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[Markets] On America's Hostile Coexistence with China

Via ChasFreeman.net,

Remarks to the Freeman Spogli Institute for International Studies China Program

Ambassador Chas W. Freeman, Jr. (USFS, Ret.)
Senior Fellow, Watson Institute for International and Public Affairs, Brown University
Stanford, California, 3 May 2019

President Trump’s trade war with China has quickly metastasized into every other domain of Sino-American relations.   Washington is now trying to dismantle China’s interdependence with the American economy, curb its role in global governance, counter its foreign investments, cripple its companies, block its technological advance, punish its many deviations from liberal ideology, contest its borders, map its defenses, and sustain the ability to penetrate those defenses at will.

The message of hostility to China these efforts send is consistent and apparently comprehensive. Most Chinese believe it reflects an integrated U.S. view or strategy.  It does not.

There is no longer an orderly policy process in Washington to coordinate, moderate, or control policy formulation or implementation.  Instead, a populist president has effectively declared open season on China.  This permits everyone in his administration to go after China as they wish.  Every internationally engaged department and agency – the U.S. Special Trade Representative, the Departments of State, Treasury, Justice, Commerce, Defense, and Homeland Security – is doing its own thing about China.  The president has unleashed an undisciplined onslaught.  Evidently, he calculates that this will increase pressure on China to capitulate to his protectionist and mercantilist demands.  That would give him something to boast about as he seeks reelection in 2020.

Trump’s presidency has been built on lower middle-class fears of displacement by immigrants and outsourcing of jobs to foreigners.  His campaign found a footing in the anger of ordinary Americans – especially religious Americans – at the apparent contempt for them and indifference to their welfare of the country’s managerial and political elites.  For many, the trade imbalance with China and Chinese rip-offs of U.S. technology became the explanations of choice for increasingly unfair income distribution, declining equality of opportunity, the deindustrialization of the job market, and the erosion of optimism in the United States.

In their views of China, many Americans now appear subconsciously to have combined images of the insidious Dr. Fu Manchu, Japan’s unnerving 1980s challenge to U.S.  industrial and financial primacy, and a sense of existential threat analogous to the Sinophobia that inspired the Anti-Coolie and Chinese Exclusion Acts.

Meanwhile, the ineptitude of the American elite revealed by the 2008 financial crisis, the regular eruptions of racial violence and gun massacres in the United States, the persistence of paralyzing political constipation in Washington, and the arrogant unilateralism of “America First” have greatly diminished the appeal of America to the Chinese elite.

As a result, Sino-American interaction is now long on mutual indignation and very short on empirically validated information to substantiate the passions it evokes.  On each side, the other is presumed guilty of a litany of iniquities.  There is no process by which either side can achieve exoneration from the other’s accusations.  Guesstimates, conjectures, a priorireasoning from dubious assumptions, and media-generated hallucinations are reiterated so often that they are taken as facts.  The demagoguery of contemporary American populism ensures that in this country clamor about China needs no evidence at all to fuel it.  Meanwhile, Chinese nationalism answers American rhetorical kicks in the teeth by swallowing the figurative blood in its mouth and refraining from responding in kind, while sullenly plotting revenge.

We are now entering not just a post-American but post-Western era.  In many ways the contours of the emerging world order are unclear.  But one aspect of them is certain: China will play a larger and the U.S. a lesser role than before in global and regional governance.  The Trump administration’s response to China’s increasing wealth and power does not bode well for this future.  The pattern of mutual resentment and hostility the two countries are now establishing may turn out to be indelible.  If so, the consequences for both and for world prosperity and peace could be deeply unsettling.

For now, America’s relationship with China appears to have become a vector compounded of many contradictory forces and factors, each with its own advocates and constituencies.  The resentments of some counter the enthusiasms of others.  No one now in government seems to be assessing the overall impact on American interests or wellbeing of an uncoordinated approach to relations with the world’s greatest rising power.  And few in the United States seem to be considering the possibility that antagonism to China’s rise might end up harming the United States and its Asian security partners more than it does China.  Or that, in extreme circumstances, it could even lead to a devastating trans-Pacific nuclear exchange.

Some of the complaints against China from the squirming mass of Sinophobes who have attached themselves to President Trump are entirely justified.  The Chinese have been slow to accept the capitalist idea that knowledge is property that can be owned on an exclusive basis.  This is, after all, contrary to a millennial Chinese tradition that regards copying as flattery, not a violation of genius.  Chinese businessfolk have engaged in the theft of intellectual property rights not just from each other but from foreigners.  Others may have done the same in the past, but they were nowhere near as big as China.  China’s mere size makes its offenses intolerable.  Neither the market economy in China nor China’s international trade and investment relationships can realize their potential until its disrespect for private property is corrected.  The United States and the European Union (EU) are right to insist that the Chinese government fix this problem.

Many Chinese agree.  Not a few quietly welcome foreign pressure to strengthen the enforcement of patents and trademarks, of which they are now large creators, in the Chinese domestic market.  Even more hope the trade war will force their government to reinvigorate “reform and opening.”  Fairer treatment of foreign-invested Chinese companies is not just a reasonable demand but one that serves the interests of the economically dominant but politically disadvantaged private sector in China.  Chinese protectionism is an unlatched door against which the United States and others should continue to push.

But other complaints against China range from the partially warranted to the patently bogus.  Some recall Hermann Göring’s cynical observation at Nuremberg that: “The people can always be brought to the bidding of the leaders. That is easy.  All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country.”   There is a lot of this sort of manipulative reasoning at play in the deteriorating U.S. security relationship with the Chinese.  Social and niche media, which make everything plausible and leave no truth unrefuted, facilitate this.  In the Internet miasma of conspiracy theories, false narratives, fabricated reports, fictive “facts,” and outright lies, baseless hypotheses about China rapidly become firm convictions and long-discredited myths and rumors find easy resurrection.

Consider the speed with which a snappy phrase invented by an Indian polemicist – “debt-trap diplomacy” – has become universally accepted as encapsulating an alleged Chinese policy of international politico-economic predation.  Yet the only instance of a so-called a “debt trap” ever cited is the port of Hambantota, commissioned by the since-ousted autocratic president of Sri Lanka to glorify his hometown.  His successor correctly judged that the port was a white elephant and decided to offload it on the Chinese company that had built it by demanding that the company exchange the debt to it for equity.  To recover any portion of its investment, the Chinese company now has to build some sort of economic hinterland for the port.  Hambantota is less an example of a “debt trap” than of a stranded asset.

Then too, China is now routinely accused of iniquities that better describe the present-day United States than the People’s Middle Kingdom.  Among the most ironic of such accusations is the charge that it is China, not a sociopathic “America First” assault on the international status quo, that is undermining both U.S. global leadership and the multilateral order remarkably wise American statesmen put in place some seven decades ago.  But it is the United States, not China, that is ignoring the U.N. Charter, withdrawing from treaties and agreements, attempting to paralyze the World Trade Organization’s dispute resolution mechanisms, and substituting bilateral protectionist schemes for multilateral facilitation of international trade based on comparative advantage.

The WTO was intended as an antidote to mercantilism, also known as “government-managed trade.”  China has come strongly to support globalization and free trade.  These are the primary sources of its rise to prosperity.  It is hardly surprising that China has become a strong defender of the trade and investment regime Americans designed and put in place.

By contrast, the Trump administration is all about mercantilism – boosting national power by minimizing imports and maximizing exports as part of a government effort to manage trade with unilateral tariffs and quotas, while exempting the United States from the rules it insists that others obey.

I will not go on except to note the absurdity of the thesis that “engagement” failed to transform China’s political system and should therefore be abandoned.  Those who most vociferously advance this canard are the very people who used to complain that changing China’s political order was not the objective of engagement but that it should be.  They now condemn engagement because it did not accomplish objectives that they wanted it to have but used to know that it didn’t.  It is telling that American engagement with other illiberal societies (like Egypt, the Israeli occupation in Palestine, or the Philippines under President Duterte) is not condemned for having failed to change them.

That said, we should not slight the tremendous impact of America’s forty-year opening to China on its socioeconomic development.   American engagement with China helped it develop policies that rapidly lifted at least 500 million people out of poverty.  It transformed China from an angry, impoverished, and isolated power intent on overthrowing the capitalist world order to an active, increasingly wealthy, and very successful participant in that order.  It midwifed the birth of a modernized economy that is now the largest single driver of the world’s economic growth and that, until the trade war intervened, was America’s fastest growing overseas market.  American engagement with China helped reform its educational system to create a scientific, technological, engineering, and mathematical (“STEM”) workforce that already accounts for one-fourth of such workers in the global economy.  For a while, China was a drag on human progress.  It is now an engine accelerating it.  That transformation owes a great deal to the breadth and depth of American engagement with it.

Nor should we underestimate the potential impact of the economic decoupling, political animosity, and military antagonism that U.S. policy is now institutionalizing.  Even if the two sides conclude the current trade war, Washington now seems determined to do everything it can to hold China down.  It seems appropriate to ask: can the United States succeed in doing this?  What are the probable costs and consequences of attempting to do it?   If America disengages from China, what influence, if any, will the United States have on its future evolution?  What is that evolution likely to look like under conditions of hostile coexistence between the two countries?

Some likely answers, issue by issue.

First: the consequences of cutting back Sino-American economic interdependence. 

The supply chains now tying the two economies together were forged by market-regulated comparative advantage.  The U.S. attempt to impose government-dictated targets for Chinese purchases of agricultural commodities, semiconductors, and the like represents a political preemption of market forces.  By simultaneously walking away from the Paris climate accords, TPP, the Iran nuclear deal, and other treaties and agreements, Washington has shown that it can no longer be trusted to respect the sanctity of contracts.  The U.S. government has also demonstrated that it can ignore the economic interests of its farmers and manufacturers and impose politically motivated embargoes on them.  The basic lesson Chinese have taken from recent U.S. diplomacy is that no one should rely on either America’s word or its industrial and agricultural exports.

For these reasons, the impending trade “deal” between China and the United States – if there is one – will be at most a truce that invites further struggle.  It will be a short-term expedient, not a long-term reinvigoration of the Sino-American trade and investment relationship to American advantage.  No future Chinese government will allow China to become substantially dependent on imports or supply chains involving a country as fickle and hostile as Trump’s America has proven to be.  China will instead develop non-American sources of foodstuffs, natural resources, and manufactures, while pursuing a greater degree of self-reliance.  More limited access to the China market for U.S. factories and farmers will depress U.S. growth rates.  By trying to reduce U.S. interdependence with China, the Trump administration has inadvertently made the United States the supplier of last resort to what is fast becoming the world’s largest consumer market.

The consequences for American manufacturers of “losing” the China market are worsened by the issue of scale.  China’s non-service economy already dwarfs that of the United States.  Size matters.  Chinese companies, based in a domestic market of unparalleled size, have economies of scale that give them major advantages in international competition.  American companies producing goods – for example, construction equipment or digital switching gear – have just been put at a serious tariff disadvantage in the China market as China retaliates against U.S. protectionism by reciprocating it.  One side effect of the new handicaps U.S. companies now face in the China market is more effective competition from Chinese companies, not just in China but in third country markets too.

Second: the U.S. effort to block an expanded Chinese role in global governance.

This is no more likely to succeed than the earlier American campaign to persuade allies and trading partners to boycott the Chinese-sponsored Asian Infrastructure Investment Bank (AIIB).  That has isolated the United States, not China.  Carping at the Belt and Road initiative and related programs from outside them does nothing to shape them to American advantage.  It just deprives American companies of the profits they might gain from participating in them.

The United States seems to be acting out of nostalgia for the simplicities of a bipolar world order, in which countries could be pressured to stand with either the United States or its then rival.  But China is not hampered by a dysfunctional ideology and economic system, as America’s Soviet adversary was.  What’s more, today’s China is an integral member of international society, not a Soviet-style outcast.  There is now, quite literally, no country willing to accept being forced to make a choice between Beijing and Washington.  Instead, all seek to extract whatever benefits they can from relations with both and with other capitals as well, if they have something to offer.  The binary choices, diplomatic group-think, and trench warfare of the Cold War have been succeeded by national identity politics and the opportunistic pursuit of political, economic, and military interests wherever they can be served.  Past allegiances do not anywhere determine current behavior.

The sad reality is that the United States, which led the creation of the Bretton Woods institutions that have been at the core of the post-World War II rule-bound international system, now offers these institutions and their members neither funding nor reform.  Both are necessary to promote development as balances of supply, demand, wealth, and power shift.   The new organizations, like the AIIB and the New Development Bank, that China and others are creating are not predatory intrusions into the domain of American-dominated international finance.  They are necessary responses to unmet financial and economic demand.  Denouncing them does not alter that reality.

Other countries do not see these organizations as supplanting pre-existing lending institutions long led by the United States.  The new institutions supplement the World Bank Group and regional development banks.  They operate under slightly improved versions of the lending rules pioneered by the Bretton Woods legacy establishments.   China is a major contributor to the new development banks, but it does not exercise a veto in them as the U.S. does in the IMF and World Bank.  The AIIB’s staff is multinational (and includes Americans in key positions).  The New Development Bank’s first president is Indian and its principal lending activity to date has been in South Africa.

Washington has chosen to boycott anything and everything sponsored by China.  So far, the sad but entirely predictable result of this attempt to ostracize and reduce Chinese influence has not curbed China’s international clout but magnified it.  By absenting itself from the new institutions, the United States is making itself increasingly irrelevant to the overall governance of multilateral development finance.

Third: the U.S. campaign to block China’s international investments, cripple its technology companies, and impede its scientific and technological advance.

The actions of the Committee on Foreign Investment in the United States (CFIUS) to prevent Chinese investment in American industry and agriculture are well publicized and are becoming ever more frequent.  So are official American denunciations of Chinese telecommunications companies like Huawei and ZTE amidst intermittent efforts to shut them down.  In an ominous echo of World War I’s anti-German, World War II’s anti-Japanese, and the Cold War’s anti-communist xenophobia, the FBI has begun issuing loud warnings about the menace posed by the large Chinese student presence on American campuses.  Washington is adjusting visa policies to discourage such dangerous people from matriculating here.  It has also mounted a strident campaign to persuade other countries to reject Chinese investments under the “Belt and Road” initiative.

In the aggregate, these policies represent a decision by the U.S. political elite to try to hamstring China, rather than to invest in strengthening America’s ability to compete with it.  There is no reason whatsoever to believe this approach can succeed.  China’s foreign direct investments have more than doubled over the past three years.  Third countries are openly declining to go along with U.S. opposition to intensified economic relations with China.  They want the capital, technology, and market openings that Chinese investment provides.   U.S. denunciations of their interest in doing business with China are seldom accompanied by credible offers by American companies to match what their Chinese competitors offer.  You can’t beat something with nothing.

It’s also not clear which country is most likely to be hurt by U.S. government obstruction of collaboration between Chinese and American STEM workers.  There is a good chance the greatest damage will be to the United States.  A fair number of native-born Americans seem more interested in religious myths, magic, and superheroes than in science.  U.S. achievements in STEM owe much to immigration and to the presence of Chinese and other foreign researchers in America’s graduate schools.  The Trump administration is trying to curtail both.

China already possesses one-fourth of the world’s STEM workforce.  It is currently graduating three times as many STEM students annually as the United States.  (Ironically, a significant percentage of STEM graduates in the United States are Chinese or other Asian nationals.  Around half of those studying computer sciences in the United States are such foreigners.)  American loss of contact with scientists in China and a reduced Chinese presence in U.S. research institutions can only retard the further advance of science in the United States.

China is rapidly increasing its investments in education, basic science, research, and development even as the United States reduces funding for these activities, which are the foundation of technological advance.  The pace of innovation in China is visibly accelerating.  Cutting Americans off from interaction with their Chinese counterparts while other countries continue risks causing the United States to fall behind not just China but other foreign competitors.

Finally: the U.S. military is in China’s face.

The U.S. Navy and Air Force patrol China’s coasts and test its defenses on a daily basis.  U.S. strategy in the event of war with China – for example, over Taiwan – depends on overcoming those defenses so as to be able to strike deep into the Chinese homeland.  The United States has just withdrawn from the treaty on intermediate nuclear forces in part to be able to deploy nuclear weapons to the Chinese periphery.  In the short term, there is increasing danger of a war by accident, triggered by a mishap in the South China Sea, the Senkaku Archipelago, or by efforts by Taiwanese politicians to push the envelope of mainland tolerance of their island’s unsettled political status quo.  These threats are driving growth in China’s defense budget and its development of capabilities to deny the United States continued military primacy in its adjacent seas.

In the long term, U.S. efforts to dominate China’s periphery invite a Chinese military response on America’s periphery like that formerly mounted by the Soviet Union.  Moscow actively patrolled both U.S. coasts, stationed missile-launching submarines just off them, supported anti-American regimes in the Western Hemisphere, and relied on its ability to devastate the American homeland with nuclear weapons to deter war with the United States.  On what basis does Washington imagine that Beijing cannot and will not eventually reciprocate the threat the U.S. forces surrounding China appear to pose to it?

Throughout the forty-two years of the Cold War, Americans maintained substantive military-to-military dialogue with their Soviet enemies.  Both sides explicitly recognized the need for strategic balance and developed mechanisms for crisis management that could limit the risk of a war and a nuclear exchange between them.  But no such dialogue, understandings, or mechanisms to control escalation now exist between the U.S. armed forces and the PLA.  In their absence Americans attribute to the PLA all sorts of intentions and plans that are based on mirror-imaging rather than evidence.

The possibility that mutual misunderstanding will intensify military confrontation and increase the dangers it presents is growing.  The chances of this are all the greater because the internal security and counterintelligence apparatuses in China and the United States appear to be engaged in a contest to see which can most thoroughly alienate the citizens of the other country.  China is a police state.  For Chinese in America, the United States sometimes seems to be on the way to becoming one.

It’s hard to avoid the conclusion that, if Washington stays on its current course, the United States will gain little, while ceding substantial ground to China and significantly increasing risks to its wellbeing, global leadership, and security.

Economically, China will become less welcoming to American exports.  It will pursue import substitution or alternative sourcing for goods and services it has previously sourced in the United States.  With impaired access to the world’s largest middle class and consumer economy, the United States will be pushed down the value chain.  China’s ties to other major economies will grow faster than those with America, adversely affecting U.S. growth rates.  Any reductions in the U.S. trade deficit with China will be offset by increases in trade deficits with the countries to which current production in China is relocated.

China’s role in global governance will expand as it adds new institutions and funds to the existing array of international organizations and takes a larger part in their management.  The Belt and Road initiative will expand China’s economic reach to every corner of the Eurasian landmass and adjacent areas.  The U.S. role in global rule-making and implementation will continue to recede.  China will gradually displace the United States in setting global standards for trade, investment, transport, and the regulation of new technologies.

Chinese technological innovation will accelerate, but it will no longer advance in collaboration with American researchers and institutions.  Instead it will do so indigenously and in cooperation with scientists outside the United States.  U.S. universities will no longer attract the most brilliant students and researchers from China.  The benefits of new technologies developed without American inputs may be withheld rather than shared with America, even as the leads the United States has long enjoyed in science and technology one-by-one erode and are eclipsed.  As cordiality and connections between China and the United States wither, reasons for Chinese to respect the intellectual property of Americans will diminish rather than increase.

Given the forward deployment of U.S. forces, the Chinese military has the great advantage of a defensive posture and short lines of communication.  The PLA is currently focused on countering U.S. power projection in the last tenth or so of the 6,000-mile span of the Pacific Ocean.  In time, however, it is likely to seek to match American pressure on its borders with its own direct military pressure on the United States along the lines of what the Soviet armed forces once did.

The adversarial relationship that now exists between the U.S. armed forces and the PLA already fuels an arms race between them.  This will likely expand and accelerate.  The PLA is rapidly shrinking the gap between its capabilities and those of the U.S. armed forces.  It is developing a nuclear triad to match that of the United States.  The good news is that mutual deterrence seems possible.  The bad news is that politicians in Taiwan and their fellow travelers in Washington are determinedly testing the policy frameworks and understandings that have, over the past forty years, tempered military confrontation in the Taiwan Strait with dialogue and rapprochement.  Some in Taiwan seem to believe that they can count on the United States to intervene if they get themselves in trouble with Chinese across the Strait.  The Chinese civil war, suspended but not ended by U.S. unilateral intervention in 1950, seems closer to a resumption than it has been for decades.

As a final note on politico-military aspects of Sino-American relations, in the United States, security clearances are now routinely withheld from anyone who has spent time in China.  This guarantees that few intelligence analysts have the Fingerspitzengefühl – the feeling derived from direct experience – necessary to really understand China or the Chinese.  Not to worry.  The administration disbelieves the intelligence community.  Policy is now made on the basis of ignorance overlaid with media-manufactured fantasies.  In these circumstances, some enterprising Americans have taken to combing the dragon dung for nuggets of undigested Chinese malevolence, so they can preen before those in power now eager for such stuff.  There is a Chinese expression that nicely describes such pretense: ??????—???? – “a dung beetle with flowers in its hair still stinks.”

All said, this does not add up to a fruitful approach to dealing with the multiple challenges that arise from China’s growing wealth and power.  So, what is to be done?  ?????

Here are a few suggestions.

First, accept the reality that China is both too big and too embedded in the international system to be dealt with bilaterally.  The international system needs to adjust to and accommodate the seismic shifts in the regional and global balances of wealth and power that China’s rise is causing.  To have any hope of success at adapting to the changes now underway, the United States needs to be backed by a coalition of the reasonable and farsighted.  This can’t happen if the United States continues to act in contempt of alliances and partnerships.  Washington needs to rediscover statecraft based on diplomacy and comity.

Second, forget government-managed trade and other forms of mercantilism.  No one can hope to beat China at such a statist game.  The world shouldn’t try. Nor should it empower the Chinese government to manage trade at the expense of market forces or China’s private sector.  Governments can and – in my opinion – should set economic policy objectives, but everyone is better off when markets, not politicians, allocate capital and labor to achieve these.

Third, instead of pretending that China can be excluded from significant roles in regional and global governance, yield gracefully to its inclusion in both.  Instead of attempting to ostracize China, leverage its wealth and power in support of the rule-bound order in which it rose to prosperity, including the WTO.

Fourth, accept that the United States has as much or more to gain than to lose by remaining open to science, technology, and educational exchanges with China.  Be vigilant but moderate.  Err on the side of openness and transnational collaboration in progress.  Work on China to convince it that the costs of technology theft are ultimately too high for it to be worthwhile.

Fifth and finally, back away from provocative military actions on the China coast.  Trade frequent “freedom of navigation operations” to protest Chinese interpretations of the U.N. Convention on the Law of the Sea for dialogue aimed at reaching common understandings of relevant interests and principles.  Ratify the Convention on the Law of the Sea and make use of its dispute resolution mechanisms.  As much as possible, call off military confrontation and look for activities, like the protection of commercial shipping, that are common interests.  Seek common ground without prejudice to persisting differences.

In conclusion: both China and the United States need a peaceful international environment to be able to address long-neglected domestic problems.  Doing more of what we’re now doing threatens to preclude either of us from sustaining the levels of peace, prosperity, and domestic tranquility that a more cooperative relationship would afford.  Hostile coexistence between two such great nations injures both and benefits neither.  It carries unacceptable risks.  Americans and Chinese need to turn from the path we are now on.  We can – we must – find a route forward that is better for both of us.

Thank you.

Published:5/18/2019 10:29:57 PM
[Markets] Visualizing The 150 Apps That Power The Gig Economy

Go back in time a decade, and you’d have a tough time convincing anyone that they would be “employed” through an app on their phone.

And yet, as Visual Capitalist's Jeff Desjardins explains, in a short period of time, the emergence of the smartphone has enabled the gig economy to flourish into a multi-trillion dollar global market. And by leveraging apps like Uber, Airbnb, and Etsy, it’s estimated that 57 million people in the U.S. now participate in the gig economy each year in some shape or form.

What apps do these people use to turn their time, skills, hobbies, or assets (cars, home, parking spaces, etc.) into additional income streams?

App Examples

Today’s infographic comes to us from TitleMax, and it lists 150 different apps that are used within the gig economy – including many that pay gig workers directly.

Here are just some of the apps that are used in some of the major categories above:

Ridesharing
Uber and Lyft are what many think of when they hear about the gig economy. However, there are now dozens of rideshare apps out there to fill different niches – for example, Wingz offers flat-fee rides to the airport, while Curb connects riders with professional taxi drivers.

Errands
TaskRabbit, which was bought by IKEA, turns errands such as assembling furniture or cleaning a gutter into payable gigs. Meanwhile, apps like Dolly and Bellhops will connect you with movers, and LawnLove is for lawn care.

Art, Design, and Crafting
Etsy, a marketplace for handmade goods, is one the of the best known brands in this category. However, there are many other niche options here as well – for example, UncommonGoods specializes in unique gifts, while Society6 focuses on gallery quality art prints.

Writing and Editing
Lulu and Kindle Direct allow you to publish eBooks online and sell them, while proofreaders and editors can get paid for their copy editing services through Gramlee.

Delivery
Fast and efficient delivery services are a centerpiece to the gig economy, and there are no shortage of options here. DoorDash, UberEats, Caviar, and GrubHub allow users to get food delivered to their doors, while apps like Instacart focus on grocery delivery.

Multimedia
We all know that you can create videos and monetize them on places like YouTube or Twitch, but did you know you can be a voice actor through services like VoiceBunny? You can also sell rights to your photos via Foap, or do freelancing work through Upwork or Fiverr.

Whether you are tapping into the gig economy for an extra income stream or you are incorporating gig economy services into your life for added convenience, there is no shortage of options to choose from.

Published:5/18/2019 10:01:18 PM
[Markets] Exposing The Regulatory-Industrial Complex

Authored by Llewellyn Rockwell via The Mises Institute,

Socialists want socialism for everyone else, but capitalism for themselves, while capitalists want capitalism for everyone else, but socialism for themselves.

Neither Ted Kennedy nor Jane Fonda practices a vow of poverty, nor are they taking any homeless into their mansions, while too many big companies try to short-circuit the market with government privileges. And one way they do it is through the regulatory agencies that acne Washington, DC.

If I may make a public confession (counting on the charity of Mises Daily readers): I used to work for the US Congress. I've since gone straight, of course, but the experience had its value, much as the future criminologist might benefit from serving with the James Gang.

For one thing, being on Capitol Hill showed me that, unlike the republic of the Founding Fathers' vision, our DC Leviathan exists only to extract money and power from the people for itself and the special interests.

Ludwig von Mises called this an inevitable "caste conflict." There can be no natural class conflict in society, Mises showed, since the free market harmonizes all economic interests, but in a system of government-granted privileges, there must be a struggle between those who live off the government and the rest of us. It is a disguised struggle, of course, since truth threatens the loot.

When I worked on Capitol Hill, Jimmy Carter was bleating about the energy crisis and promising to punish big oil with a "windfall profits tax." But I saw that the lobbyists pushing for the tax were from the big oil companies.

And, after a moment's thought, it was easy to realize why. There was no windfall-profits tax in Saudi Arabia, but it did fall heavily on Oklahoma. And as intended, the tax aided the big companies that imported oil by punishing their competitors, smaller, independent firms.

In the ensuing restructuring of the industry, also brought about by the price and allocation regulations of the Department of Energy, the big firms bought up domestic capacity at fire-sale prices, and then the Reagan administration repealed the tax and the regulations. Meanwhile, the big companies received contracts from the Department of Energy to produce money-losing "alternative fuels."

In every administration, the tools of inflation, borrowing, taxation, and regulation are used to transfer wealth from the people to the government and its cronies.

At times, one or another of these tools becomes politically dangerous, so the government alters the mix. That's why the Reagan administration switched from taxes and inflation to borrowing, and it's why the Bush administration, with the deficit a liability, calls for more taxes, inflation, and regulation.

A tremendous amount is at stake in the re-regulation of the economy advocated by the Bush administration. Just one clause in the Federal Register can mean billions for a favored firm or industry, and disaster for its competitors, which is why lobbyists cluster around the Capitol like flies around a garbage can.

While claiming to need more money for — among other vital projects — a trip to Mars supervised by Dan Quayle, the president is boosting the budget of every regulatory agency in Washington.

Here are just some of those agencies, and the way they function: Founded by Richard Nixon, the Occupational Safety and Health Administration is an antientrepreneur agency. Not only does OSHA target small- and medium-sized businesses, its regulatory cases are easily handled by Exxon's squad of lawyers, while they can bankrupt a small firm.

Also founded by Nixon, the Consumer Product Safety Commission issues regulations drawn up in open consultation with big business — regulations that often conform exactly to what those firms are already doing. Small businesses, on the other hand, must spend heavily to comply.

Another Nixon creation is the Environmental Protection Agency, whose budget is larded with the influence of politically connected businesses, and whose regulations buttress established industries and discriminate against entrepreneurs — by, for example, legalizing pollution for existing companies but making new firms spend heavily.

The Department of Housing and Urban Development was founded by Lyndon B. Johnson, but its roots stretch back to the housing policy of the New Deal, whose explicit purpose was to subsidize builders of rental and single-family housing. Since LBJ's Great Society, HUD has subsidized builders of public-housing projects, and of subsidized private housing. How can anyone be surprised that fat cats use HUD to line their pockets? That was its purpose.

The Securities and Exchange Commission was established by Franklin D. Roosevelt, with its legislation written by corporate lawyers to cartelize the market for big Wall Street firms. Over the years, the SEC has stopped many new stock issues by smaller companies, who might grow and compete with the industrial and commercial giants aligned with the big Wall Street firms. And right now, it is lessening competition in the futures and commodities markets.

The Interstate Commerce Commission was created in 1887 to stop "cut-throat" competition among railroads (i.e., competitive pricing) and to enforce high prices. Later amendments extended its power to trucking and other forms of transportation, where it also prevented competition. During the Carter administration, much of the ICC's power was trimmed, but some of this was undone in the Reagan administration.

The Federal Communications Commission was established by Herbert Hoover to prevent private property in radio frequencies, and to place ownership in the hands of the government. The FCC set up the network system, whose licenses went to politically connected businessmen, and delayed technological breakthroughs that might have threatened the networks. There was some deregulation during the Reagan administration — although it was the development of cable TV that did the most good, by circumventing the networks.

The Department of Agriculture runs America's farming on behalf of producers, keeping prices high, profits up, imports out, and new products off the shelves. We can't know what food prices would be in the absence of the appropriately initialed DOA, only that food would be much cheaper. Now, for the first time since the farm program was established by Herbert Hoover, as a copy of the Federal Food Administration he ran during World War I, we are seeing widespread criticism of farm welfare.

The Federal Trade Commission — as shown by the fascist-deco statue in front of its headquarters — claims to "tame" the "wild horse of the market" on behalf of the public. Since its founding in 1914, however, it has restrained the market to the benefit of established firms. That's why the chief lobbyists for the FTC were all from big business.

When then-Congressman Steve Symms (R-ID) tried to partially deregulate the Food and Drug Administration in the 1970s to allow more new drugs, he was stopped by the big drug companies and their trade association. Why? Because the FDA exists to protect them.

OSHA, CPSC, EPA, HUD, SEC, ICC, FCC, DOA, FTC, FDA - I could go on and on, through the entire alphabet from Hell. I have only scratched the villainous surface. But according to the average history or economics text, these agencies emerged in response to public demand. There is never a hint of the regulatory-industrial complex. We're told that the public is being served. And it is: on a platter.

*  *  *

This article was originally printed in the Free Market, September 1990. It is reprinted in The Left, the Right, and the State (2008).

Published:5/18/2019 9:29:55 PM
[Markets] Prescription For Violence: The Corresponding Rise Of Antidepressants, SSRIs & Mass Shootings

Via Ammo.com,

According to the Federal Bureau of Investigation (FBI), a mass murder occurs when at least four people are murdered, not including the shooter, over a relatively short period of time during a single incident. Over the last 30 years, the United States has seen a significant increase in mass shootings, which are becoming more frequent and more deadly.

Seemingly every time a mass shooting occurs, whether it’s at a synagogue in Pittsburgh or a nightclub in Orlando, the anti-gun media and politicians have a knee-jerk response – they blame the tragedy solely on the tool used, namely firearms, and focus all of their proposed “solutions” on more laws, ignoring that the murderer already broke numerous laws when they committed their atrocity.

Facts matter when addressing such an emotionally charged topic, and more gun controllegislation has shown that law-abiding Americans who own guns are not the problem. Consider the following: The more gun control laws that are passed, the more mass murders have occurred.

Whether or not this is correlation or causation is debatable. What is not debatable is that this sick phenomenon of mass murderers targeting “gun-free zones,” where they know civilian carry isn’t available to law-abiding Americans, is happening. According to the Crime Prevention Research Center, 97.8 percent of public shootings occur in “gun-free zones” – and “gun-free zones” are the epitome of the core philosophical tenant of gun control, that laws are all the defense one needs against violence.

Therefore, when the media and politicians focus their ire on guns, specifically what types of guns are used, such as AR-styles, carbines, semi-automatics, and “high capacity” handguns, in the wake of such tragedies the American public are being intentionally drawn into an emotionally charged debate about legal gun ownership (irrespective of whether the murderer’s gun was legally or illegally obtained). This debate leads them away from the elephant in the room and one of the real issues behind mass shootings – mental health and prescription drugs.

Ignoring what’s going on in the heads of these psychopaths not only allows mass shootings to continue, it leads to misguided gun control laws that violate the Second Amendment and negate the rights of law-abiding U.S. citizens. As Jeff Snyder put it in The Washington Times:

“But to ban guns because criminals use them is to tell the innocent and law-abiding that their rights and liberties depend not on their own conduct, but on the conduct of the guilty and the lawless, and that the law will permit them to have only such rights and liberties as the lawless will allow.”

Violence, especially random violence, is a complex manifestation of various thoughts, feelings, and external factors. When a multivariate analysis of these factors is conducted, it becomes apparent that it’s not just mental health issues that are leading to such an increase. There may be an underlying substance which plays a role in a high percentage of these violent acts – the use of prescription antidepressants, specifically selective serotonin reuptake inhibitors, or SSRIs.

At first glance, it makes sense that those involved in mass shootings may be taking antidepressants, as they’re clearly suffering from some sort of mental health issue. But the issue with SSRIs runs much deeper than just a random mental health break. These drugs are a prescription for violent crimes, and that’s a story the anti-gun media and politicians don’t want to talk about.

History of Antidepressant Use in the U.S.

To understand the rise in antidepressant use, one must first understand depression. Everyone, no matter how great their life, has periods of sadness, times when they feel down or low. This is especially true when faced with hardships or going through things like a divorce, the loss of a job, or the death of a parent.

This is not clinical depression. Clinical depression is a serious mental disorder that impacts how a person functions on a daily basis. Depression makes it hard to get out of bed. It makes it hard to go to work. It makes it hard to take a shower or answer the phone. It stops a person from functioning on the basic levels.

Understanding Depression

According to the Diagnostic and Statistical Manual of Mental Disorders, commonly referred to as the DSM-5, to be considered clinically depressed, a patient must experience five of the following symptoms most of the day, every day, for at least two weeks. What’s more, these symptoms must be so severe, they interfere with normal functioning:

  • Sadness
  • Anxiety
  • Feeling hopeless
  • Feeling worthless
  • Feeling helpless
  • Feeling “empty”
  • Feeling guilty
  • Irritable
  • Fatigue
  • Lack of energy
  • Loss of interest in hobbies
  • Slow talking and moving
  • Restlessness
  • Trouble concentrating
  • Abnormal sleep patterns, whether sleeping too much or not enough
  • Abnormal weight changes, either eating too much or having no appetite
  • Thoughts of death or suicide

Depression is a serious, and sometimes life-threatening, illness. But in the modern world, it’s highly over-diagnosed. A study published in Psychotherapy and Psychosomatics looked at 5,639 patients in the U.S. who were diagnosed with depression by their clinician and compared their symptoms to the DSM criteria for clinical depression. Of these patients, only 38.4 percent met the criteria, even though the majority of the 5,639 patients were prescribed depression medication.

Today, with the way antidepressants are prescribed, nearly one in four Americans will meet the criteria to be diagnosed with depression within their lifetime, and will be prescribed medications that interfere with how their brain functions.

The Rise of Antidepressants

In the 1950s, the first generation of antidepressants hit the market. The introductory class of antidepressants to gain Food and Drug Administration (FDA) approval were monoamine oxidase inhibitors, known as MAOIs. Although highly effective, MAOIs can cause extremely high blood pressure when paired with certain foods or medications, and therefore require diet restrictions. Because of these restrictions, they’re rarely used today to treat depression except in cases where other treatments fail.

By the late 1950s, a new class of antidepressants became available – tricyclic antidepressants. Tricyclic antidepressants are also highly effective for treating depression, but are prone to side effects. Even so, this class of antidepressants remained the go-to depression treatment for years. Other drugs were tested for depression treatment, but they hadn’t proved more effective than tricyclic and MAOI antidepressants, especially for severe depression.

Fast forward to the 1980s. America’s tranquilizer dependence was becoming problematic. Quaaludes were heavily over-prescribed for anxiety, resulting in overdose deaths, as well as an increase in deaths from vehicle accidents. The Feds stepped in and in 1984, classified Quaaludes as a Schedule 1 drug, making them illegal to sell, buy, and use.

Valium, a benzodiazepine prescribed for anxiety, was also extremely popular, and was the most prescribed medication in the U.S. from 1969 through 1982. In 1978, the year the medication peaked, more than 2.3 billion pills were sold in the U.S. But Valium was highly addictive and it was believed that a serotonergic medication was a better option to fill the void that was left when Quaaludes were outlawed.

In 1987, Prozac, the first SSRI, was released for depression. Along with it came the idea that depression could be the underlying cause of anxiety. The idea took off, as did the sales of Prozac, and within a few years, it overtook the antidepressant market. Soon, other SSRIs followed.

Along with these SSRIs came direct-to-consumer advertising, which became legal in 1985. By the mid-1990s, the FDA regulations became looser and direct-to-consumer ads exploded into the market. Prozac and other medications showed Americans through glossy advertisements that unhappiness, stress, and anxiety could be treated with a pill.

Instead of doctors recommending a specific medication, patients started coming in, requesting a medication they saw in a magazine or on television.

SSRI sales skyrocketed.

By 2010, 11 percent of Americans over the age of 12 were prescribed an antidepressant, making it the third most prescribed medication, topped only by nonsteroidal anti-inflammatory drugs (NSAIDs) like ibuprofen and naproxen. When looked at over time, there has been a 400-percent increase in antidepressant use from 1988 through 2008.

SSRIs 101: What You Should Know

Selective serotonin reuptake inhibitors, a class of drugs commonly referred to as SSRIs, are the most prescribed antidepressant in the United States. These second-generation antidepressants are marketed to doctors and patients as safe and effective, with relatively minimal side effects. SSRIs are designated to treat mild to moderate depression, as well as anxiety, obsessive compulsive disorder, and bulimia nervosa.

How do SSRIs work?

SSRIs work to increase the amount of serotonin in the brain. A neurotransmitter that helps neurons communicate, serotonin is associated with many different body functions, but is best known for its influence on mood. Sometimes called “the happy chemical,” serotonin plays a role in a person’s happiness and general feelings of wellbeing.

Low levels of serotonin are linked to depression, although the relationship is not clear. Research has not determined if the low neurotransmitter level causes depression or if depression causes the level of serotonin to drop. It should also be noted that a large amount of serotonin, up to 90 percent, is produced in the gut and may be influenced by what a person eats and drinks.

SSRI medication does exactly what its name says. When two neurons communicate, one releases neurotransmitters, which causes the other neuron to react in a certain way. Because this is constantly going on, these chemicals are always present in the brain. To keep the brain’s chemical balance correct, neurons regulate the amount of neurotransmitters released by a process called reuptake, which involves the reabsorption of the chemical by a neuron.

For instance, if there’s a high level of serotonin, the neuron knows to release less through reuptake, keeping the level balanced. If levels of the neurotransmitter are low, reuptake tells the neurons to release more.

SSRIs inhibit the reuptake of serotonin, causing neurons to release more of the neurotransmitter, therefore increasing the amount of the chemical found in the brain.

The Food and Drug Administration (FDA) has approved a variety of SSRIs, including:

  • Citalopram (Celexa)
  • Escitalopram (Lexapro)
  • Fluoxetine (Prozac)
  • Paroxetine (Paxil and Pexeva)
  • Sertraline (Zoloft)
  • Vilazodone (Viibryd)

When it comes to effectiveness, SSRIs don’t appear to have an influence on those with moderate to severe depression, with virtually no improvementseen when comparing SSRI use to placebos. Instead of a popular drug with a high efficiency, modern SSRIs have become popular based on an effective marketing campaign and little more.

Too Much of a Good Thing: Serotonin Syndrome

Sometimes serotonin levels become too high, causing Serotonin Syndrome. A potentially life-threatening disease, it occurs when serotonin levels in the brain increase to a toxic level, often caused by too much medication or taking two serotonin-increasing medications that use different mechanisms to increase the neurotransmitter.

Along with physical symptoms of excessive nerve activity, such as dilated pupils, elevated heart rate, and high blood pressure, those with the syndrome may also experience:

  • Agitation
  • Restlessness
  • Confusion
  • Anxiety
  • Disorientation
  • Excitement

The Connection Between SSRIs and Violence

Regardless if depression is overdiagnosed and America has a habit of over-prescribing mind-altering medications, there’s little doubt that SSRIs have a risk of increasing violence in patients, even in patients who have no previous history of violence or aggression before taking the medication.

This risk of violent behavior, both to the individual taking the medication and those around them, is so significant, it has led to the FDA mandating a black box warning on all SSRI medications. These black box warnings are designed to provide information and draw attention to the fact that the medication has serious and life-threatening risks.

As of 2004, all antidepressants in the U.S. are labeled:

“Anxiety, agitation, panic attacks, insomnia, irritability, hostility, aggressiveness, impulsivity, akathisia, hypomania, and mania have been reported in adult and pediatric patients being treated with antidepressants for major depressive disorder as well as for indications, both psychiatric and nonpsychiatric.”

SSRIs Can Increase the Risk of Suicide

In one study published in the American Journal of Psychiatry, patients suffering from depression, but free of serious suicidal ideation, were given fluoxetine. Within two to seven weeks of starting the medication, six patients developed an intense, preoccupation with violent suicide. Although all were immediately taken off the medication, this preoccupation persisted from three days to three months, depending on the case. In all six cases, the patient had never experienced such a severe level of depression or troubled state of mind before or with other psychotropic prescriptions.

According to the Centers for Disease Control and Prevention Surveillance for Violent Deaths, in 2013, 35.3 percent of those who committed suicide tested positive for antidepressants at the time of their death.

The risk of SSRIs and suicide is most prevalent in patients under the age of 25. It’s also more likely to occur shortly after starting the medication, after a dosage increase, or after a patient stops taking the medication.

SSRIs Can Increase the Risk of Violence Against Others

Some of the side effects caused by SSRIs can increase the risk of violence against others. Perhaps the most risky, emotional blunting (or detachment) has been linked to SSRI use and many people who’ve taken the drugs report “not feeling” or “not caring” about anything. There’s also been an established causal relationship between SSRI use and psychosis and hallucinations, both of which are known to increase the risk of violence in individuals.

According to a review of the FDA’s database, 484 drugs were identified as triggers to serious adverse events significant enough to warrant a case study during the five-year period from 2004 through 2009. Of these 484 medications, 31 were identified to have a “disproportionate” association with violence. These 31 drugs make up 78.8 percent of all cases of violence toward others in the FDA’s database and included multiple psychotropic medications:

  • 11 antidepressants
  • 6 hypnotic/sedatives
  • 3 ADHD medications
  • 1 smoking cessation drug

Researchers concluded that violence against others was a “genuine and serious adverse drug event” and that of the 484 medications, the drugs that were most consistently and strongly associated with violence were the smoking cessation medication, varenicline (Chantix), and SSRIs.

The list includes five SSRI antidepressants:

  • Fluoxetine: Prozac increased aggressive behavior 10.9 times
  • Paroxetine: Paxil increased violent behavior 10.3 times
  • Fluvoxamine: Luvox increased violent behavior 8.4 times
  • Venlafaxine: Effexor increased violent behavior 8.3 times
  • Desvenlafaxine: Pristiq increased violent behavior 7.9 times

While a surprise to the American public, this shouldn’t have been a surprise to the drug companies. During the clinical trials for paroxetine, hostility, which was the term to include homicidal idealization and aggression, presented in 60 of the 9,219 participants (.65 percent). Hostile acts were documented both while taking the medication and after tapering off. Children with obsessive-compulsive disorder (OCD) taking the medication were the most at risk for becoming hostile, with a 17-times higher probability than the rest of those in the clinical study.

In a Swedish study published in PLoS, researchers looked at information on over 850,000 patients prescribed SSRIs in the Swedish Prescribed Drug Register, which is a national database of all dispensed medications. They then compared the violent crimes committed during a three-year period and compared it to violent crimes committed by the same individuals when not taking the medications. When age was taken into effect, a significant association was apparent between violent crime convictions and SSRI use in patients between the ages of 15 and 24.

In one 2001 case, Cory Baadsgaard, a 16-year-old who attended Wahluke High School in Washington, was first prescribed Paxil, which caused hallucinations, and then was switched to Effexor. He started at a 40 mg dosage that, over the course of three weeks, increased to 300 mg. On the first day of that high dose, he woke with a headache and returned to bed. He then got up, took a rifle to his high school, and held 23 classmates hostage.

Baadsgaard’s testimony claims he has no recollection of the event, or of his principal convincing him to put the gun down and release the hostages.

In 2002, the BBC aired the documentary Panorama, which focused on paroxetine. The producers received 1,374 emails from viewers, the majority of whom told stories of violence or self-harm while taking the medication, particularly when starting and when increasing the dosage.

What’s more, in 2009, after investigating the connection between SSRIs and violence, the Japanese Ministry of Health, Labor, and Welfare revised the label warnings on these drugs to read: “There are cases where we cannot rule out a causal relationship [of hostility, anxiety, and sudden acts of violence] with the medication.”

Connection Between SSRI and Murder

In most cases, the vast majority of people who suffer from mental illness are nonviolent. Even those who self-harm are highly unlikely to hurt others. In fact, these individuals are more likely to become victims of violent crimes than the general public.

Yet after each mass shooting tragedy, the media fills with psychiatrists who say that the individual didn’t seek the help they needed and that with the proper treatment, the tragedy may have been prevented. But research doesn’t support that philosophy.

In fact, depression in particular doesn’t lead to violence, yet since the increase in SSRI antidepressants being widely prescribed, the rise in mass shootings has increased right along with it. And evidence shows that many mass shooters were either taking or had recently taken SSRIs.

Here are just some examples:

  • 1989: Joseph T. Wesbecker walked into his former employer Standard Gravure Corp and shot 20 workers, killing nine. He had been taking Prozac for a month. This shooting led to a landmark case, where the survivors sued the makers of Prozac, Eli Lilly. Wesbecker used a semiautomatic Chinese AK-47-style firearm, a 9mm pistol, and a .38 Special snubnose revolver – all of which he purchased legally, passing his background check.

  • 1995: Jarred Viktor was 15 when he was prescribed Paxil. Ten days after starting it, Viktor stabbed his grandmother 61 times.

  • 1996: At 18, Kurt Danysh murdered his father just 17 days after being prescribed Prozac by his family doctor, who failed to do even one psychological test. During his police confession, Danysh told police the medication made him feel odd, “I just act differently. I don’t have the energy or personality I used to. I spend half the time in a trance.”

  • 1997: Luke Woodham stabbed his mother, then traveled to Pearl High School, where he was enrolled, using a .30-30 to shoot two students and wound six others; he was stopped by his assistant principal (aka a good guy with a gun) who used his own .45 ACP handgun to force Woodham’s surrender.

  • 1998: 15-year-old Kip Kinkel shot both of his parents, then carried a 9mm handgun, .22 rifle, and a .22 pistol to his Thurston High School, where he murdered two classmates and injured 22 more, all while taking Prozac.

  • 1999: Eric Harris, 17, with Dylan Klebold, killed 12 students, one teacher, himself, and wounded 23 others during the Columbine school shooting; he had been prescribed Zoloft and then Luvox before he used a 12 gauge shotgun received through a straw purchaser and a 9mm TEC-DC9.

  • 2001: Christopher Pittman, a 12-year-old, was prescribed Zoloft, which caused him to become agitated, jittery, and experience tactile hallucinations; Pittman told psychiatrist Dr. Lanette Atkins that he heard voices telling him, “Kill, kill, do it, do it.” He took a .410 shotgun and shot his grandparents, then burned their house down.

  • 2001: Andrea Yates drowned all five of her children. She was taking Effexor and was suffering from delusions about satanic possession. The murder of her children led Effexor to list homicidal thoughts in the medication’s side effects. Although it’s a rare side effect, manifesting in one in 1,000 patients, over 19 million prescriptions were written and filled in 2005. That’s an estimated 19,000 people suffering from homicidal thoughts because of the medication.

  • 2005: 16-year-old Jeff Weise was taking 60 mg/day of Prozac, the highest dosage for adults, when he shot his grandfather, his grandfather's girlfriend, murdered 10 students at Red Lake, Minnesota, and wounded 12 more, before shooting himself. He was armed with a .40 caliberpistol, .22 pistol, and a 12 gauge shotgun.

  • 2008: Steven Kazmierczak was prescribed Prozac, Xanax, and Ambien, a sleeping medication, three weeks before walking into Northern Illinois University, killing six people and wounding 21, with three pistols (one chambered in 9mm and two in .380 ACP) and a shotgun. Kazmierczak had stopped taking the antidepressant “because it made him feel like a zombie.”

  • 2009: Two weeks after starting Lexapro, Robert Stewart walked into his estranged wife’s work at Pinelake Health and Rehab, and opened fire. He killed eight elderly patients and wounded three others. He doesn’t remember the incident.

  • 2012: James Holmes, also known as the Batman Movie killer, was taking sertraline when he walked into the showing of The Dark Knight with two .40 caliber pistols, an AR-style .223 rifle, and a 12 gauge shotgun, killing 12 people and injuring 70 others. In his personal notebook, which he sent to his psychiatrist the same day as the shooting, shows that as the medication decreased his anxiety, he lost his fear of consequences. As the dosage became higher, his thoughts became more obsessive and psychotic.

  • 2013: At the time of the Washington Navy Yard shooting, Aaron Alexis was a civilian contractor working at the yard and was prescribed trazodone, a serotonin antagonist and reuptake inhibitor (SARI) that works much like an SSRI to increase serotonin levels in the brain. He killed 12 people and injured eight others.

  • 2014: Ivan Lopez was a 34-year-old U.S. soldier who shot 15 of his comrades, killing three of them, at his base in Fort Hood, Texas. He was undergoing mental health treatment through the Veterans’ Administration, which is known for over-prescribing medication. The VA confirmed that Lopez was taking antidepressants (the VA only uses SSRI antidepressants) during the time of the shooting and his subsequent suicide.

  • 2015: From the moment it occurred, the Charleston Church shooting has been deemed an act of white supremacy, a race crime against blacks. But two years after Dylann Roof shot and killed nine people and injured another, the court released documents that show it was more mental health than hatred that led to the murders. The documents confirmed he was taking antidepressants.

  • 2016: Arcan Cetin, who was just 20 years old, walked into the Cascade Mall where he shot and killed four women, one just a teen, and shot one man, who later died at the hospital. Records show that Cetin was under the care of a psychiatrist and taking medication for depression and ADHD, including Prozac.

The list goes on and on. And with the implication of patient privacy laws, getting information on the medication and mental health diagnoses of people has become harder and harder, even with mounting evidence that there’s a connection between SSRI use and violence.

In 1996, the Health Insurance Portability and Accountability Act commonly referred to as HIPAA, was set in place. HIPAA represents the U.S.’s first attempt at national regulations for the use and disclosure of a person’s personal health information, or PHI. HIPAA makes it more difficult for medical personnel to release information regarding a person’s medical care, diagnosis, and prescription drugs, including those involved with mental health related crimes.

For example, in the 2008 Virginia Tech shooting, perpetrator Seung Hui Cho had multiple interactions with the mental health department on campus, some for suicidal ideation, but yet his parents nor authorities were never notified. University officials stated privacy laws restricted them from sharing the information.

Beyond the necessity for communication prior to these horrific shootings, after the incident, the person’s records are often protected. Even in situations where the perpetrator dies during the shooting, HIPAA protects their records for 50 years.

Because of this, the American public doesn’t know what kind of medications these people were taking and if it may have had an affect on their actions. Just looking at public shootings over the last five years, there’s a huge list of murderers who were likely on SSRIs. Here are a few:

  • Zephen Xaver and the SunTrust Bank shooting
  • Ian David Long and the Thousand Oaks Nightclub shooting
  • Travis Reinking and the Waffle House shooting
  • Nikolas Cruz and the Parkland, Florida school shooting
  • Devin Patrick Kelley and the Texas church shooting

The Push for Stronger Mental Health Legislation

With the media’s coverage of mass shootings, more and more legislation arises limiting the rights of those with mental health issues. While no one wants firearms in the hands of the mentally ill, the lack of clear language surrounding mental illness, and the limitations caused by government red tape, make knee-jerk mental health legislation dangerous and lay a path for more government control.

In general, people with mental illness are rarely violent to other people. Many mental health experts and advocates agree that policies that focus on the violence of mental illness make scapegoats of the individuals, who are likely to never act violently against another person.

What’s more, according to the MacArthur Violence Risk Assessment Study (MVRAS), substance abuse was significantly more responsible for violence committed by discharged psychiatric patients than their mental health. Those patients who didn’t abuse drugs or alcohol showed no higher risk for violence than the others in their communities without mental health issues.

Laws are being created that don’t focus on the research, but on the fear of guns, thinking that stricter gun laws will keep people safer.

Red flag laws are the newest gun legislation making their way through Congress. Considered a “protective order,” red flag laws will allow a family member or law officer to petition a temporary seize on someone’s firearms if they’re deemed a threat. What a “threat” consists of isn’t clearly defined.

There’s also a push for universal background checks on all gun sales, even those sold between private individuals, and the FixNICS campaign. The philosophy behind FixNICS is that the background check system can only be as strong as the records it contains. And it’s currently missing a lot, especially when it comes to mental health issues and domestic violence.

For instance, documentation of an individual diagnosed as “mental defective,” having been involuntarily committed to a mental health setting, or having engaged in domestic abuse disqualifies that person from purchasing or owning a firearm. When this information is present in the NICS, it flags the background check and stops the sale of the firearm. But too many of these records are missing.

That was the case with the 2017 Sutherlands Springs church shooting. The gunman Devin Patrick Kelley was prohibited from purchasing firearms due to a 2012 court martial for two counts of domestic abuse. The U.S. Air Force failed to provide this information to the NICS, allowing Kelley to erroneously pass his background check and to purchase an AR-style 5.56 rifle – which he used to kill 26 people and injure 20 more. He was confronted and pursued by a neighbor, another good guy with a gun.

Gun Control, Mental Health, and SSRIs: What’s the Solution?

When it comes to mass shootings, there’s no easy solution. Violence, especially random violence, is a complex manifestation of various thoughts, feelings, and external factors. While it may be impossible to fully stop mass murders, ignoring the fact that certain medications, including SSRIs, play a role in a high percentage of these violent acts, no justice is being served.

Gun control is obviously not the solution, as the rate of mass shootings has increased over  the last 30 years, at a time when multiple gun control lawshave been implemented. Taking firearms away from law abiding citizens has not and will not stop the problem.

Personal Responsibility

Instead, doctors need to educate patients and make them aware of the risks, as well as take the time to explain warning signs to loved ones. If patients are taking medication for a mental health disorder, including depression, then they should see a mental health professional and be involved in mental health treatment. After all, medication – even mental health medication – does nothing to fix the problem, it only masks the symptoms.

Patients need to take some responsibility for their lives, improving their health before reaching for a mind-altering pill to make them feel good about themselves. A healthy diet, physical activity, and time spent in nature are ways to boost the mood that can help relieve the symptoms of mild depression.

The FDA-Big Pharma Connection

Lastly, the government and big pharmaceutical companies need to be held accountable for not sharing what they know about the medications they create. A study published in The New England Journal of Medicine (NEJM) looked at drug company sponsored clinical trials on antidepressants.

Of the 74 FDA-registered trials the study looked at, 38 had positive outcomes, 36 had negative outcomes. Thirty-seven of the positive outcome trials were published, but of the 36 negative outcomes trials, 22 were not published and 11 were written in a way that initially presented the data to convey a misleading positive outcome. Only three were published with unbiased and accurate information about the drug.

With this type of misrepresentation of clinical trials on medications, particularly antidepressants, the medical community and the public can’t trust medical literature for honest and reliable drug information, nor the government agency that’s designed to monitor new pharmaceuticals for safety. When medical professionals can not rely on the FDA to provide unbiased and honest clinical trial information, a true risk-benefit ratio can’t be determined and patients suffer the consequences.

Political Influence of Big Pharma

The connection between the FDA and big pharma goes beyond clinical studies. Drug companies lure FDA employees to sit on their regulatory boards. They hire their spouses. These pharmaceutical giants utilize the field’s leading experts, who happen to be the same experts who are invited by the FDA to sit on screening panels.

Big pharma’s influence over the FDA goes even deeper. Drug companies spend billions of dollars on political lobbying and campaign contributions. Direct payments support the FDA budget. And in response, the FDA conceals risks and looks the other way when necessary.

The FDA also gives its own kickback to the drug companies. Only FDA-approved medications can be prescribed for government health insurance programs like Medicare, Medicaid, and through the VA. And to ensure Big Pharma continues to sell its drugs, the federal program only allows treatment claims on FDA-approved drugs.

The FDA Approval Process

The FDA approval process is a laborious and expensive endeavor, which typically takes more than a year and can cost up to a million dollars to complete. The process allows drug companies to patent their product. But when it comes to natural supplements, they can’t be patented, and therefore don’t go through the FDA approval process. Therefore supplements, which are often highly effective with little to no side effects, can not claim to “treat” a condition, even when there’s research that supports that claim.

On the surface, this may not seem like too big of a deal, but let’s circle back to Prozac, which hit the market in 1988. In the fall of 1989, the FDA recalled the supplement L-tryptophan, an amino acid that’s a precursor for serotonin and highly effective in treating depression. The recall occurred after one supplement company had an additive that caused a flu-like reaction. On March 22, 1990, the FDA issued a complete ban of L-tryptophan for public sale. Four days later, on March 26, 1990, Prozac was featured on the cover of Newsweek, along with a lead article about its benefits.

In 2001, the ban on L-tryptophan was lifted and since, research has shown it has huge therapeutic potential in the treatment of pain, insomnia, depression, seasonal affective disorder (SAD),  bulimia, premenstrual dysphoric disorder (PMDD), attention disorders, sleep disorders, and chronic fatigue.

A quick note about PMDD. Premenstrual dysphoric disorder is a severe form of premenstrual syndrome, otherwise known as PMS. It officially became a medical condition in 2013 with the newest addition of the DSM-V. Yet in July of 2000, the FDA approved a new medication from Eli Lilly, the same pharmaceutical company that created Prozac. The drug was Sarafem and it was marketed to treat PMDD, which technically wasn’t even a fully recognized medical condition at the time.

Sarafem is, quite literally, the exact same medication as Prozac, only in a different color capsule. Why would Eli Lilly issue the exact same drug under a different name? It just so happens that the patent for Prozac expired in August of 2001, which allowed generic versions to be made. Eli Lilly changed the medication’s name, indicated it for this “new” disease, and the company had a new patent for Sarafem that would last until 2007.

Situations like this demonstrate that the more aspects the government controls, the worse this corruption and mismanagement becomes. Federal agencies in the hands of big pharmaceutical companies, and politicians using gun control to give a false hope to the American people, distracts them from the real cause of the current state of the nation and the frequency of mass shootings.

It’s time to personally explore the evidence surrounding the issues and come to your own conclusions.

Published:5/18/2019 8:58:16 PM
[Markets] One Bank Asks "Was That It" For The Selloff... And Answers

One week after Deutsche Bank's fund flow strategist Parag Thatte noted that the sharp market drop to start May, the worst in 50 years, was "overdue" as (i) the rally since late December had been unusually long (91st percentile) and strong (96th percentile); (ii) equities at the recent peak had already priced in a rebound in growth; and (iii) positioning had become extended according to a number of indicators, he is back late on Friday, wondering whether "this was it" for the correction. 

The reason: following an almost record rally to start the year, so far the selloff has been smaller and the rebound quicker than usual.

As shown in the chart below, at the recent bottom on Monday, the market was down almost 5% from the peak, in-line with normal selloffs (3-5%) which occur every 2-3 months but somewhat less than the 5-7% selloffs which typically follow long and strong rallies. If Monday indeed marked the bottom, Thatte notes that "the selloff would also be much shorter than the usual 2-3 weeks the market takes to find a bottom" although considering the escalating trade war with China, which now appears set to last for months, the probability of another sharp move lower is increasing by the day.

Meanwhile, at the recent peak the market had run ahead and was already pricing in a strong rebound in macro as well as earnings growth, according to DB estimates. Alternatively, at the Monday bottom, the market was back in line with current growth but with the latest modest rebound, it is again slightly ahead, leaving it vulnerable in the near term.

Last week's muted drop in S&P500 stood out starkly against the backdrop of yet another massive equity fund outflow (which hasn't stopped since the start of the year) at -$19.5 billion was the largest since December, taking the total in the last two weeks to -$40 billion, the largest since December. 

As the Deutsche Bank strategist notes, outflows were very broad based across regions and countries this week except for one notable outlier: China equity funds saw a large $2.6bn inflow, similar to those seen during market selloffs in October and December last year. Excluding China, the rest of EM saw large  outflows (-$4.3bn) as did the US (-$8.1bn), Europe (-$4.5bn) and Japan (- $1.8bn). As the market turned around on Tuesday, equity ETFs saw inflows return on Wednesday and Thursday.

Perhaps in delayed response to the sharp escalation in trade war, last week saw modest cuts in equity positioning, with equity futures net long positions which were at the top of their historical range going into the selloff, now reduced but only modestly so and remain elevated. Following the recent spike in VIX, vol control funds sold  $13-$15bn in equities on the sell-off but then partially reversed that buying  $5-7bn back this week as VIX moderated.

As discussed last week, trend-following CTAs trimmed S&P 500 exposure but are still long.  In aggregate, the complex remains net long S&P 500 but with lighter positioning relative to 2018. CTA positioning is most crowded in long USD and long Treasuries. Risk Parity bought-the-dip to add equity beta.  Equity L/S trimmed gross leverage despite low net beta.

Derivatives metrics like put/call ratios, S&P 500 option skew, and VIX jumped very quickly from indicating bullish equities positioning to more bearish but have now moderated. Investor sentiment surveys also swung sharply from bullish to bearish in the space of a week and it would be interesting to see if the subsequent market rebound leads to optimism again.

Looking at the latest CFTC data, the record short in VIX futures at the end of April reverted in May as volatility increased and long VIX ETPs saw corresponding outflows. VIX futures positioning is now in-line with historical averages.

Positioning and flows aside, the bigger risk is that liquidity remains very low which means outsized reactions to small changes in positioning and flows. Despite high futures volumes relative to cash this week, on-screen liquidity in S&P 500 futures is still very low relative to history.

Bid-ask quotes within 1 index point of spot have been less than 50% of their previous 5Y average since February 2018.

According to Deutsche, this low liquidity means small changes in positioning can have outsized market impact, similar to the dynamics in late December 2018 when low liquidity exacerbated the volatility spike and sell-off.

Which means that with both volume, volatility and liquidity sliding, all that would take for another major selloff a la December 2018, is another surprise tweet, similar to Trump's May 5 shocker, for the simple reason that, as Deutsche Bank concludes, the "rebound has been quicker than typical, with market pricing again ahead of current growth and much of the cut in positioning has already reversed... leaving the market vulnerable to negative catalysts."

Published:5/18/2019 8:33:37 PM
[Markets] Myths & Misconceptions About Bitcoin (Finally) Debunked

Via Crypterium,

Cryptocurrencies have been in the market for a decade now, and its introduction saw them join the ranks of fiat currencies as a viable mean of payment. However, even with all the benefits that crypto offer today against traditional currencies, not many are enthusiastic about them. Why? While there is not a single answer to this question, one of the reasons might be the wrong beliefs around cryptocurrencies and their underlying technology, blockchain.

A recent study shows that more than 60 percent of internet users are currently familiar with cryptocurrencies. Since familiarity breeds contempt, a lot of ‘familiarities’ and not enough information has bred some misconceptions about cryptocurrency.

For that reason, we’ve taken the time to debunk the most common myths and misconceptions about Bitcoin and other cryptocurrencies. Ready? Let’s get to it!

Crypto is a Replacement of FIAT Currencies

There was a time when TV was thought to kill radio; the US dollar was once anticipated to replace gold. And now cryptocurrencies are said to be a replacement for fiat money. Don’t get us the wrong way. We are all-in for this to happen, but the truth is that fiat currencies are not going anywhere anytime soon.

Nowadays, paying with cryptocurrencies is a truly seamless experience. You can either load them to a prepaid crypto card like the Crypterium Card or cash out directly to a regular bank card using an instant payouts service.

However, many people around the world continue to rely on traditional paper money. Brazil is a good example of strong cash dependency. Only last year, Brazil’s Central Bank published a report that reveals nearly half of the country’s workforce continues to get paid in cash. And that isn’t all. An additional research by the Brazilian Service to Support Micro and Small Enterprises outlined that 60% of local businesses doesn’t have POS terminals to enable card payments.

Bitcoin is Anonymous

Bitcoin is often described as ‘anonymous’ as it’s possible to move funds without providing any personal information. But that’s not entirely true. In fact, you should think of Bitcoin as ‘pseudonymous’ instead. Each transaction is registered on the blockchain under a wallet address. If that address is ever linked to your real identity, then you’re exposed!

Moreover, there are sophisticated instruments that are used by government and financial entities to track identities and that provide blockchain forensics for illegal activities.

Monero and Dash, for example, are regarded as the best privacy coins for offering higher ‘anonymity’ to their holders. In the case of Monero, transactions are divided into randomized amounts and mixed between stealth address, making it impossible to track the real origin.

Cryptocurrencies have no “Intrinsic Value”

“The idea that [Bitcoin] has some huge intrinsic value is just a joke in my view,” said Warren Buffett, one of the world’s most influential investors. And guess what? He is right.

Now, do you think FIAT currencies have “intrinsic value”? Almost nothing in the world of trading and money has it. The value of FIAT money, issued by nations, largely depends on the support fixed by governments. Bitcoin, unlike the dollar or the euro, has a limited supply, which is certainly a point on its side as it can’t be easily manipulated.

Let’s stop for a moment and see if Bitcoin and crypto actually fit the attributes of money:

  • Acceptability: Money needs to be accepted by most people. Thanks to solutions like the Crypterium Card, you can spend cryptocurrencies all over the world.

  • Scarcity: For a currency to have value, it should be limited. Only 21 million Bitcoins will ever be mined, which means that supply is indeed limited.

  • Interchangeable: You can trade crypto against other cryptocurrencies, as well as the US dollar, the Euro, the British Pound, etc.

  • Transferability: Blockchain technology makes cryptocurrencies the easiest, fastest and cheapest way to send and receive money internationally.

  • Durability: Cryptocurrencies are stored on decentralized networks which guarantees longevity as long as these networks stay active.

  • Divisibility: You can conveniently buy fractions of cryptocurrencies. For example, you can buy 0.001 Bitcoin.

Cryptocurrencies are Untaxable

Although some countries such as Liechtenstein, the Netherlands, and South Korea don’t impose taxes on cryptocurrencies, other nations like Spain have already alerted tax payers about required contributions to the government arcs linked to their crypto activities.

Taxation on cryptocurrencies varies depending on how countries perceive digital assets. For example, in the United Kingdom, United States, and Australia, it is taxed as a capital gain. In Germany, on the other hand, the taxation will depend on whether you are buying or selling it.

Cryptocurrencies are illegal

Back in the 1970’s, the Medellín Cartel?—?one of the largest organized drug cartels in history?—?was making $60 million in drug profits per day. Does it make the dollar an ‘illegal’ currency?

The fact that criminals use a certain currency doesn’t make it illegal. It is true that crypto is highly associated with illegal transactions. For instance, a study carried out in Australia showed that 46% of Bitcoin transactions were involved in unlawful activities. But this does not mean that it’s solely used for illegal dealings. Any other currency can also be used for illegal transactions.

The Government can shut down Cryptocurrencies

Since cryptocurrencies are hosted in decentralized networks, there is no specific person to ‘take down’ or arrest. The only way this can happen is if the entire internet infrastructure is shut down.

Bitcoin is Blockchain

Okey. Let’s not put everything on one bag. Bitcoin is a cryptocurrency and, just like any other crypto, runs on blockchain. Blockchain is not the same thing as Bitcoin. Blockchain is a distributed ledger technology that is used in many different industries, not just finance.

If we were to assume that Bitcoin is a train, then, in this case, blockchain will be the train tracks. As mentioned above, blockchain allows information to be stored in a decentralized database.

Cryptocurrency is a reward that the blockchain offers miners for developing the network. To date, there are more than 1500 available coins and there is a blockchain behind each of them. That said, we can conclude that blockchain can exist in other contexts than crypto; however, crypto cannot exist outside a blockchain.

The Crypto Market is a Bubble

We get it. When you see an asset fall in value by half in a few days, bubble is the first thing that comes to mind. But bubbles aren’t always a bad thing. In fact, when bubbles have the power to boost mass adoption. Just like it happened with the dotcom or internet bubble back in the 90s.

Once the bubble bursts, it helps the market get rid of certain players, especially the ones without strong value propositions. The crypto market has experienced a speculative bubble, but as predicted by Crypterium analysts back in December, the market is recovering consistently.

Published:5/18/2019 7:58:17 PM
[Markets] Impossible Foods, Now Valued At $2 Billion, Is The New Beyond Meat

Following in the footsteps of easily the most successful IPO in recent history, Beyond Meat, Impossible Foods, maker of vegan meat substitutes, has just raised another $300 million. The company is now valued at about $2 billion, according to FT.

The latest round of funding raised by Impossible Foods was led by Temasek of Singapore and Li Ka-shing’s Horizons Ventures and has taken the company's total cash raised to over $750 million. Meanwhile, Beyond Meat's share price has tripled since two weeks ago when it listed at $25 per share. It now has a market cap over $5 billion and was last trading with a $90 handle. 

Impossible Foods' fundraising comes after the company just announced a partnership with Burger King, who is rolling out the "Impossible Whopper" to more than 7,000 restaurants, doubling Impossible's US footprint. The "Impossible Whopper" is just like the classic Whopper, but made with an Impossible patty, according to Impossible's promotional website for the partnership.

"What's in the patty? Mostly soy protein, potato protein, coconut oil, sunflower oil, and heme," the site reads. 

Source: BBG


José Cil, chief executive of Restaurant Brands, Burger King’s owner, said that the offering will attract new customers and that Burger King is targeting an international rollout before the end of the year.

Demand for Impossible burgers has led to shortages at some restaurants. The company is going to be using its newly raised capital to meet this demand.

David Lee, chief financial officer for Impossible, said the capital will be used to bolster production capacity: "We are challenged with unprecedented increase in demand. We’re doing everything to increase our supply."

Impossible Foods was founded not even a decade ago in 2011 by Pat Brown, a Stanford University biochemistry professor.

The company is targeting eliminating the need for animals in the food chain by the year 2035. It will be adding a second production line in California, where it already has a plant. Since the company launched in Singapore in March, sales have tripled in Asia with the substitute being used in traditional meat dishes, like dumplings.

Both Impossible Foods and Beyond Meat have based their meat substitutes on molecular science, using cells that mimic animal protein using plant nutrients. The companies both claim that their products have the same taste and texture as beef. The products even "bleed" like regular burgers – except the "blood" is a protein created through genetic engineering in Impossible's burgers. Beyond Meat dumbs the "bleeding" down and simply uses beetroot juice.

Whether or not the substitutes will ultimately be a fad remains to be seen. But judging by BYND's trading and Impossible's ability to raise capital, investors don't look like they're going to be waiting for "beetroot juice in the streets" before buying anytime soon. 

Published:5/18/2019 7:29:02 PM
[Markets] War of Will wins 144th Preakness in race that included riderless horse War of Will wins 144th Preakness in race that included riderless horse Published:5/18/2019 6:58:22 PM
[Markets] Ohio Suicide Rate Jumps 24% From 2008 To 2017 Amid Deindustrialization Wave

America's manufacturing sector was established in Ohio. But decades of deindustrialization have left once-thriving communities across the state in ruins. Ohio's manufacturing jobs were slashed to half by 2016, and median household income fell below the national average.

At the same time, tens of thousands of Ohioans lost their jobs, became depressed under financial pressure, and from 2008 to 2017, the suicide rate in the state jumped 24%, according to the Akron Beacon Journal.

Some of the highest rates were located in Appalachian Ohio, the southeastern part of the state, and the suicide rate among men was four times greater than women.

Rates skyrocketed 80% among young millennials (children 14 and younger) and 57% for baby boomers, according to a report published by the 28-organization public-private Ohio Alliance for Innovation in Population Health.

During the period, there were 15,246 suicides across the state, for an average annual rate of 13.3 deaths per 100,000 people, the report says, which equates to more than 520,000 years of life were lost over the decade. 

Summit County had 786 suicides from 2008 to 2017, at a rate of 14.51 per 100,000 population. Summit's economy experienced deep deindustrialization over the years, leaving surrounding communities in a state of shock.

Other counties and their suicides and rates were: Stark (591, 15.74), Medina (206, 11.95), Portage (189, 11.71), Cuyahoga (1,461, 11.41) and Wayne (125, 10.92).

Lori Criss, director of the Ohio Department of Mental Health and Addiction Services, said the suicide crisis is a significant concern for the State Health Improvement Plan.

"Our department and a number of others have initiatives that address suicide prevention and support families impacted by losing a loved one to suicide," Criss said. "This gives us a chance to really look at those and to grow them in intentional ways to have the impact that we need with specific communities or populations who are at higher risk."

The report shows nine of the 10 Ohio counties with the highest suicide rates are located in the Appalachian region.

Orman Hall, the study's author, explained these areas had experienced economic deprivation through deindustrialization.

Michelle Price, program director at the Ohio Suicide Prevention Foundation, added that these counties had seen incomes collapse for farmers and industrial workers.

Other findings: The highest suicide rates were among white Ohioans; rate increases were more in rural communities than in metropolitan areas, and firearms accounted for half of all suicides.

With a manufacturing recovery nowhere in sight and a deepening trade war, it's likely suicide rates across the state will continue to move higher into 2020. When the next downturn strikes, one-off factors relating to financial asset losses could drive the rate to record highs.

Published:5/18/2019 6:37:19 PM
[Markets] Fund Managers Now Offering To Pay Investors To Manage Their Money

It’s not just interest rates that are going negative around the globe: in a world in which money is increasingly going to robot, passive and various other low-cost, ETF-based investors, some fund managers are desperate enough to attract new outside capital that they are offering a negative fee model, that will pay investors and clients to manage their money, according to FT.

With the rise of passive investing instruments and a centrally-planned market that’s making even the stupidest investors look like geniuses thanks to central bank intervention when there is even the smallest dip, competition among passive and active managers has reached a fever pitch, even though (as the chart below shows), passive is clearly winning and active investing is losing. And because profitability for many funds comes primarily from asset growth instead of performance, the competition has been to lower fees in order to attract new business. This led Fidelity to launch the first ever zero-fee funds last year.

But now, a boutique US fund manager called Salt Financial wants to take it one step further and offer funds that have expense ratios of negative 5 bps, effectively crediting customers $5 for every $10,000 they invest. While some say this is the next evolution in the space, others simply say it’s a marketing stunt. Ben Johnson, director of global ETF research at Morningstar said: "The fee war is now a PR war". 

Total net assets of Exchange Traded Funds (ETFs) in the United States from 2002 to 2018 (in billion U.S. dollars)
 

Asset managers relinquished $3.5 billion in income through fee cuts last year and have given up nearly $16 billion since 2014. Products with the lowest expense ratios – those under 5 bps - grew 20 times faster than products with expense ratios over 20 bps. And some of the biggest names in finance, including Blackrock, Vanguard and J.P. Morgan have been aggressive in slashing fees.

The company's Low truBeta US Market ETF has a management fee of 29 bps, but Salt would offer a discount of 34 bps, essentially netting the investor 5 bps. The negative fee will apply to the first $100 million invested in the fund for the first year.

President of Salt Financial, Alfred Eskandar, said that the company made the offer as a result of struggling to attract assets to the first ETF it launched last year. He continued, noting that "...advisers had contacted him and were interested in the product but were unable to invest clients’ money as the fund total had not reached $100m. This, he says, is due to misconceptions over the lack of liquidity in small funds and the higher chance that new products would shut."

He said: “When we launched we didn’t realize how closed off the market was to new providers — more than 80 per cent is out of reach.”

Eskandar compares the negative fee model to mobile phone networks that offer free phones as a way to attract longer-term business. Like those companies, Salt believes they can retain customers through strong performance. He continued: “New ETF issuers have two choices — they can do their best to survive for the six years it takes on average to get to $100m, or they can do something more drastic that gets them there quicker. How else can they compete in a market that isn’t a level playing field?”

Rosenbluth said that he expects small companies to offer similar types of incentives if they’re having trouble getting into the market: “There are hundreds of ETFs that have more than three years of history but less than $100m of assets. It seems like a logical step for an asset manager — rather than killing off the fund, giving it a last gasp of breath.”



He also expects negative fee incentives to be temporary. He pointed out that many managers already offer fee waivers and pay brokerage companies to feature on the platform. “Negative fees may be a taboo at the moment but it’s the logical extension,” Rosenbluth continued. 

Warren Miller, chief executive of Flowspring, said managers could offer some negative fee programs that are permanent: “There’s more than one way to skin a cat and there’s more than one way to monetise a fund.”

Last year, influential pension consultancy Mercer caught the attention of the industry by proposing that asset managers should pay investors to run their portfolios and provide performance guarantees.

Divyesh Hindocha, a partner at Mercer, wrote: “If you believe in a strategy, surely you should put a bit of your capital in it — why wouldn’t you?”

We first reported on Salt's negative fee ETF in March of this year. 

Published:5/18/2019 5:57:42 PM
[Markets] Michigan GOP congressman seen as first of party to say Trump acts ‘impeachable’ Michigan GOP congressman seen as first of party to say Trump acts ‘impeachable’ Published:5/18/2019 5:27:58 PM
[Markets] Doug Casey: Not Just A Trade War, But A Shooting War With China Seems Inevitable

Authored by Doug Casey via InternationalMan.com,

The Chinese came from nothing; only 40 years ago, they had nothing but a billion impoverished peasants. No money. No technology. No power. Today, they’re on par with the United States. But, if this trend continues – which it will – their economy will be triple the size of the US economy in 20 years.

Not just a trade war, but a shooting war with the Chinese seems inevitable. Because when tensions build up between states they eventually fight with each other. China is the major rising power. It’s got four times the US population, it’s soon going to be more economically powerful, and it’s going to reach military parity. It’s of a different culture than the US. The US government may figure it’s best to take them out while the balance still favors them. It’s a bit like the situation was with the USSR in the ’80s. They could see they were going into decline, and some Soviet generals figured it was “now or never” for a successful war. Fortunately they collapsed first.

The Chinese don’t like seeing US aircraft carriers off their coast any more than we would like to see Chinese aircraft carriers in the Gulf of Mexico or off Santa Catalina Island.

The last thing that we need is a war with the Chinese. But if something that’s been called the Thucydides Trap is valid – and I think it is – then it’s highly likely. It refers to the Peloponnesian War between Athens and Sparta, at the end of 5th century BC. The Trap is sprung when a reigning power strikes out at the advancing power while they still have a chance of winning.

The American military thinks that a shooting war is inevitable. And it probably is. Why? Well, 5,000 years of history teaches us that it’s better to start a war when you’re more powerful than your enemy rather than wait until they’re more powerful than you. It’s always been this way. The Golden Rule of statecraft is: Do unto others – but do it first. It’s a very dangerous situation.

The US may do something stupid, like fabricate an incident, and launch a preemptive strike against China. Or perhaps things just get out of control, as they did in World War I.

It would make about as much sense as the Peloponnesian War, or World War I. But these things can take on a life of their own.

The wars between European powers were bad enough. But when the US fought Japan it actually turned into a race war. What happened in the Pacific was far uglier than what happened in Europe. There were basically no prisoners taken.

The next big war – as opposed to a sport war, like those in the Middle East – is likely to be with China. That could make World War II look trivial by comparison.

The Next Financial Crisis Will Be “The Big One”

Nobody has a crystal ball, but I think you can see the dominos lining up. Will this be the big one, or will it just be another recession – an inconvenience, followed by even bigger bubbles? It’s a question of odds. And the more dominos that lineup – the political, economic, social, demographic, military, and cultural dominos – the more logical that this next one is going to be much bigger than what happened in 2008.

That’s why I use the analogy of 2007-2010 being the leading edge of this hurricane. We’ve had a very big eye of the storm because of absolutely massive money printing by central banks all over the world. It’s had the effect of throwing oil on the water.

When we go into the trailing edge of this hurricane, it’s going to be much worse, much different, and much longer lasting than the unpleasantness of 2007-2010. Why? Because that was caused by inflation and debt. We’ve had vastly more of that over the last decade to paper over the problems. I think we’re re-entering the hurricane now.

But there’s always some good news. Here the good news is that most of the real wealth in the world – skills, technologies, buildings, things of that nature – won’t disappear just because the economy collapses. Most of the real wealth will still be here. It’s just going to change ownership.

I look forward to moments of crisis – assuming that the system itself is maintained in more or less its present form. In other words, it’s possible to look forward to a financial crisis, if you can position yourself to weather it. Financial crises come and go. It’s possible to position yourself to profit from a financial crisis.

I’m not, however, looking forward to an economic crisis, or a political crisis. Those can have major consequences. And I’m absolutely not looking forward to a cultural crisis, which is by far the most serious kind. Unfortunately, that is what we’re facing at this point.

Let’s just hope that what’s coming this time, over the next few years, is limited to a financial crisis. But I don’t expect that’s the case. I think it’s going to be economic, political, and cultural as well.

*  *  *

If the trade war between China and the US turns into a shooting war, a complete economic collapse is sure to follow. That’s why we’re sharing our field guide to Surviving and Thriving During an Economic Collapse. Click here to download your free PDF copy now.

Published:5/18/2019 5:27:58 PM
[Markets] Israel Attacks Syria Two Consecutive Nights While Hosting Eurovision Finals

The Syrian government says Israel has launched airstrikes on the country twice in less than twenty-four hours amid a broader pressure campaign against Iran and its allies currently being waged by the United States that has sent regional tensions soaring. 

State TV reported anti-air defenses shot down "hostile targets coming from the direction of occupied territories" on Saturday night, a day after Friday night strikes first targeted the First Division HQ of the Syrian Army near al-Kiswe, south of Damascus, according to Reuters

Purported image of anti-air defenses operational over Damascus during Friday night's Israeli strikes. 

Authorities in Damascus said Syrian air defenses successfully intercepted multiple projectiles fired from the direction of Israel, though there appears a consensus in emerging international reports that details surrounding the second wave of strikes are vague and remained unconfirmed. 

The projectiles came from “occupied territory” and appeared over airspace in southern Syria, official news agency SANA said, in reference to Israel. However, there's yet to be confirmation from the Israeli side, which usually doesn't give it even though since at least 2014 it has conducted hundreds of similar attacks. 

Some of the details were relayed in a Times of Israel report as follows:

Rami Abdel Rahman, head of the Britain-based Syrian Observatory for Human Rights, said Israel fired at least three missiles. Two of the strikes targeted a Syrian army brigade which supervises the country’s Quneitra province, he told AFP, while the third missile was destroyed by Syrian defenses.

Both the Friday and Saturday waves of strikes seemed to be brief in duration, suggesting either Hezbollah or Iran related facilities may have been the targets. 

Friday's attack was witnessed across Damascus as massive explosions were heard in the vicinity of the capital and anti-air defenses were filmed in action. 

According to the Times of Israel, Hebrew-language media presented Friday's Israeli attack as a confrontation with Iranian assets inside Syria. 

Notably Saturday's attack was carried out during the last night of the Eurovision finals song contest hosted in Tel Aviv.

Israel has faced global criticism after it conducted hundreds of airstrikes over Gaza early this month, in response to Hamas and Islamic Jihad launching a record number of their own rockets in a short period.

Some reports have suggested Israel halted its latest Gaza military campaign over fears Eurovision 2019 could have been canceled, damaging Israel's reputation internationally.

The final night of Eurovision underway as Israel launched a risky attack on southern Syria. Image via the AP/Daily Mail.

But now with the highly visible international event concluded, Israel could be right back on a war footing in both Syria and Gaza, as this weekend's strikes near Damascus suggest. 

Published:5/18/2019 4:57:37 PM
[Markets] AOC stands with Buffett: CEO net worth should take a hit if bailout given AOC stands with Buffett: CEO net worth should take a hit if bailout given Published:5/18/2019 4:27:03 PM
[Markets] Do We Really Have A Decade Left To Solve Climate Change?

Authored by Robert Murphy via The Institute for Energy Research,

Wise alecks on social media noted with amusement how Beto O’Rourke recently claimed humans had only ten years to act on climate change, thus one-upping Alexandria Ocasio-Cortez who had previously gone out on a limb by putting the deadline at twelve years.

Snark aside, it’s important to point out that the “consensus science” as codified, for example, in the periodic reports from the United Nations do not support such a cliff-hanger mentality at all.

Our Political Figures Ignore the IPCC

The quickest way to make this point is to reproduce something I highlighted several years ago in an IER post where I caught Paul Krugman just making up stuff about climate change. Specifically, the following table comes from the latest Intergovernmental Panel on Climate Change (IPCC) report, the AR5 (Table SPM.2):

Source: IPCC AR5, Working Group III, Summary for Policymakers

To make it easier to read, I’ll excerpt the relevant left and right portions of the table below:

SOURCE: Adapted from IPCC AR5, Working Group III, Summary for Policymakers, Table SPM.2

There’s a lot of information in the table, but let me summarize the important elements vis-à-vis the recent claims from O’Rourke and Ocasio-Cortez. The beige cells in the adapted table above show the percentage increases in the total (undiscounted) mitigation costs necessary to achieve the far-left (white cells) atmospheric concentrations of greenhouse gases in the year 2100, for the years 2030-2050 and also for 2050-2100, for two different scenarios of total emissions (either below 55 gigatons of CO2-equivalent, or above).

In other words, the beige cells show us how much a delay of government action through the year 2030 will increase the cost necessary to achieve the specified atmospheric concentrations for the year 2100 (white cells). Specifically, the beige cells show that by “doing nothing” about climate change until the year 2030, even in a high-emission baseline scenario, the IPCC’s best guess of the cost of achieving the aggressive outcome rises by 44 percent in the years 2030-2050 and 37 percent in the years 2050-2100.

Now to be sure, the rhetorical point of the above table in the AR5 was to encourage support for climate mitigation policies. The people who put together this table for policymakers wanted to show, “Hey, since we’re obviously going to have to deal with climate change eventually, we might as well get going, because the longer we delay, the more expensive it will be.”

IPCC: An Inconvenient Truth

My modest point here, however, is to show that this table now poses an awkward stumbling block for those—like O’Rourke and Ocasio-Cortez—trying to scare people into supporting ludicrously expensive and aggressive proposals to “fight climate change.” If O’Rourke and Ocasio-Cortez were anywhere close to being correct when issuing their ever-shrinking windows for action, then in the IPCC table above, the beige cells should have all had infinity signs, and in a footnote it would explain: “If we wait until 2030 to begin mitigation efforts, we will all die.”

But that’s not what the UN report told us. Instead, it reported that yes, the costs of achieving various climate targets (as measured by atmospheric concentrations of CO2 in the year 2100) would be higher due to delay, but even in a pessimistic scenario, the best-guess of the cost increase was 44 percent.

Conclusion

In this post, I highlighted one particular table from the most recent UN report on the science of climate change in order to show just how baseless are the recent claims that humans have years to act on climate change. Over at Reason, Ronald Bailey marshals more evidence—again, from the very “consensus science” documents we are supposed to rely on—to show that these claims are nonsense.

This whole episode is yet another example demonstrating the farce of the climate change policy debate. Whenever a critic disagrees with the most radical proposals that would—according to their own proponents—transform Western society, the critic is berated as a science denier. And yet, even a cursory examination of the actual technical reports shows that the prophets of doom are the ones who are spouting forth unsupported claims.

Published:5/18/2019 4:27:03 PM
[Markets] Single-Payer Healthcare Is The Worst Kind Of Universal Healthcare

Authored by Ryan McMaken via The Mises Institute,

In the United States, thanks largely to Bernie Sanders, the term "single-payer health care" has become more or less synonymous with the phrase "universal healthcare."

This stems partially from the fact that "single-payer" is the term most often used to refer to foreign systems of universal healthcare, and also because most Americans know virtually nothing about how foreign healthcare systems work.

Moreover, when it comes to interacting with foreigners, Americans most often encounter the writings and opinion of other English speakers — which mostly means Canadians and British subjects. And it so happens both Canada and the United Kingdom employ single-payer healthcare systems.

Elsewhere in the world, however, it is not uncommon to find other countries that employ "multi-payer" and "multi-tier" healthcare systems that are nonetheless designed to provide universal coverage.

This is also especially important to recognize because single-payer healthcare systems are some of the worst systems in regards to freedom of choice and healthcare quality. This is because the primary benefit of single-payer healthcare — as so often recounted by its supporters — is that it is cheap.

But "cheapness" is not exactly the best criteria for judging a healthcare system, and the shortcomings of single-payer systems make this abundantly clear.

What Is Single-Payer?

So what makes a single-payer system distinct from other systems? As the name implies, a single-payer system is one in which there is only one source of payments or funding for healthcare transactions. This source, of course, is the government.

So, in a single-payer system healthcare services is paid for only through government funding. This can be done through a variety of mechanisms. For example, healthcare facilities can be directly funded and run by government agencies or they can be nominally private providers which receive all their payments from a government agency.

With single-payer systems there is no competition from other "payers" such as private insurance companies, or even cash-for-service firms.

Exceptions can be found in those services that are not deemed to be "essential" healthcare services. In Canada, for example, private health services are allowed in services legally defined as non-essential such as mental health, pharmaceuticals, some types of eye care, and long-term care.

Thus, strictly speaking, no system is a "pure" single-payer system that encompasses every conceivable type of care. Consequently, in both the UK and Canada, one will still encounter activists who think that the state-run healthcare systems are too laissez-faire. These critics claim coverage should be expanded to exclude private competition even more, and to expand the definition of "essential" services. It is not uncommon to hear claims that these systems are becoming "two-tier systems" (meant pejoratively) in which the implication is that there is one low-quality tier for ordinary people, and a high-quality tier for everyone else.

In practice, however, there is a reason most of the world points to the United Kingdom and Canada as examples of single-payer systems: they offer very few private-sector options for core services. While there are always some areas where private-sector activity allowed, these systems are fundamentally built on the idea of excluding private competition and private payments in favor of directly controlling healthcare prices and services.

What Are the Multi-Payer Systems?

In contrast to a single-payer system, numerous countries with universal healthcare systems employ multi-payer systems.1

In the case of Germany, there are multiple statutory tiers of healthcare. Most Germans below a certain income level are covered by a main tier of heavily-subsidized health care. But service providers are not government owned, and they compete for customers at all income levels, including those who use private insurance.

Switzerland, meanwhile, employs a private-sector-based insurance mandate similar in some ways to Obamacare in the US. That is, the Swiss are required by law to purchase health insurance or face legal penalties. Low-income Swiss receive subsidies to purchase insurance. The Swiss system also allows for small fees to be paid by patients at each doctor visit, up to an annual maximum.

A key difference between US and Swiss insurance mandates, however, is that Swiss health insurance is purchased at the individual level, and not through employers.

These multi-tier systems — which also include France and the Netherlands, among others — are not free-market systems, of course. In all cases, markets are heavily regulated in terms of mandates that providers cover pre-existing conditions. Other regulations are used in attempts to control costs.

Single-Payer: Bad for Both Freedom and Quality

Indeed, the drive to control costs is a central reason for the single-payer healthcare system. By outlawing competition for many procedures, and by making healthcare providers dependent on a single governmental payer, it becomes easy for governments to force down prices by limiting payments to providers, and by dictating what sorts of treatments will be allowed.

But the ability to force down costs is not necessarily a great measure of a healthcare system's desirability.

A "cheap" healthcare system can certainly be achieved by imposing price controls, and cutting out pricey treatments deemed un-economical by state bureaucrats. But this often results in long waiting times and loss of quality. Not surprisingly, wait times for treatment have been shown to be significantly longer in Canada than in Germany, Switzerland, and France.

Moreover, by prohibiting competition in core services, providers lack an economic incentive to improve the quality of care. As noted by the UK's Civitas organization, competition among providers — even in a heavily regulated and subsidized systems — is important to encouraging quality services. Referring to the German system, the Civitas researchers note:

Competing providers usually treat all patients but have an incentive to attract the high paying privately insured.This has a ‘levelling up’ effect on the quality of care available to all.

Similar dynamics are true in Switzerland, and even in Denmark where the state encourages competition between hospitals. In the UK, on the other hand, the state controlled National Health Service has no reason to improve or innovate outside of public outrage. As George Pickering has noted, quality in the UK has become an increasing concern with honest observers of the British healthcare system. One recent open letter from British physicians to the Prime Minister

further noted that it had become “routine” for patients to be left on gurneys in corridors for as long as 12 hours before being offered proper beds, with many of them eventually being put into makeshift wards hastily constructed in side-rooms. In addition to this, it was revealed that around 120 patients per day are being attended to in corridors and waiting rooms, with many being made to undergo humiliating treatments in the public areas of hospitals.

Yet, apparently unaware of how other systems function, many British voters continue to support the British single-payer system uncritically. Pickering continues:

the characteristics of the NHS [i.e., universal coverage] which Britons mistakenly believe to be a unique source of pride, are actually present in almost every other healthcare system in the developed world; yet these other systems lack the NHS’s hostility to innovation in medicines and practices. Furthermore, the high number of avoidable infant deaths in some of its trusts led to the NHS being brought under government investigation in April for standards of maternal care which regulators described as “truly shocking.”

The High Cost of Government Price Controls

By allowing providers to compete, it's harder for governments to control costs. Thus, it's not surprising that when it comes to government spending on healthcare subsidies, the Netherlands, Switzerland, and Denmark are among the big spenders. In both Denmark and the Netherlands, about one third of the population chooses to buy private insurance.2 (In Switzerland, of course, the system is based on mandatory private insurance.) Prices are thus bid up as a result, for both government and the private sector.

But, taxpayers and healthcare consumers also get what they pay for.

While multi-payer systems often tolerate higher prices in the name of better choice and higher quality, single-payer outlaw choice in the name of "savings."

Defenders of single-payer systems will justify these roadblocks to high-quality service as essential for maintaining "fairness." As Canadian historian Ronald Hamowy has noted, there has been opposition in Canada to allowing even small clinics performing diagnostic services like MRI scans. This, it was argued, would allow rich people to "jump the queue."

The message is thus this: either you get healthcare services on the government's terms, or you don't get it at all.

Comparisons with the US System

Politicians in the US are increasingly willing to force markets toward some sort of universal health system. This certainly has its downsides, but the most alarming aspect of the current drive is the fact many of the loudest voices for universal healthcare are insisting on single-payer healthcare as the only alternative.

But, if US policymakers are going to continue to move the US healthcare system even further away from functioning markets, less damage would be done by avoiding a single-payer system and instead embracing a multi-payer system.

After all, the US is already a non-universal multi-payer system, and the US already has a system that heavily subsidizes healthcare through programs like Medicaid and Medicare. In fact, nearly one-half of all healthcare spending in the US is already paid by governments. And one-third of Americans already receive healthcare through some sort of government program.

Transitioning to a universal healthcare system is going to be costly — in terms of dollars — no matter what. But by adopting a single-payer system, Americans would be forced to endure high costs that aren't calculated in dollars: long wait times, rationed care, and few choices beyond the government-controlled system.

The innovation, quality improvements, and timely care offered by competing private firms would be largely destroyed by adopting a single-payer system. Although these advantages have been only partially preserved by multi-payer systems that allow some of the advantages of a free marketplace, those now clamoring for a single-payer system would have us believe this all must be abolished in favor of near-total government control.

Published:5/18/2019 3:57:06 PM
[Markets] Key Words: AOC stands with Buffett in complaint that crisis CEOs were rewarded, but should pay Rep. Alexandria Ocasio-Cortez embraces comments from Warren Buffett, who earlier this month said the net worth of the CEOs should take the hit, not shareholders, if a bailout is necessary.
Published:5/18/2019 3:57:06 PM
[Markets] Obama's Top FBI Lawyer Distances Himself From Steele Dossier As DOJ Investigation Looms

James Baker - the Obama FBI's top attorney (general counsel) said on Friday that he was skeptical about the Steele dossier, and "concerned" about its veracity when the agency received it prior to the 2016 US election, according to the Daily Caller's Chuck Ross. 

"It was more information that we viewed, that I viewed, skeptically from the outset, and I was concerned about it and had a jaundiced eye, or looked at it with a jaundiced eye right from the outset," Baker told MSNBC's Chuck Todd, adding "Steele was and had been a source that we thought was reliable. He’s reporting all this information. It looks alarming. We took it seriously, but we tried to vet it.

The dossier - a collection of memos compiled by an ex-British spy funded by Hillary Clinton's 2016 campaign and the DNC - was used by the FBI to obtain a Foreign Intelligence Surveillance Act warrant to spy on Trump campaign aide Carter Page. Steele alleged that Page provided the Trump campaign a Kremlin backchannel during the election. 

Baker also told Todd that he thinks the FISA warrants against Page would have been granted without the dossier, and took a pregnant pause when asked if the dossier was used to obtain FISA warrants on other people - saying "I don’t think I should comment on that, I’m not sure what else the government has confirmed," and adding "I don’t want to confirm or deny anything about other potential FISA applications.

Watch:

Meanwhile, Obama's former intel chiefs are at odds over who exactly pushed the dossier

According to Fox Newsan email chain exists which indicates that Comey told bureau subordinates that Brennan insisted on the dossier's inclusion in the intelligence community assessment (ICA) on Russian interference. Also interesting is that the dossier was referred to as "crown material" in the emails - a possible reference to the fact that Steele is a former British spy. 

In a statement to Fox, however, a former CIA official "put the blame squarely on Comey." 

Comey, meanwhile, has attacked Attorney General William Barr for investigating him, tweeting on Friday "The AG should stop sliming his own Department.  If there are bad facts, show us, or search for them professionally and then tell us what you found." 

Barr, has launched a wide-ranging investigation into FBI conduct during the 2016 election, making him public enemy #1 to the left. In a Friday interview with Fox News, Barr said that the use of the Steele Dossier in the FISA warrant was a "very unusual situation," especially one "that on its face had a number of clear mistakes and a somewhat jejue analysis. And to use that to conduct counterintelligence against the American political campaign would be a strange development."

James Baker, meanwhile, told Lawfare's Benjamin Wittes last week that he's 'nervous' about the DOJ Inspector General's ongoing investigation into FBI/DOJ conduct surrounding the 2016 election. 

Baker made clear that he wanted to speak "as openly as I possibly can" about the origin of the FBI's investigation into Donald Trump - "to reassure the American people that it was done for lawful, legitimate reasons, and was apolitical," according to the Washington Examiner's Jerry Dunleavy. 

Things are getting hot in DC and it's only May... 

Published:5/18/2019 3:29:20 PM
[Markets] Biden pitches himself as a uniter even as he tears into Trump Former Vice President Joe Biden sought to promote himself as a uniter of the country in a wide-ranging speech here on Saturday, even as he launched a blistering attack on President Donald Trump.
Published:5/18/2019 3:29:20 PM
[Markets] Joe Biden pitches himself as a uniter even as he tears into Trump Joe Biden pitches himself as a uniter even as he tears into Trump Published:5/18/2019 3:29:20 PM
[Markets] Why Cryptocurrency Is The Next Operating System For Capitalism

Authored by Chris Herd via Hackernoon.com,

Money won’t last Forever?—?that is Guaranteed

It didn’t exist when exchange evolved to become a feature of humanities first economic system, nor will it persist when there is no advantage to using it. That time is approaching far quicker than traditionalists care to admit.

The reality is that our evolution to a largely cashless society is almost complete. I rarely have money on me physically, I can count on one hand the number of times I have had cash in my wallet in the last 3 years. Paper cash and metallic coins are prehistoric.

That is what those who carelessly brandish Cryptocurrency a bubble fail to comprehend. Money doesn’t care what you think. It is simply a means of exchange. When it’s utility is replaced by something more efficient it will become extinct. Right now it is a protected species with a few purists trying to revive it. Unfortunately, the poachers are pulling down each pillar which underpinned the system one by one.

Soon it will fall.

With Fiat valuations no longer tied to any commodity?—?with its price being entirely independent and it’s valuation contingent on what we collectively believe it to be?—?give me one sincere and serious argument which convinces me fiat isn’t also a bubble.

Give me a coherent reason why that if we stopped believing in the value of paper money today it would be worth anything tomorrow. Without resorting to the argument of historical precedent, the size and scale of central banks or the promise these institutions have made to maintain a certain valuation what do you have to argue against it?

Fundamentally it is still a question of trust and belief. This forces you to consider that there might be a technological solution which forces a level or trust and believe that is inconceivable in a human-led system.

Your argument might still be that cryptocurrency is a bubble, but I raise you the perspective that all money is. It is a product of our beliefs married to our hope that its value will remain. Ditto stocks, shares, and bonds.

Money is, and has been for the last 30 years, an intellectual construct centered on humanities trust in Governance?—?but trust in these institutions is at a historical low. We don’t trust the reasons they give for the decisions they make, they’re incentives to act in our best interests or their ability to deliver a better future.

Cryptocurrency isn’t just the future because that is what a committed band of dreamers would have you believe. It is the future because it is a new operating system for a decentralized world.

It is the future because it takes back control of the things we are most dependent on for us to subsist. It is the future because it is already here making a difference in how we act. Bitcoin has enabled a whole generation of Venezuelans to have an alternative to crippling inflation left unchecked by corruption.

  • No longer do we have to trust a government to reign over us and carelessly prescribe dangerous monetary policy which we must accept.

  • No longer must we accept situations of austerity forced upon us due to government intervention in a financial collapse where there was no punishment for any of the individuals who caused it.

  • No longer is our future dependent on the whims of governments.

You can make any argument you like about Cryptocurrency being overvalued, about it being manipulated, about it not being a viable medium for high-frequency transactions to occur.

That’s fine but what price do you place on control?

What price would you put on trust programmed into an immutable ledger where those participating hold the keys to how the platform develops.Unilateral arbitrary decision making is replaced by consensus.

If you don’t understand the implications of that you’re not paying attention.

If you don’t understand how fiat money works, you’re not qualified to judge whether cryptocurrency will be successful or not, period. Equally, if you don’t understand the mechanisms for mining, the underlying technology that powers cryptocurrency or the economics of scarcity you aren’t qualified to tell anyone why it is a revolution.

So educate yourself and understand why things are changing, appreciate the technology underpinning the revolution. They can positively impact the progress this new system can make. Otherwise, you’re just another uneducated quack speculating to make a buck doing more damage than good.

With all that being true, if you believe in Crypto let the market come to you. Understand that the success of the system is contingent on an unwavering belief that throughout history innovation has always disrupted what currently exists.

If a system is better, exponentially so, then nothing will ever be able to stand in the way of progress. For the same reason, Google destroyed Yahoo, and Facebook vanquished MySpace, Bitcoin and Ethereum will destroy money.

In the same way Amazon has brutalized physical retail, Cryptocurrency will eradicate banks. If you don’t see this coming you aren’t paying attention.

Let the non-believers have their day, but the moment central banks pushed the button on quantitative easing they signed the death warrant of capitalism operating system that monopolized the world.

Capitalism isn’t going anywhere though. Cryptocurrency is simply a more efficient vessel which allows for its manifest destiny to be realized.

Progress is relentless.

Cryptocurrency is simply an upgrade

Published:5/18/2019 2:57:51 PM
[Markets] Candace Owens On Facebook "Hate Agents" Database; Gets 'Mistakenly' Banned For 'Racist Facts' 

A source within Facebook has revealed the existence of a list of "hate agents" - a spreadsheet of prominent right-wing and alternative media figures subject to enhanced monitoring, or who have already been banned, according to Breitbart's Allum Bokhari.

Included on the list is black conservative activist Candace Owens, who was 'mistakenly' banned from Facebook the same day that Breitbart obtained evidence of the list. 

According to the source, a Facebook employee who spoke exclusively to Breitbart News, the spreadsheet of “hate agents” that includes Owens was posted to an internal employee discussion group initially founded by Brian Amerige, the former Facebook engineer who quit the company over concerns about political intolerance.

The source claimed that the spreadsheet includes the names of prominent right-wing and alternative media figures who were recently banned from the platform.

Candace Owens is also included in the spreadsheet, in a separate category marked “extra credit.” -Breitbart

The "extra credit" category refers to people that Facebook has not yet banned, but will likely be investigated for potential violations of "hate speech" rules and subject to potential banning. 

A Facebook spokeswoman confirmed the existence of the list, which was created in April, and acknowledged that it's related to the high-profile bans of several alternative media figures such as Paul Joseph Watson and Laura Loomer on May 2nd. 

According to the report, Breitbart's source was able to capture a partial screenshot of the spreadsheet before they were locked out by the list administrator in response to the internal leak. The screenshot reveals that Owens is indeed on the list, along with instructions for Facebook employees to "look into" her after "we're done with the above designation analysis." 

Screenshot via Breitbart

Meanwhile, Owens was "mistakenly" suspended from Facebook for seven days after she criticized liberal attitudes on African Americans. 

The post which triggered her banning asked black Americans to "wake up to the great liberal hoax" and recognize that "liberal supremacy" is a greater threat to black americans than white supremacy. 

This is the post which led to her suspension: 

Owens tweeted to President Trump, writing "I am censored for posting the poverty rates in fatherless homes.

Facebook has since reversed the ban according to Breitbartstating that they restored her post and removed her block "after confirming that the content didn't violate our policies."

A spokeswoman told Breitbart in a statement: "As we said earlier today, we mistakenly applied a temporary block to Candace Owens’ account that we have since restored. We recently announced a group of people that we removed from our services for violating our policies. Candace Owens was not one of those people."

Previous leaks from Facebook have exposed how the platform developed a “deboosting algorithm”designed to covertly suppress (or “shadowban”) certain content-creators on the platform, making their posts less likely to appear on the feeds of users. According to a Facebook insider who spoke to Project Veritas, this code has been used against prominent conservatives on the platform. -Breitbart

Last week the White House launched a new tool for people to use if they feel they have been unfairly discriminated against over social media. 

Those who feel they have been wrongly banned, censored or suspended on platforms such as Facebook or Twitter can go to "wh.gov/techbias" where the following message will greet them: 

"SOCIAL MEDIA PLATFORMS should advance FREEDOM OF SPEECH. Yet too many Americans have seen their accounts suspended, banned, or fraudulently reported for unclear “violations” of user policies.

No matter your views, if you suspect political bias caused such an action to be taken against you, share your story with President Trump." 

Published:5/18/2019 2:31:36 PM
[Markets] Iraqi Parliament To Vote On Bill That Would Ban US Military Troops From Iraq

Authored by Jason Ditz via AntiWar.com,

Iraq has spent the better share of the last 16 years under US military occupation.

Despite this, time and again US-Iraqi relations have come to be defined by US hostility toward neighboring Iran, and Iraq’s desire to not get mixed up in that.

So while Iraq’s parliament was already bristling under Pentagon talk of staying in Iraq, and Trump saying that the US was staying in Iraq to “keep an eye on Iran,” the recent escalation of US rhetoric about a war against Iran has sparked action within parliament.

On Saturday, Iraq will be voting on a bill that would aim to expel all foreign troops from Iraqi soil, and singles out US troops in particular as needing to leave. The bill is endorsed by Iraq’s top two Shi’ite blocs, and is expected to pass fairly easily.

What happens then is the real question.

Iraq’s parliament is already being spun as “pro-Iran factions,” and it’s been a long time since US officials, Pentagon or otherwise, gave any indication that they thought staying in Iraq was up to the Iraqi government.

So while the Iraqi Prime Minister is warning the US that they can’t use Iraq to launch a war on Iran, the US is browbeating Iraq over its government-aligned Shi’ite militias, and doing everything they can to try to portray that Shi’ite-dominated Iraqi government as effectively in league with the Iranians, and subsequently a threat to US interests.

No matter what happens, it seems certain US-Iraqi ties will suffer for it. 

Published:5/18/2019 2:01:01 PM
[Markets] The Moneyist: My mom, 60, lives with a con artist with a history of theft, deception and bad credit This daughter is concerned her mother is being taken for all she is worth.
Published:5/18/2019 1:26:36 PM
[Markets] Will The Fed Help Trump Fight His Trade War?

Authored by Benn Steil and Benjamin Della Rocca via Council on Foreign Relations,

In a tweet on May 14, President Trump called on the Fed to “match” interest-rate cuts he expects from China “in order to make up for the business they are . . . losing” from his tariffs. But the Fed appears to be in no rush to oblige him. After the May FOMC meeting, Fed chairman Jay Powell opined that recent declines in inflation were “transient” and predicted that “inflation will move back up.”

Is he right?

In this post, we look at one important leading indicator of inflation: wages. Wage data are important because producers tend to raise prices to offset rising labor costs.

One way to gauge wage pressure on prices is to compare wage growth with price growth. When the gap is positive but small, upward pressure on prices is low; when it is large, pressure on prices is high. And as shown in the top left figure above, we find that the gap between wage growth and core inflation is now at its widest level in ten years. 

This fact suggests higher inflation to come.

One possible objection to our analysis is that we’ve failed to account for the possibility that discouraged workers, attracted by rising wages, will return to the labor force and drive wages back down. Yet we see no signs of this happening. According to OECD hours-worked estimates, the average U.S. employee now works more than at any time in the last decade—as shown in the top-right chart. 

Further, as the bottom-right chart shows, U.S. part-time employment is falling, even as total employment rises. These facts suggest that employers are being forced to squeeze more work out of existing workers, and that prices must rise to bring the gap with wages back down to more normal levels.

And this fact, in turn, suggests that the Fed won’t be helping Mr. Trump fight his trade war.

Published:5/18/2019 1:26:36 PM
[Markets] Top Iran Commander Invokes 9/11 To Say US Is "Frail"; A "Full Intelligence War" Is On

lran is currently in "a full intelligence war" with the United States, according to statements by the head of Iran’s Revolutionary Guards, Major General Hossein Salami on Saturday.

“We are in a full intelligence war with the United States and the enemies of the Islamic Republic. This war is a combination of psychological warfare, cyber operations, military operations, diplomacy, fear, and intimidation,” Salami, who became head of Iran's elite military force last moth, was quoted as saying by Fars news agency. He further noted Americans in the region face "great risks" at this point. “America has lost its power, and even though they look powerful, they are frail,” he said. 

The recently appointed head of the elite IRGC, Major General Hossein Salami.

But what's most likely to capture the West's attention is his invoking the 9/11 terror attacks: “In reality America’s story is the same as the story of the World Trade Center that collapsed suddenly with one strike,” he said, using the example both as a threat and to claim the mighty US empire can be brought to its knees with one strategic blow. 

His combative statements came days after he said provocatively that the IRGC stood on the “cusp of a full-scale confrontation with the enemy.” In that prior address , Salami notified his forces, "This moment in history, because the enemy has stepped into the field of confrontation with us with all the possible capacity, is the most decisive moment of the Islamic revolution," according to Fars.

Washington has already deployed the USS Abraham Lincoln carrier strike group and new Patriot missiles, along with a B-52 bomber group to the Persian Gulf region, but Saudi Arabia and other gulf states this weekend have reportedly agreed to host American forces "at sea and on land to deter Iran" according to a new report in Israeli media, citing Arabic sources:

Saudi Arabia and a number of Gulf states have agreed to let the United States deploy its forces at sea and on land to deter Iran from a possible attack, Saudi daily Al-Sharq Al-Awsat reported on Saturday.  

An unnamed Saudi official told Al-Awsat that the "agreement was aimed at deterring Iran from a military escalation, including attacking American targets... and not with the aim of entering into a war with it." 

Saudi Arabia has blamed the IRGC of "sabotage attacks" on two of its vessels as they entered the Strait of Hormuz a week ago, which further involved damage to two other international vessels. 

Iran for its part dismissed these and other accusations as part of "psychological warfare" - according to one top Iranian parliamentarian and spokesman this week.

Meanwhile, even as the IRGC chief highlights an ongoing "full intelligence war," de-escalation could be on the horizon, given that multiple headlines Friday noted "Trump doesn't want war" and appears to be clamping down on hawks in his own administration

Trump tweeted something Friday which actually lends credibility to Iran's dismissing both the "sabotage" accusation and heightened bluster out of Washington over the past two weeks as a continuing Psyop  part of Bolton and Pompeo's broader "maximum pressure" campaign. 

Ironically, Trump and Gen. Salami appear somewhat in agreement over this being fundamentally an "intelligence war" and not yet headed toward an actual direct war, given the US president tweeted the following astounding statement "With all of the Fake and Made Up News out there, Iran can have no idea what is actually going on!"

Published:5/18/2019 12:58:08 PM
[Markets] Here's the stock play boosted by 'Game of Thrones' bandwidth hogs Here's the stock play boosted by 'Game of Thrones' bandwidth hogs Published:5/18/2019 12:30:26 PM
[Markets] Record-Setting Art Sales Confirm Global Liquidity Bubble

Authored by Jesse Colombo via RealInvestmentAdvice.com,

Art and collectibles prices have exploded in the past decade as a result of the extremely frothy conditions created by central banks. Hardly a week goes by without news headlines being made about ugly, tacky, or just plain bizarre works of art fetching tens of millions, if not hundreds of millions, of dollars at auction houses like Sotheby’s and Christie’s (often sold to rich buyers in China or Hong Kong). Make no mistake: we’re currently experiencing a massive art bubble of the likes not seen since the Japan-driven art bubble of the late-1980s that ended disastrously. Two art market records were made in the past week: the $91.1 million “Rabbit” sculpture by Jeff Koons, which set the record for the highest amount paid for a piece of art by a living artist, and the sale of Monet’s ‘Meules’ painting for $110.7 million, which set a record for an Impressionist work.

The New York Post reports on the Koons sale –

A sculpture of a silver rabbit by artist Jeff Koons sold at Christie’s auction house in Manhattan Wednesday for $91.1 million, setting the record for the highest amount fetched for a piece of art by a living artist.

Koons’ “Rabbit” surpassed the previous record, which was set just last November when British painter David Hockney’s “Portrait of an Artist (Pool with Two Figures)” sold for $90.3 million. Both totals include the auction house fees.

Art dealer Bob Mnuchin, the father of Treasury Secretary Steven Mnuchin, made the winning bid for the Koons work, Bloomberg reported. Mnuchin made the purchase for a client, according to the report.

The sculpture, which stands just over 3 feet high, is made of stainless steel and based on an inflatable children’s toy, according to the auction house.

“Rabbit” by Jeff Koons is displayed at Christie’s in New York on May 3, 2019. Photo credit: AP

Reuters reports on the Monet sale –

One of the few paintings in Claude Monet’s celebrated “Haystacks” series that still remains in private hands sold at auction on Tuesday for $110.7 million, setting a record for an Impressionist work.

The oil on canvas, titled “Meules” and completed in 1890, is the first piece of Impressionist art to command more than $100 million at auction, said Sotheby’s, which handled the sale.

That also represents the highest sum ever paid at auction for a painting by Monet, the founder of French Impressionism and a master of “plein air” landscapes who died in 1926, aged 86.

“Meules” was one of 25 paintings in a series depicting stacks of harvested wheat belonging to Monet’s neighbor in Giverny, France.

The works are widely acclaimed for capturing the play of light on his subject and for their influence on the Impressionist movement.

“Meules” by Claude Monet is displayed at Sotheby’s New York on May 3, 2019. Photo credit: Reuters

Last month, I wrote about “bubble drunk” millennials in Hong Kong who paid $28 million for Simpsons art:

The Kaws Album’, KAWS. Courtesy Sotheby’s.

Today’s art bubble (like many other bubbles that are currently inflating) formed as a result of the Fed and other central banks’ extremely loose monetary policies after the Great Recession. In a desperate attempt to jump-start the global economy again, central banks cut and held interest rates at virtually zero percent for much of the past decade. The chart of the Fed Funds rate below shows how bubbles form when interest rates are at low levels:

In addition to holding interest rates at record low levels for a record length of time, central banks pumped trillions of dollars worth of liquidity into the global financial system in the past decade:

Assets around the world – from art to stocks to property – have been levitating on the massive ocean of liquidity that has been created by central banks. For example, the S&P 500 has soared 300% since its low in early-2009:

In order to understand today’s art bubble, it is helpful to learn about the art bubble of the late-1980s that ultimately crashed and burned. Throughout the 1980s, Japan had a bubble economy that was driven by debt and bubbles in property and stocks. Japan’s economy was seemingly unstoppable – almost everyone in the West was terrified that Japan’s economy and corporations would trounce ours while destroying our standard of living in the process. Of course, few people knew how unsustainable Japan’s economy was at that time.

As a result of hubris and the enormous amount of liquidity that was flowing throughout Japan’s economy in the late-1980s, Japanese businesspeople and corporations started to speculate in art, often bidding previously unheard of sums that Western art collectors would never have dreamed of paying. For example, Yasuda Fire and Marine Insurance paid a record $39.9 million for Vincent van Gogh’s “Sunflowers” at a London auction in 1987. Ryoei “wild fellow” Saito, Chairman of the Daishowa Paper Manufacturing empire, paid $160 million for the world’s two most expensive paintings – a Van Gogh and a Renoir. At the peak of the art market in 1990, Japan imported more than $4 billion worth of art, including nearly half of all Impressionist art that was on the market. Of course, the art market plunged along with Japan’s bubble economy in the early-1990s.

Vincent van Gogh “Sunflowers” 1888.

Unfortunately, today’s art bubble will burst just like the art bubble of the late-1980s. China, with its massive debt bubble, is currently playing the role that Japan played in the Eighties. While most people are probably not worried about the coming art market bust and won’t be directly affected by it, the point of this piece is to show how the art market acts like a barometer for the amount of froth there is in the global economy and financial markets. When the art market goes ballistic, that is typically a sign that the economic cycle is in its latter stages. We are fast approaching a time when art speculators will deeply regret paying $91.1 million for a steel rabbit sculpture and tens of millions of dollars for Simpsons art.

Published:5/18/2019 12:30:26 PM
[Markets] A new theory on why sleeping less than 7 hours per night can lead to heart disease and Type 2 diabetes Decades of research has shown that chronic short sleep is associated with increased risk of clogged arteries, heart disease, and early mortality.
Published:5/18/2019 11:55:58 AM
[Markets] US Accidentally Kills 17 Afghan Police After 'Miscommunication' During Airstrike

US airstrikes killed 17 Afghan police officers and wounded 14 others due to a "miscommunication" while fighting with Taliban forces, according to Stars and Stripes, citing Afghan officials. 

A small checkpoint guarding a highway outside Lashkar Gah, in Helmand province, April 16, 2019. Via Stars & Stripes

The "friendly fire" incident, which took place in Afghanistan's southern Helmand province Thursday evening, occurred after Afghan security forces called in US air support amid heavy fire from Taliban fighters just outside the province's capital, Lashkar Gah. 

The incident began after a police officer and two of his men decided to take down a Taliban flag from a nearby water tower on Thursday night, within walking distance from a police training center. When they arrived to remove the flag, police tripped a mine, which exploded and alerted the Taliban to their presence. 

The guerrillas began firing on them. Police at the nearby training center arrived to assist the first three officers but were unable to drive the Taliban back, he said.

The police unit then requested air support. Residents of Lashkar Gah heard a very loud explosion around 8:30 p.m. Thursday, they said. -Stars and Stripes

The US military says they were told that the area was clear of allied units. 

"Unfortunately, they were not and a tragic accident resulted," said spokesman Colonel Dave Butler, adding "Afghan Security Forces as well as Taliban fighters were killed in the strikes." 

"We’re examining the miscommunication to ensure it is not repeated. We regret this tragic loss of life of our partners and are committed to improvement every day with every mission." 

The governor of Helmand province, Mohammad Yasin, said an investigation has been launched, calling the airstrike a "tragedy." 

Thursday’s attack comes about two months after miscommunication led to a U.S. airstrike that killed at least five Afghan soldiers and wounded nine others at a checkpoint in neighboring Uruzgan province, another area of heavy Taliban activity. 

In that March incident, a firefight had erupted after soldiers at a checkpoint began shooting at a patrol of their own troops, who were accompanied by American advisers on a planned nighttime raid outside the provincial capital Tirin Kot. -Stars and Stripes

As Stars and Stripes notes, fighting in Helmand has claimed the lives of more American, British and Afghan soldiers than any other area of Afghanistan during the 18-year war, as insurgents have held control over more than half of it, according to US military data from October. 

Published:5/18/2019 11:55:57 AM
[Markets] Not Just Florida: Border Patrol To Fly Thousands Of Illegal Migrants To San Diego

Yesterday we reported that the Trump administration would be dumping thousands of illegal migrants in Florida due to overcrowding at the border.

Now, we learn that San Diego will receive hundreds of migrant families from South Texas for processing, as the agency struggles to keep up with large numbers of Central Americans who have flooded into the country. The agency said that it was also considering distributing apprehended border-crossers to Detroit, Miami and Buffalo, New York, according to the Globe and Mail

Flights from Texas' Rio Grande Valley to San Diego were slated to begin on Friday - continuing three times a week indefinitely. Each flight will carry 120 - 135 people, according to the Border Patrol's interim San Diego sector chief, Douglas Harrison. Conservatively, that means at least 1,440 migrants per month, or 17,280 annually. 

"We don’t have an end date," said Harrison. "This is a contingency operation. We’ve got to give the people in Rio Grande Valley some relief." 

Plans to fly from Rio Grande Valley to Detroit, Miami and Buffalo were preliminary, Harrison said. Authorities were researching available airports and the ability for non-profit groups to provide temporary assistance.

Already, U.S. authorities are moving four buses a day from the Rio Grande Valley to Laredo, Texas, about 100 miles (160 kilometres) away. There is also a daily flight contracted through U.S. Immigration and Customs Enforcement to Del Rio, Texas, about 275 miles away (440 kilometres) away.

Agents in the Rio Grande Valley will collect biographical information and do a medical screening before sending migrants to San Diego on flights contracted by ICE, Harrison said. Migrants will go from San Diego International Airport to a Border Patrol station, where they will be fingerprinted, interviewed and screened again for medical problems. Processing at the station typically takes hours. -Globe and Mail

ICE will decide whether to detain or release the families in San Diego. It has been longstanding practice to quickly release them into the community with notices to appear in immigration court. 

San Diego's Rapid Response Network - a coalition of civic and religious groups that help asylum-seekers with temporary shelter - will undoubtedly come under further strain. The network said that it would shelter migrants who are flown in from Texas, and that the influx of new migrants "underscores the urgent need for a permanent, long-term migrant shelter in San Diego."

Short flights cost the federal government about $6,000 each, officials said. It wasn’t immediately clear how much longer flights cost.

Border Patrol agents do some processing remotely by videoconference, but Harrison said stations in the Rio Grande Valley had run out of room even to do that. San Diego, he said, had room to hold migrants for up to 72 hours and staff to process them, which stations on the northern border lack. -Globe and Mail

Arrests at the border have nearly tripled the number from last year - reaching 98,977 in April. Around 70% were families or children traveling alone - however in March, former Homeland Security Chief Kristjen Nielsen said that border smugglers are using "child recycling rings" to thwart US Customs and Border Protection

"We’ve broken up child recycling rings — if you can believe it — in the last couple of months, which is where smugglers pick up a child, they give it to adults to present themselves as a family once they get over — because, as you know, we can only hold families for 20 days — they send the child back and bring the child back with another family. Another fake family," Nielsen told Fox News's Tucker Carlson. 

The Rio Grande Valley is the most busy corridor for border crossings, followed by El Paso, Texas. The Border Patrol reports that it's detaining around 8,000 people at a time in the Rio Grande Valley - double its maximum capacity. On Friday, the agency said that it would open four new temporary structures that will have generators, lighting and air conditioning. 

Published:5/18/2019 11:26:24 AM
[Markets] There’s no recession in sight, but the U.S. economy appears stuck in second gear The U.S. economy is in no danger of imminent recession, but it appears to be facing tighter caps on just how fast it can grow. Here’s why. Published:5/18/2019 11:26:24 AM
[Markets] Economic Preview: There’s no recession in sight, but the U.S. economy appears stuck in second gear The U.S. economy is in no danger of imminent recession, but it appears to be facing tighter caps on just how fast it can grow. Here’s why.
Published:5/18/2019 11:26:24 AM
[Markets] The tariff tiff and a Fed rethink are just two areas of stock-market angst The tariff tiff and a Fed rethink are just two areas of stock-market angst Published:5/18/2019 11:26:23 AM
[Markets] Illinois Governor Wants To Hike Taxes: What Else Isn't News?

Authored by Mike Shedlock via MishTalk,

Illinois has its eyes on your pocketbook, again. This time: gas taxes, registration fees, Netflix, and Uber.

The Illinois Policy Institute reports Gov. J.B. Pritzker’s office is using a major capital bill as a vehicle to grease lawmakers for a progressive income tax amendment. But the tax hikes to pay for it would make Illinoisans’ gas tax burden the second highest in the nation.

  • Gas tax hike ($1.2 billion): The preliminary capital plan relies on doubling Illinois’ motor fuel tax to 38 cents from 19 cents per gallon, effective July 1. This would make Illinois’ total gas tax burden the second highest in the nation. Under the proposed gas tax hike, drivers filling up in Chicago would pay 96 cents in taxes and fees on a $2.46 gallon of gasoline – an effective tax burden of 39%.

  • Vehicle registration fee hike ($490 million): The preliminary capital plan would also hike vehicle registration fees, imposing a new cost structure based on the age of the car. The current annual fee of $101 would jump to $199 for vehicles 3 years old or newer, $169 for vehicles 4-6 years old, $139 for vehicles 7-11 years old, and $109 for vehicles 12 years and older. The $199 registration fee for newer vehicles would be higher than any neighboring state and third-highest in the nation, according to Ballotpedia research.

  • New $1 per ride tax on ridesharing ($214 million): The plan would enact a statewide $1 per ride tax on ridesharing services such as Uber and Lyft. Chicago already levies a 72-cent per ride fee on ridesharing services.

  • New 7% tax on cable, satellite and streaming services ($150 million): Chicago’s “Netflix tax” would expand statewide, with the state charging a 7% tax on users of streaming services, as well as cable and satellite customers. None of these services are currently taxed at the state level. Chicago currently stretches the definition of its 9 percent citywide “amusement tax” to include online streaming services such as Netflix and Spotify, as well as Playstation rentals.

  • Tax hikes on beer, wine and liquor ($120 million): Taxes on booze would rise by up to 50%. The per-gallon tax on beer and cider would rise to 27.7 cents from 23.1 cents; the per-gallon tax on wine would rise to $2.05 from $1.39, and the per-gallon tax on distilled liquor would rise to $12.60 from $8.55. Bob Myers, president of the Associated Beer Distributors of Illinois, estimated Illinois loses out on up to $30 million per year to cross-border alcohol purchases.

  • New statewide parking garage tax ($60 million): Daily and hourly garage parking would be hit with a 6% tax while monthly and annual garage parking would come with a 9% tax. Chicagoans already pay among the highest parking rates in the country. The state does not currently tax garage parking.

  • Doubling the real estate transfer tax ($34 million): The proposal doubles the real estate transfer tax on non-residential real estate to $1 from 50 cents per $500 in value.

  • Hiking registration fees for electric vehicles ($4 million): The registration fee for electric vehicles would rise to $250 per year from $34 every other year.

Q: What do we call this?

A: A start!

This is ongoing and it will never stop.

Progressive Tax Push

Pritzker wants to amend the state constitution to allow for "progressive" graduated income taxes. He claims it will be a tax on the wealthy.

He is a blatant liar. It will be a tax on everyone. The wealthiest will leave. And even if they don't, there is already a general exodus. Illinois is losing population while neighboring states are gaining.

The most important point is that pension benefits to public unions and other unfunded obligations total nearly 50% of Illinois budget!

For discussion, please see Warren Buffett Would Not Locate a Business in Illinois: Let's Explore Why.

Published:5/18/2019 10:59:00 AM
[Markets] Facebook Admits Israeli Social Manipulation Company Spent $800,000 To Influence African Elections

In keeping with their spectacular reputation of violating privacy and rigging elections, Facebook has said that it removed "hundreds of accounts" from Facebook and Instagram that were used to influence elections in Africa, according to CNN. Only it wasn't Russia who was behind this latest intervention, but Israel.

Archimedes Group, an Israeli company, reportedly spent more than $800,000 in advertising (far more than the Kremlin allegedly spent on its "ad campaign" to crush Hillary Clinton and get Trump elected) and ran accounts that had nearly 3 million followers, for the purpose of targeting African elections. The group primarily targeted Nigeria, Senegal, Togo, Angola, Niger and Tunisia. 

For perspective, the $800,000 reportedly spent by the group compares to the $100,000 that has been claimed by the U.S. mainstream media to have been spent for ‘Russian bots’ used to allegedly sway the 2016 US presidential election, according to RT.

The company "used fake accounts to run Pages, disseminate their content and artificially increase engagement" and also "represented themselves as locals, including local news organizations, and published allegedly leaked information about politicians," according to Facebook

Facebook's Nathaniel Gleicher, the company’s head of cybersecurity policy said: “The individuals behind this network attempted to conceal their identities.

"This organization and all its subsidiaries are now banned from Facebook, and it has been issued a cease and desist letter," Facebook wrote in a blog post. It detailed the group's presence on the site by disclosing:

  • Presence on Facebook and Instagram: 65 Facebook accounts, 161 Pages, 23 Groups, 12 events and four Instagram accounts.
  • Followers: About 2.8 million accounts followed one or more of these Pages, about 5,500 accounts joined at least one of these Groups and around 920 people followed one or more of these Instagram accounts.
  • Advertising: Around $812,000 in spending for ads on Facebook paid for in Brazilian reals, Israeli shekel, and US dollars. The first ad ran in December 2012 and the most recent ad ran in April 2019.
  • Events: Nine events were hosted by these Pages. The first was scheduled for October 2017 and the most recent was scheduled for May 2019. Up to 2,900 people expressed interest in at least one of these events, and a portion of their accounts were previously identified and disabled as fake. We cannot confirm whether any of these events actually occurred.

Meanwhile, the website that reportedly links to Archimedes Group claims it "took significant roles in many political and public campaigns, among them Presidential elections and other social media projects all over the world."

"Archimedes has created and operates in it's [sic] own unique field within the social media realm."

RT notes that the firm has interesting similarities to a former Israeli social media manipulation firm:

Archimedes’ slogan is oddly reminiscent of another secretive Israeli social media manipulation firm, Psy-Group (motto: “Shape reality”), which closed its doors after coming under scrutiny during the Mueller investigation for its possible involvement in the election of Donald Trump. Psy-Group drew up a detailed prospectus for a Facebook meddling campaign seven months before the 2016 election, but supposedly never deployed it in real life. Both Psy-Group and Archimedes touted their ability to operate multiple fake online avatars simultaneously.

    According to Facebook's blog, here is a sample of the content posted by some of these pages:

    Caption: Faithful to only himself, Martin Fayulu criticizes and rejects the results of the presidential election, which has unfolded transparently and in an exemplary calmness. It is time for him to admit his defeat to president Tshisekedi who has been elected in a democratic way.

    Caption: Mali: Justice Survey on a Mysterious Gold Mine from Airbus to Mali

    Airbus group is quoted in a judicial investigation for scam on a Malian gold mine in balance sheet deposit, whose shareholders have been ruined. The investment project of the aerospace giant in this mine, LED by a close to Malian power, seemed intended to clear occult funds to facilitate the obtaining of military markets in the country. This is a very embarrassing new business….

    Incidentally, just a days ago we reported how another secretive Israeli company used WhatsApp voice calls to install spyware across countless phones.  WhatsApp, which is used by 1.5bn people worldwide, discovered in early May that attackers were able to install surveillance software on both iPhones and Android phones by ringing up targets using the app’s phone call function. The malicious code, developed by the secretive NSO Group, a notorious and controversial Israeli hacking and surveillance tools vendor, could be transmitted even if users did not answer their phones, and the calls often disappeared from call logs.

    It is unclear how many apps were infected with the spyware trojan, which could for example, allow anyone to get access to John Podesta's email password (and then blame say, Vladimir Putin for example) as WhatsApp is too early into its own investigations of the vulnerability to estimate how many phones were targeted using this method, although it is likely a substantial number.

    Still, one should perhaps ask: is it Russia - already the usual suspect for any alleged rigging on the internet - that is the true culprit here, or Israel, which never makes mainstream media headlines, yet whose actions are far more flagrant, bold and manipulative.

    Published:5/18/2019 10:25:40 AM
    [Markets] The Wall Street Journal: Students were advised to falsely claim to be racial minorities in college-admissions scandal The man behind the scheme to help wealthy students get into elite colleges by cheating on tests and faking athletic credentials also advised some families to falsely claim students were racial minorities, exploiting the push to diversify campuses, according to two people familiar with the situation.
    Published:5/18/2019 10:25:40 AM
    [Markets] Five Years In Prison For Offending Someone Online...

    Authored by Simon Black via SovereignMan.com,

    Let the weekly absurdity begin!

    New SAT scoring will combat Asian privilege

    The infamous SAT has been used since 1926 as a sort of university entrance exam to objectively test high school students’ scholastic aptitude. Until now.

    Test administrators announced plans this week to include an ‘adversity score’ for every student taking the SAT.

    This score will excuse poor test results if the student lives in a high crime neighborhood, went to a poor high school, is living in a single parent or low income household, and so on.

    And this should really put a dent in Asian privilege. Yes you read that right. With an average SAT score of 1223, Asians achieve the highest marks among all the ethnic groups tracked by SAT administrators.

    But these same Asian test takers also typically come from dual-parent, higher-income households. So they’ll be penalized because of their parents’ success.

    This is truly amazing thing to be teaching young people.

    Universities and the SAT administrators don’t want high school students to identify as strong, self-reliant, independent individuals who seek to solve problems and overcome adversity.

    Instead they’re encouraging young people to make their socioeconomic circumstances the strongest part of their identities. And, based on those socioeconomic circumstances, cultivate a guilt or victim mentality, and expect penalties or handouts for the rest of their lives.

    Click here for the full story.

    Harvard lynch-mob runs professor off campus

    Harvard Professor Ronald Sullivan has spent his career as a lawyer defending some of the poorest people in the country.

    He was previously the public defender in Washington DC and personally overturned dozens of wrongful convictions.

    Professor Sullivan also represented Michael Brown’s family after the teen was shot to death by police. Huffington Post even called him the “man who dealt the biggest blow to mass incarceration.”

    But now he and his wife– the first black student housing deans in Harvard history– have been run off campus by an angry mob of #metoo zealots.

    His crime: joining Harvey Weinstein’s defense team.

    Sullivan believes in justice for ALL, and that even a man like Weinstein who has already been convicted by the Twittering classes in the court of public opinion, is entitled to competent legal defense.

    “It is particularly important for this category of unpopular defendant to receive the same process as everyone else — perhaps even more important…

    “To the degree we deny unpopular defendants basic due process rights we cease to be the country we imagine ourselves to be.”

    Powerful words that absolutely ring true. But now all these whiny students at Harvard claim they no longer feel safe with Sullivan on campus, and they’ve demanded the university do something.

    Sadly, Harvard has buckled under the pressure, and they announced earlier this week that they would not renew his appointment as Faculty Dean at Harvard College’s Winthrop House.

    These Social Justice Warriors are starting to feed on their own.

    Click here for the full story.

    Prison for online trolls in Australia

    Online trolls could soon face up to five years in prison, if the Prime Minister of Australia gets his way.

    It’s already illegal to “menace, harass or cause offence” online in Australia. That’s right. It’s illegal to offend someone in Australia.

    And that cybercrime carries up to three years in prison if “reasonable persons” would consider the online behavior offensive or menacing.

    But the Prime Minister wants a stiffer penalty of up to five years for offending someone else’s delicate feelings.

    As usual, the government keeps their laws nice and obscure so that they can make the case that practically anyone has broken them.

    Click here for the full story.

    Charges dropped against Florida Man with “I Eat Ass” bumper sticker

    Speaking of offending people, last week a sheriff’s deputy in Florida arrested a man because he had a bumper sticker which eloquently read “I Eat Ass.”

    I almost have to admire the transparency. This man leaves no question about where he stands on the issue.

    The officer pulled the man over because of the obscene sticker, and insisted he removes all or part of it. But the man refused, citing his First Amendment free speech right to display potentially offensive bumper stickers.

    So the officer charged him with violating obscenity laws, as well as resisting arrest without violence.

    The prosecutors determined bringing a case against him would be met with a valid First Amendment defense, so the charges were dropped.

    Read the full story here.

    San Francisco chasing away tech companies with IPO tax hike

    San Francisco has long had what they refer to as an “IPO tax”; this is a tax on the value of shares that companies give to their employees.

    And the tax is on the value of the shares itself. So when a big company goes public and all those employee shares are worth hundreds of millions of dollars, the city of San Francisco rakes in the tax revenue.

    Ten years ago during the last recession, San Francisco cut its IPO tax. There was a bit of revolt by some local tech firms who threatened to leave the city over the tax, and San Francisco wanted to prevent this exodus at all costs.

    But not anymore.

    Now the local government intends to raise the tax from 0.38% to 1.5%, an almost 4x increase.

    This is pretty hilarious given that they slashed the tax a decade ago to tempt companies to stay.

    But now that it’s cool and trendy to chase productive businesses away, San Francisco wants to jack up the IPO tax.

    This is in addition to new taxes passed in November on large corporations to support the homeless population.

    Published:5/18/2019 9:56:07 AM
    [Markets] Strategist: A number of indicators suggest the stock market could extend gains Strategist: A number of indicators suggest the stock market could extend gains Published:5/18/2019 9:27:41 AM
    [Markets] The Wall Street Journal: Trump administration considers flying migrants across country to relieve border crowding The Trump administration may begin flying asylum-seeking families at the southern U.S. border across the country to have their initial claims processed, a Customs and Border Protection official said Friday.
    Published:5/18/2019 9:27:41 AM
    [Markets] Tear Gas And Condom Shortages In A Time Of Hyperinflation

    Venezuela's hyperinflationary chaos has taken its toll on all aspects of life including dating, the focus of a new Bloomberg profile highlighting the challenges and pitfalls of single life in Caracas: blackouts, political rallies, condom shortages, tear gas, Molotov cocktails and deadly protests.

    While the country experiences a massive exodus of roughly 10% of its total population, the effect on dating apps is almost comical. Many people listed on apps can see their prospective partner's location status zoom from just "1 mile away" to "1,000 miles away" in just days, as citizens emigrate to places like Chile, Mexico and Peru. 

    This leaves people asking themselves why they should even date in Venezuela to begin with. "What if you finally find the right one and her visa comes through?" the article asks. While some couples can brave the distance, romances are often cut short when one half of a relationship moves out of the country. 

    While for most it is a sad outcome that almost every romantic partner eventually moves out the country, for people with "looser social agendas" as Bloomberg puts it, this can actually be liberating - knowing that most everyone you’ve hooked up with is probably leaving and that you'll never have to see them again.

    Bride Rhandall Mondelo, 27, center, celebrates after a photo shoot for her weeding in the lobby of an upscale hotel in Caracas; Photo: AP

     There's a fair amount of looking back to the days when dating was common in the Las Mercedes district, and when lines would form outside of discos and salsa clubs - and when a night cap might include a trip to a "love motel". But now, those with little money have to find their way to one of the fast-dwindling bars in the town that give the big city of Caracas a "small town feel". 

    A women dances in the morning, following an all-night party in Caracas; Photo: AP

    Other "unique" issues also arise due to the chaos in the country. For example, the author recalls a friend being thrown out by his girlfriend after she discovered that he had moved in with her only because she had running water. 

    The biggest concern to many - crime - is rampant at night, as documented here repeatedly. Streelights are out making it "spooky" to walk around. However, this hasn't stopped citizens from going out after sundown: the wealthy still roll up to Las Mercedes' remaining restaurants in SUVs and armored cars, while regular citizens walk from place to place after being dropped off at the nearest metro stop, about a mile away. 

    Movie theaters are still in business, but often wind up closing before 8PM. And the author recounts one of his latest dates when, after he suggested Netflix as an alternative, the power wound up going out. There goes that idea. 

    And some citizens, like Eduardo Sandoval, don't need much to be happy. A recent date of his included just sitting on a bench at a mall and cuddling with his girlfriend. “At times like these, you look for any escape from the routine,” he concluded.

    Published:5/18/2019 9:27:41 AM
    [Markets] Pulling A Pocahontas? 'College Admissions' Scandal Mastermind Advised Students To Lie About Race

    To say that race is a fraught issue for the American system of higher education doesn't quite capture the divisiveness that affirmative action has fostered over the years. Just look at the DoJ-backed lawsuits against Harvard and a handful of other elite colleges suspected of discrimination against Asian applicants.

    The College Board touched on these sensitivities when it inadvertently sparked a vicious backlash over its 'adversity scores'. These attempts to quantify whether a student came from a 'privileged' or 'oppressed' background would be shared with colleges, but not the applicants.

    Rick

    GIven the controversies of the past week, a WSJ report on how college admissions scandal mastermind Rick Singer, the consultant charged with earning millions for bribing coaches and helping students cheat on the SATs in what the FBI called "Operation Varsity Blues", advised many of his clients to misrepresent their race couldn't have been better timed. 

    Apparently, it's difficult for the admissions committees to pick up on this type of deception.

    One of WSJ's anonymous sources with insider knowledge of Singer's operations said that 'Native American' was a popular option, since most families could credibly claim an affiliation stretching back generations that may or may not be accurate, and it was impossible to tell if a white student was actually mixed-race just by looking at him or her. One student checked the 'Native American' box even though "there was absolutely nothing Native American about this kid."

    Sound familiar?

    Another family charged in the scandal listed their son as "Black/Hispanic" despite having no evidence to support either claim. One source told WSJ that Singer would argue that choosing not to misrepresent their child's race would risk putting them at a serious "competitive disadvantage."

    A son of Marjorie Klapper, a parent scheduled to plead guilty Friday for participating in the scheme, was incorrectly listed on his Common Application as being black and Hispanic, the people said. William “Rick” Singer, the college counselor who has agreed to plead guilty in the case and is awaiting sentencing, also arranged for a proctor to cheat on the ACT admissions test for the teen, according to a Federal Bureau of Investigation affidavit filed in the case.

    Ms. Klapper, who lives in Menlo Park, Calif., was one of many parents charged whose child was misrepresented as a minority, according to one of the people, who is familiar with the investigation.

    Mr. Singer frequently gave families the option of misrepresenting race and would say that not doing so could put their child at a "competitive disadvantage," said one of the people, who is familiar with his business.

    None of the parents, nor Singer, are facing charges related to misrepresenting an applicant's race. But the fact that this symbol for corruption in the higher education system so easily exploited the same 'loophole' that got Elizabeth Warren into Harvard - and would even preach about the risks of not doing it - should tell us all we need to know about this new push to gauge every child's "adversity."

    Published:5/18/2019 8:56:08 AM
    [Markets] The Moneyist: My in-laws want to give us over $100,000, but they’ll tell us how to spend it — should I tell them to keep their money? ‘They already helped us buy our house, one that we otherwise would not have been able to afford.’
    Published:5/18/2019 8:24:53 AM
    [Markets] Brexit Party On Pace To Overtake Tories By Election Day

    Authored by Mike Shedlock via MishTalk,

    Nigel Farage's Brexit Party is on the verge of overtaking the Tories. From zero members to 100,000 in just Five weeks!

    Nigel Farage has some exciting news.

    Party Membership

    On the surface it would appear Labour ought to be ruling by a landslide. Since it isn't, its numbers are more than a bit suspect. Note that only 20% of the Labour total is registered.

    Numbers from UK Political Party Affiliation.

    Ability to Disrupt

    The New Yorker writes Nigel Farage Makes Trumpian Trouble with His New Brexit Party

    The thirty-odd per cent that the Brexit Party is polling is far from a majority, but the basic problem of Brexit politics is the lack of a coherent majority anywhere. Cross-party talks on a Brexit compromise have stalled. A second referendum doesn’t seem to be on offer. Jeremy Corbyn, the Labour leader, has proved adept at hiding his own position, in order to paper over divisions in his party, but not at actually leading anyone anywhere, except perhaps to a new general election.

    It would be a mistake to dismiss the European elections as a mere sideshow in the fight among Britain’s parties, either because the U.K. will withdraw its M.E.P.s should Brexit go through, or because the Parliament is viewed, by many, as mostly just the showy part of a make-work E.U. bureaucracy. The U.K. is not out of the Union yet, and it will be sending seventy-one M.E.P.s to the Parliament, nearly a tenth of the total.

    In Denial

    “The BBC is in denial, the Tory and Labour parties are in denial, I think you’re all in for a bigger surprise Thursday week than you can even imagine,” said Farage.

    The biggest denier of all is Theresa May.

    Transformation

    The Guardian asks Has the Rise of the Brexit Party Blown Away UKIP?

    Why is that a question?

    UKIP is gone Support is at 3% and headed to zero. The Brexit Party picked up all of it.

    New Slogan

    Change Politics For Good

    Farage's new slogan is "Change Politics For Good".

    On the heels of serious missteps by Labour Leader Jeremy Corby and Tory Prime Minister Theresa May, now in the same political bed, that is an excellent slogan.

    Four Former UKIP AM's Join Brexit Party

    The BBC reports Four former UKIP AMs have joined Nigel Farage's Brexit Party, announcing plans to form an assembly group.

    AMs are MPs from the Wales National Assembly.

    "I'm very pleased as leader of the Brexit Party to welcome four members of the Welsh Assembly who will now re-designate as of this afternoon as Brexit Party members," Farage stated.

    Mark Reckless, Mandy Jones, Caroline Jones and David Rowlands are the four joining the Brexit Party.

    Mr Reckless, who left the Tory group on Tuesday ahead of the announcement, said: "Brexit is being blocked and the Brexit Party group in the Welsh assembly from today will be supporting Nigel Farage, supporting the Brexit Party in everything that they are doing to protect our democracy and to ensure that Brexit is delivered."

    Fastest Growing Party

    The Independent writes the Brexit Party is ‘Fastest Growing Political Force in the Land’.

    Mr Farage revealed the momentum behind his party – which tops polls for the MEP elections – as he warned a cross-party Brexit deal between Theresa May and Jeremy Corbyn would fuel it further.

    Branding any softer Brexit agreement as a “coalition of politicians against the people”, he said: “I think millions of people would give up on both Labour and the Conservatives.”

    He added: “This would be the final betrayal. Frankly, if May signs up to this, I can’t see the point of the Conservative Party even existing. What is it for?

    “Work it out. We have raised getting on for £2m through individual people joining through our website. I can’t think that any other party in the UK has raised money like that.”

    Brexit vs labour

    The numbers suggest Farage is correct. Support for the Tory party declined far more than Labour.

    But the real story is the Brexiteers are united. Remainers are split between Labour, the Liberal Democrats, the Greens, and the newly formed Co-operative Party.

    The latter is headed towards oblivion.

    Hooray for Farage

    Hooray for Farage and the Brexit party!

    A customs union makes zero sense. It would be the worst possible action.

    Published:5/18/2019 8:24:53 AM
    [Markets] America's Next Hypersonic Passenger Plane Could Travel Between New York And London In 1.5 Hours

    Hermeus Corporation, a startup company, developing a hypersonic passenger plane for Mach 5 travel around the world, announced a seed round investment by Khosla Ventures and private investors. The financing will further the development and testing of the plane's hypersonic propulsion system, reported a press release from Hermeus.

    "Hermeus is developing an aircraft that not only improves the aviation experience with very reduced flight times, but also has the potential to have great societal and economic impact." said Vinod Khosla, founder of Khosla Ventures.

    Hermeus, which was founded last year, is concentrating on earthly hypersonic flight rather than deep space exploration. Its new propulsion technology could propel the aircraft faster than Mach 5, essentially cutting flight time between New York and London from seven hours to 90 minutes or less.

    "We've set out on a journey to revolutionize the global transportation infrastructure, bringing it from the equivalent of dial-up into the broadband era, by radically increasing the speed of travel over long distances." said co-founder and CEO AJ Piplica. "We're excited to work with Khosla Ventures to turn this vision into reality."

    Hermeus' founders are alumni from SpaceX and Blue Origin. All four founders worked together at Generation Orbit, where Piplica served as CEO and Glenn Case, Mike Smayda, and Skyler Shuford served as technical directors in the development of the Air Force's X-60A, a hypersonic rocket-plane.

    Hypersonic flight is the ability to fly at exceptionally high speeds - surpassing Mach 5. Potential advantages of hypersonic flight are reduced travel times and improved space access.

    Besides fifth-generation jet fighters, hypersonic technologies are the aerospace industry's hottest frontiers into the 2020s.

    The US, China, Russia, Germany, Britain, India, Australia, and even Indonesia have been researching hypersonic aircraft.

    China and Russia are the leaders in hypersonic technology. Since 2005, China has written more important white papers on hypersonics than any other country or international group. The Chinese have invested in hypersonic test facilities, and as of recent, have started to test hypersonic vehicles. As for Russia, Moscow is expected to deploy a hypersonic missile system this year.

    "With experience from the best of New Space companies, the Hermeus team is well-positioned to disrupt the hypersonics industry," said one of the startup's advisers Rob Meyerson, the former president of Amazon billionaire Jeff Bezos' Blue Origin space venture.

    In addition to Meyerson, Hermeus' advisory board includes:

    • Rob Weiss, former executive vice president and general manager at Lockheed Martin Skunk Works.

    • Keith Masback, former CEO of the US Geospatial Intelligence Foundation, with earlier leadership roles at the National Geospatial-Intelligence Agency and the US Army Intelligence Master Plan Office.

    • Katerina Barilov, founder of Sparkplug Capital and managing director at Shearwater Aero Capital.

    • George Nield, former associate administrator for commercial space transportation at the Federal Aviation Administration.

    • Mitch Free, founder and CEO of ZYCI and former director of technical operations at Northwest Airlines.

    So it seems the great hypersonic race is well underway - the first country to mature this disruptive technology will not just revolutionize commercial flight but will either maintain their empire [the US] or become the next dominant superpower [China].

    Published:5/18/2019 7:57:12 AM
    [Markets] Germany Votes To Define BDS Movement As Anti-Semitic

    Via Middle East Monitor,

    Germany yesterday voted to define the Boycott, Divestment and Sanctions (BDS) movement as anti-Semitic, becoming the first major European parliament to do so.

    The German parliament – known as the Bundestag – this afternoon voted to accept a motion defining BDS as anti-Semitic. The motion, “Resist the BDS Movement – Fighting Antisemitism,” was sponsored by the Bundestag’s two largest parties – Chancellor Angela Merkel’s Christian-Democratic Union and the Social Democrat party – as well as the Green Party and the Free Democratic Party.

    The text of the motion stated that “the German Bundestag is unwavering in its commitment to condemn and combat anti-Semitism in all its forms,” stressing it will oppose “anyone who defames people because of their Jewish identity […] questions the right of the Jewish and democratic state of Israel to exist or Israel’s right to defend itself.”

    On the BDS movement specifically, the motion claimed that “the arguments, patterns and methods of the BDS movement are anti-Semitic”. As evidence of this, the motion argued that BDS’ “don’t buy” stickers – which aim to identify products of Israeli origin so consumers can refrain from purchasing them – “arouse associations [with] the Nazi slogan ‘Don’t buy from Jews’” and are “reminiscent of the most horrific phase in German history”.

    Although the motion is non-binding, its significance both within Germany and across Europe is likely to be profound.

    In practical terms, German newspaper Algemeiner explains that today’s passing of the motion will “prevent ‘organizations which express themselves in an antisemitic manner, or question the right of Israel to exist’ from using ‘premises and facilities under Bundestag administration’”. It will also require the Bundestag “not to financially promote organizations that do not respect Israel’s right to exist”.

    On a European level, the motion could serve as a precedent for other parliaments to label BDS anti-Semitic. Several European countries have sought to crack down on the movement in recent years, most notably Spain which, at the behest of Israel, has dragged a number of municipal councils to court for announcing that they would support a boycott.

    The move could also pave the way for other groups to be labelled anti-Semitic for their criticism of Israel. By arguing that “the state of Israel can also be understood as a Jewish collective,” the passing of the motion will further narrow the space for criticism of Israel’s government and its policies by conflating this with anti-Semitic rhetoric.

    The Bundestag also voted today on two other anti-BDS resolutions: the first, which was submitted by the far-right Alternative for Germany (AfD) party, called on the German government to outlaw the BDS altogether; meanwhile the second, submitted by the left-wing party Die Linke, called on the government to condemn “anti-Semitism within” the BDS movement.

    The AfD’s proposed resolution called on the German government to “prohibit” BDS and “recognize the injustice done to Jewish settlers in Palestine by Arab calls for boycott, in cooperation and coordination with the Nazi regime”.

    It went on to denounce the distinction made between Israel and its illegal settlements, including the European Union (EU)’s labelling of Israeli goods made in West Bank settlements. It claimed that, in labelling the products as such, the EU had created a “de facto economic recognition” of an independent Palestinian state “without this being legitimate in any form”.

    At the time of writing, the results of the vote on the AfD’s proposed resolution have not been released. Die Linke’s motion, however, was rejected.

    Germany has waged a long-term campaign against BDS. Algemeiner reported that, last month, Bundestag members demanded that “Germany’s GLS Bank — the country’s most long-established ethical investment bank — close the account of a pro-BDS group calling itself ‘Jewish Voice’”.

    In March, three BDS activists stood trial for trumped-up claims of trespassing and assault after they protested against Israeli politician Aliza Lavie, who spoke at Berlin’s Humboldt University in 2017. The Humboldt3 as they have become known – Palestinian activist Majed Abusalama and Israeli activists Ronnie Barkan and Stavit Sinai – argued that “having criminal allegations leveled against activists is a common and standard practice in Germany.”

    They added:

    “We are, however, determined to use our relative privilege in order to turn the tables against Israel and take it to court. We do not concern ourselves with the consequences, but rather with the opportunity of challenging Israel along with Germany’s complicity in crimes against humanity.”

    Much of this crackdown comes at the behest of Israel, with whom Germany has historically maintained close relations. In October, Israel’s Minister of Jerusalem Affairs, Ze’ev Elkin, attended a conference in Belgian capital Brussels in a bid to convince European political parties to brand BDS anti-Semitic. The move was seen as an escalation of Israel’s war against BDS, for which it has reportedly set aside a war chest of $72 million and which has seen a number of smear campaigns launched against activists affiliated with the movement.

    Published:5/18/2019 7:25:31 AM
    [Markets] Where Global Alcohol Consumption Is Rising & Falling May Surprise You

    A study published in medical journal The Lancet this week has found that alcohol consumption is increasing across the world.

    Statista's Niall McCarthy reports that between 1990 and 2017, the total amount of alcohol grew from 21 billion liters to 35.7 billion liters, an increase of 70%. Low and middle-income countries are the driving force behind the trend with consumption going up 34 percent in Southeast Asia between 2010 and 2017.

    Moldova is the country with the highest rate of consumption with its inhabitants consuming 15 liters of pure alcohol every year on average in 2017. Kuwait was lowest with 0.005 liters consumed per year. The trend is expected to continue up to 2030 when Europe is no longer expected to have the highest levels of alcohol consumption.

    Between 2010 and 2017, a swathe of low and middle-income countries saw their alcohol consumption levels go up with Vietnam, India and China all posting noticeable increases. The following infographic takes a look at the trend during that seven-year period, focusing on a selection of countries from The Lancet's study.

    Infographic: Where Global Alcohol Consumption Is Rising & Falling  | Statista

    You will find more infographics at Statista

    In Vietnam, alcohol consumption skyrocketed nearly 90 percent while India also recorded a dramatic 37.2 percent increase.

    In many developed countries such as Spain, the UK, Canada and Australia, people have started drinking less.

    In Russia, consumption also fell 3.5 percent. The research also looked at the share of people worldwide who abstain from alcohol completely. The prevalence of abstinence fell from 46 percent in 1990 to 43 percent in 2017.

    Published:5/18/2019 6:54:57 AM
    [Markets] The Global Pivot Point

    Authored by Craig Murray,

    The massive economic shock following the banking collapse of 2007–8 is the direct cause of the crisis of confidence which is affecting almost all the institutions of western representative democracy. The banking collapse was not a natural event, like a tsunami. It was a direct result of man-made systems and artifices which permitted wealth to be generated and hoarded primarily through multiple financial transactions rather than by the actual production and sale of concrete goods, and which then disproportionately funnelled wealth to those engaged in the mechanics of the transactions.

    It was a rotten system, bound to collapse. But unfortunately, it was a system in which the political elite were so financially bound that the consequences of collapse threatened their place in the social order. So collapse was prevented, by the use of the systems of government to effect the largest ever single event transfer of wealth from the poor to the rich in the course of human history. Politicians bailed out the bankers by using the bankers’ own systems, and even permitted the bankers to charge the public for administering their own bailout, and charge massive interest on the money they were giving to themselves. This method meant that the ordinary people did not immediately feel all the pain, but they certainly felt it over the following decade of austerity as the massive burden of public debt that had been loaded on the populace and simply handed to the bankers, crippled the public finances.

    The mechanisms of state and corporate propaganda kicked in to ensure that the ordinary people were told that rather than having been robbed, they had been saved. In the ensuing decade the wealth disparity between rich and poor has ever widened, to the extent that this week the BBC announced the UK now has 151 billionaires, in a land where working people resort to foodbanks and millions of children are growing up in poverty.

    With the mainstream media employed entirely in diverting them from the true causes of their difficult lives, it is hardly surprising that ordinary people do not necessarily understand why a society has arisen where working hard does not enable them to work, eat and stay warm, and why the economic prospects of their children look so bleak. But they know that something has gone very wrong, they witness the vast wealth disparities of our unequal society and the deliberate dismantling of communal and altruistic public provision in favour of privatisation, and they feel contempt for their ruling classes, be they political, media or just wealthy.

    The rejection of the political class manifests itself in different ways and has been diverted down a number of entirely blind alleys giving unfulfilled promise of a fresh start – Brexit, Trump, Macron. As the vote share of the established political parties – and public engagement with established political institutions – falls everywhere, the chattering classes deride the political symptoms of status quo rejection by the people as “populism”. It is not populism to make sophisticated arguments that undermine the received political wisdom and take on the entire weight of established media opinion.

    Sometimes history appears to be approaching a pivot point, and then the weight swings back and nothing happens. But sometimes it does tip, and times such as these are times of great potential for change. I see hope, for example, in the upsurge of support for Green politics, and the happy convergence of popular political discontent with rising awareness over climate change. Jeremy Corbyn’s rise is in itself an example of the revolution in popular thought – that he is using the mechanism of one of the failed Establishment parties as his vehicle has both positive and negative consequences. In Scotland, of course, I remain anxious the revolutionary moment is being let slip and a new non-radical political class being firmly cemented into power, but retain an underlying confidence in the radicalism and will for self-determination of the Scottish people.

    These are stirring times. The popular rebellion against establishment politics is continually portrayed as an unwelcome aberration. It is not – it is a reaction to massive corruption and outrageous inequality. Everybody should fan the flames of change.

    *  *  *

    Subscriptions to keep Craig's blog going are gratefully received.

    Published:5/18/2019 6:24:09 AM
    [Markets] Crowd psychology says this ‘fool’s rally’ in stocks could fool bears A number of indicators suggest the stock market could extend gains.
    Published:5/18/2019 6:24:09 AM
    [Markets] Millions of Americans are just one paycheck away from ‘financial disaster’ Many consumers would turn to dangerous fallback options in order to make ends meet.
    Published:5/18/2019 5:24:45 AM
    [Markets] The Polar Silk Road Comes To Life As A New Epoch In History Begins

    Authored by Matthew Ehret via The Strategic Culture Foundation,

    Speaking at China’s second Belt and Road conference in Beijing featuring 37 heads of state, Russia President Vladimir Putin unveiled the intention to unite Russia’s Northern Sea Route with China’s Maritime Silk Road. This announcement should come as no surprise to anyone who has been paying attention to the close strategic friendship between both countries since the 2015 announcement of an alliance between the Russian-led Eurasian Economic Union and Belt and Road Initiative. This extension of the Maritime Silk Road represents a powerful force to transform the last unexplored frontier on the Earth, converting the Arctic from a geopolitical zone of conflict towards a new paradigm of mutual cooperation and development.

    Putin gave a speech at the BRI forum on April 26 stating:

    “the Great Eurasian Partnership and Belt and Road concepts are both rooted in the principles and values that everyone understands: the natural aspiration of nations to live in peace and harmony, benefit from free access to the latest scientific achievements and innovative development, while preserving their culture and unique spiritual identity. In other words, we are united by our strategic, long-term interests.”

    Weeks before this speech Russia unveiled a bold plan for Arctic development during the conference Arctic: Territory of Dialogue on April 9-10. This bold plan ties to the “Great Eurasian Partnership”, not only extending roads, rail and new cities into the Far East, but also extending science and civilization into a terrain long thought totally inhospitable. At this Arctic conference, China and Russia signed the first scientific cooperation agreement together setting up the “China-Russia Arctic Research Center” as a part of the Polar Silk Road.

    The BRI’s Success So Far

    The Belt and Road Initiative has already won over much of Africa as BRI-connected rail, ports, and other infrastructure are providing a breath of fresh air to nations long held hostage by IMF/World Bank conditionalities. Pakistan and much of Southwest Asia are also increasingly on board the BRI through the growing China-Pakistan Economic CorridorSeventeen Arab states consolidated 8 massive BRI infrastructure projects between April 15-16 and much of Latin America has also joined with hundreds of billions of dollars of infrastructure projects. Italy embraced this new BRI framework on March 23, and Greece joined the Central and Eastern European nations of the 16+1 alliance on April 9th. The Eurasian Economic Union is now in the final stages of a long planned economic treaty between China and the Russian-led economic block. Although America has been invited to the BRI on many occasions since its 2013 inception, no positive response has been permitted by the NATO-Deep State power structures manipulating the west.

    While China’s activity in the Arctic is only manifesting now, its Arctic Strategy began many years ago.

    The importance of the Arctic Silk Road for China

    China deployed their first Arctic research expedition in 1999, followed by the establishment of their first Arctic research station in Svalbard, Norway in 2004. After years of effort, China achieved a permanent observer seat at the Arctic Council in 2011, and began building icebreakers soon thereafter surpassing Canada and nearly surpassing the USA whose two out-dated ice breakers have passed their shelf life by many years.

    As the Arctic ice caps continue to recede, the Northern Sea Route has become a major focus for China. The fact that shipping time from China’s Port of Dalian to Rotterdam would be cut by 10 days makes this alternative very attractive. Ships sailing from China to Europe must currently follow a transit through the congested Strait of Malacca and the Suez Canal which is 5000 nautical miles longer than the northern route. The opening up of Arctic resources vital for China’s long term outlook is also a major driver in this initiative.

    In preparation for resource development, China and Russia created a Russian Chinese Polar Engineering and Research Center in 2016 to develop capabilities for northern development such as building on permafrost, creating ice resistant platforms, and more durable icebreakers. New technologies needed for enhanced ports, and transportation in the frigid cold was also a focus. China additionally has a 30% stake in the Yamal LNG Project and the ‘Power of Siberia’ 3000 mile pipeline to China is 99% complete and will soon be the primary supplier of China’s oil and natural gas needs.

    Where the Belt Goes, the Road Follows

    While the Belt and Road features two components (land and sea), the fact is that they are inextricably connected. Rails, ports and other civilization-building practices driven by a belief in scientific and technological progress have given this design a power and flexibility to adapt to every nation’s chosen developmental pathways. This is the mysterious “secret ingredient” to the BRI’s powerful adaptability which boggles the minds of closed-minded geopoliticians who can only think in zero-sum terms.

    Scientific and technological progress, when shaped by the intention to uphold the common good represent UNIVERSAL requirements for human survival and satisfy a creative yearning at the deepest core of all people. Without this commitment to the continual improvement of productive powers of society and quality of life, a society will always be divided by the localized self interest of its parts fighting for their own short term benefits. Such has been the fate of the west as it embarked upon a consumer society driven by a “post-industrial mode of existence”after the assassinations of the 1960s and floating of the US dollar in 1971.

    This concept of the common development of mankind both as a whole and in all of its parts was echoed recently by Xi Jinping who stated:

    “China is ready to jointly promote the Belt and Road Initiative with international partners. We hope to create new drivers to power common development through this new platform of international cooperation; and we hope to turn it into a road of peace, prosperity, openness, green development and innovation and a road that brings together different civilizations.”

    The BRI summit closed on April 27 with 37 Heads of State, and over 5000 leading participants from the public and private sector. Billions of dollars in BRI contracts were signed and the ideas that will carry humanity into the coming decades were displayed brilliantly. The future orientation of the BRI and the Russia-China alliance doesn’t stop with Earth based development, but extends also towards space exploration and colonization of other planetary bodies such as the Moon and Mars development programs to which both China and Russia have committed to in recent months.

    The cage of delusions holding the Trans-Atlantic system together is cracking ever faster by the day with Trump’s continued fight against the British-run Deep State producing surprises such as the US-China collaboration during China’s historic landing on the far side of the moon on January 3, and his recent appeals for China-US-Russian cooperation. Following Italy’s lead, patriotic forces in Switzerland and Luxembourg signed MOUs with China’s Belt and Road creating a precedent for more Trans-Atlantic nations to jump on board the new emerging paradigm.

    Published:5/17/2019 10:53:46 PM
    [Markets] Fake Has Become Realer-Than-Real And The Dogs Of War Are There To Keep It That Way

    Authored by Denis Conroy via The Saker blog,

    America’s self-imagined custodianship of human rights and freedom epitomize problems associated with fake prophesies. That Americans now rally behind the latest battle-cry of the Republic, ‘Make America Great Again’, indicate that they are indifferent to the fact that their country has been barnstorming across the globe these past six decades killing vast numbers of innocent people with the objective of creating a pre-eminently militaristic empire to strategically control the skies, oceans, their market-share plus control of space. In implementing these belligerent objectives, the US has repeatedly unleashed auto-da-fés to destroy many countries across the globe who failed to fall in line.

    Foremostly, America’s firebrand passage through Muslim countries clearly illustrate how a neophyte culture with racist baggage can implode the nation’s reputation, leaving it bereft of respect and credibility. This now appears to be what is happening in America. The two-tiered (or three) aspect of this enterprise requires closer examination.

    It would appear that ‘greatness’ in the American context amounts to nothing more than upholding vulgar white-middle-class racist values as the measure of excellence, with fake ‘principled’ notions of cultural superiority leading the chase. When the dogs-of-war were unleashed to wreak havoc, pillage and plunder on the habitats of millions of hapless people across the globe, the silence of so-called conscionable America was deafening.

    Violence had become an American staple and the voice of the Peace Movement is all but mute. It’s now impossible to ignore the fact that the three tiers of state, the top tier, the middle tier and the lower tier…the three classes…collude in a program whose singular use of power expresses an unwavering desire to ride the gravy train to the hilt and devil take the hindmost.

    These three classes, battle hardened and indifferent to the chaos caused by their bloodthirsty military have been blindsided by their own government. There is the sense that the flag… the stars-and-strips…has become the nation’s birth certificate and each person’s birth certificate a little bit of a collective ‘stars and stripes’ denouement that entitles them to extrajudicial considerations and the right to be proud of their dubious record. However, finding one’s niche in this hierarchal edifice is another matter altogether.

    The Wall Street Journal and the New York Times are missives of choice for the middle class in matters relating to America’s monopolistic capitalist system. Predatory incursions into foreign countries resulting in bloodshed are routinely explained away in false-flag gibberish or in some other fashion to justify the actions of the government. This business of doing business attitude exists to negate everything else and the middle-class appear to have no qualms with this scenario. The sub-text here being, as God’s own people they believe that they have the right to expect ‘mana-from-heaven’ to rain down upon them from all quarters of the globe.

    For the working class however, tweeting along with the paymaster appears to be an act of convenience. But when the music stops, as it most certainly will, the birthright question (all men are equal) will inevitable come into contention again when the issue of inequality needs to be confronted. However, the next generation may be more strident should they once again find themselves being herded back into a holding-pen position to await casino-capitalism’s next ‘flurry’ at the roulette table.

    But irony of ironies, the New York Times and the Wall Street Journal etc. are merely institutions that employ smoke and mirror tactics to conceal the nastiness of a two-tiered (or three) system that entails subjecting the public to a game of musical chairs, whose prime objective is to unseat a competitor each time Wall Street chooses to play its favourite game of ‘pass-the-stock-market-parcel’…the one designed to consolidate wealth in fewer hands each time it is played.

    Musical chairs, also known as Trip to Jerusalem, is a game of elimination involving players, chairs, and music, with one fewer chair than players. When the music stops whichever player fails to sit on a chair is eliminated, with a chair then being removed and the process repeated until only one player remains. Alas! The origins of the game are unknown. On the other hand, we may safely assume that Karl Marx or Antonio Gramsci are not its authors.

    So, the questions we need to ask here are, have Americans taken to wearing masks to hide their lack of conscience, like their President wears his hairpiece… do their masks, like Donald’s hairpiece, only make an appearance when orchestrating auto-da fes, or when administering sanctions designed to economically incinerate…or starve… apostates?

    Or should we defer to another Donald…Donald Rumsfeld…for insights into America’s moral stature. “We don’t know what we don’t know. There are too many unknowns too many factors that we may not have yet considered,” said he. Which, when translated might mean, ‘Life is like a game of musical chairs and America has the right to take occupancy of the limited number of chairs available or our armed forces will be forced to use terror to procure knowable ends that are ultimately unknowable but desirable because they make us feel great.’

    Narratives fed to the public by special interest groups come as hybridised versions of Hollywood cypher-speak-gibberish and are passed off as truths to the public for the purpose of indoctrinating them. A continuous repetition of false declamatory statements praising American exceptionality pour from the media to reinforce fake news. If there were a Noble Peace prize for hypocrisy, it would surely go to America.

    America, the so-called leader of the so-called free world is awash with fallacious narratives that are put in place by corporate entities to implement a two-tiered (or three) system that strives to gain support in the public domain by using fearmongering tactics to implement its propaganda in every way possible. Fake narratives ceaselessly eat into public consciousness while cleverly concealing their real purpose, which is full spectrum Mafioso dominance. Think of the numerous corporate ploughshares that have insidiously penetrated a country near you!

    As we now live in a technological age that has provided humans with the ability to engage in nuclear Armageddon, we can’t help but notice how worse-case scenarios abound. Some even suggest that evolution has run out of steam. Mutually Assured Destruction doctrine (MAD) is a minefield without canaries and we, in the lower tiers, are left painfully aware of our impotence on discovering that we are without a voice in the decision- making process. We are required to seal our lips and accept the reality that nuclear buttons now hang over our heads like the sword of Damocles.

    We are constantly reminded that states exist, super and otherwise, their nuclear dogs-of-war straining on the leash in readiness should lines be crossed. We are repeatedly reminded of the fact that it is now possible to cause enormous casualties and destruction to civilian populations anywhere in the world by simply pressing a button from thousands of miles away.

    We can no longer feel free because we can no longer free ourselves from the shadow of Dr. Strangelove. The more bloated the military budget becomes, the deeper we sink into gloom upon realizing how our anxiety increases exponentially with increases to the military budget.

    Knowing that unknown knowns have consigned us to carceral spaces where modern-day Caesars busy themselves toying with their nuclear buttons, suggests that the middle and working classes have become prisoners in an ill-defined reality. The knowledge that capitalism engenders fear through its ‘security’ narrative has now become the problem. The ideology that keeps capitalism frothing at the mouth has produced its own evil doppelganger…a pedagogic Promethean pariah responsible for global degradation, its power ever more lethal in a world that has learned to fear its score card.

    Four in ten Americans sometimes face what economists call “material hardship,” struggling to pay for basic needs such as food and housing, according to a new study from the Urban Institute. Even middle-class families routinely struggle financially and are occasionally unable to pay their bills and more and more ordinary citizen are beginning to feel that they no longer have a part to play in a secular agenda that has become the property of the military establishment.

    So, the problem now is that civilians seem unable to deal with facts. A shut-the-fuck-up mentality now exists to banish issues that relate to questions relating to social criteria and the people who write and whistle-blow the inequities of their government. People are relentlessly exposed to facts, but as civilians, are incapable of dealing with them. Facts appear on electronic screens ad nauseam to reveal how citizens have become captive to a static reality that uses fearmongering as a way of castrating public dissent. Facts that indicate that only the elite have skin in the game are everywhere in evidence.

    At the Colosseum level…the elite level…the grand referee in the orange hairpiece keeps tweeting dealership gibberish while the classes in the lower tiers are expected to remain on standby to applaud this kind of hubris. Many are amused but few are chosen…unless you are an exponent of the rules of Republican Likud or are Likud Democrats building separation walls to keep Zion in and Allah out, per medium of a nasty game of musical chairs…a la currency wars!

    Secondary development is fine, but at what cost to that primary narrative within us that depends on freedom of expression? It is ironic that many of the ‘learned’ amongst us strategically position themselves between the people and the elites, thereby limiting the potential for development within the masses. Traditionally, the policy of our rulers…shepherds… was to herd the ‘sheeple’ into the shepherd’s fold, lest he or she escape the soporific effects of propaganda or holy writ. To our great dismay, most of our teachers to this day do little other that look in the rear-view mirror for inspiration.

    Justifications for releasing the ‘Dogs of War’ on civilians who can’t defend themselves are inevitable meaningless. For example, the American-Zionist agenda which manufactures fear for the purpose of manufacturing enemies for the purpose of manufacturing wars, has of itself become a war on truth. Sadly, the reason why investigative reporting became so highly selective is that in the US, truth had lost its place in the established media. The fact of the matter is, white-middle-class Americans respond with pique when confronted with criticism of their values. Sadly, exposing the injustices perpetrated on Muslims, Palestinians or Black People is a matter of little concern…a poignant example of what happens to complacent people when they turn away from the truth.

    What William Kristol and Robert Kagan proposed when helping to draft the ‘Project for the New American Century’, was a manufactured narrative that led the average citizen to believe that their security depended on elites who could explain the threats they were exposed to...a win-win solution designed to keep them believing that they needed the protection of elites. And what the elites were telling them was that the military establishment was a bulwark against chaos, and the destruction of their state and the possibility that they might become subservient to non-white people.

    The West, having created a bifurcated paradigm called democracy sold it to the public as a vector capable of promoting the verity of good governance. But unfortunately, as all paradigms contain bias, the model in question went to great lengths to conceal the presence of the schism within. An upper tier and a lower tier came into existence, whereby the resolution of conflicts was subject to the veto powers of the upper tier. Soon the upper tier set about training minds in the lower-tier to shepherd the resources of the state in ways that benefited the upper-tier. Sadly, over time, the upper tier became more interested in the subject of fiscal welfare (for themselves) rather than pursuing outcomes that could serve the interests of the entire polity.

    The bifurcated concept of democracy as propounded by our learned founding-fathers was from the beginning a sleight of hand operating in deference to proprietorial principles enabling the architects of the system to retain control of their plan by fostering the notion that their vector of choice, democracy, could deliver justice for all.

    In the US, a tiny number of people cream off virtually all the wealth. Ever since the first Cold War, the ‘sheeple’ have been led to believe that an external threat to their security existed and that it could only be managed by the ruling elite. Spending money to secure the two-tiered realm would require the creation of a global military force capable of warding off threats to American hegemony.

    In recent times, emotions pertaining to loss of kudos led to acrimonious debate within the US. Insisting that the Western alliance would work better if individual members paid a bigger share of the costs involved in maintaining NATO came to the fore. This policing agency, the tip of the economic iceberg that was put in place to secure right-of-passage for US hegemony in the first instance, was now upping the ante…the cost of missiles had increased. To date, the dust may have settled, but the opprobrium (phlegm) released by Emperor continues to rile the ruled.

    In middle America…the beltway…the media, academia and the entertainment industry share a quasi-moral narrative which floats like an iceberg in an inland sea. This inland sea has a mirror-like surface which reflects the vanity of its citizenry who need to bathe in the unholy waters of hubris. For the upper and middle classes, focusing on America’s military might enables them to revel in unadulterated vainglory. Hubris within the upper class had reached a point where debasement of human values became the norm. Celebrations of inhouse grandiosity suggesting that inverted middle-class American perspectives had passed their use-by-date.

    And as the wealth of the nation continued its rise upwards, the lower tier showed signs that something had become unsustainable. The top-heaviness of the unequal economic order had begun to impact unfavourably on the lower tier. From the anonymity of the sheep-pen, the so-called sheeple people had discovered a flaw in that aphorism which stated, ‘the more things change, the more they stay the same’. They discovered that these perspectives were held by pedagogic Prometheans peering into histories rear-view mirrors. They were teachers who would never experience the thrill that came with grassroot activity or feel passions that could change the course of history.

    Published:5/17/2019 10:22:20 PM
    [Markets] 5 things to cut out of your diet right now to reduce high blood pressure and lower the risk of heart failure A study of 4,500 people over 13 years and published in the American Journal of Preventive Medicine comes to some surprising conclusions
    Published:5/17/2019 10:22:19 PM
    [Markets] Will Robot Tractors Save America's Farming Industry After It Crashes? 

    Agriculture automation has the potential to reshape the farming industry in the 2020s and beyond.

    A new analysis from Bloomberg shows robot farm equipment is becoming commercially available, which means tractors will have no cabs - able to spray, plant, plow, and weed cropland with artificial intelligence.

    Autonomous farming is a popular theme among all farming equipment manufacturers. Several years ago, the Australian government studied robot tractors from John Deere, Case New Holland, CNH Industrial, AGCO, CLAAS, Same Deutz-Fahr, and Kubota. The key takeaway from the matrix below is that Deere and CNH are leading when it comes to making tractors fully autonomous, with both companies having released working prototypes.

    Bloomberg notes that several startups in Canada and Australia have already made their autonomous farm equipment commercially available.

    In Saskatchewan, a Canadian province that borders the US, Dot Technology Corp. sold fully autonomous power platforms for the spring planting season.

    In Australia, SwarmFarm Robotic is selling weed-killing robots that can also mow and spread. These companies say their new machines are much smaller and efficient than traditional field equipment.

    Sam Bradford, a farm manager at Arcturus Downs in Australia's Queensland state, was one of the first adopters of SwarmFarm's robots last year. He has four truck-sized weed-killing robots to manage thousands of acres.

    Before, Bradford had used a Case Patriot 4430 Sprayer with a 120-foot boom that "looks like a massive praying mantis." It would cover the field in chemicals, he said.

    However, robots are more precise than traditional sprayers. Bradford said his robots work 20,000 acres, will save him 80% of his chemical costs.

    "The savings on chemicals is huge, but there's also savings for the environment from using less chemicals and you're also getting a better result in the end," said Bradford, who's run the farm for about 10 years. Surrounding rivers run out to the Great Barrier Reef off Australia's eastern cost, making the farm particularly sensitive over its use of chemicals, he said.

    Costs savings have become important as a deepening trade war has sparked a potential agriculture recession in the US. On top of that, spot prices for agriculture products have been in decline for five years.

    The S&P GSCI Grains Index Spot has collapsed more than 50% in 81 months from the August 2012 peak. Meanwhile, inflationary cost pressures have been seen in farming equipment, labor, seeds, fertilizers, fuel, and other farming inputs has led to low margins.

    Personal incomes plummeted the most in three years last quarter, as the entire industry is on the verge of collapse from the ongoing trade war.

    Trade wars, depressed commodity prices, natural disasters, and a synchronized global slowdown have brought many farmers onto the edge of bankruptcies.

    Several months ago, we reported that federal data showed the number of farmers filing for bankruptcy has climbed to its highest level in a decade.

    A farm crisis has developed across the American Heartland. Farmers will need to adopt robots to achieve higher profitability and efficiency in operations. SwarmFarm's Chief Executive Officer Andrew Bate said robots would allow farmers to grow crops more efficiently, adding to their bottom line.

    Before the start of Saskatchewan's growing season, Dot sold autonomous tractors to farmers throughout the region.

    Alex Purdy, head of John Deere Labs and director of precision agriculture technology, said, Deere hasn't released fully autonomous tractors because the technology hasn't yet matured to replace people.

    Purdy said artificial intelligence, deep learning, and advances in computer vision would transform agricultural machinery even further.

    Brett McClelland, product manager of autonomous vehicles at CNH Industrial, said the modern tractor does thousands of tasks, and to fully automate those tasks, a deep understanding of each is needed to automate them.

    One of the most challenging areas is "sensing and perception," said McClelland.

    CNH Industrial revealed an autonomous tractor at the 2016 Farm Progress Show in Boone, Iowa. The tractor is still undergoing test pilots and not yet commercially available.

    The proliferation of commercially available farm robots could be what save's the American farming industry after it crashes in the early 2020s. 

    Published:5/17/2019 9:53:10 PM
    [Markets] Attention Millennials: You Can Now Buy Tiny Homes On Amazon 

    One of the main goals of the Federal Reserve's monetary policies of the past decade was to generate the "wealth effect": by pushing the valuations of homes higher, would make American households feel wealthier. But it didn't. Most Americans can't afford the traditional home with a white picket fence around a private yard (otherwise known as the American dream), and as a result, has led to the popularity of tiny homes among heavily indebted millennials.

    Tiny homes are popping up across West Coast cities as a solution to out of control rents and bubbly home prices, also known as the housing affordability crisis. 

    Amazon has recognized the hot market for tiny homes among millennials and has recently started selling DIY kits and complete tiny homes.

    One of the first tiny homes we spotted on Amazon is a $7,250 kit for a tiny home that can be assembled in about eight hours.

    A more luxurious tiny home on the e-commerce website is selling for $49,995 +$1,745.49 for shipping. This one is certified by the RV Industry Association's standards inspection program, which means millennials can travel from Seattle to San Diego in a nomadic fashion searching for gig-economy jobs.

    Those who want a 20 ft/40 ft expandable container house with solar energy, well, Amazon has that too. This tiny home has it all: a post-industrial feel using an old shipping container, virtue signaling with solar panels, full bathroom, and a kitchen to make avocado and toast. 

    With almost two-thirds of Millennials living paycheck to paycheck and less than half of them have $500 in savings, we're sure this lost generation could afford one of these trailers tiny homes with their Amazon credit card. Nevertheless, the tiny home craze among millennials is more evidence that living standards are collapsing.

    Published:5/17/2019 9:22:48 PM
    [Markets] What Does It Take to Trigger a Stock-Market Selloff, Anyway? Investors have become accustomed to central banks stepping in to bail out the market. Has something fundamentally changed? Published:5/17/2019 8:51:55 PM
    [Markets] "Cultural Schizophrenia": US Media No Longer Reports Facts, But Appeals To Emotions

    Authored by Mac Slavo via SHTFplan.com,

    The mainstream media in the United States has made a shift in the past few decades.  Now, they appeal to emotions as opposed to reporting the facts. This “cultural schizophrenia” is tearing the U.S. apart at the seams.

    Based on the conclusions to a RAND Corporation study, the mainstream media is actively sowing discord in American society, award-winning journalist Chris Hedges tells RT. The media is focusing on making two sides hate each other instead of reporting on the facts, and the majority of the public is unaware and doesn’t care that their minds are being manipulated by their own emotional responses.

    The study, which was released by RAND earlier this week, states that between 1987 and 2017, news content has shifted from event- and context-based reporting to coverage that is more subjective, relies more heavily on argumentation and advocacy, and includes more emotional appeals.” According to RT,  prime-time cable news shows and online journalism lead the way in this shift to emotional and hate-based rhetoric. It has been noticed in print journalism as well, the government-funded think tank concluded.

    This is contributing to what RAND termed “Truth Decay.” This is described as a shift away from facts and analysis in public discourse.

    Hedges claims that the deterioration of the mainstream media is “far worse” than the RAND report suggests. And he isn’t alone in that assessment.

    [American journalist Matt]Taibbi says that the result of this journalistic decay and emotional fear mongering is a public addicted to hating each other.

    Americans have become addicted to the news that agrees with their bias, and it was set up that way on purpose. The only thing anyone will hear when they turn on the news are stories specifically crafted to manufacture outrage, make you hate the other side, and fuel the addiction to anger. –SHTFPlan

    The mainstream media has succeeded in addicting the average American to anger and hatred. The idea that the media could profit off of facts was lost long ago. 

    Commercial structure that created the old media is gone and it has eviscerated journalism within the country because it is not sustainable. We saw it with the collapse of the classified advertising, which was 40 percent of the newspapers’ revenues. It is not sustainable economically anymore, Hedges said.

    It is becoming difficult to tell apart facts and opinion now, and people believe whatever they want to believe, Hedges explained. We spent years watching CNN and MSNBCpromoting this conspiracy theory that Trump was a Kremlin agent… It was all garbage but it attracted viewers,” Hedges added as an example. And, if you don’t mind your IQ dropping, turn on MSNBC for just a few minutes. It’s likely you’ll still hear something about Russiagate to keep the public pissed off beyond comprehension.

    Now people can claim their emotions as facts and never have to actually view anyone who disagrees with them as a fellow human being.  This will be successful at keeping the fighting amongst the public as the politicians steal more of their money, take away more of their freedom, and get away with it.

    “It creates cultural schizophrenia, Hedges said, noting that he observed this during the collapse of Yugoslavia in the 1990s. At that time, the media drove antagonisms and hatreds between ethnic groups. Similar things are happening in the US right now, as right-wing media are demonizing Bernie Sanders and Barack Obama by comparing them to Hitler and the left-wing media label all Trump supporters as racists and deplorables,” Hedges saidIt all creates societal fragmentation and discord,” Hedges told RT.

    These schisms could lead to civil unrest – that is what happens here.”

    “You can sway a thousand men by appealing to their prejudices quicker than you can convince one man by logic.”
    ? Robert A. Heinlein

    Published:5/17/2019 8:51:55 PM
    [Markets] Cartels "Kicking Our Butts" In New Mexico As State Left Without Checkpoints

    Authored by Daniel Horowitz via ConservativeReview.com,

    What happens when our government takes down its interior checkpoints north of the border in New Mexico? Well, the cartels, with the drug and human smuggling, are “kicking our butts,” according to one local official.

    In an interview with CR, Couy Griffin, the chairman of the Otero County, New Mexico, county commission, explained how our government has exposed his county, and by extension, the rest of the nation, to unprecedented criminal activity from the Mexican cartels. In his view, by taking down the two secondary Border Patrol checkpoints in his county in order to focus on more processing of illegal immigrants, the federal government is missing the point.

    “The cartel is winning and winning big; they are kicking our butts,” complained the commissioner of this sparsely populated but large county bordering Texas, near El Paso.

    “We get so tied up and focused on the asylum seekers or the illegal immigrant aspect of what’s going on at our southern border, but the reality of it is that it’s nothing but a mere smoke screen for the cartel. They’re using these large groups of migrants as nothing more than a smoke screen to smuggle their drugs across the southern border. Meanwhile, as soon as those agents are exhausted, those critical spots, they’re sending boatloads of drugs across the border in unsecured areas. The shutting down of the checkpoints on the major drug smuggling corridors is a recipe for disaster. Now they have a green light to shuttle drugs through our counties and through our rural areas, with no security in place.”

    Otero County, while itself not on the international border, has two highways originating from the two main border towns where the illegal immigrants are coming in and the cartels are operating – U.S. Highway 70 and U.S. Highway 54. For years, there has been a checkpoint on each highway on the way to Alamogordo, the foremost town in this county. Griffin noted that while the cartels used to relegate their activity to remote parts of the southeast corner of the county, “Now, with our checkpoints being shut down, there’s no need to take it out to the middle of nowhere when they can just run it right up to main road.”

    Otero County Sheriff David Black told me that his tiny three-man narcotics team and other deputies now have to deal with the cartels all on their own without any help from Border Patrol: “We have rerouted all of our overtime money to interdictions on the highway.” Black noted that his informants tell him the large stash houses in El Paso and even in source cities in Mexico like Juarez are now empty because the cartels “are taking advantage of the unprecedented open borders because nothing is stopping them.”

    Obviously, his three-man narcotics team catches only a small amount of the drugs, but what they’ve seen demonstrates the relationship between the surge in the border migration distracting agents, the taking down of checkpoints, and the increased drug traffic.

    “In February, before the closing of the checkpoints, we seized $3,500 worth of drugs, including meth, heroin, and marijuana. In March we seized $23,000, and in April we seized $61,790. For our county, that’s a lot.”

    In total, there are six checkpoints in the El Paso Border Patrol sector: one in El Paso County, Texas, two in Otero County, N.M., and three in Doña Ana County, N.M. Customs and Border Protection has confirmed with CR that all six remain shut down. Thus, there is not a single checkpoint operating in New Mexico. While the politics of Doña Ana County and the central state government in the urban areas of Albuquerque and Santa Fe have rolled out the welcome mat to illegal immigration and cartel activity, officials in the more conservative and rural counties, such as Otero and its neighboring county to the north, Lincoln, resent the secondary effects and fear that more is coming.

    “I’ve never seen all these checkpoints closed in my life, and I’ve been in Lincoln and Otero Counties for 30 years,” said Lincoln County Sheriff Robert Shepperd in an interview with CR.

    “I have friends who are out on ranches who now have to lock their doors and do things they shouldn’t have to do. It’s eerie watching these checkpoints look like ghost towns.”

    Sheriff Black in Otero believes that in the greater El Paso area, the cartel operatives are picking up those who sneak in while Border Patrol is tied down. “I guarantee you they are picking them up in truckloads and driving them north with nothing stopping them in our county.” Black feels a responsibility not only for his county but as a gatekeeper for the entire country. But he has only the resources of a 65,000-person county to deal with the largest transnational criminal organizations at a volatile international border.

    The El Paso-Juarez region is a hotbed for transnational cartel and gang activity. Kyle Williamson, the special agent in charge (SAC) for the DEA’s operations in the El Paso sector, explained to me in an interview last week that three major cartels are operating in the region: Sinaloa, Cartel Jalisco Nueva Generación (CJNG), and La Linea (Juarez Cartel). They are all served by three major transnational gangs operating in the Juarez-El Paso region, including the violent Barrio Aztecas, which were just elevated to a Tier 1 threat by Texas DPS’ gang threat assessment. According to Williamson, Sinaloa is still the dominant cartel in the region, but Cartel Jalisco New Generacion is “coming on strong and pushing a lot of meth.”

    Williamson echoed the concerns of the local officials about the lack of checkpoints – with a federal perspective of particular concern to the DEA. “When they catch drugs at the checkpoints, unlike at the points of entry, we as DEA actually respond to those. At the points of entry, it’s Homeland Security Investigations that responds. Border Patrol catches a lot of drugs at those checkpoints, then we go out there and take the prisoners and drugs, continue to develop the investigation and get them into court.”

    Thus, when the Border Patrol is diverted in order to process the influx of illegal aliens, it hampers the DEA’s core mission. “These checkpoints are a very effective and important second line of defense, absolutely vital and necessary.”

    And while most of the politicians and the media are focused on opioids, Williamson believes there needs to be more attention paid to meth.

    “My biggest threat in New Mexico and West Texas is methamphetamine without a doubt. When you talk about Mexican cartels, the transnational criminal groups, and drugs, you can’t do so in the same breath as the opioid crisis.”

    On top of the diverted federal resources, the more conservative rural counties in New Mexico must deal with the open-border policies of the governor, who doesn’t seem concerned about the empowerment of the cartels or the drugs coming into her state. Earlier this year, Governor Michelle Grisham scoffed at the notion that there even was an emergency and initially rebuffed requests for help from Hidalgo County when it was slammed with thousands of migrants. She even removed the National Guard troops from the border, who could have been used to free up more border agents, so they could return to the checkpoints.

    Three weeks ago, Couy Griffin and his fellow commission members declared an emergency in Otero Countybecause of the closure of the checkpoints. “If Governor Grisham really had a heart for the people, she would redeploy the National Guard to our border, which would relieve those agents from the border to come back to our checkpoints, but she won’t do that,” said Griffin in our interview.

    Couy believes it all boils down to politics.

    “The politics of our state is what’s killing our state. It all just boils down to politics.”

    Meanwhile, as American leaders fight over politics, cartel leaders fight over turf, drugs, and human smuggling routes made possible by these policies. Those with years of experience in law enforcement seem certain that things will only get worse from here. “About six months down the road is when we are going to start seeing a spike in property crimes and a spike in overdoses,” predicted Sheriff Black ominously. “We have not seen the worst of it yet; it’s still coming.”

    Sheriff Shepperd sees the same picture just one county north. “It’s like the calm before the storm.”

    Published:5/17/2019 8:23:24 PM
    [Markets] What China Wants to Avoid in Trade Talks: Becoming the Next Japan Chinese media contend that U.S. negotiators aim to thwart China’s rise, just as they ended Japan’s ascendancy 34 years ago, via an unfavorable deal. Published:5/17/2019 7:54:13 PM
    [Markets] Iran Used Underwater Drones In Tanker Attacks, Insurer Claims

    Investigators say last Sunday's mysterious "sabotage" attack on four tankers which included two Saudi ships off Fujairah in the United Arab Emirates was "highly likely" the work of Iran's elite Revolutionary Guards (IRGC) deploying underwater attack drones

    Specifically an IRGC surface vessel is believed to have launched the underwater drones packed with between 30 and 50kg of explosives which detonated on impact, according to a new report issued this week by the Norwegian Shipowners’ Mutual War Risks Insurance Association, known as DNK. Among the vessels hit were a Norwegian-flagged vessel as well as a UAE ship. 

    A new report by Reuters summarized the Norwegian insurance investigators' preliminary findings as based on analyzing shrapnel from the attacks which was "similar" to shrapnel recovered from surface drones used off Yemen by Iran-backed Houthi militia.

    Illustrative image of underwater drone via the WSJ.

    However, the insurance assessment seen by Reuters is "confidential" with an investigation still ongoing, and thus must be treated with skepticism.

    Further, the evidence appears largely circumstantial at this point, with Iran's guilt appearing to hinge on the assumption that shrapnel from Houthi operations and remnant material found at the port of Fujairah are from the same source. 

    Reuters lists the following summary points and "evidence" from the DNK assessment which allege the IRGC's inolvement as follows:

    • A high likelihood that the IRGC had previously supplied its allies, the Houthi militia fighting a Saudi-backed government in Yemen, with explosive-laden surface drone boats capable of homing in on GPS navigational positions for accuracy.

    • The similarity of shrapnel found on the Norwegian tanker to shrapnel from drone boats used off Yemen by Houthis, even though the craft previously used by the Houthis were surface boats rather than the underwater drones likely to have been deployed in Fujairah.

    • The fact that Iran and particularly the IRGC had recently threatened to use military force and that, against a militarily stronger foe, they were highly likely to choose “asymmetric measures with plausible deniability”. DNK noted that the Fujairah attack had caused “relatively limited damage” and had been carried out at a time when U.S. Navy ships were still en route to the Gulf.

    The attack location, so close to the entrance to the Strait of Hormuz - which the IRGC has previously threatened to close in order to strangle global oil shipping - was also a key factor in pointing to Iran's guilt, according to the report. 

    The DNK noted the sabotage attacks occurred between six and 10 nautical miles off Fujairah, just off the vital and narrow strait. No boat was sunk, but the Saudi-flagged crude oil tanker Amjad and the UAE-flagged bunker vessel A.Michel had damage to their engine rooms. 

    Norwegian oil tanker Andrea Victory, one of the four tankers damaged in alleged underwater drone "sabotage attacks" early this week. Via the AFP

    The insurance assessment lines up with Saudi and US accusations which came quickly on the heels of the bizarrely timed incident (following Bolton's previously announced heightened "Iran threat" against US troops and allies in the region) that Iran orchestrated it to show its military has the power to disrupt global oil markets. 

    The WSJ had reported just a day after the alleged attack that according to an initial U.S. assessment, "Iran was likely behind the attack" on the four vessels, according to an anonymous US official. Iran for its part dismissed these and other accusations as part of "psychological warfare" - according to one top Iranian parliamentarian and spokesman

    Meanwhile, we could actually be headed toward rapid de-escalation even as US warships continue to enter the Persian Gulf late this week, as multiple headlines Friday noted "Trump doesn't want war" and appears to be clamping down on hawks in his own administration

    And perhaps most interesting is that Trump tweeted something which actually lends credibility to Iran's dismissing both the "sabotage" accusation and heightened bluster out of Washington over the past two weeks as a continuing Psyop, part of Bolton and Pompeo's broader "maximum pressure" campaign. 

    Trump tweeted the following astounding statement on Friday: "With all of the Fake and Made Up News out there, Iran can have no idea what is actually going on!"

    Published:5/17/2019 7:54:13 PM
    [Markets] Farm Crisis: Suicides Spike In Rural America As Trade War Deepens

    The deepening trade war between the US and China has roiled complex global supply chains and America's Heartland. The latest breakdown in negotiations comes at a time when soybean exports to China have crashed, and huge stockpiles are building, have resulted in many farmers teetering on the verge of bankruptcy. Mounting financial stress in the Midwest has allowed a public health crisis, where suicide rates among farmers have hit record highs, according to one trade organization's interview with the South China Morning Post.

    Bill Gordon, a fourth-generation farmer in Worthington, Minnesota, who is also vice-president of the American Soybean Association, warned that spot prices for agriculture products have dropped so low, many in the Midwest can't even service their debts or also pay their bills. Farmers are losing their land to creditors daily. This has triggered the suicide rate among farmers to jump in the last several years.

    "The markets are so low, we cannot even break even to pay our bills. Farmers are losing their farms every day. The suicide rate among farmers is at an all-time high," Gordon said.

    "It is not up to us to tell the president how to negotiate, but a handout from the government is not how I want to run my business," Gordon explained while talking about President Trump's bailout of farmers and the possible use of the Commodity Credit Corp., a federal agency given authority during the Great Depression, to buy $15 billion worth of agricultural product from farmers.

    "It took us 40 years to build these markets … and while no trade deal is perfect, for the most part the agriculture trade with China was on the up and up, or mutually beneficial," he said.

    Agricultural economist Scott Irwin, a professor at the University of Illinois Urbana-Champaign, told the Post that farmers right now are losing $50 to $100 on corn and soybeans per acre. This excludes the government bailout, he said.

    Irwin believes the Trump administration will hand out checks to farmers rather than using the Commodity Credit Corp. to buy physical crops.

    "They are likely going to roll out that Market Facilitation Programme and probably expand it because Trump believes he has plenty of money to cover any checks he is going to write the farmers," Irwin said.

    "Every developed country in the world subsidizes its ag sector," he said. "We have an over 80-year history of doing that here in the US. If it is socialism, it is not new socialism."

    Soybean futures fell 25% in 50 weeks since the inception of President Trump's trade war early last summer.

    CBOT Soybeans futures plunged to their lowest level in a decade as China on Monday said it would raise tariffs on $60 billion in US goods in retaliation for Trump's decision last Friday to raise duties on $200 billion in Chinese products to 25% from 10%.

    Gordon emphasized that farmers are looking to compete on a fair and level playing field, and don't want government bailouts during a time when spot prices drop.

    "What we want people to understand is that we don't want people to think we are complaining because we are not becoming super profitable," he said.

    "Today, If I plant soybeans, I'm guaranteed to lose $65,000 on this planting. I have to find somewhere else that money just to get me back to zero."

    The trajectory on spot prices for soybeans is down despite several years of bumper crops in the Americas.

    The 2019/20 farm crisis is a repeat of the 1980s crisis; farmers back then had heavy debt loads with high stockpiles. Once the US slapped the Soviet Union with trade embargos, crop exports to the country collapsed and triggered an agriculture recession in the Midwest. Very similar to today, Trump administration's trade war forced China to respond with retaliatory tariffs on American soybeans, thus collapsing soybean exports to China by 80%. With the trade war deepening, financial stress in America's Heartland will only increase, leading to a continuation of farmer suicides. The moral of the story: get government out of markets. 

    Published:5/17/2019 7:22:24 PM
    [Markets] The Normalization And Institutionalization Of Fraud

    Authored by Charles Hugh Smith via OfTwoMinds blog,

    Normalizing and institutionalizing fraud undermines the foundations of the economy and the financial system.

    I am indebted to Manoj Samanta (twitter: @flation_debate) for the insightful concept the commoditization of fraud. The first step in the commoditization of fraud is to normalize fraud as Business as Usual (BAU) to the point that it's no longer viewed as "wrong," destructive or an aberration of evil-doers but as an accepted way to maximize gain and offload risk onto others.

    The last step in the process is to institutionalize fraud within central banking and government policies.

    How is selling shares in a money-losing corporation at outlandish valuations not the commoditization of fraud? The fraud has been normalized into a game of hoping that greater fools will be so enamored of the normalized fraud that they'll take the IPO shares off your hands at ever-higher valuations until the fraud breaks down.

    But by then, the instigators of the fraud--the IPO--have escaped with billions in gains and zero liability.

    How is private equity loading companies up with debt as a means of paying outlandish dividends to themselves not commoditized fraud? How is paying dividends with debt rather than earnings not fraud? The net result of this fraud is the debt-burdened company eventually defaults on its debt, defrauding the investors who were suckered into the scam.

    But once again, the instigators of the fraud--private equity--have escaped with billions in gains and zero liability.

    How is understating inflation so Social Security retirees get near-zero cost of living adjustments as real-world inflation pushes 7% not normalized, institutionalized fraud? We all understand the motivation for this institutionalized fraud: to limit the increasing cost of Social Security and mask the erosion of household income's purchasing power.

    While the Social Security recipient and the minimum wage worker are getting squeezed, those getting nearly free money from the Federal Reserve to plow into stocks are piling up trillions of dollars in gains. How is the Fed's fee money for financiers not commoditized, institutionalized fraud? Those who can borrow outlandishly large sums at a discount are in effect being given the tools to defraud the financial system and all the other players who aren't as close to the money spigot of the central bank.

    How is charging 20% interest on a credit card balance while financiers pay 2% not commoditized, institutionalized fraud? The cover for this fraud is particularly rich: the high credit risk of the credit card holder demands a high rate of return, while the "low-risk" financier gets 2% financing to blow up the entire financial system and get bailed out by the taxpayer.

    Normalizing and institutionalizing fraud undermines the foundations of the economy and the financial system. Calling these commoditized frauds business as usual doesn't mean they won't destroy the system from the inside.

    *  *  *

    Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 ebook, $12 print, $13.08 audiobook): Read the first section for free in PDF format. My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF). My book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format. If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com. New benefit for subscribers/patrons: a monthly Q&A where I respond to your questions/topics.

    Published:5/17/2019 6:53:06 PM
    [Markets] The Growing Phenomenon Of Racially-Exclusive Grad Ceremonies

    Authored by Daniel Payne via The College Fix,

    It’s not progress; it’s regression

    Several dozen universities now offer graduation ceremonies exclusively for black students. These ceremonies, which are independent of the larger commencement exercises offered at most institutions, are meant to “give extra honors and recognition to black students earning their degrees.” The National Association of Scholars surveyed over 170 schools and found that nearly half of them offer ceremonies such as this.

    It is worth asking what, precisely, the point of such events really is.

    Why do black students need their own special graduation ceremonies?

    Put another way: What is it about being a black American college student that calls for a racially exclusive commencement exercise?

    There probably isn’t a good answer for that.

    One spokeswoman told The Fix that these exercises “oftentimes incorporate cultural traditions.”

    That is a bit of a non sequitur - there is, after all, no single “cultural tradition” that unites all black Americans, any more than there is for white ones. African-Americans throughout the centuries have contributed immense riches to the American cultural tapestry, but those contributions are not monolithic; they are varied and regional and not at all the sort of thing you can cram haphazardly into a seventy-minute ceremony.

    In all likelihood these events are little more than sops to campus identity politics. A kind of racial radicalism has gripped many campuses in recent years: demands for racially segregated housing are common in higher education these days, and racial segregation is increasingly common at student centers, workshops and other campus events.

    This is not progress; it is regression. The great American political movements of the 19th and 20th century were about bridging the profound and often brutal chasm that has divided the races in this country since its earliest beginnings. Many campuses are now helping to widen that chasm rather than close it further. It’s a terrible thing to witness.

    Published:5/17/2019 6:21:53 PM
    [Markets] US Market Indexes Close Lower on Friday S&P 500 down 0.58% on Friday and 0.80% for the week Published:5/17/2019 5:51:49 PM
    [Markets] Trump Cancels $929 Million For California's High-Speed Rail Quagmire

    The Trump administration has officially pulled a $929 million federal grant to the California High-Speed Rail Authority after terminating a 2010 agreement. 

    In a release, the Federal Railroad Association - a component of the US Department of Transportation - said that California's rail authority "repeatedly failed to comply with the terms of the FY10 agreement and has failed to make reasonable progress on the project. Additionally, California has abandoned its original vision of a high-speed passenger rail service connecting San Francisco and Los Angeles, which was essential to its applications for FRA grant funding," according to CNBC

    The FRA added that it "continues to consider all options regarding the return of $2.5 billion in American Recovery and Reinvestment Act funds awarded to CHSRA."

    President Trump in February called for California to return $3.5 billion in federal funds given to the state for the failed high-speed rail line planned between San Francisco and Los Angeles. The $929 million in grant funds awarded to the state had not yet been paid out. 

    Trump’s call for the return of money followed Democratic California Gov. Gavin Newsom at his first state of the state address on Feb. 12 announcing a reeling in of the state’s high-speed rail project, saying the current plan “would cost too much and take too long.” He added, “There simply isn’t a path to get from Sacramento to San Diego, let alone from San Francisco to LA.” -CNBC

    In a Thursday statement, Newsom said "The Trump administration’s action is illegal and a direct assault on California, our green infrastructure, and the thousands of Central Valley workers who are building this project," adding "Just as we have seen from the Trump administration’s attacks on our clean air standards, our immigrant communities and in countless other areas, the Trump administration is trying to exact political retribution on our state. This is California’s money, appropriated by Congress, and we will vigorously defend it in court."

    While California canceled the bulk of the high-speed rail project, the state is continuing construction on a 119-mile section in the Central Valley in order to be able to legally keep federal funds for the project. Over $6 billion has already been spent on the project

    Back in 2008, California voters approved Proposition 1A, authorizing nearly $10 billion in bond money for the construction of the high-speed rail system. Since the vote, though, the project been plagued by delays and cost overruns. -CNBC

    Last October, Oracle co-founder Larry Ellison panned the $77 billion project. 

    "Trains leave when you don’t want to leave, from a place you don’t want to leave from, and take you to a place you don’t want to go to, at a time you don’t want to get there, and then you have to get into a car and go wherever you’re going. It is a crazy system.

    Published:5/17/2019 5:51:49 PM
    [Markets] Crack Pipe, IDs, And Badge Found In Hunter Biden Rental Car

    A used crack pipe, two DC driver's licenses, multiple credit cards, a Delaware Attorney General badge and a US Secret Service business card belonging to Hunter Biden were found in a rental car returned to an Arizona Hertz location in the middle of the night, days before the 2016 presidential election, according to Breitbartwhich obtained an exclusive copy of the police report.

    Photo via RadarOnline

    Hunter, son of former Vice President and 2020 candidate Joe Biden, had rented the vehicle from a California location, intending to return it to the Prescott, Arizona location where iut was discovered after being dropped off with the crack pipe and Hunter Biden's personal effects. 

    Instead of returning the car keys to the drop box where after-hours returns are supposed to go, the car was returned—according to the police report—with the keys left in the gas tank compartment of the vehicle. Also found inside the vehicle, per the police report, were two drivers’ licenses both bearing Hunter Biden’s legal name Robert Biden, as well as “some credit cards with the same name,” “a secret service business card,” and an “Attorney General’s badge” all contained inside a wallet that Hertz rental employees discovered—along with a pipe that Hertz employees thought and police later confirmed was used to smoke illicit drugs, as well as “a white powdery substance in the arm rest of the vehicle.” -Breitbart

    Of note, Hunter was discharged from the Navy after he tested positive for cocaine

    The morning after the car was dropped off, a phone number belonging to a renowned local "Colon Hydrotherapist" called the Hertz. The caller identified himself as "Joseph McGee," who told the employees that the keys were located in the gas cap as opposed to the drop box. 

    “McGee” informed the rental car company employee, according to police, that “his friend was feeling sick so they didn’t know what to do” when the car was returned. Police, according to a supplemental report filed by a Prescott Police Department detective, sought and obtained a subpoena to discover the source of the “Joseph McGee” phone call—and traced it to a phone number owned and operated by a renowned “Colon Hydrotherapist” in the region. -Breitbart

    Police were unable to find and interview "Joseph McGee," as well as contact the younger Biden, however they were unsuccessful at reaching either. The report does say that the Secret Service had located Hunter, and that he was "well." 

    Laboratory analysis by the Arizona Department of Public Safety later determined that the pipe discovered in the vehicle was used to smoke cocaine, not meth, but fingerprints were not found on the device.

    The 23 pages of law enforcement and police documents repeatedly refer to the suspect under investigation as Robert Hunter Biden and the report type as a “Narcotics Offense.” Breitbart News is publishing the documents here, with redactions made to remove personally-identifying contact information like addresses and phone numbers as well as the last names of key witnesses. -Breitbart

    No prosecution

    Despite the overwhelming evidence after an investigation which included two Prescott Police Department officers and a detective, local authorities in both the city and county attorney's offices declined to prosecute the case

    A document shows the reason the county attorney declined to prosecute the vice president’s son is because they thought they would only be able to get minor charges to stick, and kicked it down to the city attorney. It is unclear from the documents why the city attorney declined to prosecute.

    In addition to local police, FBI and the U.S. Secret Service agents were roped into the case, as well. The FBI dispatched agents to the scene, according to the law enforcement documents, and the Secret Service communicated with the various law enforcement officials investigating and confirmed that Hunter Biden was not in harm’s way. -Breitbart

    Read the rest of the report here

    Published:5/17/2019 5:21:30 PM
    [Markets] The Dow Drops 99 Points Because Trade War Jitters Just Won’t Go Away There was a lack of positive signs for a trade deal, as China called the U.S. a “bully.” Stocks spent much of the day near the breakp-even line before falling late in the day. Published:5/17/2019 4:52:44 PM
    [Markets] Non-Citizens Commit 42% Of Federal Crimes, Despite Being Only 7% Of US Population

    Authored by Victor Skinner via TheAmericanMirror.com,

    A new federal report shows non-citizens in the United States commit nearly half of all federal crimes, or more than six times their proportion to the American population.

    For 2017, data from the U.S. Census Bureau’s American Community Surveyshows non-citizens comprise about 7 percent of the country’s population, but the 2018 Annual Report and Sourcebook of Federal Sentencing Statistics shows they committed more than 40 percent of all federal crimes.

    The United States Sentencing Commission reviewed 321,000 sentencing documents in fiscal year 2018 and outlined several statistics in the annual report:

    In fiscal year 2018, the courts reported 69,425 felony and Class A misdemeanor cases to the Commission. This represents an increase of 2,552 cases from the prior fiscal year, and the first increase since fiscal year 2011.

    The race of federal offenders remained largely unchanged from prior years. In fiscal year 2018, 54.3 percent of all offenders were Hispanic, 21.2 percent were White, 20.6 percent were Black, and 3.8 percent were of another race. Non-U.S. Citizens accounted for 42.7 percent of all federal offenders.

    Immigration cases accounted for the largest single group of offenses in fiscal year 2018, comprising 34.4 percent of all reported cases. Cases involving drugs, firearms, and fraud were the next most common types of offenses after immigration cases. Together these four types of offenses accounted for 82.9 percent of all cases reported to the Commission in fiscal year 2018.

    A breakdown of crimes in the report shows about 92 percent of immigration crimes, or about 21,835 cases, involved non-citizens. But they also committed other crimes at far higher rates than their 7 percent proportion of the population as a whole.

    Cases involving drug possession, for example, were nearly evenly split between citizens and non-citizens with 361 and 339, respectively. In other words, non-citizens violated federal drug possession laws at a rate roughly seven times higher than citizens.

    Statistics were similar for violations of national defense, with 30 percent of cases involving non-citizens, as well as money laundering at 27 percent, drug trafficking at 24 percent and murder at 18 percent. Other crimes committed at higher rates include kidnapping, fraud/theft/embezzlement, extortion/racketeering, burglary, assault, “commercialized vice,” and environmental crimes, among others.

    The largest numbers of crimes occurred in border states, and areas with sanctuary policies. Arizona, New Mexico, Texas, Florida and southern California were among the most heavily concentrated areas for federal crimes. Data in the Sentencing Commission’s report show the Fifth Circuit Court covering Texas and the Ninth Circuit Court covering California and Arizona are the busiest, with about 26 and 20 percent of cases, respectively.

    In the vast majority of cases involving both citizens and non-citizens – 87.8 percent – the offenders were sentenced to prison. For the roughly 29,000 non-citizens convicted of federal crimes in fiscal year 2018, that statistic was 98.5 percent, according to the report.

    Published:5/17/2019 4:52:44 PM
    [Markets] NewsWatch: The stock market punished earnings misses more than it rewarded earnings beats First-quarter earnings season is virtually in the books. A look back shows stock-market investors were in a mood to punish shares of companies that disappointed on results more than they rewarded companies that exceeded expectations.
    Published:5/17/2019 4:22:23 PM
    [Markets] This Is A Much Better Alternative To Keeping Your Money In A Bank

    Authored by Simon Black via SovereignMan.com,

    The banking scandals are all starting to blur together.

    When I heard that five big banks were fined by regulators today, I had to think…

    Was that the scandal over employees creating fake accounts? No. Was it the scandal over recommending investments “highly likely to lose value”? No, not that one either.

    Today’s fine didn’t stem from when banks scammed customers into buying auto insurance they didn’t need, illegally repossessed vehicles, accidentally foreclosed on homes, colluded to defraud investors, or rigged interest rates.

    This time the banks colluded to rig foreign exchange rates. They even informed competitors on their own clients’ transactions, and coordinated to sit out certain auctions to manipulate the rates.

    The most persistent myth in the world has got to be that banks are a safe place to keep your money. If they aren’t outright screwing you, they are risking your money on terrible investments, and not giving you any of the return.

    And the organizations meant to ride to the rescue– the FDIC, the Federal Reserve, and the US government– are all practically bankrupt.

    You still need to keep cash somewhere though, especially today when essentially all asset classes are at all time highs.

    But large US banks are NOT the place to keep all your cash. They don’t even give you a tenth of a percent in interest for the pleasure of being treated like a doormat.

    That’s why I circumvent the banking system and hold a good chunk of my cash right now in US government Treasury Bills.

    Now, before you call the authorities to report that someone has kidnapped Simon Black and replaced him with a US Treasury Department bureaucrat, let me explain.

    I would NEVER put my money into long-term bonds in a massively indebted country like the US. People who buy 30 year US government bonds are insane. It’s hard to imagine what the country is going to look like next YEAR, let alone 30 years from now.

    But the shortest duration bonds (technically known as ‘bills’) are just 28 days.

    And however you feel about the US government, or even Donald Trump, it’s a pretty safe bet that they’re not going to default in the next four weeks.

    While other people risk their money buying stocks at record high prices, or hold their money in a risky bank for a 0.02% interest rate, 28-day T-bills pay an annualized return of 2.4%.

    The best way to buy 28-day T-Bills is to open an account at Treasury Direct, which you can do here.

    All you’ll need is a US Social Security Number and a US bank account. It’s a remarkably simple process.

    The government sells 28-day T-bills once a week. So when you want to purchase, you just log in, click a few buttons to indicate how much you want to buy, and the Treasury Department will automatically debit the money directly from your bank account to buy the T-bill.

    You can also choose to automatically roll over four weeks later into a new T-bill. Or you can choose to have the proceeds deposited directly into your bank account.

    One very easy way to do it is to split your savings into fourths; so let’s say you want to park $400,000 into 28-day T-bills.

    You’d buy $100,000 worth on January 1st, then another $100,000 on January 8th, then another $100,000 on January 15th, and another $100,000 on January 21st.

    Then, the following week, on January 28th, the original $100,000 T-bill that you purchased on January 1st will mature, and you could roll that over for another 28-days.

    Or if you find you need the money, you could choose to redirect the funds back to your bank account.

    This is an easy approach that could literally earn you 100x more interest than what your bank is paying you, without the hassle.

    It’s pretty pathetic that the Treasury Department is an easier financial partner to deal with than the banking system, but at least for now, that’s the reality.

    Published:5/17/2019 4:22:22 PM
    [Markets] Business Highlights A rare mix of geopolitical tensions in the Middle East and China is tugging oil prices in opposite directions and creating uncertainty over where they might land. Deteriorating trade talks between the United States and China have threatened to drive down the cost of oil and gasoline. WASHINGTON (AP) -- Caught in a sprawling trade dispute with U.S. rival China, President Donald Trump has decided against declaring commercial war on America's friends. Published:5/17/2019 4:22:22 PM
    [Markets] Nasdaq, S&P 500 Break Key Support To Cap Week With Losses The S&P 500 and Nasdaq closed below their 50-day moving average lines Friday, after stocks headed south amid heightened trade talk concerns. Published:5/17/2019 3:51:14 PM
    [Markets] Nearly half of women who have abortions live below the federal poverty level As Missouri, Georgia and Alabama move to restrict abortion access, the cost can vary by state, trimester, procedure and other factors.
    Published:5/17/2019 3:51:14 PM
    [Markets] "People Are Going To Get Burned": Uptick In Questionable Deals Telegraphs Market Pain Ahead

    The sell off at the end of the year last year, despite being long gone from the memory of traders, did have one profound effect. It caused dealmakers to speed things up due to fears of the more than decade-long bull market finally coming to an end, according to Bloomberg.

    So naturally, when 2019 gifted dealmakers with a market rebound, many of them rushed to peddle as many deals and arrangements as they could, especially deals that could test the limits of risk tolerance in a falling market. This has resulted in all types of shoddy deals in 2019 - from questionable IPOs, to private equity deals, to issuing junk bonds to pay dividends.

    Junk bonds are "flying out of the door" in 2019. Companies that are deep in debt are borrowing even more now, while they can, to pay equity holders. And two of the most heralded IPOs in recent history, Uber and Lyft, both wound up turning into case studies for what happens when you try to stuff overpriced stock down the throats of retail investors.

    Marshall Front, the chief investment officer at Front Barnett Associates said: 

    “At some point, people are going to get burned. People want to take their companies public because they don’t know what the next years hold, and there are people who think we’re close to the end of the cycle. If you’re an investment banker, what do you do? You keep dancing until the music stops.”

    Back in October, bankers had suggested a $120 billion valuation for Uber, whose market cap now sits at half of that. Lyft's market cap has also fallen by a third since its IPO, the timing of which "serves to further stoke the suspicions of those Wall Street observers who see a plot to transfer a private-market bubble into public hands."



    Credit markets have also reversed much of their late 2018 carnage, allowing for companies to pick up the pace of borrowing. Junk bond issuance is ahead of last year‘s pace and last week alone saw $12 billion priced - the busiest the market has been in 20 months. And good old investment grade issuances are also gaining steam, despite being down from a year ago. Back to back offerings this month from Bristol-Myers Squibb and IBM were each around $20 billion.

    Private equity is also taking advantage of the market conditions to cut risk and realize gains. They have taken the opportunity to saddle companies they’ve invested in with more debt in order to pay themselves dividends. Leveraged loans for distributions to equity holders has reached its highest point in six months.

    Sycamore Partners, for example, pulled $1 billion out of Staples last month through a recapitalization that increased the company's interest expense by $130 million a year. Hellman & Friedman and Carlyle sold a junk bond to help pay for a $1.1 billion dividend from Pharmaceutical Product Development LLC. The bond sold was the largest of its kind since since 2017.

    There have been very few instances where investors have extracted concessions from borrowers. One example, the buyout of NSO Group, found banks forced to offer debt at a steep discount to get it off their books, while ION Group dropped plans for a $250 million dividend that was going to be issued from a $2.2 billion leveraged loan sale.



    And then there’s state oil giant Saudi Aramco, who borrowed $12 billion in an unprecedented sale, staging a massive comeback from a year ago when Wall Street turned a blind eye to the company after the assassination of journalist Jamal Khashoggi. In early trading, the bonds fell, calling into question bank's claims that there was $100 billion worth of orders to buy the securities.

    In the equity market, bankers have been working on unclogging a pipeline of IPO hopefuls. As of today, 89 offerings have raised $27.2 billion in the US, which is the fastest start for IPOs since 2014. Names like Beyond Meat and Pinterest have done well, while Uber and Lyft have been stark reminders of other flops, like Snapchat and Blue Apron.

    Banks have even turned to unusual tactics to keep deals moving amid a backlog of filings for regulators as a result of the government shut down. Many recent IPOs skipped the process of price discovery and instead disclosed fixed IPO prices 20 days before the stock began trading. Seven companies set terms for IPOs while regulator offices were closed due to the government shut down. A majority of those names, including New Fortress Energy, fell below their listing prices.

    But not all deals snuck through. Virgin Trains USA was withdrawn the same day it was expected to debut by bankers who had to pull the sale when they couldn’t get the $3.15 billion price tag they sought.

    Front concluded:

     “People see it like this: it’s been great until now, but the window is going to shut, the door is going to close, should we do something now because the next few years are a question mark? Wall Street gets a lot of money between now and then and they’ll be able to put medals on their chest and say ‘Look how we did’ until they didn’t anymore.”

    Published:5/17/2019 3:51:14 PM
    [Markets] Dow Suffers Worst Streak Since 2016 Despite Best Dip-Buying In A Decade

    Quite a week...

    China was ugly overnight after defending any dip all week - have to make sure the stock market does not reflect weakness after the trade deal fell apart!!

     

    But Europe soared this week as US delayed auto tariffs...

     

    China remains the best performer YTD, barely...

     

    The late-day headlines from CNBC that "trade talks have stalled" - merely repeating what was said overnight numerous times - triggered the algos to dump after early gains (thanks to op-ex gamma hedging and US-Canada tariff headlines)...Small Caps were the week's biggest laggard...

    The Dow is down four weeks in a row - something it has not done since May 2016!!

    The midweek ramp was all one big short-squeeze and the machines ran out of ammo today...

     

    Another failed IPO today...

     

    Trade deal hope was dashed this week...

    The ratio between Morgan Stanley's China Trade Sensitive Basket and the S&P 500 has dropped to the lowest since U.S. President Trump and Chinese President Xi announced a truce at the G-20 meeting in Argentina in December.

    Credit ended the week wider (despite ripping back midweek from Monday's gap wider)...VIX was around unch...

     

    Stocks and bonds decoupled this week (as stocks short-squeezed higher midweek)...

     

    Treasury yields were bid on the week and accelerated lower in the last hour as repeated headlines of trade talks being stalled sparked more bond buying...

     

    10Y Yields fell back close to YTD lows this week

     

    Notably crude and inflation breakevens decoupled late in the week...

     

    The yield curve closed the week just above inversion...

     

    But before we leave bond-land, both US and Europe priced in more dovishness from their respective central banks this week (41bps of cuts in 2019 for the Fed and 35bps of cuts for the ECB)...

     

    The Dollar Index rose on the week - its best week in over 2 months...

     

    The last two weeks have seen offshore yuan collapse over 3.1% getting closer to 7.00 - the biggest 2-week plunge since Aug 2015's devaluation

     

    Cable was a disaster this week with GBPEUR down 10 days in a row - the longest losing streak in 19 years

     

    The Loonie rallied on the day after US dropped steel tariffs...

    Emerging-market stocks fell for a second day and a gauge of EM currencies erased 2019 gains as China signaled its reluctance to resume trade talks with the United States

     

    Cryptos had a violent week but ended significantly higher, led by a 33% rise in ethereum...

     

    With Bitcoin reaching almost $8500 before crashing Friday...

     

    The dramatic outperformance of Ethereum in the last few days has erased all of Bitcoin's outperformance over the last 6 weeks...

     

    WTI rallied on the week (copper did not) despite a strong dollar and trade talks breakdown but silver was the biggest loser...

     

    Finally, in case you thought something had change in recent days - despite the collapsing fun-durr-mentals and the death of trade talks - you were right. Bloomberg's Luke Kawa notes that over the past 10 sessions (or since the trade war resurfaced) the S&P 500 has averaged a drop of 0.5% overnight and a gain of 0.3% during the day. That 0.8 percentage point average gap over the two-week stretch constitutes the biggest disparity between poor overnight retreats and intraday advances since July 2009.

    In other words, as the US-China trade deal began to collapse confidence in the markets, 'someone' was panic-buying US equities during the day after 'someone else' was dumping them overnight at historically high levels.

    With global money supply now collapsing, stock markets are gonna need more dip-buying to support this debacle...

    Published:5/17/2019 3:20:44 PM
    [Markets] U.S. stocks end lower for day and week on U.S.-China trade uncertainty U.S. stocks end lower for day and week on U.S.-China trade uncertainty Published:5/17/2019 3:20:44 PM
    [Markets] Tesla stock falls nearly 8% after reports of ‘hardcore’ plan to slash costs Shares of Tesla Inc. touched another two-year low Friday after a leaked memo spoke of the Silicon Valley car maker potentially running out of cash in just months without strict cost-control measures.
    Published:5/17/2019 3:20:44 PM
    [Markets] U.S. stocks drop late in session on trade uncertainty Wall Street shares extended losses in late trade on Friday after CNBC reported that the next round of U.S.-China negotiations was in flux, looking set to end a seesaw week the same way they started with ... Published:5/17/2019 2:52:09 PM
    [Markets] Trump To Dump Thousands Of Migrants In Broward, Palm Beach Counties

    The Trump administration is about to release hundreds of migrants caught along the southern border into Florida's Broward and Palm Beach counties, according to local officials. 

    According to Broward Mayor Mark Bogen and Palm Beach County Sheriff Ric Bradshaw, there will be two weekly planeloads of immigrants, starting in about two weeks, according to what they were told to expect. The 270 weekly passengers, or just over 1,000 per month, will be split equally between the two counties, according to the Sun-Sentinel

    That said, Florida Governor Ron DeSantis (R) along with local members of Congress and Florida's two Republican senators haven't heard a thing about the plan

    "The governor’s office was not informed of this decision," said DeSantis' spokeswoman in an email to the Sentinel, adding "Florida counties do not have the resources to accommodate an influx of illegal immigrants." 

    In an afternoon news conference organized after the news broke, Sheriff Bradshaw said the Miami border patrol operations chief “came up” to talk to him about it earlier this week. -Sun-Sentinel

    Broward Sheriff Gregory Tony also said that he was advised of the plan - however not by Border Patrol, but "by my trusted colleague" Sheriff Bradshaw. 

    The immigrants are families who crossed the border illegally into El Paso, Texas, and who indicated they were Florida-bound, Bradshaw said. They will be processed at U.S. Customs and Border Protection Offices in Dania Beach and in Riviera Beach, and released into the community, expected to return for hearings, he said.

    The federal government isn’t offering to help, he said.

    “No accommodations for transportation leaving there. No accommodations for shelter or a place to live. Just no real plan what is going to happen to these people,” Bradshaw said. -Sun-Sentinel

    ICE to hire contractor to transport 225,000 migrants

    Meanwhile, ICE (the federal Immigration and Customs Enforcement agency) will be transporting approximately 225,000 migrant children and families to shelters across the country over the next five years as they await the processing of their asylum claims, according to Fox News. The agency is seeking the services of a "highly responsible" contractor that "fully embraces the philosophy" of humanely treating all unaccompanied minors (UACs) and family units (FAMUs) with "dignity and respect," according to a May 13 federal procurement document

    Hopefully it doesn't turn into some giant child exploitation ring. 

    Whoever is chosen for the contract will transport around 60,000 people annually, and will work to arrange commercial flights and ground transportation for migrant children under the age of 18, along with adults with children. Food, clothing and hygene products will be provided. 

    "Sometimes the contractor will have to plan commercial or charter flights in a period of less than 24 hours," reads the procurement document, which highlights an increased (and perhaps poorly worded) need for "on demand escort-services" due to the ongoing border crisis. 

    President Trump announced a plan to “transform” America’s immigration system on Thursday, introducing a system to favor admissions based on job skills rather than family ties. The proposal would judge immigrants with a points-based system that would favor high-skilled workers -- accounting for age, English proficiency, education and whether the applicant has a well-paying job offer.

    Over the course of a five-year contract, the migrants will be relocated from their points of entry or staging locations to Office of Refugee Resettlement shelters or family residential centers across the nation. -Fox News

    "ICE has zero tolerance for any forms of sexual abuse and assault," reads the document. 

    Published:5/17/2019 2:52:08 PM
    [Markets] TREASURIES-Yields inch lower amid trade uncertainty Trade tension between the United States and China ratcheted up again on Friday, pushing Treasury yields slightly lower as traders sought safety in high-quality assets. China struck a more aggressive tone in its trade war with the United States on Friday, suggesting a resumption of talks between the world's two largest economies would be meaningless unless Washington changed course. "There has been a generalized risk-off move on the back of the headlines earlier from China that said they were not particularly interested in restarting negotiations on trade," said Jonathan Cohn, head of rates trading strategy at Credit Suisse. Published:5/17/2019 2:22:06 PM
    [Markets] Confidence In Consumer Confidence Surveys Plummets

    One of the reasons for today's latest, and quite remarkable turnaround higher in stocks, is that Friday's University of Michigan consumer sentiment report showed that, following a small dip in April, in May US consumers responded with a surprising surge in confidence, led by a spike in expectations, i.e., "hope", which helped the overall survey print at the highest level in 15 years, or since January 2004.

    Which, on the surface, is perplexing as a repeating argument for why various economic metrics have been sputtering lately is the renewed trade war with China. Meanwhile, in what appears to be a far more accurate survey of consumer sentiment, also on Friday Bank of America released its latest consumer confidence indicator, which found that "consumer sentiment has begun to turn down amid the latest news on trade."

    Specifically, according to the report by BofA economist Joseph Song, consumers reacted negatively to the escalation in the trade war, and the confidence indicator started to slip lower on May 11th, coinciding with the announcement that the US will raise tariffs on imports from China to 25% from 10%.

    Digging into the details, BofA found that the deterioration in confidence was driven by a decline in both current conditions and expectations, diametrically opposite to what UMich found, beginning the question are US sentiment and confidence surveys - which clearly have the power to boost stocks, something which the president has clearly made a prerogative of his administration - just as manipulated as any "data" out of China?

    Among the findings in the BofA report, is that the current expectations indicator had rebounded back to recent highs before the latest trade news, which the bank notes is "unwelcomed news as even a short term trade dispute could have a meaningful, albeit temporary, impact on spending."

    Case in point, when we asked respondents if they had reduced or delayed spending at the start of the year, roughly 48% reported some pull back with lower income households citing the government shutdown as the primary reason and upper income households noting the stock market selloff.

    Naturally, a protracted trade war would have not just a dire impact on the S&P, with even uber-bullish JPMorgan now conceding that a full blown trade war would push the S&P back down to 2,550, but it would also have a substantial adverse impact on consumer spending. 

    Worse, as we noted in the latest SLOOS report, consumer borrowing conditions have been less favorable of late. According to the latest Fed Senior Loan Officer Opinion Survey for 2Q 2019, lending standards tightened on balance with more banks reporting tighter conditions than easier.

    The tighter standards appear to be having a bigger impact on lower income households. When asked if it is easier or harder to get a loan, fewer lower income respondents are reporting it is easier compared to last year.

    But worst of all is the argument we made first two weeks ago (and which Citi's Matt King hammered in his latest presentation), namely that the economic weakness has nothing to do with credibility availability, and everything to do with credit demand, or lack thereof, with BofA also noting that "banks are reporting weaker demand for all consumer credit."

    We find two plausible reasons for the slowdown. First, there has been limited change in the consumer's ability to pay off debt. When asked if it is easier or harder to make a minimum debt payment, we find little change from last year.

    Finally, BofA also found that consumers are comfortable living within their means. When asked what respondents would do with more disposable income, majority of respondents continue to report that they would pay down debt or save more. As the bank concludes, "this isn't all bad news: a more conservative consumer could lead to a more resilient economy."

    And while the BofA consumer confidence survey is certainly in line with what one would expect, one can't help but wonder if, with two separate confidence surveys reaching two diametrically opposite conclusions, whether confidence in consumer confidence surveys, at least one of which appears to have been gamed for market manipulation purposes, just crashed to an all time low.

    Published:5/17/2019 2:22:06 PM
    [Markets] Market Extra: ‘Godfather’ of chart analysis says Wall Street shouldn’t bet on stock-market records anytime soon Prominent market technician Ralph Acampora says Wall Street needs new highs for him to be confidently bullish about the outlook for the stock markets, after a whipsawing period for the major indexes. But it’s not entirely clear that investors will see records in the immediate term.
    Published:5/17/2019 2:22:06 PM
    [Markets] Wall Street mixed as strong consumer data dampened by trade jitters Wall Street struggled for gains in an up-and-down session on Friday as mixed headlines on trade dampened positive consumer sentiment data, sending investors into the weekend with little enthusiasm. The Dow inched up, while the Nasdaq lost ground and the bellwether S&P 500 was nominally lower, hovering more than 2% below its record high reached on April 30. China added fuel to the fire of the increasingly rancorous trade war with the United States with a defiant front-page commentary on the Communist Party's People's Daily, ratcheting up tensions the day after U.S. President Donald Trump officially blacklisted Chinese telecom Huawei Technologies Co Ltd from doing business with U.S. companies. Published:5/17/2019 1:52:12 PM
    [Markets] Lawrence Jones: SAT 'Adversity Score' Is "Insulting," Implies "People Like Me" Can't Make It

    Authored by Jon Street via Campus Reform,

    Campus Reform Editor-in-Chief Lawrence Jones joined Fox & Friends Friday morning to discuss, among other topics, the SAT beginning to assign students an "adversity score," which will factor in students' social and economic hardships. 

    As Campus Reform reported Thursday, the College Board, which oversees the college admissions test known as the SAT, will take into account 15 different factors when determining the student's "adversity score," which the students themselves will not even be able to see. The College Board and supporters of the "adversity score" have touted it as a way of leveling the playing field for disadvantaged students. Jones disagrees.

    "This is not leveling the playing field. This is a savior complex. This is identity politics," Campus Reform's editor-in-chief said.

    "The fact that they think they can judge people based on where they come from, the color of their skin,  and what they went through, I think is insulting. It's essentially saying, people who come from those backgrounds, people like me, cannot make it and I think we warned America that this was going to happen and no one paid attention."

    Jones continued by advocating to fix the education system on the local level as an alternative to the "adversity score."

    "We're about to create a workforce where people aren't qualified but the universities don't care because guess what, they still get the money," Jones said, while later asking, "why are we pushing college so much still when a lot of these college students that graduate with a degree still can't get jobs."

    "They did not think this through," Jones said. He then zeroed in on how students will not even be able to see their own "adversity scores."

    "Anything that's done in secret is very shady," Jones said. 

    As for the College Board, it told Fox News, "the ECD doesn't provide information about the student; it provides information about the student's environment. It puts a student's SAT score and other academic accomplishments in the context of where they live and learn..."

    Published:5/17/2019 1:52:12 PM
    [Markets] Here’s one reason Wall Street’s ‘fear gauge’ didn’t explode amid the stock market’s recent skid Stocks are in a phase of apparent recovery after a tariff-sparked selloff threatened to put a lasting end to the bull run for U.S. equity markets. Published:5/17/2019 1:42:31 PM
    [Markets] Missouri House Passes Strict Anti-Abortion Bill

    Though it's not quite as strict as the law that Alabama Gov. Kay Ivey just signed into law, an anti-abortion bill passed by lawmakers in Missouri on Friday would ban abortions after more than eight weeks. And with the state's governor poised to sign it, Missouri is about to become the latest state to pass a restrictive abortion law as Republicans angle to get the issue back in front of the Supreme Court.

    Missouri

    Missouri's Republican-controlled House passed the bill, HB 128, with a 110-44 vote on Friday, one day after the Senate passed a similar bill. The bill would make it illegal for a woman to get an abortion after the eighth week of pregnancy.

    Doctors who violate the law would face a Class B felony, punishable by up to 15 years in prison (which isn't nearly as much as the 99 year maximum in Alabama).

    Like the Alabama bill, Missouri's bill doesn't allow exceptions for rape and incest.

    The bill now travels to the desk of Missouri Gov. Mike Parson, who is expected to sign it into law in about a week. Missouri would then join Ohio, Georgia, Mississippi, Alabama and a handful of other states in passing restrictive abortion laws designed to provoke legal challenges that will, presumably, ultimately be adjudicated by the Supreme Court.

    Pro-choice advocates are terrified that the Supreme Court might invalidate Roe v. Wade as soon as next year, and with more states expected to pass restrictive abortion laws, President Trump is already delivering on one of the promises he made to the evangelicals.

    Published:5/17/2019 1:42:31 PM
    [Markets] Elizabeth Warren calls Navient ‘scammers’ after student loan giant celebrates making the Fortune 500 The company is facing multiple lawsuits from the CFPB and states attorneys general.
    Published:5/17/2019 1:42:31 PM
    [Markets] The U.S. and Canada have agreed to eliminate all tariffs on steel and aluminum The U.S. and Canada have agreed to eliminate all tariffs on steel and aluminum Published:5/17/2019 1:20:59 PM
    [Markets] Social Capital: This simple trick could make it a lot harder for corporations to skip out on their tax bill The U.S. could reduce inequality, rein in abusive tax shelters, and gain some needed revenue if it taxed corporate profits based on the share of sales that occurred in the U.S., writes Pedro da Costa.
    Published:5/17/2019 1:20:59 PM
    [Markets] "People Are Dying" Watch AOC Grill Gilead CEO Over $21,000 HIV Drug

    Alexandria Ocasio-Cortez (D-NY) grilled the CEO of Gilead over a life saving HIV drug that costs $1,780 per month ($21,360 per year) in the United States, yet just $8 in Australia. 

    "You're the CEO of Gilead. Is it true that Gilead made $3 billion in profits from Truvada in 2018?" Ocasio-Cortez asked Gilead CEO Daniel O'Day. 

    "$3 billion in revenue," he replied. 

    "The current list price is $2,000 a month in the United States, correct?" AOC then asked. 

    "It's $1,780 in the United States," responded O'Day. 

    "Why is it $8 in Australia?" countered Ocasio-Cortez. 

    "Truvada still has patent protection in the United States and in the rest of the world it is generic," explained O'Day, adding "It will be generically available in the United States as of September 2020."

    "I think it's important here that we notice that we the public, we the people, developed this drug. We paid for this drug, we lead and developed all the patents to create Prep and then that patent has been privatized despite the fact that the patent is owned by the public, who refused to enforce it," shot back the Congresswoman. "There’s no reason this should be $2,000 a month. People are dying because of it and there’s no enforceable reason for it.

    As the Washington Post reported in March, Gilead's development of Truvada was "almost fully funded by US taxpayers.

    In 2012, Truvada became the first drug ever approved to prevent HIV, the virus that causes AIDS. Fast forward seven years, and US patients are having a hard time receiving treatment, known as PrEP

    "We are suffering under the weight of your company’s pricing," said neurologist and co-founder of the PrEP4All Collaboration, Aaron Lord - which has petitioned the Trump administration over the cost of Truvada, according to Bloomberg. "Why not lower the price of Truvada to $15 a month?" 

    According to the Post, the US government patented the treatment in 2015, but has "opted not to file an infringement suit to enforce" the patent. 

    O'Day, meanwhile, said that the CDC's patents are invalid, adding "Gilead invented Truvada, no one else.

    While Gilead created the drug, the U.S. government was heavily involved in making the use of it for prevention a reality. The CDC did early experiments on monkeys that suggested that the two compounds that make up Truvada were more effective than one for prevention. The federal government also obtained patents on the use of the compounds in Truvada for HIV prevention. Those patents weren’t widely known until AIDS activists discovered them recently. -Bloomberg

    Others disagree - including Yale Law School patent attorney and research scholar, Christopher Morten

    "Gilead seems to be using the CDC’s technology for free without compensating the CDC, without compensating the taxpayer," said Morten in an interview after reviewing the CDC's patents at the request of the PrEP4All Collaboration. 

    The US government also sponsored a trial, the results of which were published in 2010, which established the efficacy of Truvada for the prevention of HIV in humans. 

    "Gilead’s role was limited to donating study medicine and placebos," said UC San Francisco doctor Robert M. Grant - calling Gilead a "reluctant partner" in the research. 

    The CEO called the company’s deal with the federal government to donate up to 2.4 million bottles of Truvada annually to help treat uninsured Americans at risk for HIV “one of the largest ever donations of medicine.” The effort, which was announced last week, coincides with a call by President Donald Trump during his State of the Union address in February to put an end to the HIV epidemic.

    Truvada generated $3 billion in revenue for Gilead last year, including $2.6 billion in the U.S. The price had risen more than 50% since the drug was approved for prevention, to $1,780 a month, according to data compiled by Bloomberg Intelligence. -Bloomberg

    In Australia's state of New South Wales, HIV diagnoses plummeted 25% for gay and bisexual men after Truvada was widely distributed for prevention, according to a study published in the journal Lancet HIV last year.  

    Published:5/17/2019 12:56:54 PM
    [Markets] MarketWatch First Take: Nvidia tells the truth, and tempers a potential rally for chip stocks For months, chip companies have been telling investors that a rebound is right around the corner, with little evidence to back up those claims. Nvidia Corp. admitted as much Thursday afternoon, throwing a wet blanket on an after-hours bounceback for its beleaguered stock and shares in other chip companies.
    Published:5/17/2019 12:56:53 PM
    [Markets] 3M stock keeps falling as its most-bearish analyst has just gotten more bearish 3M stock keeps falling as its most-bearish analyst has just gotten more bearish Published:5/17/2019 12:21:22 PM
    [Markets] Bitcoin’s tumble ‘has caused a lot of technical damage’, says analyst A surge in bitcoin prices that took it well above $8,000 appears to be coming to a halt, as the world’s No.1 crypto asset has faced sudden and sharp selling pressure within the past 24 hours. Published:5/17/2019 12:21:22 PM
    [Markets] CryptoWatch: Bitcoin’s tumble ‘has caused a lot of technical damage’, says analyst A surge in bitcoin prices that took it well above $8,000 appears to be coming to a halt, as the world’s No.1 crypto asset has faced sudden and sharp selling pressure within the past 24 hours.
    Published:5/17/2019 12:21:22 PM
    [Markets] Wells Fargo Banker Pleads Guilty To Helping Launder Millions For Sinaloa Cartel

    A 30-year-old Wells Fargo personal banker pleaded guilty on Thursday to knowingly opening bank accounts for people working with the Sinaloa cartel for money laundering purposes. 

    Seized money from the Sinaloa cartel, September 18, 2008. (AP Photo/Eduardo Verdugo)

    Luis Figueroa of Tijuana admitted to the scheme which spanned the United States, according to Business Insider

    Between 2014 and 2016, money laundering organizations recruited people who would open bank accounts for the cartel's drug money, according to the US Attorney's Office in the Southern District of California. The operation laundered over $19 million dollars in narcotics proceeds.

    The drug money would be deposited into the bank accounts, also known as "funnel accounts," in amounts below the threshold for regulatory reporting. -Business Insider

    Drug money would be picked up by cash couriers - often stuffed into "shopping bags, duffel bags or shoeboxes," after which it would be deposited at Wells Fargo and other banks, according to a DOJ press release. Couriers traveled to Los Angeles, Chicago, Charlotte, Boston, New Jersey, and New York City to pick up drug money into the hundreds of thousands of dollars, picking up the money in private residences or public places such as parking lots or retail stores. 

    The couriers would deposit the bulk cash in $22,000 - $45,000 increments at various banks used for laundering, including Wells Fargo, after which funds were transferred into Mexico-based shell corporations operated by the launderers - which would then be transferred to the Sinaloa Cartel. 

    Figueroa, who was arrested in November in the joint FBI-IRS investigation, personally made several wire transfers from funnel accounts knowing that he was dealing with drug money. He faces a maximum sentence of 20 years in prison and a $500,000 fine. 

    Eight other people were arrested and charged in the scheme. 

    "We can't allow our banks to be laundromats for cartel cash," said US Attorney Robert Brewer. "Bank employees who launder drug money for traffickers will face prosecution and prison."

    The Sinaloa cartel is one of the largest drug trafficking groups in the world. Based in the West Coast of Mexico, the first lab believed to have produced fentanyl was found at a home in Sinaloa's state capital. 

    Published:5/17/2019 12:21:22 PM
    [Markets] China Slams "Barbaric" US Behaviour Toward Huawei, Which "Can Be Viewed As A Declaration Of War"

    A letter written by He Tingbo, president of HiSilicon, a semiconductor company owned by Huawei, was published on Friday in China. In the letter, which the Global Times described as "touching and which has won public support", He said that employees of the company embarked on the "most stirring journey in technology history in recent years" to make backup products for Huawei and now these products will finally be put to use.  

    Or maybe not if Trump gets his way and Huawei is barred from operating in the US, something which the bond market is increasingly concerned about, sending the price on Huawei's dollar bond plunging the most in history overnight.

    The plunge came even though in his letter to employees, He Tingbo also claimed that Huawei will be able to continue its service to clients in such scenario, and will push for innovation and achieve technological independence.

    In other words, China is increasingly forced to resort to hollow, jingoist propaganda to rally the people around the flag, such as this one from the Global Times Editor In Chief, Hu Xijin, who earlier on Friday tweeted that "Shanghai stock exchange index dropped 2.48% Friday due to worry of an overall escalation of trade war, but Huawei related stocks soared. This is vote of confidence of the market on Huawei's long prepared back-up plan. Huawei's US supplies will become real victims."

    Going back to the Global Times, this is how the nationalist Chinese tabloid discloses that the propaganda war will be fought: with factless statement, and with sweeping emotional appeals such as this one:

    Huawei is not only strong but wise, sober-minded and tenacious. Cutting off supplies from the US will not defeat Huawei, which has long been preparing for the dark moment. On the contrary, Huawei will start getting even stronger.

    Well... not if you look at its publicly traded bonds. That said, the rest of the bellicose screed is rather entertaining, not to mention informative, so here it is in its entirety:

    Huawei is the symbol of China's ability to do independent research. As a private company, it is the forerunner of China's reform and opening-up. It has been deeply engaged in the development of global communications and become the leader of 5G technology. That Huawei will not lose to the US is significant for China's response to the US' strategic suppression.

    The US has completely abandoned commercial principles and disregarded law. Its barbaric behavior against Huawei by resorting to administrative power can be viewed as a declaration of war on China in the economic and technological fields. It is time that the Chinese people throw away their illusions. Compromise will not lead to US goodwill.

    We must dare to compete with evil characteristics embedded in the US. While sticking to opening-up, China should become good at countering the US.

    In this fight against the US, we should abide by international rules and take into consideration the general trend of China's reform and opening-up on the one hand. On the other hand, we should not be too gentle or worry about Western opinion. Any measure that can bite into the US and do no harm to China can be adopted.

    Obviously, the US has strengthened multifaceted aggression beside its economic warfare. China's countermeasures in other fields should not be too soft either. We should abandon such thinking as not taking the lead to create trouble in China-US relations.

    The trade war launched by the US is becoming more and more like real war. At its core is the US resorts to unscrupulous means to suppress China while China is committed to crushing US arrogance. The US has been telling its people that China would soon make compromises, and we must break such lies by making clear China will not sign any unequal deal.

    The China-US trade war is reshaping this bilateral relationship. Chinese society must acknowledge that a fiercer strategic rivalry is unavoidable. Huawei cannot lose, nor can China. This is a real concern of our generation and the responsibility we should bear for China's future.

    While it remains to be seen if the trade war between the US and China will escalate into a "kinetic" one, it increasingly appears that this transition will be decided between Trump's tweets and China's populist appeals, which sooner or later will result in a complete boycott of US goods and services, forcing the US to escalate even more.

    Published:5/17/2019 11:50:08 AM
    [Markets] The Ratings Game: 3M’s stock keeps falling as the most-bearish analyst gets even more bearish Shares of 3M Co. kept sinking Friday, toward the lowest close in years, after Wall Street’s most bearish analyst got even more bearish, citing the company’s overly optimistic growth outlook at a time of very high inventory levels.
    Published:5/17/2019 11:50:08 AM
    [Markets] The Dow Gains 2 Points Because a Little Good News Goes a Long Way Markets got a boost from news that the U.S. is planning to remove metals tariffs on Canada and Mexico, as well as the fact that U.S. consumer sentiment hit a 15-year high. Published:5/17/2019 11:50:08 AM
    [Markets] Bond Report: Treasury yields trade off session lows as stock losses recede Treasury prices fall Friday after Chinese state media suggest a resumption in trade negotiations may not take place as soon as anticipated.
    Published:5/17/2019 11:22:05 AM
    [Markets] Stocks flip flop as market's trade-war spin cycle continues NEW YORK (AP) — U.S. stocks erased an early morning slide Friday, the latest spin cycle for a market that's been tossed around the last two weeks by rising and falling worries about the global trade war. Published:5/17/2019 11:22:05 AM
    [Markets] Pilots Confront Boeing: 737 Max Crashes Were Not Pilot Error

    Authored by Mike Shedlock via MishTalk,

    The lie of the day: Skilled pilots could have prevented the two 737 Max crashes.

    The deeper we dig into the 737 Max crashes, the easier it is to make a case that Boeing, not software, not poorly trained pilots is to blame for the 737 Max crashes.

    The Seattle Times addresses the issue in How much was pilot error a factor in the Boeing 737 MAX crashes?

    In his opening statement Wednesday at the House Aviation subcommittee hearing on the 737 MAX in Washington, D.C., the lead Republican congressman blamed errors by the Indonesian and Ethiopian pilots for the two deadly MAX crashes in those countries.

    “Pilots trained in the United States would have successfully been able to handle” the emergencies on both jets, said Rep. Sam Graves of Missouri, ranking member of the House Transportation and Infrastructure Committee. He added that preliminary reports about the accident “compound my concerns about quality training standards in other countries.”

    That's the gambit that Boeing wants everyone to believe. However, pilots strongly disagree.

    “I’m disappointed with those who sit in their lofty chairs of judgment and say this wouldn’t have happened to U.S. pilots,” said a veteran captain with a major U.S. airline, who asked not to be named to avoid involving his employer.

    The flight crew on the March 10 Ethiopian flight faced a barrage of alerts in the flight that lasted just 6 minutes. Those alerts included a “stick shaker” that noisily vibrated the pilot’s yoke throughout the flight, warning the plane was in danger of a stall, which it wasn’t; repeated loud “DON’T SINK” warnings that the jet was too close to the ground; a “clacker” making a very loud clicking sound to signal the jet was going too fast; and multiple warning lights telling the crew the speed, altitude and other readings on their instruments were unreliable.

    The Lion Air crash in October would have been at the forefront of the Ethiopian pilots’ minds, and they seem to have focused solely on following the Boeing procedure to eliminate the MAX’s new flight-control system — called Maneuvering Characteristics Augmentation System (MCAS) — that was pushing the nose down. They did so by flipping two cut-off switches. But then the heavy forces on the jet’s tail prevented them from moving the manual wheel in the cockpit that would have corrected the nose-down attitude.

    “What would the best pilot do on their worst day with all of this sensory overload?” the veteran U.S. airline captain said. “Who knows what any of us would have done?” “The manufacturer isn’t supposed to give us airplanes that depend on superhuman pilots,” he added. “We should have airplanes that don’t fail the way these airplanes failed.”

    What Does the Simulator Say?

    Starting from the point where the Ethiopian pilots hit the cut-off switches and stopped MCAS from operating, the U.S. MAX crew tried in the simulator to recover.

    Even though the U.S. crew performed the simulator experiment at a normal speed of 250 knots instead of the more than 350 knots of the Ethiopian jet, the forces on the jet’s tail still prevented them from moving the manual wheel in the cockpit that would have corrected the nose-down attitude.

    To get out of it, the pilots used an old aviator technique called the “roller coaster” method — letting the yoke go to relieve the forces on the tail, then cranking the wheel, and repeating this many times.

    This technique has not been in U.S. pilot manuals for decades, and pilots today are not typically trained on it. Using it in the simulator, the U.S. MAX crew managed to save the aircraft but lost 8,000 feet of altitude in the process. The Ethiopian MAX never rose higher than 8,000 feet, indicating that from that point in the flight, the crew couldn’t have saved it.

    Two Hours on an Ipad

    Boeing says 2 hours on an iPad is all it takes in additional training.

    Really? When top-notch pilots cannot recover a craft in a simulator as opposed to real life panic?

    Of course, Boeing insists that the software is now fixed.

    Is it?

    Trained Pilots

    Bjorn Fehrm, a Swedish pilot and aerospace engineer who is an analyst for Bainbridge Island-based Leeham.net, said the report assumes the accidents could have been avoided by “a really proficient pilot … on a good day.” But he said Boeing and Airbus cannot rely on the roughly 300,000 pilots flying worldwide having a good day and being perfectly trained for every emergency.

    The veteran U.S. airline captain said that the American aviation community needs to avoid getting “too cocky about U.S. pilots being immune from mistakes.”

    He said he’s spent a lot of time flying with local pilots in western China where the mountains are high and the flying is hazardous. I’d put them up against American airline pilots any day,” he said. “They are exceptional airmen.” And he criticized Boeing for designing an airplane in which a system triggered by a single sensor failure would present such challenges and require such a high-performance response from the pilots.

    Myth Shattered

    I believe that dispels the myth that US pilots would necessarily have avoided those crashes.

    Damning Audio

    Next consider a damning audio that shows pilots confronting Boeing about new features suspected in deadly crashes.

    CBS News has obtained audio from the American Airlines pilots' union confronting Boeing about new features to the 737 Max that may have been factors in two deadly crashes. Frustration boiled over during the tense meeting in November 2018, less than a month after the first Max crashed, and four months before the second crash.

    "We flat out deserve to know what is on our airplanes," one pilot is heard saying. "I don't disagree," a Boeing official said.

    The pilots at the meeting were angry that system was not disclosed to them until after the first crash. "These guys didn't even know the damn system was on the airplane — nor did anybody else," one pilot said.

    The official, Boeing vice president Mike Sinnett, who does not appear to know he was being recorded, claimed what happened to Lion Air was once-in-a-lifetime type scenario.

    Boeing told the pilots it would make software changes, perhaps in as little as six weeks, but didn't want to hurry it. "We want to make sure we're fixing the right things," the official said. "That's the important thing. To make sure we're fixing the right things. We don't want to rush and do a crappy job of fixing the right things, and we also don't want to fix the wrong things."

    That fix was still in development when the second 737 Max crashed in March, leading to the worldwide grounding of the plane. The existence of the audio was first reported by the Dallas Morning News.

    Fixes Needed

    Boeing was aware fixes were needed but sent out no alerts or warnings. Boeing did not treat this as an emergency.

    Recall that even after the second crash Boeing begged Trump to not ground the planes.

    How galling is that?

    Criminal Negligence?

    The Points Guy says Boeing Faces a Possible Legal Nightmare With Airlines for the 737 MAX.

    Norwegian Air has already declared that it will demand compensation from Boeing for its grounded fleet of 737 MAXes and lost fares, meaning that a lawsuit is all but certain unless Boeing simply gives in, which is unlikely. Other airlines are widely expected to follow Norwegian’s lead.

    Boeing and its client airlines are likely already frantically preparing their legal arsenals. That will play a huge role in determining how much the aircraft manufacturer will ultimately be on the hook for — or whether it might even come out of the debacle scot-free.

    The key point of contention will be whether Boeing did its due diligence in keeping its planes safe. That includes rolling out an airworthy vessel, but also making sure it and its clients were up to date on needed improvements, upgrades and revised standards.

    “The easiest thing to relate it to is your car,” Dedmon said. “If the airbag’s been found to be bad, the manufacturer issues a notice to the buyers, you take it to the dealer, and they get it fixed. Things of that nature happen in aviation as well, like a repair that went out at a certain time, or inspections to have to be done within certain flight hours — those things aren’t routine in aviation, and there’s nothing abnormal in any form with that.”

    Where the parties are likely to disagree in court, however, is whether the airline or Boeing or a third party didn’t do the best reasonable job of making sure everyone who needed to know was kept abreast of vital updates.

    What the plaintiffs’ lawyer will particularly be keeping an eye out for — but are unlikely to find, in this day and age — is a “smoking gun” document that’s proof that Boeing knew about a dangerous fault in the 737 MAX and covered it up. That’s what happened with the Ford Pinto, which notoriously exploded into flames in relatively minor collisions.

    Tough But Not Too Tough

    The Detroit Free Press discusses criminal negligence in its report Should Boeing be held liable for plane crashes? It's complicated.

    The crashes highlight a perennial question facing authorities in many nations: How to punish and correct bad corporate behavior without damaging the economy or thousands of innocent employees?

    Preet Bharara, the former U.S. attorney for the Southern District of New York, writes in his new book "Doing Justice" that people often ask him why no Wall Street executives went to jail following the collapse of the financial system in 2008, an event that triggered the Great Recession. The answer, he writes, is that criminal charges are often so hard to make stick.

    "Much of what happened in 2008 was not the product of a few people with clear, provable intent to rob others of their savings," he writes. Rather, the financial collapse stemmed from thousands of people ignoring or not understanding the risks in the mortgage-backed securities they were buying and selling.

    Everyone wants the bad actors to go to jail, Bharara adds. "But in the system that we have, you can't proceed without proof of particular people engaging in particular conduct with a particular mental intent. The bar to prove intent is high."

    Absent clear evidence of criminal intent, he writes, "You can find behavior reprehensible, careless, greedy, thoughtless and cruel, but that's not enough to bring a case."

    "If they can't get an individual, then they'll try to charge the company because companies generally are easy to get," Henning said. "They tend not to fight, so there's less of a chance they will go to trial." And often what you see in these settlements with companies, they try to mitigate the damage. They get the penalty but then they try to make sure it doesn't cost the company too much. You don't want to put Boeing out of business.

    Smoking Gun?

    In the absence of a smoking gun, it would be very difficult to prove criminal negligence.

    But consider wrongful death lawsuits. Expect the airlines to be dragged into some of those lawsuits.

    And Boeing might counter-sue over cancelled contracts claiming the planes are fit to fly.

    This can drag on for years and probably will.

    Lawyers will have a field day and make a fortune.

    Published:5/17/2019 11:22:05 AM
    [Markets] The Ratings Game: Pinterest shares tumble after earnings but analysts seem unfazed Pinterest Inc. shares tumble, as analysts weigh in on the company’s first quarterly earnings since going public, with most seeming unfazed by bigger-than-expected losses.
    Published:5/17/2019 10:49:58 AM
    [Markets] Buchanan: Who Wants This War With Iran?

    Authored by Patrick Buchanan via Buchanan.org,

    Speaking on state TV of the prospect of a war in the Gulf, Iran’s supreme leader Ayatollah Khamenei seemed to dismiss the idea.

    “There won’t be any war. … We don’t seek a war, and (the Americans) don’t either. They know it’s not in their interests.”

    The ayatollah’s analysis — a war is in neither nation’s interest — is correct. Consider the consequences of a war with the United States for his own country.

    Iran’s hundreds of swift boats and handful of submarines would be sunk. Its ports would be mined or blockaded. Oil exports and oil revenue would halt. Air fields and missile bases would be bombed. The Iranian economy would crash. Iran would need years to recover.

    And though Iran’s nuclear sites are under constant observation and regular inspection, they would be destroyed.

    Tehran knows this, which is why, despite 40 years of hostility, Iran has never sought war with the “Great Satan” and does not want this war to which we seem to be edging closer every day.

    What would such a war mean for the United States?

    It would not bring about “regime change” or bring down Iran’s government that survived eight years of ground war with Saddam Hussein’s Iraq.

    If we wish to impose a regime more to our liking in Tehran, we will have to do it the way we did it with Germany and Japan after 1945, or with Iraq in 2003. We would have to invade and occupy Iran.

    But in World War II, we had 12 million men under arms. And unlike Iraq in 2003, which is one-third the size and population of Iran, we do not have the hundreds of thousands of troops to call up and send to the Gulf.

    Nor would Americans support such an invasion, as President Donald Trump knows from his 2016 campaign. Outside a few precincts, America has no enthusiasm for a new Mideast war, no stomach for any occupation of Iran.

    Moreover, war with Iran would involve firefights in the Gulf that would cause at least a temporary shutdown in oil traffic through the Strait of Hormuz — and a worldwide recession.

    How would that help the world? Or Trump in 2020?

    How many allies would we have in such a war?

    Spain has pulled its lone frigate out of John Bolton’s flotilla headed for the Gulf. Britain, France and Germany are staying with the nuclear pact, continuing to trade with Iran, throwing ice water on our intelligence reports that Iran is preparing to attack us.

    Turkey regards Iran as a cultural and economic partner. Russia was a de facto ally in Syria’s civil war. China continues to buy Iranian oil. India just hosted Iran’s foreign minister.

    So, again, Cicero’s question: “Cui bono?”

    Who really wants this war? How did we reach this precipice?

    A year ago, Secretary of State Mike Pompeo issued a MacArthurian ultimatum, making 12 demands on the Tehran regime.

    Iran must abandon all its allies in the Middle East — Hezbollah in Lebanon, the Houthis in Yemen, Hamas in Gaza — pull all forces under Iranian command out of Syria, and then disarm all its Shiite militia in Iraq.

    Iran must halt all enrichment of uranium, swear never to produce plutonium, shut down its heavy water reactor, open up its military bases to inspection to prove it never had a secret nuclear program and stop testing missiles. And unless she submits, Iran will be strangled with sanctions.

    Pompeo’s speech at the Heritage Foundation read like the terms of some conquering Caesar dictating to some defeated tribe in Gaul, though we had yet to fight and win the war, usually a precondition for dictating terms.

    Iran’s response was to disregard Pompeo’s demands.

    And crushing U.S. sanctions were imposed, to brutal effect.

    Yet, as one looks again at the places where Pompeo ordered Iran out — Lebanon, Yemen, Gaza, Syria, Iraq — no vital interest of ours was imperiled by any Iranian presence.

    The people who have a problem with Hamas in Gaza and Hezbollah in Lebanon are the Israelis whose occupations spawned those movements.

    As for Yemen, the Houthis overthrew a Saudi puppet.

    Syria’s Bashar Assad never threatened us, though we armed rebels to overthrow him. In Iraq, Iranian-backed Shiite militia helped us to defend Baghdad from the southerly advance of ISIS, which had taken Mosul.

    Who wants us to plunge back into the Middle East, to fight a new and wider war than the ones we fought already this century in Afghanistan, Iraq, Syria, Libya and Yemen?

    Answer: Pompeo and Bolton, Bibi Netanyahu, Crown Prince Mohammed bin Salman and the Sunni kings, princes, emirs, sultans and the other assorted Jeffersonian democrats on the south shore of the Persian Gulf.

    And lest we forget, the never-Trumpers and neocons in exile nursing their bruised egos, whose idea of sweet revenge is a U.S. return to the Mideast in a war with Iran, which then brings an end to the Trump presidency.

    Published:5/17/2019 10:49:57 AM
    [Markets] US stocks flip flop, erase morning losses to pull higher NEW YORK (AP) — U.S. stocks erased an early morning loss on Friday to pull higher, the latest spin cycle for a market that's been tossed around the last two weeks by rising and falling worries about the global trade war. Published:5/17/2019 10:49:57 AM
    [Markets] CFPB sues debt-collection firm used by Discover, Citi CFPB sues debt-collection firm used by Discover, Citi Published:5/17/2019 10:49:57 AM
    [Markets] China's Luckin Coffee appears set to surge 40% from IPO price in Nasdaq debut China's Luckin Coffee appears set to surge 40% from IPO price in Nasdaq debut Published:5/17/2019 10:20:04 AM
    [Markets] US Poised To Remove Steel, Aluminum Tariffs On Canada, Mexico

    In a move that helps clear the way for USMCA ratification, Bloomberg reports that, according to people familiar with the matter, the U.S. is poised to lift steel and aluminum tariffs on Canada and Mexico in favor of stronger enforcement actions.

    The effective date for removing the tariffs is the outstanding issue, one of the people said.

    The move will lift the 25% steel and 10% aluminum tariffs the U.S. placed on the two trading neighbors almost a year ago in the name of national security.

    US equities extended gains on the news (as did Canadian and Mexican stocks)...

     

    And the Loonie and peso jumped...

     

    Published:5/17/2019 10:20:04 AM
    [Markets] Dow claws back from 205-point skid to trade higher as stock market stages late-morning turnaround The Dow Jones Industrial Average on Friday pivoted from a solid loss to a firm gain, erasing a more than 200-point opening drop in late-morning dealings. The Dow was up 64 points, or 0.3%, at 25,929, after hitting an intraday low of 25,657.78, representing a roughly 205-point decline for the blue-chip gauge. The move coincided with a broad pivot for the other two main U.S. benchmarks, with the S&P 500 index rising 0.3% at 2,883, and the Nasdaq Composite Index advancing 0.2% at 7,914, with both indexes wiping out earlier declines. All week, investors have been wrestling with developments on trade between the U.S. and its international counterparts, with tensions between the U.S. and China particularly elevated. Published:5/17/2019 10:20:04 AM
    [Markets] The Woman Who Predicted the 2018 Stock Market Volatility Blowup Has a New ETF Nancy Davis is the brain behind a new exchange-traded fund on Wall Street that aims to offer investors ways to bet on inflation, the shape of the yield curve, and a sharp rise in interest rates. Published:5/17/2019 9:57:27 AM
    [Markets] Fastly's stock opens 34% above IPO price Fastly's stock opens 34% above IPO price Published:5/17/2019 9:57:27 AM
    [Markets] Key Levels To Watch: S&P Is "Deep In The Throes Of Op-Ex Gamma Hedging"

    S&P futures tumbled overnight, erasing all of yesterday's gains ahead of the cash market open. But once Op-Ex day began and stocks started trading, the S&P went vertical and is chopping around as Nomura's Charlie McElligott notes that trading remains deeply in the throes of Gamma hedging around Op-Ex.

    Via Nomura,

    The following levels remain “in-play” (and proving to act as magnets over the course of yesterday’s session): 

    • 2850 to the downside (now $3.44B of notional Gamma)

    • 2880 ($2.72B notional Gamma) and 

    • 2900 ($6.46B notional Gamma—thus that RAGING +55 handle rally intraday) to the upside as most likely points across the range.

    Notably and despite the overnight tone, the S&P Call wing went “bid” yesterday (heavy 2950, 2975, 3000, 3025 C / CS activity) on a nerve-y “grab,” as futures were intraday pulled higher to the gravity of the large Gamma at 2880 & 2900 strikes, all part of the feedback loop which elicited “rolling stop-ins” from last week’s “short delta” hedges in Spooz.

    S&P CALL WING GOES ‘BID,’ INDICATING THAT THE MARKET IS SCARED OF THE ‘RIGHT TAIL’:  See the three-day progression of the options-implied price distribution—with the daily move from Tuesday (green) to Wednesday (light blue) to Thursday (pink) shifting further to the right, pulled via demand for higher strikes.

    McElligott highlights the following crucial CTA Pivot Points across asset-classes...

    • Equities

      • [b/s is 0.06% away] Euro Stoxx 50, currently 100.0% long, [3406.0], selling under 3403.85 (-0.06%) to get to 69% , more selling under 3375.27 (-0.90%) to get to -92% , flip to short under 3375.62 (-0.89%), max short under 3080.76 (-9.55%)

      • [b/s is 0.53% away] Russell 2000, currently -91.6% short, [1559.9], more selling under 1543.52 (-1.05%) to get to -96% , max short under 1543.36 (-1.06%), buying over 1568.14 (+0.53%) to get to -76% , more buying over 1615.24 (+3.55%) to get to 20% , flip to long over 1615.24 (+3.55%), max long over 1615.39 (+3.56%)

      • [b/s is 0.53% away] Nikkei 225, currently -91.6% short, [21050.0], more selling under 20939.24 (-0.53%) to get to -96% , max short under 20937.14 (-0.54%), buying over 22038.1 (+4.69%) to get to -11% , more buying over 22226.64 (+5.59%) to get to 84% , flip to long over 22040.21 (+4.70%), max long over 22228.75 (+5.60%)

      • [b/s is 0.67% away] S&P 500, currently 68.8% long, [2878.6], more buying over 2898.02 (+0.67%) to get to 84% , max long over 2898.31 (+0.68%), selling under 2740.71 (-4.79%) to get to 65% , more selling under 2691.48 (-6.50%) to get to -20% , flip to short under 2691.48 (-6.50%), max short under 2691.48 (-6.50%)

      • [b/s is 1.02% away] NASDAQ 100, currently 68.8% long, [7600.25], more buying over 7677.6 (+1.02%) to get to 84% , max long over 7678.36 (+1.03%), selling under 7005.86 (-7.82%) to get to 65% , more selling under 6778.24 (-10.82%) to get to -20% , flip to short under 6778.24 (-10.82%), max short under 6778.24 (-10.82%)

      • [b/s is 3.02% away] HangSeng CH, currently -100.0% short, [10756.0], buying over 11080.31 (+3.02%) to get to -96% , more buying over 11743.8 (+9.18%) to get to -76% , flip to long over 11776.38 (+9.49%), max long over 11776.38 (+9.49%)

    • Bonds

      • [b/s is 0.14 away] JPY_10Y, currently 100.0% long, [152.83], selling under 152.69 (-0.14) to get to 45% , more selling under 151.02 (-1.81) to get to -45% , flip to short under 151.03 (-1.80), max short under 150.45 (-2.38)

      • [b/s is 0.205 away] ED4, currently 100.0% long, [97.785], selling under 97.58 (-0.20) to get to -100% , more selling under 97.58 (-0.20) to get to -100% , flip to short under 97.6 (-0.19), max short under 97.58 (-0.20)

      • [b/s is 1.3 away] GBP_10Y, currently 100.0% long, [128.61], selling under 127.31 (-1.30) to get to 45% , more selling under 124.99 (-3.62) to get to -45% , flip to short under 125.0 (-3.61), max short under 122.19 (-6.42)

      • [b/s is 1.9619 away] USD_10Y, currently 100.0% long, [124.421875], selling under 122.46 (-1.96) to get to 45% , more selling under 119.33 (-5.09) to get to -45% , flip to short under 119.34 (-5.08), max short under 118.6 (-5.82)

      • [b/s is 2.95 away] EUR_10Y, currently 100.0% long, [166.95], selling under 164.0 (-2.95) to get to 45% , more selling under 159.0 (-7.95) to get to -45% , flip to short under 159.01 (-7.94), max short under 154.51 (-12.44)

    • Commods

      • [b/s is 0.69% away] Gold, currently 89.7% long, [1286.2], more buying over 1323.47 (+2.90%) to get to 95% , max long over 1323.6 (+2.91%), selling under 1277.34 (-0.69%) to get to 61% , more selling under 1238.08 (-3.74%) to get to -33% , flip to short under 1238.08 (-3.74%), max short under 1237.95 (-3.75%)

      • [b/s is 1.29% away] Copper, currently -100.0% short, [6089.0], buying over 6167.34 (+1.29%) to get to -33% , more buying over 6528.75 (+7.22%) to get to 61% , flip to long over 6167.95 (+1.30%), max long over 6749.77 (+10.85%)

      • [b/s is 1.43% away] WTI, currently 33.2% long, [62.87], more selling under 54.72 (-12.96%) to get to -33% , flip to short under 54.72 (-12.96%), max short under 54.71 (-12.98%), buying over 63.77 (+1.43%) to get to 61% , more buying over 63.77 (+1.43%) to get to 90% , max long over 65.09 (+3.53%)

    • FX

      • [b/s is 0.01% away] USDJPY, currently -1.5% short, [109.935], more buying over 109.9469 (+0.01%) to get to 49% , flip to long over 109.9469 (+0.01%), max long over 109.9579 (+0.02%), selling under 108.0239 (-1.74%) to get to -50% , more selling under 108.013 (-1.75%) to get to -100% , max short under 108.013 (-1.75%)

      • [b/s is 0.31% away] GBPUSD, currently -100.0% short, [1.2792], buying over 1.2832 (+0.31%) to get to -49% , more buying over 1.3632 (+6.57%) to get to 50% , flip to long over 1.2833 (+0.32%), max long over 1.3632 (+6.57%)

      • [b/s is 1.62% away] EURUSD, currently -100.0% short, [1.1178], buying over 1.1359 (+1.62%) to get to -49% , more buying over 1.2052 (+7.82%) to get to 50% , flip to long over 1.136 (+1.63%), max long over 1.2052 (+7.82%)

      • [b/s is 2.05% away] USDCNH, currently 100.0% long, [6.9148], selling under 6.773 (-2.05%) to get to -1% , more selling under 6.4014 (-7.42%) to get to -100% , flip to short under 6.773 (-2.05%), max short under 6.4014 (-7.42%)

      • [b/s is 2.92% away] AUDUSD, currently -100.0% short, [0.69055], buying over 0.7107 (+2.92%) to get to -49% , more buying over 0.7511 (+8.77%) to get to 50% , flip to long over 0.7107 (+2.92%), max long over 0.7511 (+8.77%)

     

    Published:5/17/2019 9:57:27 AM
    [Markets] U.S. consumer-sentiment index jumps to 15-year high U.S. consumer-sentiment index jumps to 15-year high Published:5/17/2019 9:25:56 AM
    [Markets] Stocks drop around the world, bonds rise on trade worries Stocks flopped on Friday, and investors herded into the safety of bonds after the market's reading of the U.S.-China trade war flipped back to worry. Industrial companies had the sharpest losses after equipment maker Deere cut its profit forecast for the year, citing slower sales from farmers worried about exports, among other factors. More than 80% of the stocks in the S&P 500 fell. Published:5/17/2019 9:25:56 AM
    [Markets] Soon more borrowers will be able to use vacation days to pay off student-loan debt It’s an added twist to an increasingly popular employee benefit.
    Published:5/17/2019 9:25:56 AM
    [Markets] Beijing Backs Iran, "Firmly Opposes" Unilateral US Sanctions

    In the latest sign of Beijing's frustration with the US, the Chinese leadership have reiterated their opposition to American sanctions against Iran. After a meeting with Iranian Foreign Minister Javad Zarif, Chinese Foregin Minister Wang Yi reiterated Beijing's 'firm opposition' to unilateral US sanctions against Iran.

    • CHINA'S FOREIGN MINISTER WANG YI MEETS IRAN'S ZARIF
    • CHINA FIRMLY OPPOSES U.S.'S UNILATERAL SANCTIONS AGAINST IRAN

    With the US moving more firepower into the Persian Gulf, an attempt to send Tehran an unmistakable message, Zarif asked Beijing to try and save the 2015 nuclear deal, WSJ reports.

    Iran

    Iranian Foreign Minister Javad Zarif and Chinese Foreign Minister Wang Yi.

    Zarif's meeting with his Chinese counterpart is the first step on a tour of Asia, as Iran canvasses its key economic partners now that US sanctions have been reimposed.

    Mr. Zarif’s visit to China, where he will meet his Chinese counterpart, is part of a longer trip that includes other key economic partners Russia, Japan and India. It comes amid growing tensions between Washington and Tehran, which spiked over the past week when the U.S., citing unspecified intelligence, deployed an aircraft carrier, a bomber task force and other personnel to the Middle East.

    The Iranian embassy in China said on Twitter that Mr. Zarif had "arrived in Beijing to maintain consultations between all-weather friends in the wake of new efforts to manufacture unnecessary tensions."

    China’s Foreign Ministry confirmed Mr. Zarif’s visit but declined to release further information.

    The Iranian situation is difficult for Beijing, said Yin Gang, a Middle East politics expert with the government-backed Chinese Academy of Social Sciences. He said the conflict isn’t simply between the U.S. and Iran but between Arab states and Iran. China, Mr. Yin said, "wants a balanced diplomacy in the Middle East, and hopes to make friends and do business with everyone."

    China imports crude from Iran and has expressed reservations about US sanctions in the past. However, given the state of the relationship between Washington and Beijing, the Chinese appear to be signaling that a proxy war over Iran could be just around the corner if Washington doesn't seriously reevaluate its approach.

    Published:5/17/2019 9:25:56 AM
    [Markets] Former NHTSA Head: Tesla's "Defective" Autopilot Uses Drivers As "Guinea Pigs", Should Be Recalled

    Perhaps the most notable take on the recent fatal Autopilot related accident in Delray Beach, Florida has come from a former acting head of the NHTSA.

    For months, we have been asking why the NHTSA has been dragging its feet in taking action regarding Tesla's obviously mislabeled and misinterpreted driver assistance software, "Autopilot", which continues to be at the center of numerous Tesla accidents reported on by the mainstream media.

    Though the NHTSA has yet to take any meaningful action regarding Autopilot, they may be compelled to pay closer attention after comments made yesterday by a former agency official.

    Speaking to the LA Times, David Friedman, who was acting head of the NHTSA in 2014 and is now vice president of advocacy for Consumer Reports, said he was "surprised the agency didn’t declare Autopilot defective after the [2016] Gainesville crash and seek a recall."

    “Their system cannot literally see the broad side of an 18-wheeler on the highway,” Friedman said.

    He also said that Tesla's system was "too slow" to warn the driver to pay attention, unlike other systems that Consumer Reports has tested from GM. Recall, just days ago we wrote about the family of a killed Model X driver suing Tesla, claiming his “state-of-the-art” Tesla lacked safety features, such as an automatic emergency braking system, which the family pointed out was available on less expensive vehicles from other carmakers.

    Friedman continued:

    "Tesla needs a better system to more quickly detect whether drivers are paying attention and warn them if they are not. Tesla has for too long been using human drivers as guinea pigs. This is tragically what happens.”

    “There are multiple systems out on the roads right now that take over some level of steering and speed control, but there’s only one of them that we keep hearing about where people are dying or getting into crashes. That kind of stands out,” Friedman concluded.

    We reported yesterday that the NTSB had released its preliminary report  regarding a fatal Tesla crash in Delray Beach, Florida that took place on March 1. The report found that Tesla's Autopilot "was active at the time of the crash".

    The report describes the events leading up to the incident:

    As the Tesla approached the private driveway, the combination vehicle pulled from the driveway and traveled east across the southbound lanes of US 441. The truck driver was trying to cross the highway’s southbound lanes and turn left into the northbound lanes.

    According to surveillance video in the area and forward-facing video from the Tesla, the combination vehicle slowed as it crossed the southbound lanes, blocking the Tesla’s path. The Tesla struck the left side of the semitrailer. The roof of the Tesla was sheared off as the vehicle underrode the semitrailer and continued south. The Tesla came to a rest on the median, about 1,600 feet from where it struck the semitrailer. The 50-year-old male Tesla driver died as a result of the crash. 

    The report then goes on to note that Autopilot had been engaged 10 seconds before the collision and that the vehicle, traveling about 68 mph, didn't execute evasive maneuvers: 

    The driver engaged the Autopilot about 10 seconds before the collision. From less than 8 seconds before the crash to the time of impact, the vehicle did not detect the driver’s hands on the steering wheel. Preliminary vehicle data show that the Tesla was traveling about 68 mph when it struck the semitrailer. Neither the preliminary data nor the videos indicate that the driver or the ADAS executed evasive maneuvers.

    NHTSA, it's your move. 

    Published:5/17/2019 8:49:23 AM
    [Markets] Dow falls 160 points at the open, jeopardizing multiday rally as China trade tensions flare up U.S. stock benchmarks Friday morning opened solidly lower, putting the thee main indexes on a path to book weekly losses and halt a three-session advance amid further investor concerns about trade relations between the U.S. and its international counterparts. The Dow Jones Industrial Average traded about 158 points, or 0.6%, lower at 25,712, the S&P 500 index declined 0.6% at 2,858, and the Nasdaq Composite Index retreated 0.7% at 7,840 at the open. For the week, the Dow was set for a weekly decline of 1%, the S&P 500 was poised for a weekly slide of 0.8%, while the Nasdaq was on track to fall 1%, according to FactSet data. Heightened trade tensions appeared evident in comments from state-controlled media, including the Communist Party's People's Daily and Xinhua News Agency, which published scathing attacks on U.S. actions in recent days. "The U.S. has made an irrational act in trying to blackmail China with tariff hikes, which will be proven over time to be shortsighted and doomed to fail," read an editorial in the Xinhua early Friday. Meanwhile, the British pound was under pressure against the dollar amid growing uncertainty about Britain's plans to exit from Europe's trading bloc. In corporate news, shares of Pinterest Inc. were looking at double-digit percentage losses, after the social-media company announced Thursday evening that its first-quarter losses of $41.4 million were three times as large as analysts had expected. Published:5/17/2019 8:49:23 AM
    [Markets] Dow industrials suffer triple-digit loss at Friday's opening bell Dow industrials suffer triple-digit loss at Friday's opening bell Published:5/17/2019 8:49:23 AM
    [Markets] Trump delays automobile-tariff decision Trump delays automobile-tariff decision Published:5/17/2019 8:20:38 AM
    [Markets] JPM Warns About "Perfect Storm" American Farm Crisis, Slashes Deere To Sell

    An escalating Sino-American trade war is creating turmoil in rural America.

    JPMorgan told clients Tuesday, the American agriculture complex is on the verge of disaster, with farmers caught in the crossfire of an escalating trade war, reported the Financial Times.

    "Overall, this is a perfect storm for US farmers," JPMorgan analyst Ann Duignan warned investors.

    With a farm crisis currently underway, Duignan downgraded John Deere's stock to underweight, citing fundamentals in the Midwest are "rapidly deteriorating."

    And his downgrade was well-timed after Deere's earnings overnight, as Bloomberg reports that Deere & Co. is no longer “cautiously optimistic” as it has been for so long.

    The machinery giant reported lower-than-expected earnings and cut its annual guidance as its farmer customers shun major purchases amid uncertainty about demand for their products.

    “Ongoing concerns about export-market access, near-term demand for commodities such as soybeans, and a delayed planting season in much of North America are causing farmers to become much more cautious about making major purchases,” Chief Executive Officer Sam Allen said in a statement Friday.

    And shares are tumbling...

    Farmers are facing tremendous headwinds, including worsening trade war, collapsing soybean exports, global oversupply conditions, and crop yield losses in the Midwest due to flooding.

    "As a result of tariffs and excess global supply, US soybean export inspections are down 27%" YoY, Duignan wrote. She added that the Chinese are shunning US farmers and are purchasing crops from South America.

    Refinitiv trade flows indicate the trade war has cut over 80% of US soybean exports to China so far this market year (September-August).

    Domestically, "the Midwest is off to a very slow start in 2019/20," Duignan wrote. The growing season is "off to a bad start," and soybeans are far behind in "planting progress" compared with 2018, she said.

    After promising over the weekend to "never surrender to external pressure," Beijing defied President Trump's demands that it not resort to retaliatory tariffs and announced plans to slap new levies on $60 billion in US goods.

    China's retaliatory tariff rate increase comes after the White House raised tariffs on some $200 billion in Chinese goods to 25% from 10% on Friday.

    In more bad news, China might completely stop purchasing agricultural products from the US. There are currently 7.4 million metric tons of beans that have not yet been shipped to China, according to the US Department of Agriculture data. China could easily cancel the orders, or if the beans are en route, Chinese ports could refuse to take the cargo, a Bloomberg headline said.

    This all comes at a time when farmers are defaulting and missing payments at alarming rates, forcing regional banks to restructure and refinance existing loans.

    Several months ago, we showed the number of farmers filing for bankruptcy climbed to its highest level in a decade.

    Because of the unfriendly environment, the level of farm debt is approaching highs not seen since the farm crisis of the early 1980s.

    The deepening trade war has led Trump to pledge $15 billion worth of agricultural product purchases from American farmers through the Commodity Credit Corp., a federal agency given authority during the Great Depression to stabilize prices.

    Farmers are some of Trump's key supporters, they've been big advocates of getting a better trade deal with Beijing, but now many are running out of patience as the Midwest goes bankrupt - triggering JPM to write a gloomy note to investors of the next farm crisis.

    Published:5/17/2019 8:20:38 AM
    [Markets] Stock-index futures point lower as China casts doubt on further trade talks Stock-index futures point to a lower start for Wall Street Friday as a bounceback from a rout inspired by the U.S.-China trade battle appears in danger of running out of steam. Published:5/17/2019 7:50:42 AM
    [Markets] Bitcoin's plunge headlines cryptocurrency selloff Bitcoin's plunge headlines cryptocurrency selloff Published:5/17/2019 7:50:42 AM
    [Markets] White House Confirms Auto Tariffs Delayed By 6 Months

    Beijing's announcement overnight that there are no plans for more trade talks with Washington has rattled global markets, and seeing as there's no positive trade news on the China front, the White House is giving a bullish headline about auto tariffs, perhaps the second-most-important trade-related issue.

    Confirming earlier reports, Trump said plans to impose auto tariffs on EU auto imports by six months.

    • TRUMP SAYS EU, JAPAN AUTO TARIFFS DELAYED FOR AT LEAST 180 DAYS
    • WHITE HOUSE SET TO ANNOUNCE UP TO SIX MONTH DELAY IN DECIDING WHETHER TO IMPOSE TARIFFS ON IMPORTED CARS AND PARTS FRIDAY

    Cars

    One analyst told BBG that the delay is a sign that the administration is shelving its plans for a broader trade battle, but still, everything else pales in comparison to China.

    "So one part of the trade fight is being put off. And hopefully we'll soon know if the metals tariffs the U.S. imposed on Mexico and Canada will be torn down after this week's proposal. But all that pales in comparison to the China situation."

    Unfortunately, the jawboning has met with limited success. US stock futures have moved off their lows for the session on the news.

    Published:5/17/2019 7:50:42 AM
    [Markets] Capitol Report: Treasury, IRS set to miss Trump tax return subpoena deadline | Bolton-Pompeo relationship strained over Iran The Hill writes that the Treasury Department and Internal Revenue Service are set to miss a Friday deadline to comply with subpoenas for President Donald Trump’s tax returns, setting up a prolonged legal battle.
    Published:5/17/2019 7:50:41 AM
    [Markets] Market Snapshot: Stock-index futures point lower, putting rebound in danger after China casts doubt on further trade talks Stock-index futures point to a lower start for Wall Street Friday as a bounceback from a rout inspired by the U.S.-China trade battle appears in danger of running out of steam.
    Published:5/17/2019 7:20:29 AM
    [Markets] Cray to be sold to HP Enterprise in a $1.3 billion deal, at a 17% premium Cray to be sold to HP Enterprise in a $1.3 billion deal, at a 17% premium Published:5/17/2019 7:20:28 AM
    [Markets] Dow Futures Tumble as China Dials Up Trade Rhetoric; Dollar Hits Two-Week High State-run media use print, television and social media to excoriate U.S. moves on trade, as well as its blacklisting of Huawei, suggesting the two sides are moving further away from a potential deal. Bank of Japan Governor vows to keep rates near zero until the Spring of next year, underscoring the trade war threat to growth and its impact on currency markets and the U.S. dollar. Published:5/17/2019 7:20:28 AM
    [Markets] Trump De-escalating? Satellite Intel Based On Tehran "Misreading" US Intentions

    Soaring tensions of the past nearly two weeks paving the way for a potential direct military clash in the Persian Gulf between the US and Iran could be de-escalating as rapidly as they began as the president attempts to reign in hawks in his own administration, per a new report in FT:

    President Donald Trump said he hoped the US would not go to war with Iran, cooling tensions at the end of a week in which worries spiked over the risk of conflict between the US and the Islamic republic. As he stood outside the West Wing waiting to meet Swiss president Ueli Maurer on Thursday, Mr Trump was asked by a reporter whether the US was going to war with Iran. He replied: “I hope not.”

    This as the WSJ also reports Trump is fast reigning in his two Iran hawk horsemen of the apocalypse Bolton and Pompeo: "There are sharply differing views within the Trump administration over the meaning of intelligence showing Iran and its proxies making military preparations, people familiar with the matter said," according to the report.

    Image source: AFP/Getty

    So Trump doesn't want war, and now with the Senate demanding it be given a comprehensive briefing on just what the increased Iran threat constitutes and the intelligence consensus behind it (or lack thereof), it looks like the war train could be grinding to a halt. 

    Bloomberg also agrees, per its latest report:

    President Donald Trump is wary of drawing the U.S. into a war with Iran, in part out of concern that an armed conflict with the Islamic Republic would imperil his chances at winning a second term, according to people familiar with the matter. U.S.’s evidence of Iran threat readied for release by Pentagon. 

    But the Pentagon war machine's next move could hinge on what's been revealed as the initial key piece of intelligence "evidence" of Iran's "attack preparations" that got us here in the first place, starting with Bolton's May 5th announcement of a major Iranian threat escalation. The "smoking gun" that started it all apparently hinges on satellite photos showing Iranian paramilitary forces moving missiles on boats in the Persian Gulf (perhaps even in their own territorial waters!?).

    The New York Times cited three defense officials who confirmed that, “The intelligence that caused the White House to escalate its warnings about a threat from Iran came from photographs of missiles on small boats in the Persian Gulf that were put on board by Iranian paramilitary forces.”

    But crucially, according to US intelligence officials cited by the WSJ, the "missile movement" satellite photographs may have just been picking up on Iranian defensive measures that came in reaction to Tehran's belief that a US military attack was on the horizon.  

    "Intelligence collected by the U.S. government shows Iran’s leaders believe the U.S. planned to attack them, prompting preparation by Tehran for possible counterstrikes, according to one interpretation of the information," reports The Wall Street Journal's Warren Strobel, Nancy Youssef, and Vivian Salama.

    However, what was originally set in motion itself has momentum enough to spark confrontation, given on Thursday two Navy destroyers have entered the Persian Gulf as the American military continues to add to its assets in the region to head off any planned Iranian 'aggression', USNI reported.

    The USS McFaul and USS Gonzalez traveled through the Strait of Hormuz Thursday afternoon without being challenged by IRGC forces. They joined the USS Abraham Lincoln, which is stationed in the Gulf of Oman, as well as a strike force that includes several B-52 bombers out of Qatar. 

    So there it is: formula for de-escalation; however, the chances of some "accident" happening which leads to clashes remains high and unpredictable, at which point the intelligence debate Congress is demanding could turn into a moot afterthought, as is the pattern with many US wars. 

    Published:5/17/2019 7:20:28 AM
    [Markets] Stocks Retreat as China Dials Up Trade Rhetoric; Dollar Gains on Growth Concerns State-run media use print, television and social media to excoriate U.S. moves on trade, as well as its blacklisting of Huawei, suggesting the two sides are moving further away from a potential deal. Bank of Japan Governor vows to keep rates near zero until the Spring of next year, underscoring the trade war threat to growth and its impact on currency markets and the U.S. dollar. Wall Street futures suggest a weaker start to the trading day, following last night's rally that lifted benchmarks into positive territory for the week, ahead of earnings from Deere & Co. and consumer sentiment data at 10:00 am Eastern time. Published:5/17/2019 6:53:33 AM
    [Markets] "Government Power Was Used To Spy On American Citizens," Barr Says

    In his first pair of interviews since being sworn in, Attorney General Barr told Fox News and WSJ that he was pursuing the investigation into the origins of the Trump-Russia probe - an investigation he has tasked 

    John Durham, the US Attorney from Connecticut, with leading - because Americans need to know whether the government "put a thumb on the scale" to try and undermine President Trump both during the campaign and during the first two years of his term, just like "we need to ensure that foreign actors don't influence the outcome of our elections."

    Separately, he told WSJ that "government power was used to spy on American citizens...I can't imagine any world where we wouldn't take a look and make sure that was done properly."

    Barr has doubled-down on using the term 'spying', which has angered Democrats, after first using it during Senate committee testimony from April 10, where he uttered the now-infamous phrase "I think spying did occur."

    Barr

    The AG has declined to elaborate on what prompted these concerns, though he has said he'd be interested to see the underlying intelligence that sparked the FBI decision, in the summer of 2016, to open a counterintelligence investigation. At this point, Durham's review isn't a criminal investigation, and Barr hasn't offered a timetable for when the investigation might be completed. Ultimately, the probe could lead to changing FBI protocols involving investigations into political campaigns.

    Appearing to respond to Barr's interviews, President Trump declared that his campaign was "conclusively" spied on.

    As far as we know, the FBI first started investigating the campaign after an Australian ambassador told his superiors that George Papadopoulos had appeared to know about Russian plans to release 'dirt' on Hillary Clinton. The FBI later sent an informant, Stefan Halper, and a woman who identified herself as a research assistant, to meet with Papadopoulos and push him to say whether Russia was helping the Trump campaign.

    Watch the Fox interview below:

    Published:5/17/2019 6:53:33 AM
    [Markets] Internet legend Grumpy Cat has died at age 7 Internet and marketing star “Grumpy Cat” has died at the age of seven, her owners said early Friday.
    Published:5/17/2019 6:53:33 AM
    [Markets] Chemicals company Avantor prices IPO at $14 a share to raise $2.9 billion Chemicals company Avantor prices IPO at $14 a share to raise $2.9 billion Published:5/17/2019 6:53:33 AM
    [Markets] Nvidia's stock climbs 1.4% premarket after Q1 results late Thursday Nvidia's stock climbs 1.4% premarket after Q1 results late Thursday Published:5/17/2019 6:18:31 AM
    [Markets] Two More US Warships Travel To Persian Gulf As Tensions With Iran Escalate

    In the latest provocation against Tehran by the US, two Navy destroyers have entered the Persian Gulf as the American military continues to add to its assets in the region to head off any planned 'aggression', USNI reports.

    The USS McFaul and USS Gonzalez traveled through the Strait of Hormuz Thursday afternoon without being challenged by IRGC forces in the are. They join the USS Abraham Lincoln, which is stationed in the Gulf of Oman, as well as a strike force that includes several B-52 bombers, as the US continues to build up its military presence in the region. Another Aircraft Carrier, the USS Kearsarge, is anchored off the coast of the UAE. 

    Destroyer

    According to USNI, if the US wanted to attack Iran from the water, its ships would be better off outside of the Persian Gulf, where it would be more difficult for Iranian missiles to reach them, and where they would be outside of Iran's "domain awareness."

    The move comes after the US government has continued to warn about heightened threats from Iran. These fears have already prompted the evacuation of non-essential embassy personnel from the Baghdad embassy and the Erbil consulate.

    Secret satellite photos of Iranian missiles on a small boat in the Gulf have helped ratchet up tensions, and the US has threatened to attack Iran if the regime starts stockpiling enriched uranium and heavy water again, as it has warned it would abandon the Iran deal if its European partners don't make good on promises to buy Iranian oil and other financial considerations. CENTCOM has maintained that Iran is a 'growing threat' in the region.

    An investigation into the source of attacks on two Saudi tankers that Iran is suspected of having orchestrated.

    Published:5/17/2019 6:18:31 AM
    [Markets] The Dow Is Dropping Because China Is Talking Tough on Trade China has upped the trade rhetoric, with state-run media organizations running articles arguing that there’s no point in further talks until the U.S. shows it actually wants a deal. Published:5/17/2019 6:18:31 AM
    [Markets] Deep Dive: These 20 S&P 500 companies have posted the biggest sales surprises this earnings season Quarterly sales numbers can give you more insight than a quick “earnings beat” headline.
    Published:5/17/2019 6:18:31 AM
    [Markets] Immigrants would have to know more about the U.S. than many Americans under Trump’s immigration proposal Just under half of people knew that Justice John Roberts was the Chief Justice of the U.S. Supreme Court, a recent survey showed.
    Published:5/17/2019 5:48:53 AM
    [Markets] Taiwan Legalizes Gay Marriage

    Taiwan's Parliament voted on Friday to legalize gay marriage, becoming the first Parliament in Asia to do so, the BBC reports.

    Lawmakers weighed three separate bills to move ahead with legalizing same-sex unions, and ended up moving ahead with the government's bill, which has been described as the most progressive of the three. Taiwan's Supreme Court ruled that gay marriage should be legal back in 2017, and set a two-year deadline for Parliament to pass the changes into law. But this provoked a public backlash that ended with a series of referendums on the issue. The referendums showed that a majority of voters didn't want to legalize same sex marriage. Ultimately, lawmakers compromised and decided not to alter the existing definition of marriage, and instead passed a special law allowing same-sex marriage

    The government's bill was passed, 66-27, and was backed by lawmakers from the majority Democratic Progressive Party. It will take effect as soon as President Tsai Ing-wen passes it into law, allowing full equality for same-sex marriages and even clearing the way for limited adoption rights.

    President Tsai celebrated the vote on Twitter.

    Gay rights activists throughout the region also celebrated the victory, saying Taiwan had set an example for other developed Asian nations, including Singapore. Elsewhere in Asia, lawmakers are growing increasingly tolerant of the LGBTQ community, with India's Supreme Court ruling that gay sex is no longer a criminal offense.

    Published:5/17/2019 5:48:53 AM
    [Markets] Deere's stock sinks after profit miss, downbeat sales outlook Shares of Deere & Co. sank 4% toward a 5-month low in premarket trade Friday, after the agriculture, construction and turf care equipment maker reported fiscal second-quarter earnings that missed expectations and provided a downbeat outlook. Net income for the quarter to April 29 fell to $1.13 billion, or $3.52 a share, from $1.21 billion, or $3.67 a share, in the year-ago period. The FactSet consensus for net EPS was $3.60. Total revenue grew 5.8% to $11.34 billion, just shy of the FactSet consensus of $11.36 billion. Agriculture and turf revenue rose 3% to $7.28 billion, compared with the FactSet consensus of $7.32 billion; construction and forestry revenue rose 11% to $2.99 billion, topping expectations of $2.97 billion; financial services revenue increased 11% to $886 million, beating the FactSet consensus of $852 million. For fiscal 2019, Deere expects sales to increase 5%, while the FactSet consensus of $35.69 billion implies 7% growth. "Ongoing concerns about export-market access, near-term demand for commodities such as soybeans, and a delayed planting season in much of North America are causing farmers to become much more cautious about making major purchases," said Chief Executive Samuel Allen. The stock has lost 2.1% year to date through Thursday, while the Dow Jones Industrial Average has gained 11%. Published:5/17/2019 5:48:53 AM
    [Markets] Trade Optimism Fizzles As China Says No Plans For More Talks

    Well, it looks like President Trump finally did it. He finally pushed Beijing so hard on Huawei that they had no choice but to respond.

    The Chinese weren't kidding when they warned that Washington's latest aggression toward Huawei - adding the Chinese telecoms giant to a blacklist that will make it extremely difficult, if not impossible, for Huawei to buy components from American companies - might crash trade talks.

    Trade

    Because after the Commerce Department formally added Huawei to the blacklist, the Chinese media and Chinese officials turned up the rhetoric, warning that there are no plans for another round of talks. Markets didn't take this well: Chinese stocks plunged 2.5% overnight on Friday - a big drop, though still not as bad as the 3% decline from last Monday,the market's worst day in three years. European shares didn't fare much better because, as one analyst explained to Bloomberg...

    "The China state media commentaries fueled concerns that the U.S.-China trade disputes will prolong, deterring risk-taking," said Koji Fukaya, chief executive officer at FPG Securities Co. in Tokyo. "This issue will probably be one of the major market drivers for a while as U.S.-China trade war influences global economic conditions."

    US futures were in the red, leaving stocks on track for a lower open. Yields on Treasuries and bunds declined. Asia's emerging currencies and the yuan weakened. The yen and Swiss franc advanced.

    A comment on Taoran, seen as a venue for the government's views, accused the US of playing "little tricks to disrupt the atmosphere," and insinuated that the Huawei blacklisting had seriously jeopardized talks.

    "We can’t see the U.S. has any substantial sincerity in pushing forward the talks. Rather, it is expanding extreme pressure," the blog wrote. "If the U.S. ignores the will of the Chinese people, then it probably won’t get an effective response from the Chinese side," it added.

    One former government official said there's no point in holding another round of talks if the US won't listen to Beijing.

    "If the U.S. doesn’t make concessions in key issues, there is little point for China to resume talks," said Zhou Xiaoming, a former commerce ministry official and diplomat. "China’s stance has become more hard-line and it’s in no rush for a deal" because the U.S. approach is extremely repellent and China has no illusions about U.S. sincerity," he said.

    This comes after Treasury Secretary Steven Mnuchin said this week that he and the other negotiators "will mostly likely go to Beijing at some point" in the near future.

    As BBG noted, another striking detail about the coverage is that China's strident trade rhetoric has suddenly been plastered across state-controlled media. The People's Daily ran three aggressive articles, including two editorials, with titles like "No Power Can Stop The Chinese People From Achieving Their Dream" - "the trade war will not cripple China, it will only strengthen us as we endure it."

    Looking ahead, President Xi and President Trump might have an opportunity to revive talks at the G-20 summit in Osaka next month. Until then, both sides will likely dig in.

    Published:5/17/2019 5:18:25 AM
    [Markets] Millennials are signing up to $600 retreats with ‘grief dances,’ lake swimming and creative writing to deal with grief ‘Dead to me’ on Netflix is making grief less taboo, and so are these social outlets that help millennials cope with loss.
    Published:5/17/2019 5:18:25 AM
    [Markets] Europe Markets: Brexit, China trade weigh on Europe markets New tidbits of old news narratives keep investors on the back foot
    Published:5/17/2019 4:50:14 AM
    [Markets] World shares fall as Huawei sanctions stir trade fears SINGAPORE (AP) — Global markets were mostly lower on Friday amid worries that U.S. economic sanctions on Huawei may cast a pall on trade negotiations with China. Published:5/17/2019 4:20:37 AM
    [Markets] UK Propaganda Unit Has Secret Plans To Target French Muslims

    Authored by Ian Cobain and Hassina Mechai via Middle East Eye,

    A shadowy UK government propaganda unit that privately declares that it works to “effect behavioural and attitudinal change” among British Muslims has drawn up plans to begin operating in France.

    The Research, Information and Communications Unit (RICU), which is based at the Home Office in London, generates films, social media, websites, leaflets and news stories that are intended to influence public opinion while concealing the British government's role in their creation.

    Now, documents seen by Middle East Eye show that RICU has awarded a contract to a consortium of communications companies which had demonstrated its ability to operate in France.

    The contract makes clear that while these companies are expected to be able to influence Muslim public opinion in France as part of a covert counter-extremism programme, the ultimate aim of the programme would be to encourage the French authorities to develop their own propaganda initiatives on the RICU model.

    “RICU-I [RICU International] expects to see evidence of increased political will to tackle terrorism, and a recognition and willingness to act on UK priorities,” the documents say.

    It is unclear from the documents whether RICU operations in France have actually begun, or whether the programme is being developed in the hope of securing French co-operation in the future.

    However, the documents shed further light on other countries in the Middle East, Europe and Asia where RICU is already working.

    Last year MEE reported that the unit was involved in projects which used rap music and graffiti to attempt to influence the thinking and behaviour of youths in Tunisia, Morocco and Lebanon.

    The documents show that by the end of 2018, RICU operations had been underway in Jordan, Algeria and Pakistan. The unit has also organised a number of events in Finland and the Netherlands.

    The papers also show that the consortium which won the contract was expected to demonstrate an ability to operate in at least four other countries in addition to France: Belgium, Kenya, Bangladesh and Indonesia.

    The documents do not disclose the details of the operations being planned for each country, other than to make clear that they involve the development of social media strategies, video production, web development, writing blogs, “paid promotion on Facebook, Twitter and Snapchat”, leafletting schools and “maintaining a stream of communications, products and materials”.

    Lead role

    The lead role played by RICU in a number of European Union-level strategic communications projects is already known.

    Last year MEE established that RICU was working with the British Council on a European Union-funded project which used what were termed “buffer organisations” to drive a social media and rap music campaign entitled Ala Khatrek Tounsi – Because You Are Tunisian – to promote a sense of Tunisian national identity among the country’s youth.

    The EU funds RICU work in Tunisia, Lebanon and Morocco through a counter-extremism programme called “Strengthening Resilience”.

    Details about RICU’s involvement in EU-level counter-extremism work were also revealed in 2017 by Hans Das, the head of the European Commission’s Terrorism and Radicalisation Unit, who told a conference in London that the unit was running a strategic communications network providing “support and consultancy to other member states”.

    In recent years RICU has said privately that its work in the UK is conducted "at an industrial scale and pace". Covert projects that have previously come to light include:

    • Setting up an organisation that held face-to-face talks with university students without disclosing that it represented the government.

    • Posting short films and images on Twitter, Facebook and Instagram with no acknowledgement of UK government involvement.

    • Leafletting 760,000 homes in areas of the UK with large Muslim populations, without any of the recipients being informed that they had been published and distributed on behalf of the government.

    • Establishing a public relations agency to push news stories to journalists, without disclosing in any way that the agency was being operated and funded in accordance with a government contract.

    Some of the communications are made public through civil society groups, but with RICU saying privately that it always retains editorial control.

    Earlier this year RICU fought a successful court battle to prevent it being obliged under freedom of information law to disclose how it seeks to influence the arts in Britain.

    RICU was established in 2007 as part of the Office of Security and Counter Terrorism at the UK Home Office. A number of people involved in its creation and management say it was inspired by a Cold War-era British propaganda unit, the Information Research Department.

    While RICU helps to deliver the UK government's controversial counter-radicalisation programme, known as Prevent, its messaging is aimed not just at individuals thought to be at risk of being drawn into extremism, but at the country's Muslim population.

    'Prevent audiences'

    Other documents seen by MEE show that RICU uses the terms “primary target audience” or “Prevent audiences”, which it defines as Muslims aged 15-39, particularly males.

    The documents seen by MEE were written by a small team of civil servants with the assistance of a former British army officer who specialised in military “information operations” in Afghanistan.

    One contains the claim that RICU is the most advanced strategic communications unit in the world: “No other country currently has capabilities as well developed as those of RICU.”

    Together, the papers make clear that RICU is not only running propaganda operations outside the UK, but wishes also to persuade the UK’s allies that they should be more deeply engaged in such operations themselves.

    One document says that the principle object for the private sector contractor carrying out the work “is providing RICU International with the delivery architecture and capability to build the capacity of our partners to deliver strategic communications, in the UK and overseas”.

    It adds: “The key objective of delivering these communications activities is increasing the will, confidence and capacity of our partners to deliver these communications independently.”

    While RICU’s methods were developed for use in the UK, and “designed iteratively over several years”, the Home Office “considers the approach to be based on a set of core strategic principles which can be applied in other contexts”.

    However, the ultimate aim of RICU’s overseas operations appears to be to bolster its work within the UK: private sector contractors have been told that their operations are expected to “deliver impact in UK priority areas”.

    'A fig leaf for the causes of extremism'

    Several activists working in Muslim communities in France told MEE they were surprised to learn of British government plans for counter-radicalisation campaigns in France, and said they were concerned that such initiatives could serve to further alienate communities already subjected to scrutiny and suspicion.

    Fateh Kimouche, the editor of Al-Kanz, a website reporting on issues affecting French Muslims, questioned the effectiveness of counter-radicalisation campaigns.

    He compared them to efforts made in France in the 1980s and 1990s to influence and integrate Muslim communities via a national network of community youth centres known as Maisons des Jeunes et de la Culture (MJC).

    “If a person becomes radicalised, will graffiti and rap suffice?” Kimouche told MEE.

    “We should be asking questions about the foreign policies of Western countries. Rather than this type of initiative, why not stop weapons in Saudi Arabia?”

    Participants in a "Muslims Against Terrorism" campaign rally in 2017 to mark two years since Islamic State bombers and gunmen attacked Paris (AFP)

    Houria Bouteldja, a French-Algerian activist, said that French Muslims had long been the target of state policies that sought to shape and create a "moderate" French version of Islam.

    Bouteldja, who is a spokesperson for the Indigenous Party of the Republic (PIR), a political party which campaigns on anti-racism issues, added that one consequence of counter-radicalisation campaigns was the creation of “behaviours of guilt and self-criticism” in targeted communities.

    “The fact that this is now becoming a transnational programme is concerning. The fight against radicalisation has become a fig leaf for the real causes of extremism,” she told MEE.

    “We will spend our time criticising ourselves rather than states and their policies.”

    'Diaspora communities' targeted

    The documents say that requirements of the contract include being able to “build networks of civil society organisations” in the countries in which they operate, in order to share information about countering violence and extremism.

    Those organisations are to “focus on working with diaspora communities in each country which have most impact/influence on the UK”.

    The contract to run RICU’s operations in France, Belgium, the Middle East and North Africa was won by a consortium headed by Adam Smith International (ASI), a London-based foreign aid contractor.

    Two years ago the founders of ASI were compelled to stand down when the British government froze future contracts after the contractor was found to be using leaked official documents to secure commercial advantage.

    ASI was subsequently accused of allowing British aid money to be paid to militant groups in Syria, a claim it denied.

    The overseas contract is understood to have been one of three contracts issued late last year. A second was for further RICU operations in the UK, while the third was for a programme of evaluation.

    Paris's Grand Mosque, photographed on 22 March, 2019 (AFP)

    MEE understands that one member of the consortium led by ASI is a London communications company, Breakthrough Media, which has worked closely with RICU for several years.

    Last year Breakthrough Media faced criticism in Australia for running a number of campaigns without making clear it was funded by the federal government.

    Subsequently, the company began operating in Australia under a new name, Zinc Network, which it has since also adopted in the UK.

    The French Ministry for Europe and Foreign Affairs did not respond to requests for a comment.

    The UK Home Office confirmed that the contract had been awarded to ASI, but declined to explain what work RICU was doing in France, or may be doing in the future.

    In a brief statement, the department said: “We work with many international partners to share lessons and experiences in support of the aims of the Home Office.”

    ASI said only that it was "setting systems in place", but said that under the terms of its contract with RICU it could not elaborate on what it was doing, or where it was operating.

    Zinc Network did not respond to requests for a comment.

    Published:5/17/2019 4:20:37 AM
    [Markets] Two Democrats introduce legislation in Congress to ban cashless stores Two bills aim to require businesses to accept cash payments.
    Published:5/17/2019 4:20:36 AM
    [Markets] UK Cops Fine Pedestrian $115 For Avoiding Facial Recognition Camera

    A UK pedestrian was arrested and fined £90 ($115 US) after attempting to cover his face while passing a controversial facial recognition camera van on a East London street. The notorious London police vans scan the faces of passers-by and compare them to a database of wanted criminals. 

    One man wasn't having any of it, and was seen covering his face with his hat and jacket before London police stopped him and took his picture anyway according to the Daily Mail

    "If I want to cover me face, I'll cover me face. Don't push me over when I'm walking down the street," said the man after his stop. 

    "How would you like it if you walked down the street and someone grabbed your shoulder? You wouldn't like it, would you?" the man asked an officer, who replied "Calm yourself down or you're going in handcuffs. It's up to you. Wind your neck in." 

    "You wind your neck in," the man replied. 

    After being fined, the man told a reporter: 'The chap told me down the road - he said they've got facial recognition. So I walked past like that (covering my face).

    'It's a cold day as well. As soon as I've done that, the police officer's asked me to come to him. So I've got me back up. I said to him 'f*** off', basically.  

    'I said 'I don't want me face shown on anything. If I want to cover me face, I'll cover me face, it's not for them to tell me not to cover me face. 

    'I've got a now £90 fine, here you go, look at that. Thanks lads, £90. Well done.' -Daily Mail

    The ticketing comes in the wake of another similar incident in February, in which another man refused to be scanned by one of the facial recognition vans and was also fined £90. 

    "He simply pulled up the top of his jumper over the bottom of his face, put his head down and walked past," said Silkie Carlo, director of Big Brother Watch, who added that at least one man had seen placards warning the public of the facial recognition cameras being used from a parked police van.

    "There was nothing suspicious about him at all … you have the right to avoid [the cameras], you have the right to cover your face. I think he was exercising his rights," said Carlo. 

    Meanwhile, the technology is terribly inaccurate - wrongly matching over 2,000 people to criminals when it was deployed ahead of the Champions League Final in Cardiff in 2017. 

    Last December, a suspect was arrested by the Metropolitan Police during a trial of the facial recognition technology among Christmas shoppers at Leicester Square in London's West End.  

    Another man was stopped due to the technology, but found not to be the man the computer thought he was - although he was arrested over another offence. 

    Big Brother Watch has previously said the technology is a 'breach of fundamental rights to privacy and freedom of assembly'. -Daily Mail

    "It is important to note that police are now days away from making a decision about the future of facial recognition in the UK," Carlo told MailOnline. "We believe it has no place in a democracy and we will continue with our legal challenge against the Met if they do go ahead with it.

    Published:5/17/2019 3:48:48 AM
    [Markets] The Moneyist: My grandson’s live-in girlfriend hates me and doesn’t want me to stay at their home — should I still leave him all my money? This woman is upset that she’s been shunned by her grandson’s partner.
    Published:5/17/2019 3:48:48 AM
    [Markets] Stocks Retreat as China Dials-up Trade Rhetoric; Dollar Gains on Growth Concerns State-run media use print, television and social media to excoriate U.S. moves on trade, as well as its blacklisting of Huawei, suggesting the two sides are moving further away from a potential deal. Bank of Japan Governor vows to keep rates near zero until the Spring of next year, underscoring the trade war threat to growth and its impact on currency markets and the U.S. dollar. Wall Street futures suggest a weaker start to the trading day, following last night's rally that lifted benchmarks into positive territory for the week, ahead of earnings from Deere & Co. and consumer sentiment data at 10:00 am Eastern time. Published:5/17/2019 2:52:26 AM
    [Markets] Green Revolution Nonsense: Corbyn Wants To Nationalize UK National Energy Grid

    Authored by Mike Shedlock via MishTalk,

    UK Labour leader Jeremy Corbyn made an absurd proposal on Wednesday. He wants to nationalize SSE. Shares hammered.

    The Telegraph reports Labour Power Grab Wipes £500m Off Firms.

    The threat of a Labour government wiped more than £500m off SSE and National Grid on Wednesday as party plans to seize UK energy networks emerged.

    Sector shares slipped as The Telegraph revealed Jeremy Corbyn wants to renationalise the £62bn network, compensating shareholders with government bonds below market rate.

    SSE shares closed at a five-month low, sinking as much as 3.2pc as the City baulked at the plans. National Grid, which presents full-year results tomorrow, sank more than 2pc before halving its losses.

    Labour’s official Bringing Energy Home proposal claims public ownership would spark a “Green Industrial Revolution”.

    The Confederation of British Industry called the plans “hanging a ‘closed’ sign above the UK”. “The country needs policies focused on powering economic growth in the future, not revisiting mistakes,” said policy director Matthew Fell.

    Support for Labour’s nationalisation agenda has slumped in recent weeks, says a ComRes poll for Water UK

    ENA Members

    Plan Details

    For details of Corbyn's absurd plan, please see Jeremy Corbyn draws up plans to seize control of UK's energy with sweeping nationalisation of networks

    A leaked Labour party document has revealed plans for a swift and sweeping renationalisation of the country’s £62bn energy networks at a price decided by Parliament. The blueprint, seen by the Telegraph, lays bare for the first time Mr Corbyn’s plan to bring all energy network companies under public ownership “immediately” following a Labour election win.

    Those in Labour’s sights include the FTSE 100 energy giant National Grid, which is worth over £29bn, and the transmission arms of Big Six energy companies SSE and Scottish Power. The nationalisation agenda will also include all 19 of the UK’s smaller regional gas and power grids and the massive subsea power cables linking the UK to Europe.

    The agencies will be tasked with sourcing low carbon or renewable sources for 60pc of all energy use by 2030. They will also oversee the rollout of electric vehicle charging networks and new energy storage projects across the country.

    A spokesman for National Grid warned that the state-ownership plans “would only serve to delay” the huge investments needed to help the UK take a lead in the green economy.

    The Price?

    The Government gets to set the price paid for the takeover.

    Labour Self Destruction

    The Labour party is already split in several pieces over Brexit.

    This move will raise more than a few eyebrows.

    Corbyn in Praise of Venezuela

    Recall that Corbyn is a supporter and fan of Venezuela and Hugo Chavez.

    Here's an even better video, just not one that I can embed: Corbyn Calls Hugo Chavez ‘An Absolute Legend in Every Way’

    Green Revolution Nonsense

    I am pleased as punch with the monstrous stupidity of this proposal.

    Why?

    Because Corbyn just handed Nigel Farage and his Brexit Party (which I support) a second major issue on a on a silver platter.

    The Brexit Party is already in first place in the polls as noted in Brexit Party Surge: Tories Drop to 5th Place in European Parliament Polls

    Labour and the Tory party are both in self-destruct mode.

    Published:5/17/2019 2:52:26 AM
    [Markets] UK-US Row Over Iran Intel Unleashes Storm Of Behind The Scenes Infighting

    A new report in Britain's The Times says the UK's Ministry of Defense (MoD) is standing by its senior officer in the US-led coalition in Iraq and Syria, who earlier this week publicly contracted the Pentagon and US administration by appearing to dismiss US intelligence claims over the heightened Iran threat. 

    The awkward public exchange unfolded between the US military and its closest allied military coalition force during a Pentagon press conference on Tuesday wherein a top British commander in charge of anti-ISIS coalition forces rebuked White House claims on the heightened Iran threat. 

    “No – there’s been no increased threat from Iranian-backed forces in Iraq and Syria,” British Army Maj. Gen. Christopher Ghika, a deputy head of the US-led coalition, asserted confidently in a video link briefing from Baghdad to the Pentagon in response to a CNN question.

    Essentially this meant the powerful number two commander of "Operation Inherent Resolve" Combined Joint Task Force was questioning the entire basis on which the "imminent threats" and "high level of alert" shift in mission readiness decision was made. But now Britain's Foreign and Commonwealth Office is said to be fuming over the handling of the situation.

    The public disagreement, quickly picked up in world headlines, and further weakening the White House's stance on the "Iran threat", has unleashed a storm of controversy among allies behind the scenes. 

    The Times report includes the following bombshell details:

    Officials from the Foreign and Commonwealth Office are understood to be angry at the MoD’s handling of the situation. The row raises questions about the extent of intelligence that the US has shared with Britain about the alleged threat from Iran. Israeli media reported that the warnings were passed on by Mossad, the Israeli intelligence agency. The US State Department has ordered non-emergency employees to leave Iraq.

    The report further quoted a former head of the British Army, who said it was “unfortunate that there should be publicly expressed divergent views” on the issue by allies.

    The source, identified as General Lord Dannatt, said: “It’s pretty unusual. The UK was accused by the US from time to time of slightly going our [own] way in southern Iraq and southern Afghanistan, but that was respected as operational divergences of opinion, which is something different from straight contradiction.”

    Following Tuesday's Pentagon press briefing a rare and swift rebuke was issued from the US side hours later, when US Central Command (CENTCOM) released its own statement slamming Gen. Ghika's words as inaccurate, insisting coalition troops in Iraq and Syria were an a "high level of alert" due to the "Iran threat". 

    “Recent comments from OIR’s [Operation Inherent Resolve] deputy commander run counter to the identified credible threats available to intelligence from US and allies regarding Iranian-backed forces in the region,” the CENTCOM statement said.

    “US Central Command, in coordination with OIR, has increased the force posture level for all service members assigned to OIR in Iraq and Syria. As a result, OIR is now at a high level of alert as we continue to closely monitor credible and possibly imminent threats to US forces in Iraq.”

    Britain's MoD had also tried to do damage control, saying in written statement following the CENTCOM press release, according to The Times: Captain Urban added that Operation Inherent Resolve, the US-led mission, “is now at a high level of alert as we continue to closely monitor credible and possibly imminent threats to US forces in Iraq”.

    US troops in the Middle East, via The Times:

    “Major-General Ghika speaks as a military officer in the US-led coalition focused on the fight against Daesh [Isis] in Iraq and Syria,” the MoD statement continued.

    “His comments are based on the day-to-day military operations and his sole focus is the enduring defeat of Daesh. He made clear in the Pentagon briefing that ‘there are a range of threats to American and coalition forces in this part of the world. There always have been, that is why we have a very robust range of force protection measures.’ ”

    The MoD statement added: “The UK has long been clear about our concerns over Iran’s destabilising behaviour in the region.”

    One former British diplomat to the Middle East said as quoted in The Times report that, “I cannot remember a precedent and certainly not one that is so public”.

    Published:5/17/2019 2:04:06 AM
    [Markets] Asian shares mixed as Huawei sanctions stir trade fears SINGAPORE (AP) — Asian stocks were mixed on Friday amid worries that U.S. economic sanctions on Huawei may cast a pall on trade negotiations with China. Published:5/17/2019 2:04:06 AM
    [Markets] "A World Aching For Peace & Stability Can No Longer Afford NATO"

    Authored by Jon Wight, op-ed via RT.com,

    NATO Secretary General Jens Stoltenberg calling for an end to the fighting in Libya is like an arsonist calling for the house he’s just burned to the ground to stop emitting smoke...

    For this reason it can only be an excess of black humor or wilful amnesia on the part of Mr Stoltenberg that explains his perverse call for this particular conflict to end in this particular country, eight years after it received a prolonged visit from a Western military alliance over which he currently presides.

    Along with recent NATO exercises in Estonia, involving 9,000 troops operating just 15km from Russia’s border, Jens Stoltenberg’s call for a peaceful resolution to the ongoing crisis in Libya  suggests that the pride of place above the entrance to NATO headquarters in Brussels should be inscribed in bold letters with the Orwellian mantra of ‘War is peace. Freedom is slavery’.

    Because ever since the demise of the Soviet Union, NATO has been engaged in a perennial quest for meaning and relevance, which means to say for opportunities to unleash its democracy missiles and drop its democracy bombs. It is a quest that has and continues to involve ideologues in the media, neocon think tanks, and governments going out of their way to convince people across Europe and the US that without NATO manning the ramparts of Western civilization, the barbarians located to the North, South, East and West of them will come and destroy everything they hold dear.

    Stripped of obfuscation, what we have here is a tawdry and base exercise in scaremongering; its aim to inculcate the belief that Russia, Iran, China, North Korea, Venezuela (you can take your pick) is their enemy and a threat to their security. Thus it is that the extent to which people living in the West refuse to internalise the propaganda of their own ruling class and its functionaries is determined by their ability to see the world as it truly is, rather than continue to exist in the darkened room of Western exceptionalism.   

    One man who understood this was Karl Marx, who put it thus:

    To call upon people to give their illusions about their condition, is to call on them to give a condition that requires illusions.

    And when people do give up a condition that requires illusions, and more importantly do so on a collective basis, a dynamic of social change is unleashed – a dynamic such as the Yellow Vest movement in France, for example. I suspect you would find it hard to convince any member of this mass protest movement, who’ve been determinedly protesting Macron and his neoliberal centrist works for the past six months across France, that what they need right now is NATO to protect them from Russia.

    On the contrary, the violence that has and continues to be visited on thousands of protesters on the streets of Paris and elsewhere by Macron’s security services, makes a strong case for NATO intervention there. This, after all, was the premise upon which the Libyan intervention in 2011 rested, was it not: to protect civilians from the government against which they’d risen up in protest?

    Well then NATO, what are you waiting for?

    While we wait for those NATO fighter bombers to appear over Paris, let us return for a moment to Estonia to remind ourselves that the moral swamp of fascism has not yet been drained in Europe, not when today we have the glorification of Estonians who fought under the banner of Waffen SS during WWII.

    That it is here, today, where NATO troops are engaged in military exercises on the border not just of any country, but the country whose people did more than any other to crush Hitler’s genocidal project in Europe seven decades ago, stands as a diabolical disgrace. There is no flag big enough to cover the shame involved in such a squalid turn of events, and no amount of historical revisionism can ever justify it.

    And neither can ever be justified the murder of Libya eight years ago with the full participation of the same military alliance Jens Stoltenberg and his ilk want us to believe is the last best hope for peace and security in the world. Though the organization’s current secretary general may wish to elide NATO’s role in this crime, refusing to provide him with the satisfaction of doing so is a non-negotiable condition of the historical memory from which intellectual and ethical integrity flows.

    A country that in 2010 could boast of a UN High Development Index coterminous with that of first world countries in child mortality, life expectancy, education, women’s rights, etc, is today a place where death and discord reign – and whereslave markets, yes slave markets, are alive and kicking.

    In the last analysis, NATO’s legacy of provocation, intimidation and aggression contradicts its otherworldly and fatuous claim of being a military alliance that is dedicated to, according to the organization’s ownwebsite, democratic values and the peaceful resolution of conflicts.

    There is nothing democratic about slave markets, and neither is there anything peaceful about conducting military exercises on Russia’s border; legitimising thereby the historical anti-Russian animus and fascist proclivities that exist within states that have been reduced to cat’s paws of Western hegemony.

    The only possible conclusion to be drawn, after we draw up  the necessary historical balance sheet, is that NATO’s continuous existence is an impediment to peace, justice, global stability and, with it, human progress. It is a relic of the first Cold War which has done much to bring about the New Cold War, calling to mind the cogent analysis of Roman imperialism provided by political economist Joseph Schumpeter in the second decade of the 20th century:

    There was no corner of the known world where some interest was not alleged to be in danger or under actual attack. If the interests were not Roman, they were those of Rome's allies; and if Rome had no allies, then allies would be invented. When it was utterly impossible to contrive such an interest—why, then it was the national honor that had been insulted. The fight was always invested with an aura of legality. Rome was always being attacked by evil-minded neighbors, always fighting for a breathing space. The whole world was pervaded by a host of enemies, and it was manifestly Rome's duty to guard against their indubitably aggressive designs. They were enemies who only waited to fall on the Roman people.

    Published:5/17/2019 1:18:27 AM
    [Markets] Stocks rally in Japan, but retreat in Hong Kong and mainland China Asian markets were mixed in early trading Friday, with stocks in Hong Kong and mainland China retreating amid ongoing trade tensions with the U.S. Published:5/17/2019 12:17:40 AM
    [Markets] What Putin And Pompeo Did Not Talk About

    Authored by Pepe Escobar via The Asia Times,

    Russia is uneasy over the destabilization of Tehran, and on other hotspots the powers’ positions are clear...

    Even veiled by thick layers of diplomatic fog, the overlapping meetings in Sochi between US Secretary of State Mike Pompeo and President Putin and Foreign Minister Sergey Lavrov still offer tantalizing geopolitical nuggets.

    Russian presidential aide Yury Ushakov did his best to smooth the utterly intractable, admitting there was “no breakthrough yet” during the talks but at least the US “demonstrated a constructive approach.”

    Putin told Pompeo that after his 90-minute phone call with Trump, initiated by the White House, and described by Ushakov as “very good,” the Russian president “got the impression that the [US] president was inclined to re-establish Russian-American relations and contacts to resolve together the issues that are of mutual interest to us.”

    That would imply a Russiagate closure. Putin told Pompeo, in no uncertain terms, that Moscow never interfered in the US elections, and that the Mueller report proved that there was no connection between the Kremlin and the Trump campaign.

    This adds to the fact Russiagate has been consistently debunked by the best independent American investigators such as the VIPS group.   

    ‘Interesting’ talk on Iran

    Let’s briefly review what became public of the discussions on multiple (hot and cold) conflict fronts – Venezuela, North Korea, Afghanistan, Iran.

    Venezuela – Ushakov reiterated the Kremlin’s position: “Any steps that may provoke a civil war in the country are inadmissible.” The future of President Maduro was apparently not part of the discussion.

    That brings to mind the recent Arctic Council summit. Both Lavrov and Pompeo were there. Here’s a significant exchange:

    Lavrov: I believe you don’t represent the South American region, do you?

    Pompeo: We represent the entire hemisphere.

    Lavrov: Oh, the hemisphere. Then what’s the US doing in the Eastern Hemisphere, in Ukraine, for instance?

    There was no response from Pompeo.

    North Korea – Even acknowledging that the Trump administration is “generally ready to continue working [with Pyongyang] despite the stalemate at the last meeting, Ushakov again reiterated the Kremlin’s position: Pyongyang will not give in to “any type of pressure,” and North Korea wants “a respectful approach” and international security guarantees.

    Afghanistan – Ushakov noted Moscow is very much aware that the Taliban are getting stronger. So the only way out is to find a “balance of power.” There was a crucial trilateral in Moscow on April 25 featuring Russia, China and the US, where they all called on the Taliban to start talking with Kabul as soon as possible.

    Iran – Ushakov said the JCPOA, or Iran nuclear deal, was “briefly discussed.”.He would only say the discussion was “interesting.”

    Talk about a larger than life euphemism. Moscow is extremely uneasy over the possibility of a destabilization of Iran that allows a free transit of jihadis from the Caspian to the Caucasus.

    Which brings us to the heart of the matter. Diplomatic sources – from Russia and Iran – confirm, off the record, there have been secret talks among the three pillars of Eurasian integration – Russia, China and Iran – about Chinese and Russian guarantees in the event the Trump administration’s drive to strangle Tehran to death takes an ominous turn.

    This is being discussed at the highest levels in Moscow and Beijing. The bottom line: Russia-China won’t allow Iran to be destroyed.

    But it’s quite understandable that Ushakov wouldn’t let that information slip through a mere press briefing.

    Wang Yi and other deals

    On multiple fronts, what was not disclosed by Ushakov is way more fascinating than what’s now on the record. There’s absolutely no way Russian hypersonic weapons were not also discussed, as well as China’s intermediate-range missiles capable of reaching any US military base encircling or containing China.

    US Secretary of State Mike Pompeo, third right, meets Russian Foreign Minister Sergei Lavrov, center left, in Sochi on 14 May 2019. Photo: AFP / Russian Foreign Ministry Press Service / Anadolu

    The real deal was, in fact, not Putin-Pompeo or Pompeo-Lavrov in Sochi. It was actually Lavrov-Wang Yi (the Chinese Foreign Minister), the day before in Moscow.

    A US investment banker doing business in Russia told me:

    “Note how Pompeo ran like mad to Sochi. We are frightened and overstretched.”

    Diplomats later remarked: “Pompeo looked solemn afterwards. Lavrov sounded very diplomatic and calm.” It’s no secret in Moscow’s top diplomatic circles that the Chinese Politburo overruled President Xi Jinping’s effort to find an accommodation to Trump’s tariff offensive. The tension was visible in Pompeo’s demeanor.

    In terms of substance, it’s remarkable how Lavrov and Wang Yi talked about, literally, everything: Syria, Iran, Venezuela, the Caspian, the Caucasus, New Silk Roads (BRI), Eurasia Economic Union (EAEU), Shanghai Cooperation Organization (SCO), missiles, nuclear proliferation.

    Or as Lavrov diplomatically put it: 

    “In general, Russia-China cooperation is one of the key factors in maintaining the international security and stability, establishing a multipolar world order. . . . Our states cooperate closely in various multilateral organizations, including the UN, G20, SCO, BRICS and RIC [Russia, India, China trilateral forum], we are working on aligning the integration potential of the EAEU and the Belt and Road Initiative, with potentially establishing [a] larger Eurasian partnership.”

    The strategic partnership is in sync on Venezuela, Syria, Iran, Afghanistan – they want a solution brokered by the SCO. And on North Korea, the message could not have been more forceful.

    After talking to Wang Yi, Lavrov stressed that contacts between Washington and North Korea “proceeded in conformity with the road map that we had drafted together with China, from confidence restoration measures to further direct contacts.”

    This is a frank admission that Pyongyang gets top advice from the Russia-China strategic partnership. And there’s more:

    “We hope that at a certain point a comprehensive agreement will be achieved on the denuclearization of the Korean Peninsula and on the creation of a system of peace and security in general in Northeast Asia, including concrete firm guarantees of North Korea’s security.”

    Translation: Russia and China won’t back down on guaranteeing North Korea’s security. Lavrov said:

    “Such guarantees will be not easy to provide, but this is an absolutely mandatory part of a future agreement. Russia and China are prepared to work on such guarantees.”

    Reset, maybe?

    The indomitable Maria Zakharova, Russian Ministry of Foreign Affairs spokeswoman, may have summed it all up. A US-Russia reset may even, eventually, happen. Certainly, it won’t be of the Hillary Clinton kind, especially when current CIA director Gina Haspel is shifting most of the agency’s resources towards Iran and Russia.

    Top Russian military analyst Andrei Martyanov was way more scathingRussia won’t break with China, because the US “doesn’t have any more a geopolitical currency to ‘buy’ Russia – she is out of [the] price range for the US.”

    That left Ushakov with his brave face, confirming there may be a Trump-Putin meeting on the sidelines of the G20 summit in Osaka next month.

    “We can organize a meeting ‘on the go’ with President Trump. Alternatively, we can sit down for a more comprehensive discussion.”

    Under the current geopolitical incandescence, that’s the best rational minds can hope for.

    Published:5/16/2019 11:16:41 PM
    [Markets] "We're Done With Asking Nicely": British Columbia Launches Probe After Report Finds $7.4 Billion Laundered In 2018

    Better late than never, eh?

    On the heels of a stunning report revealing over $7 billion in laundered money through British Columbia in 2018 (mostly in the form of Chinese oligarchs buying Vancouver real estate and using it to park money offshore), the province will finally hold a public inquiry into money laundering, according to CBC. The decision was announced by BC Premier John Horgan and Attorney General David Eby on Wednesday morning. They were joined by Finance Minister Carole James. 

    At the announcement, Horgan said: "It became abundantly clear to us that the depth and the magnitude of money laundering in British Columbia was far worse than we imagined when we were first sworn in, and that's why we established the public inquiry today." 



    Heading up the inquiry will be B.C. Supreme Court Justice Austin F. Cullen, who will be looking into real estate, gaming, financial institutions and the corporate and professional sectors. Eby claimed that the recent report formed the basis for the inquiry, while also noting that some individuals had refused to participate in voluntary reviews. Cullen has been given "significant" powers to compel witnesses, testimony, gather evidence and search and seize records with a warrant. 

    Eby also said that Organized Crime Reduction Minister Bill Blair assured him that the government would cooperate with the inquiry. Eby said: "We are done with asking nicely. Today, our government has given Justice Cullen the authority to do more than ask for voluntary participation."

    "If there is testimony that the commissioner needs to get to the bottom of this, he will compel that testimony. We're not constraining the commissioner in any way," Horgan said. 

    Earlier this week we discussed a report detailing the extent of money laundering in the Canadian province, which included more than $5.3 billion being laundered through the real estate market. The independent report released just days ago concluded that an astounding $7.4 billion was laundered in British Columbia in 2018, out of a total of $46.7 billion laundered across Canada throughout the same period. The report was published by an expert panel led by former B.C. deputy attorney general Maureen Maloney.

    The reports come after the government commissioned them to try and shed light on laundering by organized crime in BC’s real estate market. This follows last June’s report on dirty money in casinos, which we also wrote about just days ago. 

    RCMP commissioner Peter German was commissioned to write the report on real estate, and he concluded that illicit money is what led to “a frenzy of buying” that caused housing prices to spike around Metro Vancouver. The report concluded that there are thousands of properties worth billions at high risk for money laundering. 

    An international anti-money laundering agency said last year that organized criminals were laundering about $1 billion per year in the province.

    Green Leader Andrew Weaver had already called for a public inquiry: "Namely, that it would improve public awareness, play a crucial role in fault finding, and would help to develop full recommendations,” he said last week. In sum, the report made 29 recommendations, including for the entire province to launch a financial investigations unit. 

    Finance Minister Carole James said last week: “…all the recommendations look critical, but the government wants to ensure it's prioritizing the most important ones, while also noting that action already underway in the legislature on some solutions.”

    In late April, we highlighted measures that Vancouver casinos were taking against money laundering, noting that they were resulting in casinos taking a brutal hit to their bottom lines. 

    The final public inquiry report is expected to be delivered by May 2021 and an interim report is expected within the next 18 months.

    Published:5/16/2019 10:46:56 PM
    [Markets] Asia Markets: Stocks rally in Japan, but retreat in Hong Kong and mainland China Asian markets were mixed in early trading Friday, with stocks in Hong Kong and mainland China retreating amid ongoing trade tensions with the U.S.
    Published:5/16/2019 10:16:41 PM
    [Markets] Secret Satellite Photos Of Iranian Missiles In Persian Gulf Behind Intensifying Crisis

    As the international hand-wringing continues over whether there is an actual heightened "Iran threat" with American troops in the cross hairs, and as some US allies - notably Spain, Germany, and The Netherlands - actually withdraw their forces from US operations support in the region, we must ask at this point, what do we actually know in terms of Bolton's original intelligence cited earlier this month which sparked the ongoing crisis? 

    Aside from knowing much or all of the intelligence was reportedly provided to the administration by Israeli Mossad, we have the piecemeal explanations of both top admin officials and regional allies.  Secretary of State Mike Pompeo told Iraqi officials during his unplanned stopover in Baghdad last week that "U.S. intelligence showed Iran-backed militias moved missiles near bases housing American forces," according to Fox

    Iranian weaponry and military equipment exhibition in Tehran on February 2, 2019. Image source: AFP

    According to that report, a senior Iraqi source relayed of the US message: “They said if the U.S. were attacked on Iraqi soil, it would take action to defend itself without coordinating with Baghdad.” So the crisis appears focused on potential Iranian proxy actions in Iraq - apparently enough to take the very rare step of evacuating all non-emergency US personnel from the US embassy in Baghdad (a move that hadn't even been done at the height of ISIS' offensive across western and northern Iraqi). 

    However, US allies even disagree on this point. For starters, the deputy head of the US-led coalition, British Army Maj. Gen. Christopher Ghika, caused an almost unheard of row among allies when earlier this week he flatly stated“No – there’s been no increased threat from Iranian-backed forces in Iraq and Syria,” in a videolink briefing at a Pentagon press conference.

    Furthermore, Iraqi Prime Minister Adel Abdul Mahdi said on Tuesday that the Iraqis had no information showing “movements that constitute a threat to any side,” but added that his government “is doing its duty to protect all parties.”

    So is the new "threat" which warranted the latest US military build-up, which has caused Iran's military to warn "We are on the cusp of a full scale confrontation with the enemy" — all based on either Iran or Iran-backed "popular mobilization units" in Iraq moving around a few missiles? If so, it would be nothing new.  

    All the way back in August of last year we reported, based on Reuters, "Iran Stuns Enemies By Moving Ballistic Missiles To Iraq - Within Easy Striking Distance of Tel Aviv." It was known at that time that Iran had transferred short-range ballistic missiles to Shia proxy forces in Iraq for "months" prior, according to Western and Iraqi intelligence sources. This is why a number of prominent Middle East watchers and military analysts have shrugged, "nothing new... nothing to see here" in response to the "new" vaunted White House intelligence. This also appears to be the attitude of Britain's chain of command within the joint "Operation Inherent Resolve" coalition.

    And enter the New York Times, which in a report published late Wednesday citing three defense officials, found that: “The intelligence that caused the White House to escalate its warnings about a threat from Iran came from photographs of missiles on small boats in the Persian Gulf that were put on board by Iranian paramilitary forces.”

    And further, the report stated

    Overhead imagery showed fully assembled missiles, stoking fears that the Islamic Revolutionary Guards Corps would fire them at United States naval ships. Additional pieces of intelligence picked up threats against commercial shipping and potential attacks by Arab militias with Iran ties on American troops in Iraq.

    The NYT also noted that some  top lawmakers are seeking to ensure that Congress is consulted before taking any military action against Iran. Speaker Nancy Pelosi reportedly "criticized the administration’s lack of transparency on the intelligence" in a closed-door meeting involving House Democrats.

    Pompeo's latest statements presented in the earlier Fox report seems to confirm the new NYT report. US allies in the region have also reportedly dismissed the "satellite evidence" of the Iranians moving missiles as mere usual defensive posturing. 

    And then there's the possibility that all of this bluster and heated war rhetoric and build-up could have merely originated from Iran's moving or assembling missiles on their own soil or in their own territorial waters in the Persian Gulf. 

    Published:5/16/2019 10:16:41 PM
    [Markets] Is China's "Mandate Of Heaven" In Jeopardy?

    Authored by James Rickards via The Daily Reckoning,

    U.S. policy through the Bush and Obama administrations was to soft-pedal questionable Chinese trade practices, pirating technology and theft of intellectual property in return for cheap manufactured goods and China’s willingness to finance trillions of dollars of U.S. government debt.

    Now Trump has changed the rules of the game. He’s said lost jobs in the U.S. are not worth the cheap goods and cheap financing. He bet that China had no alternative but to keep producing those goods and keep buying our debt, even if the U.S. imposes tariffs to help create manufacturing jobs here.

    President Trump and President Xi had been on a collision course involving issues of trade, tariffs, and currency manipulation, which are coming to a head.

    It’s important to understand that China’s economy is not just about providing jobs, goods and services. It is about regime survival for a Chinese Communist Party that faces an existential crisis if it fails to deliver. It is an illegitimate regime that will remain in power only so long as it provides jobs and a rising living standard for the Chinese people. The overriding imperative of the Chinese leadership is to avoid societal unrest.

    Once the Chinese job machine stalls out, popular unrest could emerge on a scale much greater than the 1989 Tiananmen Square protests. This is an existential threat to Communist power.

    If China encounters a financial crisis, Xi could quickly lose what the Chinese call, “The Mandate of Heaven.” That’s a term that describes the intangible goodwill and popular support needed by emperors to rule China for the past 3,000 years.

    If The Mandate of Heaven is lost, a ruler can fall quickly.

    China has serious structural economic problems and its internal contradictions are catching up with it. Economies can grow through consumption, investment, government spending and net exports. The “Chinese miracle” has been mostly a matter of investment and net exports, with minimal spending by consumers.

    The investment component was thinly disguised government spending — many of the companies conducting investment in large infrastructure projects were backed directly or indirectly by the government through the banks.

    This investment was debt-financed. China is so heavily indebted that it is now at the point where more debt does not produce growth. Adding additional debt today slows the economy and calls into question China’s ability to service its existing debt.

    China is now confronting an insolvent banking system, a real estate bubble, and a $1 trillion wealth management product Ponzi scheme that is starting to fall apart.

    Up to half of China’s investment is a complete waste. It does produce jobs and utilize inputs like cement, steel, copper and glass. But the finished product, whether a city, train station or sports arena, is often a white elephant that will remain unused.

    Chinese growth has been reported in recent years as 6.5–10% but is actually closer to 5% or lower once an adjustment is made for the waste. The Chinese landscape is littered with “ghost cities” that have resulted from China’s wasted investment and flawed development model.

    What’s worse is that these white elephants are being financed with debt that can never be repaid. And no allowance has been made for the maintenance that will be needed to keep these white elephants in usable form if demand does rise in the future, which is doubtful.

    Essentially, China is on the horns of a dilemma with no good way out. On the one hand, China has driven growth for the past eight years with excessive credit, wasted infrastructure investment and Ponzi schemes.

    The Chinese leadership knows this, but they had to keep the growth machine in high gear to create jobs for millions of migrants coming from the countryside to the city and to maintain jobs for the millions more already in the cities.

    The two ways to get rid of debt are deflation (which results in write-offs, bankruptcies and unemployment) or inflation (which results in theft of purchasing power, similar to a tax increase).

    Both alternatives are unacceptable to the Communists because they lack the political legitimacy to endure either unemployment or inflation. Either policy would cause social unrest and unleash revolutionary potential.

    China has hit a wall that development economists refer to as the “middle income trap.” Again, this happens to developing economies when they have exhausted the easy growth potential moving from low income to middle income and then face the far more difficult task of moving from middle income to high income.

    The move to high-income status requires far more than simple assembly-style jobs staffed by rural dwellers moving to the cities. It requires the creation and adoption of high-value-added products enabled by high technology.

    China has not shown much capacity for developing high technology on its own, but it has been quite effective at stealing such technology from trading partners and applying it through its own system of state-owned enterprises and “national champions” such as Huawei in the telecommunications sector.

    Unfortunately for China, this growth by theft has run its course. The U.S. and its allies, such as Canada and the EU, are taking strict steps to limit further theft and are holding China to account for its theft so far by imposing punitive tariffs and banning Chinese companies from participation in critical technology rollouts such as 5G mobile phones.

    My view is that a crisis in China is inevitable based on China’s growth model, the international financial climate and excessive debt. A countdown to crisis has begun.  Geopolitical issues will make the economic issues even harder to resolve.

    Yes, headlines are dominated by the trade war. That escalating confrontation is a big deal, but it’s not the only flash point in U.S.-China relations, and not even the most important. China is as much concerned about a military confrontation in the South China Sea as it is about the economic confrontation in the trade wars.

    China dredged sand surrounding useless rocks and atolls in the South China Sea and converted them into artificial islands and then built out the islands to include naval ports, air force landing strips, anti-aircraft weapons and other defensive and offensive weapons systems.

    Not only are the Chinese militarizing rocks, but they are trampling on competing claims by the Philippines, Vietnam, Brunei, Malaysia and other countries surrounding the sea.

    The world has developed rules-based platforms for resolving these issues without military force. The U.S. is guaranteeing freedom of passage, freedom of the seas and the territorial rights of allies such as the Philippines.

    So far, the U.S.-Chinese confrontation has been about naval vessels passing in close quarters and surveillance aircraft being harassed by fighter jets. The risk of such tactics is an accidental collision, a rogue shot fired or a command misunderstood.

    Any such incident could lead to retaliation, and there’s no telling where it might stop. Trump is not someone to back down, and Chinese leadership does not want to appear weak before the U.S.

    That’s especially true at a time of great economic uncertainty. China does not want war at this time. But diverting the people’s attention away from domestic problems toward a foreign foe is an old trick leaders use to unite the people in times of uncertainty. Rallying the people around the flag is a tried and true method to garner support.

    If China’s leadership decides that the risk of losing legitimacy at home outweighs the risk of conflict with the United States, the likelihood of war rises dramatically.

    I’m not predicting it, but wars have started over less. This is a very dangerous time.

    Be sure to hold cash, gold, silver, land and other assets that will cushion you against a market crash.

    Published:5/16/2019 9:48:59 PM
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