

A week before Chairman Trump and Salman bin Abdulaziz Al Saud sat down to lobster bisque, roast swan stuffed with oysters, and sautéed slave to discuss how many Yemenis could be wiped out with the brand spanking new US bombs, President Xi hosted leaders from around the world pushing ahead with China's ambitious OBOR project.

One can conquer by force or by trade - a point worth remembering.

With trade comes influence - political, economic, and social.

Consider what's happened in just 40 years.

Forty years ago, China was a backwater - nothing of a place inhabited by little brown people in straw hats rummaging around in garbage cans wearing clothing that looked like they'd been nicked from the film set of Schindler's List.

If you were lucky, you'd spot a moped but it had probably run out of fuel because nobody could afford anything more than soup. And since nobody had invented a moped that ran on soup, it wasn't going anywhere.

Today, not only does China produce an avalanche of goods but they are rapidly becoming a formidable consumer themselves. In terms of influence consider that they are now:

  • Asia's largest trading partner
  • US largest trading partner
  • Germany's largest trading partner
  • Australia's largest trading partner
  • Russia's second largest trading partner (after Germany)
  • Africas largest trading partner
  • South America's largest trading partner

China has, over this 40 odd years, built up some impressive things. Among them a credit bubble, which will need to be dealt with but also substantial foreign exchange reserves, most of them held in US government debt securities. Trading those securities for influence, and dare I say it inflation protection, will translate into revenues to the Middle Kingdom. This is the plan... and it isn't a bad one.

They sure could do worse. They could sell bombs to the most hated family in the Middle East, and when the inevitable backlash takes place, then turn around and say with a straight face.


Washington Poll

Cast your vote here and also see what others think is going on

- Chris

"The supreme art of war is to subdue the enemy without fighting." — Sun Tzu, Chinese


Liked this article? Don't miss our future missives and podcasts, and

get access to free subscriber-only content here.


Published:5/25/2017 6:49:53 PM
[News] FBI Now Looking Into Jared Kushner as Part of Russian Investigation: Report The FBI does not necessarily suspect Kushner of committing a crime. Published:5/25/2017 6:49:53 PM
[In The News] President Donald Trump’s Schedule for Friday, May 26, 2017

By Rich Mitchell

Doanld Trump and Melania Trump Israel visit

The President and First Lady will spend the day in Taormina, Italy. The president meeting with G7 leaders and the First Couple taking in a performance by the La Scala Philharmonic Orchestra.

President Donald Trump will meet with Prime Minister Shinzo Abe of Japan then attend a welcome ceremony and reception for G7 leaders.

After a luncheon with members of the G7, the President and First Lady will attend an orchestra concert at the Ancient Greek Theatre of Taormina.

President Trump's schedule for 5/26/17

All Times Local//Eastern

  • 10:20 AM // 4:20 AM The President has a bilateral meeting with Prime Minister Shinzo Abe of Japan - Hotel Villa Diodoro
  • 11:45 AM // 5:45 AM The President participates in the welcome ceremony for G7 leaders - Ancient Greek Theatre of Taormina
  • 12:50 PM // 6:50 AM The President participates in the reception for G7 leaders - San Domenico Palace Hotel
  • 1:10 PM // 7:10 AM The President participates in the G7 luncheon and working sessions - San Domenico Palace Hotel
  • 7:00 PM // 1:00 PM The President and the First Lady attend the La Scala Philharmonic Orchestra concert- Ancient Greek Theatre of Taormina
  • 8:10 PM // 2:10 PM The President and the First Lady participate in a dinner hosted by President Sergio Mattarella of Italy - Belmond Grand Hotel Timeo Taormina

The article President Donald Trump’s Schedule for Friday, May 26, 2017 is original content from Conservative Daily News.

Published:5/25/2017 6:49:53 PM
[Comedy] @MikeDrucker Every inspirational story in America: "You can do anything if you work hard (as long as you have wealthy parents)." Published:5/25/2017 6:19:40 PM
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Published:5/25/2017 6:19:39 PM
[American atheists] Discoverer Of DNA's Double-Helix Banned From U of I For "Failing Test Of Decency"

The University of Illinois has capitulated to faculty complaints and rescinded a speaking invitation to Nobel Laureate James Watson, who has ruffled feathers with past comments about race.

Watson is famous for co-discovering the double-helix structure of DNA, but even a preemptive email stating that he would be giving a "narrowly focused scientific talk" failed to assuage faculty concerns.

The issue is that outside of the research lab, Watson isn't the same admirable figure: He has made all manner of offensive and racist comments. In a 2007 interview he said he was "gloomy about the prospect of Africa" because "our social policies are based on the fact that their intelligence is the same as ours — whereas all the testing says not really." He also said he hopes everyone is equal but "people who have to deal with black employees find this not true." He apologized but has made other tasteless, sexist comments that call into question his character and judgment — but not his scientific expertise.

As's Adam Sabes reports, Watson is known primarily for co-discovering the double-helix structure of DNA along with Francis Crick, but had offered to give a “narrowly focused scientific talk” at the school’s Institute for Genomic Biology about his recent cancer research, Institute Director Gene Robinson told The News-Gazette of Champaign-Urbana, adding that he considered the offer “carefully” before deciding to accept.

Robinson said he had anticipated potential objections to Watson’s lecture, and attempted to head them off with an email making explicitly clear that the invitation was not an endorsement of Watson’s past comments.

"We tried to consider this very carefully in going forward, and different perspectives on the possibilities of him giving a science-based lecture,” Robinson explained. "With respect to his past, the email that I sent out stated very clearly that we didn't condone any of his past comments, racist comments and sexist comments. And we noted that he had apologized and thought about all those very carefully.”


"We support Dr. Watson for his discovery and work, and believe that his remorse and subsequent apology to those groups he spoke against are genuine,” the email stated, “but the IGP's stance is unchanged—we do not condone discrimination of any form, and the respect that we give to each individual in our community is paramount."

Robinson’s outreach did not assuage the concerns of many faculty members, however, particularly biological anthropology professor Kate Clancy, who drew the Institute’s attention with a series of tweets proposing to organize a protest against Watson’s talk. Less than an hour after she began tweeting, the Institute replied announcing that it had decided to cancel the lecture in response to her complaints.

"In hearing the faculty's concerns, we decided that the right thing to do was not to have the lecture," Robinson said, adding that while he respects the principle of free speech, "I really respect the perspectives of the faculty who raised the concern. It was a tough call either way."

The Chicago Tribune, however, questioned Robinson’s judgment on that front in an editorial, arguing that Watson’s “tasteless, sexist comments” do not detract from his “scientific expertise,” and that cancelling the talk is an example of the “reflex on college campuses to shut down offensive or controversial speech as an affront to the community.”

:Watson's nixed appearance at the U. of I., not intended as a venue for his repugnant opinions, could have been acceptable as a narrowly focused science talk, since the research institute was clear in repudiating his personal views,” the editorial concluded.

“Watson isn't the only expert in some specific field who otherwise fails tests of decency. Attendees would have come away enlightened by his science lecture.”

Student Jacqueline Moffat, conversely, told Campus Reform that she supports the decision to cancel the speech, saying the Institute can just find another “smart” person who has not engendered past controversy.

“The school should not be promoting someone like that,” she asserted. “There are plenty of other smart people that we can hear from.”

Published:5/25/2017 6:19:39 PM
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[Economy] Trump’s Food Stamp Reform Would Close the Trap of Dependency

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Published:5/25/2017 6:19:39 PM
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