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[Donald Trump] President Donald Trump Totally Remakes Forest Policy, Eliminating Obama’s Envirowacko Rules

After a year of so many devastating forest fires in left-wing California, President Donald Trump has finally thrown out Obama’s disastrous, envirowacko forestry policy and replaced them for common-sense forestry. There is only one reason that the forest fires were so destructive in California and that is because Barack Obama put in place disastrous rules ...

The post President Donald Trump Totally Remakes Forest Policy, Eliminating Obama’s Envirowacko Rules appeared first on Godfather Politics.

Published:12/26/2018 8:38:51 AM
[Donald Trump] President Donald Trump Totally Remakes Forest Policy, Eliminating Obama’s Envirowacko Rules

After a year of so many devastating forest fires in left-wing California, President Donald Trump has finally thrown out Obama’s disastrous, envirowacko forestry policy and replaced them for common-sense forestry. There is only one reason that the forest fires were so destructive in California and that is because Barack Obama put in place disastrous rules ...

The post President Donald Trump Totally Remakes Forest Policy, Eliminating Obama’s Envirowacko Rules appeared first on Godfather Politics.

Published:12/26/2018 8:03:39 AM
[Iran] Helping the AP get it straight (Scott Johnson) Michael Doran retweets Omri Ceren’s correction of the AP (below) with the comment: “In order to fuel its attacks on Trump, the press is actively, constantly rewriting the history of Obama’s Iran concessions. You can see it in real time below.” We are suffocating in media lies and Orwellian revision of recent history. It is exceedingly difficult to keep the facts straight. Orwell himself put it this way: “To see Published:12/26/2018 7:03:17 AM
[Markets] Did Trump Put The Deep State On Notice With Syrian Withdrawal?

Authored by Robert Bridge via The Strategic Culture Foundation,

The reason so many people continue to misread the actions of US President Donald Trump is because they tend to confuse him with the actions and behaviors of past US administrations, where indiscriminate death and destruction was America’s calling card around a shell-shocked planet. Although certainly erratic in his actions, Trump thus far has been predictable on one score: keeping the powers-that-be guessing.

Last week, Donald Trump, acting unilaterally and within full power as Commander-in-Chief, derailed the Deep State’s plans for yet another disastrous regime change operation, announcing the withdrawal of US troops from Syria.

In a video released via Twitter, the American leader announced that, “We have won against ISIS…and it’s time for our troops to come home.”

In the not-so-distant past, such an announcement would have been greeted with cheers since it is generally agreed that war is - at least for those doing the grunt work - a very unpleasant enterprise. But the times have changed, together with the national agenda, and instead of applause filling the airwaves, the American people can hear nothing but the screeching of incensed hawks on both sides of the political aisle. That screeching is the sound of the Deep State expressing its deep displeasure and even pain.

Trump withdrawing US troops from Syria strongly suggests that the real estate magnate from Manhattan just might be the real deal, a rabble-rousing populist delivered to the White House by an army of voters across an angry and divided country that are tired of traveling snake-oil salesmen deceiving them with empty promises.

Is Trump the real deal?

There are two schools of thought on Donald J. Trump.

The first says that he is just another typical politician beholden to the puppet masters of the Establishment, dutifully carrying out orders from above, albeit with a bit more bluff and bluster than past frauds. After all, the argument goes, there is no possible way any individual could reach the Oval Office without the full support of the establishment – media, military, intelligence, etc.

Although that position has some merit, it underestimates the full extent of the desperation that has been gnawing away at the American heartland for many years. Such sentiments peaked out after it became painfully apparent that Trump’s predecessor Barack Obama, despite all the sweet talk of ‘hope and change,’ was no different from the others, and in many cases even worse.

At the same time, it overestimates the ability of the deep state to control every aspect of the political process. This explains why Russia was dragged into the picture – the Deep State needed to provide some sort of alibi as to how Hillary Clinton lost the 2016 election, as well as provide an 11 time-zone smokescreen to conceal her myriad wrongdoings.

The other school of thought says that Trump is the real deal, one of those rare, irresistible forces of political nature who, by sheer exertion of will, character and – dare I say it – genius, ascends the misty mountaintops despite, or because of, the powerful forces aligned against him. In other words, the Trump phenomenon is an open window of opportunity to salvage what is left of the American political system, and the elite, fully aware as to what is at stake, is doing everything to destroy it.

The reason for belonging to the second camp of thought is twofold.

First, if Trump truly were just another political cutout in the Republican-Democrat, two-party dichotomy, the mainstream media would not be so fiercely committed to destroying this man and everything he stands for. It’s no exaggeration to say that never before in US history has a political leader attracted so much vitriolic, spleen-bursting venom from the so-called Fourth Estate, itself just another compromised arm of the deep state. Not only is he vilified 24/7 in nearly every mainstream media outlet, with Fox News as perhaps the only major exception, the attacks continue when the sun goes down and the merchants of late-night ‘comedy’ take over, spinning their tired anti-Trump ‘jokes’ night after shameless night. When has comedy in America ever been so mean-spirited? The same could be said of Hollywood, where the award ceremonies have turned into marathon hate rallies. Meanwhile, even across the pond in Britain the anti-Trump crusade continues, which seems rather odd given that a foreign country would be expected to present a more balanced version of reality. This concerted attack on one individual suggests something more than hate and loathing; it has the smell of palpable fear.

Another reason to believe that Trump is the real deal is because if he were just another political stooge, doing the bidding of special interests, then certainly we’d have been at war by now. It is easy to forget since the media never mentions it, but America has not experienced such a dry spell in full-blown military action like this for many years, since Barack and Hillary destroyed the most developed country in Africa and called it a peace.

And who could forget how giddy the establishment became last year when Trump gave them their first taste of bloodshed with a limited missile strike on Syria? Hopeful of a military conflict, neo-Liberal wolves in sheep clothing, like CNN analyst Fareed Zakaria who declared that “Trump became president last night” following the unauthorized strike on the sovereign state. MSNBC anchor Brian Williams, not to be outdone, referred to the “beauty” of the nighttime airstrike three times in 30 seconds.

Today, the ‘peace-loving’ Liberals have once again betrayed their true colors, not to mention masters, by rebuking Trump for having the audacity to bring our troops home from a warzone.

Does all of this mean that Trump – who may have been compelled to withdraw from Syria as an act of vengeance against the Deep State for not only pursuing him with ‘Russiagate’ for the last two years, but for refusing to fund his Mexican Wall - will continue to endorse non-military solutions to global problems? Not at all. In fact, we may actually live to see more militaristic mayhem under this president than from his predecessors.

Already, the situation between Ukraine and Russia, for example, where Kiev is deliberately provoking Moscow, looks ripe for some sort of escalation of events that could trigger a chain reaction of unfathomable consequences.

Whatever the case may be, one thing looks certain right now, and that is Trump’s newfound desire to unilaterally call the shots in his presidency. The Deep State must now be rightly wondering what Trump could do next: order the US military to build his wall on the Mexico border? Initiate indictments against the Clinton Foundation over “pay to play” allegations, among other things? Shut down the Federal Reserve and bring back the US Treasury to print America’s money supply, as called for in the US Constitution? Everything is now on the table as far as Trump’s options go, and that must certainly be of no small concern to the powers-that-be in Washington DC.

Published:12/25/2018 10:02:07 PM
[Markets] The World According To The "Adults In The Room" - A Year Of Forever War In Review

Authored by US Army Major Danny Sjursen via TomDispatch.com,

Leave it to liberals to pin their hopes on the oddest things. In particular, they seemed to find post-Trump solace in the strange combination of the two-year-old Mueller investigation and the good judgment of certain Trump appointees, the proverbial “adults in the room.” Remember that crew? It once included Secretary of State Rex Tillerson, the former ExxonMobil CEO, and a trio of active and retired generals -- so much for civilian control of the military -- including Secretary of Defense Jim Mattis, National Security Advisor H.R. McMaster, and White House Chief of Staff John Kelly. Until his sudden resignation, Mattis was (just barely) the last man standing. Still, for all these months, many Americans had counted on them to all but save the nation from an unpredictable president. They were the ones supposedly responsible for helming (or perhaps hemming in) the wayward ship of state when it came to foreign and national security policy.

Too bad it was all such a fantasy. As Donald Trump wraps up his second year in the Oval Office, despite sudden moves in Syria and Afghanistan, the United States remains entrenched in a set of military interventions across significant parts of the world. Worse yet, what those adults guided the president toward was yet more bombing, the establishment of yet more bases, and the funding of yet more oversized Pentagon budgets. And here was the truly odd thing: every time The Donald tweeted negatively about any of those wars or uttered an offhand remark in opposition to the warfare state or the Pentagon budget, that triumvirate of generals and good old Rex went to work steering him back onto the well-worn track of Bush-Obama-style forever wars.

All the while, a populace obsessed and distracted by the president’s camera-grabbing persona seemed hardly to notice that this country continued to exist in a state of perpetual war. And here’s the most curious part of all: Trump wasn’t actually elected on an interventionist military platform. Sure, he threw the hawkish wing of his Republican base a few bones: bringing back waterboarding as well as even “worse” forms of torture, bombing “the shit” out of ISIS, and filling Guantánamo with “some bad dudes.” Still, with foreign policy an undercard issue in a domestically focused campaign to “Make America Great Again,” most Trump supporters seemed to have little stomach for endless war in the Greater Middle East -- and The Donald knew it.

Common Sense on the Campaign Trail

Despite his coarse language and dubious policy positions, candidate Trump did seem to promise something new in foreign policy. To his credit, he calledthe 2003 Iraq War the “single worst decision ever made” (even if his own shifting position on that invasion was well-documented). He repeatedly tweeted his virulent opposition to continuing the war in Afghanistan and regularly urged President Obama to stay out of Syria. And to the horror of newly minted Cold War liberals, he even suggested a détente with Russia.

Like so much else in his campaign, none of this was from the standard 2016 bullet-point repertoire of seasoned politicians. Sure, Donald Trump lacked the requisite knowledge and ideological coherence usually considered mandatory for serious candidates, but from time to time he did -- let’s admit it -- offer some tidbits of fresh thinking on foreign policy. However blasphemous that may sound, on certain international issues the guy had a point compared to Hillary, the hawk.

During his presidency, traces of his earthy commonsense still showed up from time to time. In August 2017, for instance, when announcing yet another escalation in the Afghan War, he felt obliged to admit that his original instincthad been to “pull out” of it, adding that he still sympathized with Americans who were “weary of war."  He sounded like a man anything but confident of his chosen course of action -- or at least the one chosen for him by those “adults” of his. Then, last week, he surprised the whole business-as-usual Washington establishment by announcing an imminent withdrawal of U.S. troops from Syria.  Whether he reverses himself, as he's been apt to do, remains unknown, but here was at least a flash of his campaign-style anti-interventionism.

How, then, to explain the way a seemingly confident candidate had morphed into a hesitant president -- until his recent set of decisions to pull troops out of parts of the Greater Middle East -- at least on matters of war and peace? Why those nearly two years of bowing to the long-stale foreign policy thinking that had infused the Bush-Obama years, the very thing he had been theoretically running against?

Well, pin it on those adults in the room, especially the three generals. As mid-level and senior officers, they had, after all, cut their teeth on the war on terror. It and it alone defined their careers, their lives, and so their thinking. Long before Donald Trump came along, they and their peer commanders had already been taken hostage by the interventionist military playbook that went with that war and came to define the thinking of their generation. That was how you had to think, in fact, if you wanted to rise in the ranks.

The adults weren’t, for the most part, political partisans. Then again, neither was the militarist playbook they were following. Both Hillary Clinton and Jeb Bush had been selling exactly the same snake oil in 2016. Only Trump -- and to some extent Bernie Sanders -- had offered a genuine alternative. Nevertheless, the Trump administration sustained that same policy of forever war for almost two full years and the grown-ups in the room were the ones who made it so. Exhibit A was the Greater Middle East.

The Same Old Playbook

While George W. Bush favored a “go-big” option of regime change, massive military occupation, and armed nation-building, Barack Obama preferred expanded drone strikes, increased military advisory missions, and -- in the case of Libya -- a bit of light regime-changing. In Trump’s first two years in office, the U.S. military seemed to merge aspects of the losing strategies of both of those presidents.

If Trump’s gut instinct was to skip future “dumb” Iraq-style wars, “pull out” of Afghanistan, and avoid regional conflict with Russia, his grown-up advisers pushed him in exactly the opposite direction. They chose instead what might be called the more strategy: more bombing, more troops, more drone strikes, more defense spending, more advisors, more everything. And if a war seemed to be failing anyway, the answer came straight from that very playbook, as in Afghanistan in 2017: a “surge” and the need for yet more time. As a result, America’s longest-ever war grew longer still with no end faintly in sight.

Given such thinking, it’s odd to recall that those adults in the room were, once upon a time, reputed to be outside-the-box thinkers. Secretary Mattis was initially hailed as such an avid reader and devoted student of military history that he was dubbed the "warrior monk." H.R. McMaster was similarly hailed for having written a book critical of U.S. strategy in Vietnam (though wrong in its conclusions). Both Democrats and Republicans in Washington were similarly convinced that if anyone could bring order to the Trump administration, it would be the ever-responsible John Kelly.

Let’s review, then, the advice that these innovators offered the president in his first two years in office and the results in the Greater Middle East, starting with that presidential urge to pull out of Iraq. You won’t be surprised to learn that U.S. troops are still ensconced there in an ongoing fight against what’s suddenly a growing ISIS insurgency (now that its “caliphate” is no more). Nor has Washington taken any meaningful steps to bolster the legitimacy of the Shia-dominated Baghdad government, which portends an indefinite Sunni-based insurgency of some sort (or sorts) and a possible Kurdish secession.

In Syria, rather than downsize the U.S. military mission in the interest of Trump’s stated wish for détente with Russia and his urge to get the troops out “like very soon,” his administration had more than stayed put. It essentially chose to go with an indefinite American occupation of eastern Syria, including up to 4,000 mainly Special Operations forces backing predominantly Kurdish rebels there. In fact, only recently Mattis and other “senior national security officials” reportedly tried unsuccessfully to talk the president out of his recent tweeted proclamation to end the American role in Syria and withdraw those troops from the country as, it seems, is now happening. In this, he clearly wants to avoid the ongoing risk of war with both Russia and NATO ally Turkey, not to speak of Iran. The Turks continue to threaten to invade the northern Syrian region controlled by those U.S.-backed Kurds, while Russian forces had, alarmingly, exchanged fire with U.S. troops more than once along the Euphrates River buffer zone. The Syrian mission was all risk and no reward, but the adults in the room continued to work feverishly to convince the president that to pull out might create a new “safe haven” not just for ISIS but also for the Iranians.

In Afghanistan, whatever Trump’s “instinct” may have been, after many meetings with his “cabinet and generals,” or what he called his “experts,” the president decided on a new escalation, a mini-surge in that then 17-year-old war. To that end, he delegated yet more decision-making to the very generals who were so unsuccessful in previous years and they proceeded to order the dropping of a record number of bombs, including the first-ever use of the largest non-nuclear ordnance in the Air Force arsenal, the so-called Mother of all Bombs. The results were the very opposite of reassuring. Indeed, the U.S. and its Afghan allies may be headed for actual military defeat, as the Taliban controls or contests more districts than ever, while Afghan government casualties have become, in the phrase of an American general, “unsustainable.”

Now, in a rebuke to those very experts and adults, the president will apparently remove half the U.S. troops in Afghanistan. After so many years of fruitless war, this sensible decision raised immediate alarm among the hawks in Congress and in the rest of the Washington national security establishment.  That decision, plus pulling the plug on the Syrian operation, apparently proved to be a red line for the last adult left standing and Jim Mattis promptly resigned in protest.  For the outgoing secretary of defense, it seems that complicity in Saudi war crimes in Yemen and the murder of Washington Post columnist and Saudi citizen Jamal Khashoggi were passing events.  Trump's willingness to try to end the American role in two failing, dubiously legal quagmires, however, proved to be the general's breaking point. 

Elsewhere, the Trump team has moved ever closer to a regime-change policy in Iran, especially after the replacement of Tillerson and McMaster by the particularly Iranophobic duo of Mike Pompeo and John Bolton as secretary of state and national security advisor. Still, don’t blame any looming Iran disaster on them. Washington had unilaterally pulled out of the Obama-negotiated nuclear deal with that country well before they arrived on the scene. While the grown-ups might not have been quite as amenable to war with Iran as Bolton and Pompeo, they couldn't countenance détente for even a second.

And, of course, all those adults in the room supported U.S. complicity in the Saudi-led terror bombing and starvation of Yemen, the poorest Arab country. They also favored sustained ties with Saudi Arabia and its increasingly brutal crown prince, Mohammed bin Salman. Indeed, despite the recent murder and dismemberment of Washington Post columnist and Saudi citizen Jamal Khashoggi in that country’s embassy in Istanbul, Turkey, and the Senate's increasing disenchantment with the war in Yemen, Mattis remained a vocal supporter of the Saudis. Just before the Senate recently voted to pull U.S. military assistance for the Saudi war, he joined Pompeo in urging that chamber not to abandon Riyadh. In addition, key senators called Mattis’s testimony "misleading" because he “downplayed” the Saudi crown prince’s role in the murder, ignoring the conclusion of the CIA that the prince was indeed “complicit” in it.

So when it comes to outside-the-box thinking about the Greater Middle East almost two years into the president’s first term, the U.S. remains ensconced in a series of distinctly inside-the-box and unwinnable wars across the region.  Trump, however, now appears ready to change course, at least in Syria and Afghanistan, perhaps out of frustration with the ever-so-conventional mess the adults left him in. 

A Militarized Planet

Elsewhere, matters are hardly more encouraging. At a global level, the grown-ups have neither tempered the president’s more bizarre policies nor offered a humbler, more modest military approach themselves. The result, as the country enters 2019, is an increasingly militarized planet. Mattis’s ownNational Defense Strategy (NDS), released in January 2018, represents a blatant giveaway to the domestic arms industry, envisioning as it does a world eternally on the brink of Great Power war.

On that planet of the adults, the U.S. must now prepare for threats across every square inch of the globe. Far from the military de-escalation hinted at by candidate Trump (and suggested again in a recent tweet of his), Mattis’s “2-2-1 policy” has the Pentagon ramping up for potential fights with two “big” adversaries (China and Russia), two “medium” opponents (Iran and North Korea), and one “sustained” challenge (conflicts and terrorism across the Greater Middle East). Few have asked whether such a strategy is faintly sustainable, even with a military budget that dwarfs that of any other power on the planet.

In fact, the implementation of that NDS vision is clearly leading to a new arms race and a burgeoning Cold War 2.0. Washington is already engaged in a spiraling trade war with Beijing and has announced plans to pull out of a key Cold War nuclear treaty with Russia, while developing a new group of treaty-busting intermediate range nuclear missiles itself. In addition, at the insistence of his military advisers, the president has agreed to back an Obama-era “modernization” program for the U.S. nuclear arsenal now estimated to cost at least $1.6 trillion over the next three decades.

So much for a Republican insistence on balanced budgets and decreased deficits. Furthermore, climate-change denial remains the name of the game in the Trump administration and, in this singular case, the adults in the room could do nothing about it. Despite earlier Pentagon reports that concluded man-made climate change presents a national security threat to the country, the Trump administration has ignored such claims. It has even insisted upon substituting the term “extreme weather” for “climate change” in current defense reports. Here, the grown-ups do indeed know better -- the military has long been focused on the dangers of climate change -- but have dismally failed to temper the president’s anti-science policies.

So, as 2018 comes to a close, thanks to the worldview of those grown-ups and the pliability of Trump’s own ideology (except when it comes to climate change), Washington’s empire of bases, its never-ending war on terror, and its blank-check spending on the military-industrial complex were more firmly entrenched than ever.  It will fall to the president -- if indeed he proves to be serious when it comes to a course change -- to begin the long work of (modestly) undoing a planet of war.

The Last Adult?

Looking toward 2019 in a world on edge, here are a couple of thoughts on our future. Expect that Robert Mueller’s future report will find many things to focus on, including plenty of collusion with women, but -- whatever the Russians did and whatever the desires of those around candidate Trump may have been -- no actual collusion of substance with Moscow in election 2016. That will undoubtedly break the hearts of liberals everywhere and ensure -- despite the best efforts of a new Democratic House -- a full Trump term (or two!). Furthermore, whatever “blue-wave” Democrats do domestically, they are unlikely to present a coherent, alternative foreign-policy vision. Instead, prepare to watch them cede that territory (as always) to Trump and the Republicans. Meanwhile, at least until 2021, they will continue to lament the absence of those "adults in the room" and their supposed ability to preserve a respectable foreign policy, which, of course, would have meant war all the way to the bank.

Maybe it’s time to start thinking of those adults as the tools (and often enough the future employees) of a military-industrial-congressional complex that feeds Americans ample servings of endless war, year after year, decade after decade. In truth, in this century presidents change but the failing policies haven't.

Call it the deep state, the swamp, or whatever you like, but bottom line: during Trump's first two years in office, there wasn't, until now, any serious rethinking of American foreign and military policy, not in terms of peaceableness anyway. Trump’s original adults in the room set the table for endless war. Their replacements clearly intended to devour plentiful helpings of the same dishes. Make no mistake, if it were up to those adults, the United States would be ringing in this New Year with yet another copious serving of militarism.  It still may.

I must admit that I find myself in a lonely spot as 2018 ends. I’ve been serving in the U.S. Army during this period, while dissenting from prevailing foreign policy. After spending 18 years in uniform, including tours of duty in both the Afghan and the Iraq wars, and observing a slew of retired generals and policymakers who oversaw those very wars champion yet more (failed) conventional thinking, forgive me for wondering, from time to time, if I weren't the last true adult in the room.

Published:12/25/2018 8:30:57 PM
[Markets] Trump Urges Americans To Buy The Dip; Voices Confidence In Mnuchin, Powell

Stocks may have finally found the catalyst they need, if only for a brief relief rally.

Almost ten years after president Obama marked the bottom of the financial crisis, when on the day the S&P hit 666, the president gave the green light to buy stocks on March 6, 2009, saying - rather bizarrely - that "what you're now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long-term perspective on it", president Trump also urged Americans to buy the dip when on Tuesday he suggested that the recent swoon in the stock market is a buying opportunity for investors.

"We have companies, the greatest in the world, and they’re doing really well," Trump told reporters at the White House on Christmas Day. "They have record kinds of numbers. So I think it’s a tremendous opportunity to buy. Really a great opportunity to buy."

Trump's invocation to BTFD came one day after the most violent Christmas Eve selloff on record, and the day when the S&P fell not only to its lowest level in 20 months, but also slumped into a bear market. For Trump, the stock market has served as a barometer on his administration, and while he was pointing out virtually every major uptick for the past two years, the recent plunge has infuriated him, leaving him mute on any market-related topic.

But a more important catalyst for a potential Wednesday rally came when Trump appeared to back off on his demands that the Fed stop hiking, which culminated with Trump reportedly seeking to fire Fed Chair Powell and speculation that if the market does not stop falling, Treasury Secretary Mnuchin may also be on the chopping block.

Alongside urging Americans to BTFD, Trump expressed confidence in the Treasury secretary and the Federal Reserve, in an attempt to calm financial markets further roiled after a recent Bloomberg report that the president had discussed firing the central bank’s chairman over raising interest rates.

Asked about Fed Chairman Jerome Powell, Trump said the central bank is “raising interest rates too fast” but he has “confidence” that the Fed will “get it pretty soon.”

Trump was also asked if he has confidence in Treasury Secretary Steven Mnuchin  who sparked a market panic on Monday with his late Sunday statement in which he said he had called the CEOs of the top 6 banks to make sure bank liquidity levels are fine (prompting a frenzy of question what he knows that the rest of the market does not) and followed it up with a call with the Plunge Protection Team on Monday, which however failed to prevent one of the worst one-day routs in history .

Trump's response: "yes I do, very talented guy, very smart person."

While answering questions from reporters at the White House after addressing U.S. armed forces members on a Christmas Day video conference call, Trump also said the Fed is hiking borrowing costs because the "economy is doing so well" - which is accurate, however it is the market that is spooked by the aggressive tightening - adding that U.S. companies are having “record kinds of numbers” and it’s a “tremendous opportunity to buy.”

The remarks represented Trump’s first expression of public support for Mnuchin and Powell since Bloomberg reported last week that the president has discussed dismissing Powell who was recommended by Mnuchin. Overnight, Bloomberg also reported that the president also weighed dismissing Mnuchin, while another said that Mnuchin’s tenure may depend in part on how much markets continue to drop.

Trump’s Oval Office remarks on Tuesday contrasted with an angry tweet on Monday saying "The only problem our economy has is the Fed. They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders." Previously, Trump had unleashed a litany of complaints about the Fed's rate hiking pace, as summarized in the chart below, raising concerns that the Fed may lose its "independence" if Powell is seen as folding to Trump's demands or if Trump replaces the Fed chair as a result of the recent market drop.

Trump's latest remarks on the Fed may be seen as bullish by the market as they alleviate somewhat concerns that Trump would try to remove Powell, even if the president didn’t explicitly say that he won’t fire the central bank chief. Mnuchin said in a pair of tweets Saturday evening that he’d spoken with the president about the matter, and he quoted Trump saying he didn’t believe he had the authority to remove the Fed chairman.

"Well, we’ll see," Trump said Tuesday when asked about his confidence in Powell. “They’re raising interest rates too fast. That’s my opinion. But I certainly have confidence. But I think it will straighten. They’re raising interest rates too fast because they think the economy is so good. But I think that they will get it pretty soon. I really do. I mean, the fact is that the economy is doing so well that they raised interest rates and that is a form of safety in a way.”

Trump’s "safety" comment is a reference to the Fed's ability to lower rates from higher if and when the economy starts contracting, giving the economy a greater cushion in case of a downturn. This is also known as the "hiking rates now to lower them later" approach.

Incidentally, according to the Fed Funds market, as of Monday's rout, the odds for a January 2020 cut are now higher than for a hike, indicating that the market is now pricing in an easing cycle and/or a recession starting in just over one year.

 

 

Published:12/25/2018 3:58:54 PM
[Markets] Mall Ninjas Rejoice; Nunchucks Now Protected Under 2nd Amendment

Nunchuck-wielding New Yorkers are free to injure themselves in the testicles after a federal judge ruled last week that the state's 45-year ban on the simple but deadly weapon is unconstitutional and protected by the Second Amendment. 

The ruling, reported by Guns.com, was based on a 15-year-old case brought by New York attorney, college professor and amateur martial artist James Maloney - who created his own martial arts style revolving around the use of nunchucks.

Maloney filed the suit to overturn New York's ban, as he wanted to train his children in the art as well as possess the weapons legally at home. 

Judge Pamela K. Chen found in favor of James M. Maloney in her 32-page ruling on Friday, arguing that the sale, use, and possession of nunchaku or chuka sticks — a simple weapon consisting of two sticks connected by a length of chain or rope — is protected by the Second Amendment. As such, New York’s ban on such weapons, enacted in 1974 after their popularity in martial arts films of the time, went too far and is an unconstitutional restriction. 

...

As part of his case, witnesses for Maloney advised that at least 64,890 factory-produced metal and wood nunchakus were sold to individuals in the U.S. since 1995. 

...

In an effort to preserve the law, the Nassau County District Attorney, where Maloney lives, argued there were 56 anecdotal nunchaku-related incidents in the country since 1974, to which Chen, a 2013 appointment by President Obama, said, “Even if Defendant had offered evidence of these 56 incidents at trial, they do not constitute clear and convincing evidence, or a preponderance of evidence, that nunchakus are not commonly used by law-abiding citizens for lawful purposes.” -Guns.com

Nunchucks are still banned in California, Massachusetts and Arizona with limited exceptions such as martial arts schools. 

This is all Bruce Lee's fault... 

Read the decision below:

Published:12/25/2018 11:27:49 AM
[Markets] Taibbi: We Know How Trump's War Game Ends

Authored by Matt Taibbi via RollingStone.com,

Nothing unites our political class like the threat of ending our never-ending war ...

So we’re withdrawing troops from the Middle East.

GOOD!

What’s the War on Terror death count by now, a half-million? How much have we spent, $5 trillion? Five-and-a-half?

For that cost, we’ve destabilized the region to the point of abject chaos, inspired millions of Muslims to hate us, and torn up the Geneva Convention and half the Constitution in pursuit of policies like torture, kidnapping, assassination-by-robot and warrantless detention.

It will be difficult for each of us to even begin to part with our share of honor in those achievements. This must be why all those talking heads on TV are going crazy.

Unless Donald Trump decides to reverse his decision to begin withdrawals from Syria and Afghanistan, cable news for the next few weeks is going to be one long Scanners marathon of exploding heads.

“Today’s decision would cheer Moscow, ISIS, and Iran!” yelped Nicole Wallace, former George W. Bush communications director.

“Maybe Trump will bring Republicans and Democrats together,” said Bill Kristol, on MSNBC, that “liberal” channel that somehow seems to be populated round the clock by ex-neocons and Pentagon dropouts.

Kristol, who has rarely ever been in the ballpark of right about anything — he once told us Iraq was going to be a “two month war” — might actually be correct.

Trump’s decisions on Syria and Afghanistan will lay bare the real distinctions in American politics. Political power in this country is not divided between right and left, and not even between rich and poor.

The real line is between a war party, and everyone else.

This is why Kristol is probably right. The Democrats’ plan until now was probably to impeach Trump in the House using at minimum some material from the Michael Cohen case involving campaign-finance violations.

That plan never had a chance to succeed in the Senate, but now, who knows? Troop withdrawals may push a collection of hawkish Republicans like Lindsey Graham, Marco Rubio, Ben Sasse and maybe even Mitch McConnell into another camp.

The departure of Defense Secretary Jim Mattis — a standard-issue Pentagon toady who’s never met an unending failure of a military engagement he didn’t like and whose resignation letter is now being celebrated as inspirational literature on the order of the Gettysburg Address or a lost epic by Auden or Eliot — sounded an emergency bell for all these clowns. The letter by Mattis, Rubio said:

“Makes it abundantly clear we are headed towards a series of grave policy errors which will endanger our nation, damage our alliances & empower our adversaries.”

Talk like this is designed to give political cover to Republican fence-sitters on Trump. That wry smile on Kristol’s face is, I’d guess, connected to the knowledge that Trump put the Senate in play by even threatening to pull the plug on our Middle Eastern misadventures.

You’ll hear all sorts of arguments today about why the withdrawals are bad.

You’ll hear Trump has no plan, which is true. He never does, at least not on policy.

But we don’t exactly have a plan for staying in the Middle East, either, beyond installing a permanent garrison in a dozen countries, spending assloads of money and making ourselves permanently despised in the region as civilian deaths pile up through drone-bombings and other “surgical” actions.

You’ll hear we’re abandoning allies and inviting massacres by the likes of Turkish dictator Recep Tayyip Erdogan. If there was any evidence that our presence there would do anything but screw up the situation even more, I might consider that a real argument. At any rate, there are other solutions beyond committing American lives. We could take in more refugees, kick Turkey out of NATO, impose sanctions, etc.

As to the argument that we’re abandoning Syria to Russians — anyone who is interested in reducing Russian power should be cheering. If there’s any country in the world that equals us in its ability to botch an occupation and get run out on a bloody rail after squandering piles of treasure, it’s Russia. They may even be better at it than us. We can ask the Afghans about that on our way out of there.

The Afghan conflict became the longest military engagement in American history eight years ago. Despite myths to the contrary, Barack Obama did not enter office gung-ho to leave Afghanistan. He felt he needed to win there first, which, as anyone who’s read The Great Game knows, proved impossible. So we ended up staying throughout his presidency.

We were going to continue to stay there, and in other places, forever, because our occupations do not work, as everyone outside of Washington seems to understand.

TV talking heads will be unanimous on this subject, but the population, not so much. What polls we have suggest voters want out of the region in increasing numbers.

A Morning Consult/Politico poll from last year showed a plurality favored a troop decrease in Afghanistan, while only 5 percent wanted increases. Polls consistently show the public thinks our presence in Afghanistan has been a failure.

There’s less about how the public feels about Syria, but even there, the data doesn’t show overwhelming desire to put boots on the ground.

When Trump first ordered airstrikes in Syria over Assad’s use of chemical weapons, 70 percent favored sanctions according to Politicowhile 39 percent favored sending troops. A CBS poll around that time found 45 percent wanted either no involvement period, or airstrikes and no ground troops, versus 18 percent who wanted full military involvement.

Trump is a madman, a far-right extremist and an embarrassment, but that’s not why most people in Washington hate him. It’s his foreign-policy attitudes, particularly toward NATO, that have always most offended DC burghers.

You could see the Beltway beginning to lose its mind back in the Republican primary race, when then-candidate Trump belittled America’s commitment to Middle Eastern oil states.

“Every time there’s a little ruckus, we send those ships and those planes,” he said, early in his campaign. “We get nothing. Why? They’re making a billion a day. We get nothing.”

As he got closer to the nomination, he went after neoconservative theology more explicitly.

“I don’t think we should be nation-building anymore,” he said, in March of 2016. He went on: “I watched as we built schools in Iraq and they’re blown up. We build another one, we get blown up.”

Trump was wrong about a thousand other things, but this was true. I had done a story about how military contractors spent $72 million on what was supposed to be an Iraqi police academy and delivered a pile of rubble so unusable, pedestrians made it into a toilet.

The Special Inspector General for Iraqi Reconstruction noted, “We witnessed a light fixture so full of diluted urine and feces that it would not operate.”

SIGIR found we spent over $60 billion on Iraqi reconstruction and did not significantly improvelife for Iraqis. The parallel body covering Afghanistan, the Special Inspector General for Afghan Reconstruction, concluded last year that at least $15.5 billion had been wasted in that country between 2008 and 2017, and this was likely only a “fraction” of financial leakage.

Trump, after sealing the nomination, upped the ante. In the summer of 2016 he said he wasn’t sure he’d send troops to defend NATO members that didn’t pay their bills. NATO members are supposed to kick in 2 percent of GDP for their own defense. At the time, only four NATO members(Estonia, Poland, the U.K. and the U.S.) were in compliance.

Politicians went insane. How dare he ask countries to pay for their own defense! Republican House member Adam Kinzinger, a popular guest in the last 24 hours, said in July 2016 that Trump’s comments were “utterly disastrous.”

“There’s no precedent,” said Thomas Wright, a “Europe scholar” from the Brookings Institute.

When the news came after Trump’s election that he’d only read his intelligence briefings once a week instead of every day as previous presidents had dutifully done, that was it. The gloves were off at that point.

“The open disdain Trump has shown for the agencies is unprecedented,” said Patrick Skinner, a former CIA official for both George W. Bush and Obama.

All that followed, through today, has to be understood through this prism.

Trump dumped on basically every segment of the political establishment en route to Washington, running on a classic authoritarian strategy — bash the elites, pose as a populist.

However fake he was, there were portions of the political establishment that deserved abuse, the Pentagon most of all.

The Department of Defense has been a money pit for decades. It has trillions in expenditures it can’t account for, refused an audit for nearly 30 years and then failed this year (as in failed completely, zero-point-zero, not producing any coherent numbers) when one was finally funded.

We have brave and able soldiers, but their leaders are utter tools who’ve left a legacy of massacres and botched interventions around the world.

NATO? That’s an organization whose mission stopped making sense the moment the Soviet Union collapsed. We should long ago have repurposed our defense plan to focus on terrorism, cyber-crime and cyber-attacks, commercial espionage, financial security, and other threats.

Instead, we continued after the Soviet collapse to maintain a global military alliance fattened with increasingly useless carriers and fighter jets, designed to fight archaic forms of war.

NATO persisted mainly as a PR mechanism for a) justifying continued obscene defense spending levels and b) giving a patina of internationalism to America’s essentially unilateral military adventures.

We’d go into a place like Afghanistan with no real plan for leaving, and a few member nations like Estonia and France and Turkey would send troops to get shot at with us. But it was always basically Team America: World Police with supporting actors. No wonder so few of the member countries paid their dues.

Incidentally, this isn’t exactly a secret. Long before Trump, this is what Barney Frank was saying in 2010: “I think the time has come to reexamine NATO. NATO has become an excuse for other people to get America to do things.”

This has all been a giant, bloody, expensive farce, and it’s long since time we ended it.

We’ll see a lot of hand-wringing today from people who called themselves anti-war in 2002 and 2003, but now pray that the “adults in the room” keep “boots on the ground” to preserve “credibility.”

Part of this is because it’s Trump, but a bigger part is that we’ve successfully brainwashed big chunks of the population into thinking it’s normal for a country to exist in a state of permanent war, fighting in seven countries at once, spending half of all discretionary funding on defense.

It’s not. It’s insane. And we’ll never be a healthy society, or truly respected abroad, until we stop accepting it as normal.

Incidentally, I doubt Trump really follows through on this withdrawal plan. But until he changes (what passes for) his mind, watch what happens in Washington.

We’re about to have a very graphic demonstration of the near-total uniformity of the political class when it comes to the military and its role. The war party is ready for a coming-out party.

Published:12/25/2018 10:58:32 AM
[International] Now Is Not the Time to Repeat Obama’s Iraq Mistake in Afghanistan

There have been recent media reports that up to 7,000 U.S. troops, roughly half of the number of troops there, will be removed from Afghanistan.... Read More

The post Now Is Not the Time to Repeat Obama’s Iraq Mistake in Afghanistan appeared first on The Daily Signal.

Published:12/24/2018 12:54:32 PM
[Politics] 40% Say U.S. Heading in Right Direction

Forty percent (40%) of Likely U.S. Voters think the country is heading in the right direction, according to a new Rasmussen Reports national telephone and online survey for the week ending December 20.

This week’s finding is down one point from last week. This finding has been running in the 40s for most weeks this year after being in the mid- to upper 20s for much of 2016, President Obama's last full year in office.

Starting Thursday (Dec 27) & continuing through New Year's week, Rasmussen Reports’ exclusive subscriber data level - Platinum - will be open to everyone. See the detailed data behind all of our polls. Stay tuned for more information!

(Want a free daily e-mail update? If it's in the news, it's in our polls). Rasmussen Reports updates are also available on Twitter or Facebook.

The national telephone survey of 2,500 Likely Voters was conducted by Rasmussen Reports from December 16-20, 2018. The margin of sampling error for the survey is +/- 2 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research, LLC. See methodology.

Published:12/24/2018 10:55:01 AM
[Politics] There’s something BIG Trump wants you to know about Brett McGurk… Trump wants you to know something about Brett McGurk, the Obama appointee who made news this weekend by moving up his resignation from the State Department: For all of the sympathizers out . . . Published:12/24/2018 10:22:37 AM
[Politics] There’s something BIG Trump wants you to know about Brett McGurk… Trump wants you to know something about Brett McGurk, the Obama appointee who made news this weekend by moving up his resignation from the State Department: For all of the sympathizers out . . . Published:12/24/2018 9:51:13 AM
[2016 Presidential Election] What we have learned so far (3) (Scott Johnson) In this series we have sought to recall what we have learned so far in the matter of the greatest scandal in our history — the one underlying the presidential election of 2016, from the Clinton campaign to the highest reaches of the Obama administration. UC Berkeley School of Law Heller Professor and former Deputy Assistant Attorney General John Yoo wrote at FOX News over the weekend: A transcript [of Published:12/24/2018 7:50:49 AM
[Markets] The Daily Caller's List Of 2018's Worst 'Fake News' Stories

Authored by Amber Athey via The Daily Caller,

As 2018 comes to a close, it’s time to review the year’s worst cases of media misquotes, misleading narratives, major corrections and straight-up fake news...

While last year’s fake reporting largely occurred during the media’s relentless pursuit to prove Russian collusion, this year’s list is much more varied. However, some themes emerged: stories about then-Supreme Court nominee Brett Kavanaugh and the U.S. border were routinely flagged for misinformation.

Without further ado, here is the list of 2018’s worst examples of fake news:

1. WAPO BLAMES BORDER PATROL FOR DEATH OF 7-YEAR-OLD MIGRANT

The Washington Post published a story in December focusing on a 7-year-old migrant child from Guatemala who died in border patrol custody.

Despite WaPo’s misleading headline suggesting border patrol was to blame for the girl’s death, the full timeline of events and statements from the girl’s father praising border agents revealed a different story.

2. CNN AND THE HILL SPREAD RETRACTED SEXUAL ASSAULT CLAIM AGAINST KAVANAUGH

CNN and The Hill both reported on a sexual assault claim against Supreme Court nominee Brett Kavanaugh in late September without ever mentioning that the claim had been quickly retracted.

WASHINGTON, DC – SEPTEMBER 27: Judge Brett Kavanaugh testifies to the Senate Judiciary Committee during his Supreme Court confirmation hearing in the Dirksen Senate Office Building on Capitol Hill September 27, 2018 in Washington, DC. Kavanaugh was called back to testify about claims by Christine Blasey Ford, who has accused him of sexually assaulting her during a party in 1982 when they were high school students in suburban Maryland. (Photo by Win McNamee/Getty Images)

Jeffrey Catalan apologized for making a “mistake” in leveling the false claim against Kavanaugh, but CNN and The Hill’s initial reports on the claim failed to note the retraction. The Hill later retracted a tweet bolstering the claim and CNN updated its misleading report.

3. BOSTON GLOBE CORRECTS LIZ WARREN STORY — MAKES HER LESS NATIVE AMERICAN

Democratic Massachusetts Sen. Elizabeth Warren released a DNA test in October seeking to prove her repeated claims that she has Native American ancestry.

The Boston Globe initially reported on the DNA test by explaining that Warren was somewhere between 1/32 and 1/512 Native American. However, the paper eventually issued two corrections that damaged Warren’s ancestral claims even further.

“The generational range based on the ancestor that the report identified suggests she’s between 1/64th and 1/1,024th Native American,” The Globe admitted.

4. NYT ACCUSES NIKKI HALEY OF PURCHASING EXPENSIVE CURTAINS

The New York Times initially tied U.S. Ambassador to the UN Nikki Haley to expensive curtains hanging in the ambassador’s apartment in New York, writing, “Nikki Haley’s View of New York Is Priceless. Her Curtains? $52,701.”

US Ambassador to the UN Nikki Haley addresses the UNSC during a United Nations Security Council meeting on Ukraine November 26, 2018 at the United Nations in New York. (Photo by DON EMMERT/AFP/Getty Images)

However, NYT’s own article later admitted that the curtains were approved in 2016 and that Haley had no say in the matter.

5. MEDIA STILL BLAMING REPUBLICANS FOR STEELE DOSSIER

CNN’s Jim Sciutto, MSNBC’s Katy Tur, and MSNBC’s Ari Melber were all responsible for falsely claiming that Never-Trump Republicans were responsible for initial funding of the salacious Steele dossier.

Washington Free Beacon founder Paul Singer did pay Fusion GPS for standard opposition research, however, he stopped paying Fusion GPS well before they contracted Christopher Steele to create the dossier. That research was paid for solely by the DNC and the Clinton campaign.

This falsehood has been shared so many times that even former FBI director James Comeyhas repeated it.

6. NBC SAT ON INFORMATION THAT CONTRADICTED KAVANAUGH ALLEGATIONS

While NBC’s story is not incorrect, its choice to sit on evidence that contradicted a serious sexual assault allegation against Supreme Court nominee Brett Kavanaugh earned them a spot on this list.

Celebrity porn lawyer Michael Avenatti claimed he knew a second woman who could back up gang rape allegations made against Kavanaugh by his client, Julie Swetnick.

That second woman actually contradicted the allegations in a phone interview with NBC News on September 30. Mysteriously, NBC chose not to publish this information until weeks later and after Kavanaugh had already been confirmed to the Supreme Court.

7. MCCLATCHY CLAIMS MUELLER HAS EVIDENCE THAT CORROBORATES PIECE OF DOSSIER

McClatchy reported in April that special counsel Robert Mueller had evidence that former Trump attorney Michael Cohen had been in Prague in the summer of 2016. The report appeared to corroborate a key part of the largely unverified Steele dossier.

US President Donald Trumps former attorney Michael Cohen leaves US Federal Court in New York on December 12, 2018 after his sentencing after pleading guilty to tax evasion, making false statements to a financial institution, illegal campaign contributions, and making false statements to Congress. (Photo by TIMOTHY A. CLARY/AFP/Getty Images)

But no other news outlets came forward to confirm McClatchy’s reporting and a spokesperson for Mueller’s team hinted to The Daily Caller News Foundation that the report may be false.

Cohen’s attorney, Lanny Davis, emphatically denied in December that Cohen had ever been in Prague as the dossier alleges.

8. JIM ACOSTA SAID ILLEGAL IMMIGRANTS WOULDN’T CLIMB BORDER

CNN Chief White House Correspondent Jim Acosta got into an ugly, public battle with President Donald Trump over immigration in November. During the testy exchange, Acosta claimed that illegal immigrants would “not be” trying to climb over the U.S.-Mexico border wall.

TOPSHOT – US President Donald Trump points to journalist Jim Acosta from CNN during a post-election press conference in the East Room of the White House in Washington, DC on November 7, 2018. (Photo by JIM WATSON/AFP/Getty Images)

Unfortunately for Acosta, images a week later revealed that immigrants were doing exactlywhat he claimed they wouldn’t.

9. WAPO RAN KAVANAUGH STORY WITH KNOWINGLY FALSE INFORMATION

The Washington Post ran a story in October suggesting that Georgetown Preparatory School was hiring a new employee to deal with fallout from the Kavanaugh hearings.

The author of the report was informed by a spokesperson for Georgetown Prep that the new position was actually listed well before the Kavanaugh hearings. Somehow, that information didn’t make it into the report and WaPo had to issue a correction.

“This was a completely unintentional error-I read right over the date in haste. Story was corrected and correction is noted. Have a great weekend, all!” reporter Emily Heil wrote in response to backlash.

10. ANDREA MITCHELL SAYS DISGRACED FL ELECTION OFFICIAL IS A REPUBLICAN

Allegations of voter fraud and electoral misconduct in Florida during the 2018 midterms brought Broward County Elections Supervisor Brenda Snipes into the spotlight.

Snipes, a Democrat, had been accused of misconduct in the past and was slammed again for violating Florida election law.

NBC’s Andrea Mitchell bafflingly said on air that Snipes is a Republican and “hardly a Democratic official, or someone doing the bidding of the Democratic candidates there.”

11. WAPO FORCED TO CORRECT NIKKI HALEY MISQUOTE

The Washington Post had to issue a correction after falsely attributing a quote about poverty to U.S. Ambassador to the UN Nikki Haley.

After multiple requests by Haley for WaPo to issue a correction, the paper admitted that the quote in question was actually said by The U.S. Permanent Mission to the United Nations and International Organizations in Geneva.

12. MEDIA CLAIMS TRUMP CALLED THE FBI A ‘CANCER’

President Donald Trump referred to corruption and bias within the FBI, particularly related to the Russia probe, as a “cancer” during a September interview with The Hill.

The media repeatedly misquoted the president and claimed he called the FBI itself “cancer,” despite clarification from the two people who interviewed him.

13. RACHEL MADDOW ACCUSES WH OF EDITING PUTIN TAPE

MSNBC anchor Rachel Maddow opened a show in July by insisting that the Trump administration edited a tape of the president’s meeting with Russian President Vladimir Putin on July 16 in Helsinki.

The Washington Post’s Phillip Bump pointed out that the error was made by reporters too and was due to a change “between the feed from the reporters and the feed from the translator.”

14. NBC’S BRIAN WILLIAMS BUNGLES HIT PIECE ABOUT TRUMP AND DOGS

MSNBC anchor Brian Williams — also a noted survivor of a helicopter attack during the Iraq war — thought he exposed the president for being a dog-hater in an August segment.

Williams claimed his team “launched an extensive web search” and only found one photo of President Donald Trump with a dog.

The Daily Caller revealed, with the help of a quick Google search, multiple photos of the president holding dogs.

15. NPR: DONALD TRUMP JR. COMMITTED PERJURY

NPR published a report in November insisting that Donald Trump Jr. lied to Congress about efforts to build a Trump Tower in Moscow because his statements conflicted with those of former Trump attorney Michael Cohen.

However, NPR failed to realize that the piece of Trump Jr.’s testimony they quoted was about a different project.

“Trump Jr.’s statements about work on a Trump Tower Moscow that ended in 2014 referred to negotiations with Aras Agalarov,” The Daily Caller News Foundation’s Chuck Ross explained. “Felix Sater, a businessman with links to Cohen and Russian officials, tried to make a Trump Tower Moscow happen in 2015.”

16. TIME MAGAZINE’S FAMILY SEPARATION COVER FEATURING CRYING HONDURAN CHILD

Time Magazine published an infamous cover in June that showed a Honduran child crying at the U.S. border, apparently after she had been separated from her mother. The image quickly became the face of the “issue of family separations at the border,” despite the fact that the child in question was never separated.

An AFP journalists reads a copy of Time Magazine with a front cover using a combination of pictures showing a crying child taken at the US Border Mexico and a picture of US President Donald Trump looking down, on June 22, 2018 in Washington DC. (Photo by ERIC BARADAT/AFP/Getty Images)

Later reports also revealed that, in contrast to common left-wing talking points, the mother and her child were not fleeing violence, and the mother had been previously deported from the U.S. In addition, the mother left three other children in Honduras and allegedly paid a smuggler to help her and her daughter cross the border illegally.

17. MIC WRITER CLAIMS RUSSIAN SPY WAS IN THE OVAL OFFICE

Shortly after it was revealed that a Russian spy was attempting to infiltrate right-wing networks, Mic writer Emily Singer claimed that same Russian spy was present during an Oval Office meeting with Russian diplomat Sergey Lavrov.

Singer claimed Russian spy Maria Butina was spotted in a photo of the meeting, citing the fact that she has red hair like the woman in the photo.

The woman in the photo is actually NSC staffer Cari Lutkins.

18. NEW YORKER PUBLISHES KAVANAUGH ACCUSATION WITH ZERO CORROBORATION

The New Yorker’s Jane Mayer and Ronan Farrow — generally known for their sharp reporting on sexual harassment — made a major blunder with their report on Deborah Ramirez’s allegations against Supreme Court nominee Brett Kavanaugh.

Ramirez claimed Kavanaugh thrust his penis in her face at a college party, but The New Yorker was unable to produce any firsthand witnesses or even confirm that Kavanaugh was at the party in question.

The New York Times even opted not to run the same allegation because they were unable to corroborate it. Ramirez herself admitted she had significant memory gaps about the incident and she told former classmates that she wasn’t even sure if Kavanaugh was the offender.

19. DAILY BEAST CLAIMS MIGRANTS IN CARAVAN DON’T HAVE DISEASES

The Daily Beast claimed that there is “zero evidence” that members of the migrant caravan were bringing HIV and TB into the United States.

The Tijuana Health Department reported a handful of cases of tuberculosis, HIV and chickenpox among the caravan. Officials with the Mexican state of Baja California disputed that there have been cases of tuberculosis, but confirmed that some migrants are carrying HIV and chickenpox.

20. MEDIA CLAIMS OBAMA DIDN’T SEPARATE FAMILIES AT THE BORDER

Several reporters claimed during the uproar over President Donald Trump’s family separations at the border that President Barack Obama never separated families.

However, reports from McClatchy and statements from former Obama administration officials revealed that, yes, Obama did separate some families who crossed the borderillegally.

MCALLEN, TX – SEPTEMBER 08: A girl from Central America rests on thermal blankets at a detention facility run by the U.S. Border Patrol on September 8, 2014 in McAllen, Texas. The Border Patrol opened the holding center to temporarily house the children after tens of thousands of families and unaccompanied minors from Central America crossed the border illegally into the United States during the spring and summer. (Photo by John Moore/Getty Images)

“ICE could not devise a safe way where men and children could be in detention together in one facility,” Leon Fresco, a deputy assistant attorney general under Obama, said. “It was deemed too much of a security risk.”

...

*  *  *

This is the just the Top 20... See the rest of The Daily Caller's full list of incredible 'fakest' mews stories here...

Published:12/23/2018 10:19:57 PM
[Markets] What "Winning" In Afghanistan Really Looks Like

Authored by Mike Shedlock via MishTalk,

"By the end of next year, the war in Afghanistan will be over."

What Winning Looks Like

Here's a 1.5 hr documentary about Afghanistan. It is a few years old but shows the quagmire. Marine Major Steuber seems like a stand-up guy trying to do the right thing. I wonder if he kept his rank after this documentary came out.

A quick check of my calendar shows that it's December 22, 2018. Almost five years have passed since Obama declared the war would be over.

Tired of Being Policeman

In response to Trump announcing the US would pull troops out of Syria and cut back troops in Afghanistan, defense secretary James Mattis resigned. Good Riddance.

The warmongers, including many on the left were shocked. In a nauseating article, left-wing VOX called Mattis the last “adult” in the Trump administration.

Perpetual War

These McCain-like warmongers, left and right, will keep us there us there forever.

I say, Thank You, President Trump! Troop Reduction in Afghanistan, Pulling Out of Syria

Staying is absurd. We did not win in 18 years and we won't win in another 18 years.

Published:12/23/2018 6:18:25 PM
[Markets] Angry Trump Forces Mattis Out Early, Names Former Boeing Exec As Acting SecDef

As if President Trump's stream of tweets defending his decision to pull US troops from Syria - and his lashing out at the apoplexy of th US military establishment - didn't clearly communicate Trump's anger over the resignation of Defense Jim "Mad Dog" Mattis (who said in his resignation letter that the Syria decision was the last straw), President Trump tweeted Sunday that he had appointed Patrick Shanahan, Mattis's deputy and a former Boeing exec, to serve as the acting Secretary of Defense, effectively confirming reports that he was pushing to terminate Mattis immediately, ahead of the Feb. 28 departure date that Mattis had set out in his letter.

Trump then acknowledged his conversation with Turkish President Recep Tayyip Erdogan, which reportedly inspired him to withdraw troops.

Earlier,  CBS and the New York Times reported that Trump was preparing to push out Mattis by the end of the year, ahead of the agreed-upon Feb. 28 departure date that Mattis had included in his letter.

The NYT reported that Trump told administration officials that he would try and force Mattis out before the new year, a sign that he is furious over the days of news coverage characterizing Mattis's departure as a rebuke of Trump's reckless foreign policy. Trump reportedly wants to replace Mattis with Patrick M. Shanahan, Mattis’s deputy, as the acting defense secretary while he finishes his search for a permanent replacement.

The departure is hardly a surprise, Trump had been tweeting critical messages about Mattis and Brett McGurk, a top national security official who resigned after Mattis.

Trump also accused the media of bias, tweeting that if anybody but he had pulled troops out of Syria after decimating ISIS, they would have been heralded as a hero.

Trump slammed McGurk as a turncoat Obama appointee who was already expected to leave in February.

With Shanahan as acting SecDef, one thing is for sure: The military industrial complex will be looked after.

Here's Shanahan's official bio, which shows just how deep his ties with government contractors run.

Patrick M. Shanahan became the 33rd Deputy Secretary of Defense on July 19, 2017. Mr. Shanahan most recently served as Boeing senior vice president, Supply Chain & Operations. A Washington state native, Mr. Shanahan joined Boeing in 1986 and spent over three decades with the company. He previously worked as senior vice president of Commercial Airplane Programs, managing profit and loss for the 737, 747, 767, 777 and 787 programs and the operations at Boeing's principal manufacturing sites; as vice president and general manager of the 787 Dreamliner, leading the program during a critical development period; as vice president and general manager of Boeing Missile Defense Systems, overseeing the Ground-based Midcourse Defense system, Airborne Laser and Advanced Tactical Laser; and as vice president and general manager of Boeing Rotorcraft Systems, overseeing the Apache, Chinook and Osprey. He previously held leadership positions on the 757 program, 767 program and in the fabrication division. Mr. Shanahan is a Royal Aeronautical Society Fellow, Society of Manufacturing Engineers Fellow and American Institute of Aeronautics and Astronautics Associate Fellow. He served as a regent at the University of Washington for over five years. Mr. Shanahan holds a Bachelor of Science degree in mechanical engineering from the University of Washington and two advanced degrees from the Massachusetts Institute of Technology: a Master of Science degree in mechanical engineering, and an MBA from MIT’s Sloan School of Management.

If anything can be gleaned from Shanahan's ascendancy to the top position at DOJ, it's that, after a rough couple of weeks for the aerospace company, Monday could be a good day for Boeing shares (and the Dow more broadly).

Published:12/23/2018 11:16:08 AM
[Education] Administration Rescinds Obama School Discipline Letter (Paul Mirengoff) Here’s some good news. The Department of Education and the Department of Justice have jointly rescinded an Obama-era “Dear Colleague” letter that threatened federal action against schools whose discipline policies result in a “disparate impact” on racial minorities. We have repeatedly denounced this assault by the Obama administration on the ability of schools to maintain classroom discipline. Indeed, of all the wars the left is waging on standards, its attack, Published:12/22/2018 8:46:33 PM
[Markets] Did Someone Slip Donald Trump Some Kind Of Political Viagra?

Authored by James George Jatras via The Strategic Culture Foundation,

This has been an extraordinary week...

After two years of getting rolled by the Washington establishment, it seems that President Donald Trump woke up and suddenly realized, “Hey – I’m the president! I have the legal authority to do stuff!”

  • He has announced his order to withdraw US troops from Syria.
  • His Defense Secretary James Mattis has resigned. There are rumors National Security Adviser John Bolton may go too. (Please take Secretary of State Mike Pompeo with you!)
  • He announced a start to withdrawing from Afghanistan.
  • He now says he will veto a government funding bill unless he gets $5 billion for his Wall, and as of 12:01 AM Washington time December 22 the federal government is officially under partial shutdown.

All of this should be taken with a big grain of salt. While this week’s assertiveness perhaps provides further proof that Trump’s impulses are right, it doesn’t mean he can implement them.

The Syria withdrawal will be difficult. The entire establishment, including the otherwise pro-Trump talking heads on Fox Newsare dead set against him – except for Tucker Carlson and Laura Ingraham.

Senator Lindsey Graham is demanding hearings on how to block the Syria pullout.  Congress hardly ever quibbles with a president’s putting troops into a country, where the Legislative Branch has legitimate Constitutional power. But if a president under his absolute command authority wants to pull them out – even someplace where they’re deployed illegally, as in Syria – well hold on just a minute!

We are being told our getting out of Syria and Afghanistan will be a huge “gift” to Russia and Iran. Worse, it is being compared to Barack Obama’s “premature” withdrawal from Iraq (falsely pointed to as the cause of the rise of ISIS) and will set the stage for “chaos.” By that standard, we can never leave anywhere.

This will be a critical time for the Trump presidency. (And if God is really on his side, he soon might get another Supreme Court pick.) If he can get the machinery of the Executive Branch to implement his decision to withdraw from Syria, and if he can pick a replacement to General Mattis who actually agrees with Trump’s views, we might start getting the America First policy Trump ran on in 2016.

Mattis himself said in his resignation letter, “Because you have the right to have a Secretary of Defense whose views are better aligned with yours on these [i.e., support for so-called “allies”] and other subjects, I believe it is right for me to step down from my position."

Right on, Mad Dog! In fact Trump should have had someone “better aligned” with him in that capacity from the get-go. It is now imperative that he picks someone who agrees with his core positions, starting with withdrawal from Syria and Afghanistan, and reducing confrontation with Russia.

Former Defense Secretary Chuck Hagel complains that “our government is not a one-man show.” Well, the “government” isn’t, but the Executive Branch is. Article II, Section 1: “The executive Power shall be vested in a President of the United States of America.” Him. The President. Nobody else. Period.

Already the drumbeat to saddle Trump with another Swamp critter at the Pentagon is starting: “Several possible replacements for Mattis this week trashed the president’s decision to pull out of Syria. Retired Gen. Jack Keane called the move a “strategic mistake” on Twitter. Republican Sens. Lindsey O. Graham (R-S.C.) and Tom Cotton (R-Ark.) signed a letter demanding Trump reconsider the decision and warning that the withdrawal bolsters Iran and Russia.” If Trump even considers any of the above as Mattis’s replacement, he’ll be in worse shape than he has been for the past two years.

On the other hand, if Trump does pick someone who agrees with him about Syria and Afghanistan, never mind getting along with Russia, can he get that person confirmed by the Senate? One possibility would be to nominate someone like Acting White House Chief of Staff Mick Mulvaney specifically to run the Pentagon bureaucracy and get control of costs, while explicitly deferring operational decisions to the Commander in Chief in consultation with the Service Chiefs.

Right now on Syria Trump is facing pushback from virtually the whole Deep State establishment, Republicans and Democrats alike, as well as the media from Fox News, to NPR, to MSNBC. Terror has again gripped the establishment that the Trump who was elected president in 2016 might actually start implementing what he promised. It is imperative that he pick someone for the Pentagon (and frankly, clear out the rest of his national security team) and appoint people he can trust and whose views comport with his own. Just lopping off a few heads won’t suffice – he needs a full housecleaning.

In the meantime in Syria, watch for another “Assad poison gas attack against his own people.” The last time Trump said we’d be leaving Syria “very soon” was on March 29 of this year. Barely a week later, on April 7, came a supposed chemical incident in Douma, immediately hyped as a government attack on civilians but soon apparent as likely staged. Trump, though, dutifully took the bait, tweeting that Assad was an “animal.” Putin, Russia, and Iran were “responsible” for “many dead, including women and children, in mindless CHEMICAL attack” – “Big price to pay.” He then for the second time launched cruise missiles against Syrian targets. A confrontation loomed in the eastern Med that could to have led to war with Russia. Now, in light of Trump’s restated determination to get out, is MI6 already ginning up their White Helmet assets for a repeat?

Trump’s claim that the US has completed its only mission, to defeat ISIS, is being compared to George W. Bush’s “Mission Accomplished” banner following defeat of Iraq’s army and the beginning of the occupation (and, as it turned out, the beginning of the real war). But if it helps get us out, who cares if Trump wants to take credit? Whatever his terrible, horrible, no good, very bad national security team told him, the US presence in Syria was never about ISIS. We are there as Uncle Sam's Rent-an-Army for the Israelis and Saudis to block Iranian influence and especially an overland route between Syria and Iran (the so-called “Shiite land bridge” to the Mediterranean).

For US forces the war against ISIS was always a sideshow, mainly carried on by the Syrians and Russians and proportioned about like the war against the Wehrmacht: about 20% “us,” about 80% “them.” The remaining pocket ISIS has on the Syria-Iraq border has been deliberately left alone, to keep handy as a lever to force Assad out in a settlement (which is not going to happen). Thus the claim an American pullout will lead to an ISIS “resurgence” is absurd. With US forces ceasing to play dog in the manger, the Syrians, Russians, Iranians, and Iraqis will kill them. All of them.

If Trump is able to follow through with the pullout, will the Syrian war wind down? It needs to be kept in mind that the whole conflict has been because we (the US, plus Israel, Saudi Arabia, Qatar, Turkey, UAE, the United Kingdom, etc) are the aggressors. We sought to use al-Qaeda and other jihadis to effect regime change via the tried and true method. It failed.

Regarding Trump’s critics’ claim that he is turning over Syria to the Russians and Iranians, Assad is nobody's puppet. He can be allied with a Shiite theocracy but not controlled by it; Iran, likewise, can also have mutually beneficial ties with an ideologically dissimilar country, like it does with Christian Armenia. The Russians will stay and expand their presence but unlike our presence in many countries – which seemingly never ends, for example in Germany, Japan, and Korea, not to mention Kosovo – they'll be there only as long and to the extent the Syrians want them. (Compare our eternal occupations with the Soviets’ politely leaving Egypt when Anwar Sadat asked them, or leaving Somalia when Siad Barre wanted them out. Instead of leaving, why didn’t Moscow just do a “Diem” on them?) It seems that American policymakers have gotten so far down the wormhole of their paranoid fantasies about the rest of the world – and it can't be overemphasized, concerning areas where the US has no actual national interests – that we no longer recognize classic statecraft when practiced by other powers defending genuine national interests (which of course are legitimate only to the extent we say so).

What happens over the next few days on funding for the Border Wall – which is fully within the power of Majority Leader Mitch McConnell to deliver – and over the next few weeks over Syria and Afghanistan may be decisive for the balance of the Trump presidency. If he can prevail, and if he finally starts assembling an America First national security team beginning with a good Pentagon chief, he still has a chance to deliver on his 2016 promises.

Anyway, if this week’s developments are the result of someone putting something into Donald’s morning Egg McMuffin, America and the world owe him (or her) a vote of thanks. Let’s see more of the wrecking ball we Deplorables voted for!

Published:12/22/2018 8:46:33 PM
[Markets] US Army Major: "Trump Is Right On Syria"

Authored by Maj. Danny Sjursen via AntiWar.com,

Neither the mainstream left or the interventionist right is willing to admit that Trump is capable of cogent policy. Sometimes they’re right – on Syria, they’re wrong!

"Impulsive, irresponsible, and dangerous."

Such was the way, just this morning on CNN, that Democratic Representative, and House Minority Whip, Steny Hoyer described President Trump’s recent announcement that he’s bringing home the 2,000 U.S. troops currently in Syria. Last night, Republican Senator Lindsay Graham – a true hawk’s hawk – declared on the Senate floor that Trump’s decision is a "disaster," and a "stain on the honor of the United States."

Two points here, one minor, one major – let’s begin with a semantic quibble: when maintaining national "honor" becomes a last ditch argument for continuing indecisive, perpetual war, perhaps it really is time to leave. And, more importantly, there’s this: anytime that Steny Hoyer and Lindsay Graham are in agreement and share a disdain for a foreign policy decision – even a Trump decision – well, then, the president might just be on to something.

My point is this: the bipartisan interventionist/militarist consensus of centrist Dems and hawkish Republicans has brought only disaster, death, humanitarian crisis, exploding debt and endless war for nearly two decades. For ample evidence see Iraq, Afghanistan, Libya, Yemen, etc. So, why are we still listening to these folks? Well, partly because the United States is an increasingly militarized (ostensible) republic in which a world-leading domestic arms industry all but owns Congress and the corporate media. Then there’s the matter of Trump – a man that the bipartisan Washington establishment simply loathes. Indeed, The Donald can do no right as far as these folks are concerned. Now, few authors – especially serving on active-duty in the military – have been as (constructively) critical of this president as I have, but occasionally the man demonstrates good sense, especially in foreign affairs. Fairness demands that we recognize this, whatever we think of the president’s general personality.

Let us return, then, to Syria, and take Representative Hoyer’s assessment apart one piece at a time. In point of fact there was nothing particularly "impulsive" about President Trump’s announcement. More than six months ago, in May, he announced that the US military would be withdrawing from Syria "like, very soon." In fact, arguably the only reason American troops have remained in the country as long as they have can be attributed to poor advicefrom the last "adult-in-the-room," Defense Secretary Jim Mattis. Candidate Trump ran on a largely anti-interventionist platform, and – during the Obama presidency – regularly tweeted that the US should "stay out" of Syria. So there’s nothing exceptionally impulsive or surprising about Trump’s latest decision on troop withdrawal.

Next, Hoyer called Trump’s decision "irresponsible." But is it, really? One could, in fact, argue the exact opposite. Besides the originally stated mission to defeat ISIS’s physical caliphate – which has essentially been accomplished – ever more expansive, unachievable, and flimsy justifications for a perpetual US troop presence in Syria have begun to creep in. Trump’s own cabinet members, and the usual (perennially wrong) Beltway insiders have alternately argued that America must stay in Syria to check Russia, counter Iran, deter Turkey, protect the Kurds, and on and on. No one, not Trump nor his "grown-up" advisors, seemed capable of articulating a cogent, sustainable strategy or communicating an exit strategy. And military occupation of a sovereign country – sanctioned neither by the US Congress nor the United Nations – ought to be driven by more than policy inertia.

Only that’s become the norm in US Mideast policy. We stay because we don’t know what else to do – remaining not for positivist goals but out of fear of negativist what-ifs. When policy goals are muddled and end-states unclear, now that’s "irresponsible." If Trump’s team can’t enunciate a vital national interest in maintaining a military intervention – which they’ve proven time and again that they can’t – then the president has a duty to pull the plug on the latest forever war.

Then there’s Hoyer’s claim – echoed by Senator Graham, every pundit on CNN and MSNBC, and just about every vacuous D.C. analyst – that pulling out of Syria is "dangerous." It’s not, or, put another way, it’s at least less dangerous than staying. This author has argued for over a year that Syria is the next great Middle East trap, all risk and no reward for the United States. Let’s review just why this is. Here’s what the US stands to gain by staying put in Syria – a temporary denial of Assad and his allies’ forces entering the country’s far east, a limited zone of unsustainable Kurdish autonomy, and tough-guy bragging rights on the international scene.

Up against this are the truly "dangerous" – and arguably unacceptable – risks of perpetual military occupation. As if the latest (unnecessary) iteration of Cold War with Russia in Eastern Europe isn’t treacherous enough, in Syria today US troops (and allies) face-off with Russian troops (and their allies) on an unstable front along the Euphrates River. Despite some limited deconfliction measures in place, we now know that American and Russian soldiers have – according to the special US ambassador – exchanged gunfire"more than once" along this precarious boundary. In one particularly disturbing incident several months back, US airstrikes killed "dozens" of Russian mercenaries in a four-hour battle. Luckily Putin showed restraint after that exchange. Can we count on that in the future? Who knows. What’s certain is that Russia holds the stronger hand in Syria, has been invited there by Assad, and possesses thousands of nuclear weapons. De-escalation seems more than prudent given these undeniable truths.

Then there’s the minor matter of Turkey, a treaty ally with the second-largest army in NATO. President Erdogan has repeatedly threatened US troops, actually invaded Northern Syria, and refuses to recognize any sort of Kurdish autonomous entity (and he never will). All this bluster led the Pentagon, in November, to announce a new strategy of placing outposts along the Turkish border to deter Ankara. Tell me how this risky "strategy" contributes to the stated mission of US troops in Syria – the defeat of ISIS? It doesn’t. Again, plentiful risk, scant reward.

Finally, if 17+ years of indecisive war in the Greater Middle East should have taught Washington anything, it’d be this: prolonged ground-force occupation of sovereign Islamic states or regions is ultimately counterproductive. The longer the US stays in Syria – or anywhere for that matter – the greater the chance of an outbreak of armed insurgency. Turns out (gasp!) that folks don’t appreciate being occupied by a foreign superpower. Sure, the Kurds want our protection, but Eastern Syria is home to more than just a Kurdish minority. Indefinite US military presence could enflame Sunni tribal hostilities, reestablishing that perilous, if ubiquitous, alliance between nationalist Sunnis and Islamist jihadis – something we’ve seen percolate in both Afghanistan and Iraq. And just wait: should such an insurgency break out – and I predict it eventually would – well then the Pentagon and professional DC pundits would tell us we have to stay and sprinkle some magic counterinsurgency dust on that new enemy. It is thus that America’s post-9/11 wars have become self-sustaining quagmires.

US strategy, especially military strategy, should be undergirded by realism, policy sobriety, and facts. And here’s the most relevant, if inconvenient, fact: Bashar al-Assad’s regime – backed by Iran and Russia – has already won the civil war. Nothing the US has done, can do, or is willing to try, will change that salient truth. The endgame in Syria – just as in Afghanistan someday soon – will be messy, uncomfortable, and optically unsettling. Syria will remain what it’s been for half-a-century, a minor "adversary’s" ally stably situated in the Russian and, to a lesser extent, Iranian camp. So it has been and so it shall remain. Assad’s Syria is eminently containable – as is Iran, for that matter – and presents no existential threat or vital interest to U.S. security. Indeed, though Assad is undoubtedly a monster, his secular regime is actually morelikely to suppress transnational terror threats than a divided Syria at war with itself. Extremism feeds on instability and division – precisely what continued American military intervention would ensure.

It is long past time to leave behind childish things – excessive optimism, sentimentality (for the Kurds, for example), and the foolish fantasy of America’s special mission to transform the world – in the interest of sound strategy. Love Trump or hate him, his decision on Syria is neither "impulsive," "irresponsible," or unacceptably "dangerous." The president is delivering on his – albeit muddled – campaign promise to eschew risky interventionism and put American interests first in foreign policy. Let us give credit where credit is do.

Published:12/22/2018 2:41:12 PM
[Markets] David Collum's 2018 Year In Review: "The Year Everything Changed"

Authored by David B. Collum, Betty R. Miller Professor of Chemistry and Chemical Biology - Cornell University (Email: dbc6@cornell.edu, Twitter: @DavidBCollum),

“Dave: You are roundly tolerated.”

~Danielle Dimartino Booth, former Fed advisor and founder of Quill Intelligence

2018 Year In Review: "The Year Everything Changed"

The whole beast can be downloaded as a single PDF Here...

Contents

  • Introduction
  • Background: The Author
  • Sources
  • My Personal Year
  • Investing
  • The Economy
  • Valuations
  • Broken Markets
  • The FAANGs
  • Gold
  • Bitcoin: Tales from the Crypt
  • Real Estate
  • Pensions
  • Debt
  • Corporate Debt
  • Personal Debt
  • Sovereign Debt
  • Inflation versus Deflation
  • Banks
  • The Fed
  • Human Achievement
  • Nature
  • Middle East
  • Syria
  • Nerve Gas Poisoning
  • Kavanaugh versus Blasey Ford
  • Political Correctness–Adult Division
  • Political Correctness–Collegiate Division
  • Political Correctness–Youth Division
  • Conclusion
  • Acknowledgments
  • Books

Introduction

Every December, I write a Year in Review that’s first posted on Chris Martenson & Adam Taggart’s website Peak Prosperity and later at ZeroHedge. This is my tenth, although informal versions go back further. It always presents a host of challenging questions like, “Why the hell do I do this?” Is it because I am deeply conflicted for being a misogynist with sexual contempt—both products of the systemic normalization of toxic masculinity perpetuated by an oppressively patriarchal societal structure? No. That’s just crazy talk. More likely, narcissism and need for e-permanence deeply buried in my lizard brain demands surges of dopamine, the neurotransmitter that drives kings to conquer new lands, Jeff Bezos to make even more money, and Harvey Weinstein to do whatever that perv does. The readership has held up so far. Larry Summers said he “finished the first half.” Even as a fib that’s a dopamine cha-ching.

"If you think you are too small to make an impact, try spending the night in a room with a mosquito."

~African proverb

A non-pejorative justification for writing this beast is that life, with the aid of the digital world, hurls information at us so fast we cannot process it. Who could forget when Knight Capital Group launched an algorithm that sent them into bankruptcy within 45 minutes? What ever came of the Vegas shootings? Will David Hogg's 10 minutes of fame as a world-class douche be forgotten? (If not, please euthanize me.) It seems a shame to simply let these fragments of life drift into the void without trying to find an underlying meaning to the human folly. I mostly ponder broken markets and the antics of bankers looking for signs of unintelligent life. The markets have been well over the historical fair value marks for 15 years. I have been a bear long enough to earn my permabear merit badge. The always-chipper Mark Dow called me a “bunker monkey.” John Hussman referred to some of my ideas as “bloodthirsty,” although I prefer the term “ghoulish.” The odds that I understand what has already happened are vanishingly small. I don't know if markets are going up or down, only that they will move from left to right. None of what I say should be taken as investment advice; channel George Costanza and do the opposite.

“I would have written a shorter letter, but I did not have the time.”

~Blaise Pascal, French mathematician, 1656

What’s with the trite “matrix” metaphor? (I swear I will not refer to naked swimmers, rhyming history, or kicking cans.) I'm not even sure the puzzle pieces are real, fake, or as Ben Hunt calls them, “counterfeit.” It is deeper than that. I have like-minded friends sharing seemingly common interests who look at events—think Brett Kavanaugh, for example—and extract from them unrecognizably different messages because our perspectives are not similar; they are profoundly different. If you shuffle a deck of cards, the odds that the resulting order has ever before been created is zero (52! = 8 × 1067). What are the odds all of us share common websites, read the same articles or blogs, or have the same Twitter feed? Zero. It is preposterous to think that we are looking at the same world through similar lenses. The viral audio in which some hear “Yanny” and others hear “Laurel” is metaphorical.ref 4 This document is what I saw and heard described as fact-based hyperbole. It is the Year According to Dave.

“I want to thank everybody who made this day necessary.”

~Yogi Berra

Background: The Author

When reading Dave's Year In Review
You'll note one conclusion rings true
His odd observations
And strange contemplations
Have proven he's missing a screw

@TheLimerickKing

By way of introduction—despite a knowledge and understanding of economics, finance, and politics that one would expect from a lifetime of studying organic chemistry—I am 1/1,024th economist. There is absolutely no substitute for a genuine lack of preparation. I’ve managed to get cameos in the most improbable of venues including the Wall Street Journal, Russia Today (RT), the Guardian, and even Rolling Stone (but not “on the cover”). With some regularity and little forethought, I routinely manage to risk career and what's left of my tattered reputation by getting embroiled in international incidents, which included brawling publicly with the American Federation of Teachers in 2017ref 5 and locking arms with Nassim Taleb in defense of Nobel Prize winner Tim Hunt in 2015.ref 6 This year was no exception. I risked an international incident by being the only chemist in the world calling bullshit on the Sergei and Yulia Skripal Novichok poisoning story. That gets its own section.

Aristotle noted that an educated man can entertain an idea without endorsing it. I also have a penchant for entertaining any idea until it dies of SIDS or gets legs, and I have to chase it down. I am, in short, a conspiracy theorist. We all should be conspiracy theorists because men and women of wealth and power conspire. If some ideas make you uneasy, just shut up. Pejoratively denouncing the rest of us as “conspiracy theorists” is intentionally shutting down uncomfortable discussions. If you do this in the current political climate, I get to smack you to get you to agree with me. If you wish to discuss dicey topics, quit apologizing by saying, “I am not a conspiracy theorist but . . .” because you are one.

Figure 1. Jeff Macke (@JeffMacke) original. CNBC's Fast Money and chartist-artist extraordinaire.

I can't control what topics go on and off my radar; they just do it. Hardly a shot was fired this year in the War on Cash. Some issues are huge but change on geologic timescales. We're all doomed to burn in eternal hell, but I can only say that so many years in a row before it starts getting old. I got the most email complaints for not discussing the opioid crisis. I still haven't gone there, but I’m about to read Beth Macy’s Dopesick. Energy has been a hot topic and had moments of hilarity this year, but my bandwidth limitations and lack of investment exposure left me bored.

There is a tractor beam that pulls economic blogs into the political realm. I have saved more notes and links and destroyed more gray matter than I thought possible trying to understand Russian collusion, the politics of Trump and Trump haters, and criminal behavior inside the FBI and CIA. I could write a book, but I just can’t do these topics justice in this forum. I'm letting them go for now, concluding that we desperately need a wall . . . around the Beltway.

If I have offended you already—I guarantee that at least a few readers are—it’s time to stop reading. Although no puppies were killed writing this blog, trust me: I am just warming up.

Sources

I sit in front of a computer 16 hours a day gerrymandering my brain, at least three of which are dedicated to non-chemistry pursuits. I’m a huge fan of Adam Taggart and Chris Martenson (Peak Prosperity), Tony Greer (TG Macro), Doug Noland (Credit Bubble Bulletin), The Automatic Earth, Grant Williams (Real Vision and Things That Make You Go Hmmm), Raoul Pal (Real Vision), Bill Fleckenstein (Fleckenstein Capital), Mike Krieger (Liberty Blitzkrieg), Demetri Kofinas (Hidden Forces), James Grant (Grant’s Interest Rate Observer), Campus Reform, and any nonsense spewed by Twitter legend @RudyHavenstein. There are so many others, many of whom I consider friends that I am simply waiting to meet. ZeroHedge is by far my preferred consolidator of news; it’s an acquired taste and requires a filter, but I think those rogues are great. Twitter is a window to the world if managed correctly—especially for a chemist attempting to connect with the finance world. Warning: the Holy Grail of maximizing follower counts is an illusion; it produces a counterproductive hyperconnectivity that makes extracting signal from noise difficult. So much flow, so little time.

My Personal Year

My emergent role as a Roosky apologist (pronounced “Roo-ski”) brought in a wave of interviews including two each with British provocateur George Galloway, RT,ref 7,8,9 Lee Stranahan and Garland Nixon on Fault Lines,ref 10 and Scott Horton.ref 12 Other interviews focusing on economics, markets, and the absurdity we call “college” included Crush the Street,ref 11 Jason Burack (Wall St. for Main Street),ref 13 Chris Martenson (Peak Prosperity),ref 14 several with Lance Roberts,ref 15,16 and several on local radio.ref 17 Last year’s write-up on pensions was reproduced verbatim in the Solari Report on pensions.ref 18

A three-hour dinner with Jonah Goldberg. I'll remember vividly. I also played a role in coaxing one of my favorite economists, Stephen Roach, and one of my readers and friend, Tony Deden, to do RealVision interviews purely out of self-interest: I wanted to hear what they had to say. This much heralded two-part Deden interview was his first interview ever.ref 19 In return, I got to spend 10 hours sitting on my deck chatting with Tony about the meaning of everything. Y’all are now free to eat your hearts out.

On the chemistry front. Somebody recorded a chemistry lecture I gave in Portugal in which you can hear my Yankee-dog jokes bomb.ref 20 Halfway through dinner that night, I remembered that one of my three compatriots had won the Nobel Prize in chemistry six months earlier. Another was six months shy of winning this year’s prize. (Congrats, Frances) In 2017 I had two NIH grants hit the same study section. Any academic will tell you that was guaranteed to be a “Sophie’s choice” moment at best. I only needed a few stitches—I got one of them funded—and it looks like the other is coming back in the spring. (Phew!)

Investing

My investing acumen has been pretty lucky, with one notable bad streak. From 1980 to 1987, I was all long-dated bonds. Those suffering acute equityphilia may not realize that bonds were great. The ’87 dip prompted me to switch to equities, which I held until mid-1999. Here's a dark secret that I’ve never told anybody: I had tech stocks on leverage. Ding! Ding! Ding! They ring bells at the top! I woke up in time, sold everything, and held only cash, gold, and a token short position from late 1999 forward, dumping the short position during the ’02–’03 recession. From around 2003 through 2010 it was gold, cash, and energy-based equities with a pinch of tobacco. That was my best decade, relatively speaking, cranking out >10% annually compounded returns like a boss in an otherwise brutal environment. Yahtzee! Then we get to 2010 through the present, and Mr. Smarty Pants got a ’tude adjustment. Energy, gold, and cash hoisted me by my own petard and put me headfirst through a wood chipper. As explained last year, my employer booted me out of my entire (15%) energy position after the beatings. Thanks. I've been sitting on gold and cash witnessing an epic equity ’roid rage accumulating skid marks in my boxers.

Precious metals, etc.: 28%
Energy: 0%
Cash equivalent (short term): 63%
Standard equities: 9%

For me, however, investing is all about valuations. The section on “Valuations” will explain why I didn’t buy equities when they were dirt cheap—hint: they were never dirt cheap—and where I think it all goes from here. I have one overarching goal: don’t fuck up. If I hit this goal, I will retire in comfort. The one variable I have no control over, however, is time, and that is why the chronostrictesis of sitting on the sidelines for nearly a decade caused me to start cutting myself again. Let me show you a foreshadowing chart that should give you pause (Figure 2):

Figure 2. Peak-to-peak or trough-to-trough (full cycle) inflation-adjusted capital gains of 1.8–2.2% per annum since 1870.

If you negate timing—if you measure peak-to-peak or trough-to-trough—your inflation-adjusted capital gains will average about 2%. If you get caught holding your life savings in equities at the wrong time, you will not recover in your lifetime. Hold that thought until “Valuations.”

"But there is one course of action – one classic mistake – that I most strongly feel is wrong: reaching for return."

- Howard Marks, founder of Oaktree Capital

How’d I do in 2018? Large physical gold and much smaller silver investments went moderately down (–5% and –15%, respectively). Fixed income finally offered returns without a zero preceding the decimal point, but they’re still pyrrhic gains at best. My TIAA retirement account returns 3.6% per year guaranteed (unless the zombie apocalypse arrives). I am also laddering 2-year treasuries and CDs; reaching any further for yield makes sense only if you’re a diehard deflationist because the yield curve is dangerously flat. To my joy, my former energy position would have cost me another –10% loss had it not been liquidated by my employer. I will get it back when I’m ready—when the next recession is making headlines. All this compares with a –10% return on an S&P index fund.

Here is my maxim: Save to retire, and invest to combat inflation. I have prided myself on saving 20–30% of my gross salary per year, but for the first time ever (including the college tuition years!), my spending exceeded earnings. Adult children are expensive as hell, especially when the youngest spawn is trying to be a non-starving musician and starting a new venture—buying and selling violins.ref 21 (You wanna buy a violin?) You could call the money loans, but that means you’ve never loaned money to your children. Also, being married to a grandmother of three who is armed to the teeth with credit cards and digitally linked to point-and-click purchases of toys and kid’s clothing (Amazon) is quite the experience. I bought her a Jacuzzi for our deck overlooking Cayuga Lake (Figure 3) knowing that she can't order toys and clothes while while in the tub. I plunged into the antique furniture bear market after a multi-decade hiatus by buying some nice pieces at seriously low prices; those in Figure 4 are emblematic. They will be in my estate, but I’m still hoping they don’t get seriously cheaper. Did I mention the dental implant, which seems almost metaphorical? To top it all off, I got an altogether unexpected 30% hit on annual gross income, which appears to be a one-off event. I see a return to profitability in Q1 2019—the ol’ first-half recovery story.

Figure 3. Hot tub city, and I am the mayor.

Figure 4. (a) Mid-19th century tiger maple drop-leaf dining room table; (b) Circa 1770 century Boston highboy.

The Economy

"In our current framework the economy is singularly brittle."

~Larry Summers (@LHSummers), former secretary of the Treasury

“Absolute blowout number for ISM Manufacturing Index in August. 61.3 is a 14-year high. While many keep pointing to threats, this economy is Kevlar.”

~Brian Wesbury (@wesbury), chief economist, First Trust Portfolios

“I am not playing this down at all. I think we have a very serious global synchronized downturn.”

~Lakshman Achuthan (@businesscycle), Economic Cycle Research Institute (ECRI)

It is instructive to ponder the meaning of wealth creation. It’s about making our collective lives better. The U.S. built an empire founded on strong property rights, a growing populace with a gritty work ethic, a resource-rich continent with seemingly limitless room for expansion, and global European competitors hobbled by relentless tribal fighting. How many of these factors are still intact? The first industrial revolution was about converting enthalpy (heat) obtained from fossil fuels into negative entropy (order we call civilization). I keep wondering what will drive the gains over the next 100 years. We are told FAANGs are replacing the smokestack industrial juggernauts. We'll see.

Heady questions aside, how about this year? This time last year I was writing about downturns in housing and autos, and now I’m hearing about downturns in housing,ref 22 autos,ref 23 lumber,ref 24 retail,ref 25 trucking,ref 26energy,ref 27 and semiconductors (chips ’n’ dips).ref 28 Did we have a boom I missed? Yes and no. Assuming inflation corrections using “substitution” and “hedonic improvements” are accurate—I don’t—and assuming GDP corrections using these inflation numbers are accurate—I don’t—then the GDP grew a paltry 2% off the ’09 bottom, quite literally tracking the Great Depression from 1931 to 1939.ref 29 BLS employment numbers are generated by a trend-cycle statistical modelref 30 (read: making shit up). Nonetheless, even Helen Keller could’ve seen the help wanted signs on the lowest economic rung (retail). Personal consumption expenditures (PCEs) are said to be soaring relative to GDP despite stagnant wages and no personal savings.ref 31

“It doesn't take even 10 minutes’ worth of investigation to show that the BLS tightness gauge—the U-3 unemployment rate—is not worth the paper it's printed on.”

~David Stockman (@DA_Stockman), former Reagan economic advisor and former Blackstone group partner

In 2018 we somehow witnessed a couple quarters of 3–4% GDP growth. I am so dark that I wonder whether the numbers have been jiggered explicitly to provide cover for the Fed to raise rates. Even so, more balanced individuals than I wonder whether we are creating real wealth or witnessing economic activity stimulated by yet another credit bubble. Luke Gromen (FFTT, LLC) notes that the 4% GDP print was suspicious in light of a 6.5% year-over-year drop in tax receipts and a 1.8% drop in gasoline demand.ref 32 (Fuel consumption and economic activity go together like Starsky and Hutch.) Something is amiss. David Stockman says that “these goal-seeked numbers are notoriously unreliable at cyclical turning points like late 2007 and early 2018.” He also notes that S&P profits haven’t grown for over three years.ref 33 In a really engaging interview,ref 34 economist Mariana Mazzucato seems to contradict Stockman, noting that “this is the sharpest post-recession rise in reported EPS in history.” She goes on to say that the “sharp increase in earnings did not come from revenue.” Stephen Roach, former executive director at Morgan Stanley asks, "Are the fundamentals really that sound? For a U.S. economy that has a razor-thin cushion of saving, nothing could be further from the truth."ref 35 He notes the anemic personal savings rate of 2.4%—the lowest in a dozen years and one-fourth of the historical norm—cannot support a strong economy. The scholarly market historian and market maven Lacy Hunt calls the economy “very weak.” Let us not forget the obvious: The views are always the best from the summit.

Today’s economic boom is driven not by any great burst of innovation or growth in productivity. . . . The global economy is now awash in debt.”

~Steven Pearlstein, Washington Post

“If it’s debt financed, you cannot increase GDP. You can only increase components of GDP.”

~Lacy Hunt, economist

The main problem is that growth, whether tepid or strong, was driven largely by a doubling of global debt over the decade,ref 36 which I am tempted to call 7% annualized inflation. The debt-to-GDP ratio in the third world—called “emerging markets” on Wall Street and “shitholes” inside the Oval Office—created a mania of mergers and share buybacks while the real economy sputtered. Debt is consumption pulled forward. The bill for that hamburger you eat today is coming due on Tuesday, Wimpy.

Pre-pubescent Paul Volcker: "Why can't we have a boat like those people?"

Momma Volcker: "They have mortgages; we don't."

Figure 5. Popular plot asserting that federal debt is losing its stimulatory effect.

The real story of the 2018 economy appears to be that it was juiced by several large, one-time stimuli. Hurricane repairs holding over from the 2017 carnage lifted GDP while creating no additional net wealth.ref 37 (One could argue trashing the old and replacing with new brings minor benefits.) The 14% Trump tax cuts and massive one-time tax repatriation of overseas earnings—one time since the last one in 2004ref 38—is said to have contributed significantly to the economy. The bulk was preordained to go to share buybacks despite blathering by corporate chieftains. Even so, that is said to represent a new slug of coin pulsing through the economy somewhere—but maybe not. That money wasn’t just parked in a vault in Zurich; it was in the multinational banking system already juicing economies worldwide.

“For now, we estimate that the U.S. economy has peaked—the powerful expansionary cocktail of unfinanced tax cuts, repatriation of capital, and fiscal spending ramped up growth in the U.S., but these one-off effects will peter out as the year ends.”

~Steen Jakobsen (@Steen_Jacobsen), chief economist and CIO at Saxo Bank

Meanwhile, corporate debt grew way faster than GDP.ref 39 Of course, some debt for pump ’n’ dump schemes (share buybacks) was offset by cash waiting for repatriation, but debt is the lifeblood of a leveraged system (Ponzi finance), and it grew. The IMF suggests that the benefits of the one-time boluses should wear off soon, leaving a 2.5% growth rate by 2019.ref 40 (I'm looking for contraction, but that's just me.) Before moving to the last one-off stimulus, let me add that these routine overseas tax repatriations rot the system by giving advantage to slow-growing multinationals while providing no benefit to rapidly growing smaller companies. Look at it this way: If you can make money overseas and then get a tax jubilee every decade or so to “make America great,” where will you build your plants? Where will wily corporate bean counters declare all their earnings? Of course, the share buybacks don’t stimulate the economy at all because these monetary ’roids never left the system, so they can’t return to it. Shares and money just change hands. The real point is that since taxpayers will have to fill the void left by the tax jubilee, then what we just witnessed were taxpayer-funded corporate share buybacks.

The third one-time bolus for the economy this year was the looming trade war with China. Scrrrrratch! Come again? Are you nuts? Stay with me here as I digressively peel back a few layers of this onion. First, some claim that there has been a trade war on slow burn for decades and that the U.S. is finally starting to fight back. Obama fired the first shot with a tariff on rolled steel in 2014ref 41 to garner union support while, according to Roach (personal communication), it merely shifted business to higher cost producers. Trump then took the tariff debate to 11 on the dial. (He had been talking about doing this years before the election.)ref 42 One can squeal that this is a tariffying repeat of the Smoot–Hawley tariffs. The Smoot–Hawley Tariff Act was a political football for Roosevelt during the 1928 election, causing the putative damage from the bugger-thy-neighbor tariffs to be overplayed in the history books. The tariffs also conveniently take the blame off central bankers for creating a ginormous credit bubble in the '20s as promulgated by the 500+ economists on the Fed’s payroll. Hoover’s failure to get authority to change the tariffs without Congressional approval may have left a destructive rigidity—an unresponsiveness—in the Smoot–Hawley Act (see "Books"). Through the auspices of the “United States Fair and Reciprocal Tariff Act"—yes, the U.S. FART Act—Trump requested the same authority.ref 43 Somehow giving the Donald discretionary power to do anything important makes people nervous. He is rumored to be a little volatile.

Do you have a point here, Onion Boy? Sure, but drop the ’tude, ya punk. Tariffs were GDP positive in 2018 as industry scrambled to make hay while the pre-tariff sun was still shining. The Atlanta Fed claimed that up to 60% of U.S. economic growth stemmed directly or indirectly from industry front-running the tariffs by stockpiling and accelerating exports.ref 44 Of course, billions of dollars of subsidies are already budgeted to offset the negative effects on farmers with presumably more to come.ref 45 The savvy reader will notice that the consumer will pay more for imported goods and higher taxes for the subsidies—a one-two punch to the groin. In the short run, the tariffs generated a little wiggle in the economy this year and may even be a powerful bargaining chip to get concessions during a period of Chinese vulnerability, but they will be a problem if they linger.

“What does it say about productivity when the retail sector reportedly hires 50k in the same month when sales dip 0.1%. Or maybe the payroll number was completely bogus.”

~David “Rosie” Rosenberg (@EconguyRosie), chief economist and strategist at Gluskin Sheff

We hear how employment is tightref 46—said by Alan Greenspan to be the tightest labor market ever—while 100 million working-age Americans are not working and while inflation-adjusted wages have been stagnant since the 1980s. The law of supply and demand says there’s something wrong with this picture. Indeed, we have a system in which 100 million are incented not to work even if jobs are aplenty. The other problem is that rising wages (oh thank the Lord. Finally!) will create what economists call “negative externalities” or, as the rest of us say, “shit happens.” What comes next is predictable. First, the wage pressures will cut into corporate profits—real wage growth conflicts with bubble-level corporate profit margins—driving equity valuations skyward or equity prices earthward. Second, the rising wages will be labeled “inflation,” which will cause the bean counters to correct for it declaring, “inflation-adjusted wages are stagnant.” Third, the Fed will get their thongs in knots and slay the inflation dragon by stepping on the economy. Just as consumers are trying to pull themselves up from the precipice, our Fed overlords will be stepping on their fingers.

“We have abolished the idea of failure—nature’s cleansing mechanism. As a consequence, we’ve lost real economic vitality. We’ve substituted finance for industry as the locomotive of economic growth. In GDP terms, it looks terrific. But it is neither enduring nor real.”

~Tony Deden, founder of Edelweiss Holdings

That’s a great segue into a chat about wealth inequality, a topic that is causing even the gazillionaires living in modern-era Versailles palaces to get nervous. I submit that a healthy economy naturally distributes wealth with a Machiavellian fairness. As you grow an economy that is firmly founded on wealth creation—making and moving goods and services—it is not a zero-sum game; all boats rise, albeit to different levels. (It will never be fair; get over it.) The natural tension between the cost of labor and the cost of labor-saving technology is dealt with by the supply–demand curve. When you have to redistribute wealth at a wholesale level to keep the mobs from charging the Bastille, however, something got out of whack. As you financialize the economy—as the GDP becomes a measure of how much money is being moved around or what economists call “rent seeking”—it is a reverse Robin Hood wealth distribution. The rich accumulate wealth at the expense of the poor because nobody is actually creating wealth. It becomes a zero-sum game with winners and losers. Rockefeller, Carnegie, and Vanderbilt got fabulously wealthy building an empire. I remain unconvinced that Zuckerberg, Bezos, and What’s His Name at Apple will be able to make such claims. David Tepper, Ray Dalio, Stevie Cohen, and Warren Buffett create none of the Wealth of Nations. They are wealth aggregators, much to the joy of their adherents.

“The greatest economic recovery the top 0.1% has ever seen.”

~@RudyHavenstein, legend

One more point. Economic models assume dislocated workers will just move, but they don’t. The impacts of “rolling industry recessions” is to leave workers behind and instill social instability owing to epidemic levels of cognitive dysphoria slathered with some serious hysteresis (lingering negative externalities!). The gutting of the middle class is setting up to be emblematic of the gutting of the American empire. What role did the Fed play? Their fake-it-till-you-make-it monetary policies financialized the economy. What do you think?

Valuations

“We’re probably only 10 years into another 50-year bull-market cycle.”

~Andy Sieg, head of Merrill Lynch Wealth Management

Jeepers. How long was Andy floating in the harbor when they found him? I recall sitting in a room with friends when the Nasdaq had just crept over 5,000 for the first time and proclaiming it would be back to triple digits. They laughed. I missed by <200 points. Benjamin Graham, the most legendary investor of the twentieth century and mentor of Warren Buffett, lost 70% in the ’29–’33 bear market. Failing to exit the highway before hitting the traffic jam taught him about risk. Every year I talk about valuations, but I will lay it out in detail so that, in the end, I can sleep knowing that you’ve been warned.

Let’s first illustrate the consequences of buying at secular highs. Many analyses show how long it has taken those fully invested at tops to break even. Of course, you must inflation-adjust to even approximate capital gains and losses. I have taken a slightly different tack by asking how long it takes to go from a secular high to that same value for the last time (Figure 6).

Figure 6: Inflation-adjusted S&P capital gains. Blue arrows show time required to return to the peak valuation for the last time (hopefully).

“So imagine valuations never see their norms, or 2009 levels again, and this cycle completes at 2002 levels—the highest level of valuations ever seen at a cycle low. That would still be more than enough to wipe out every bit of S&P 500 total return above T-bills since 2000.”

~John Hussman (@hussmanjp), Hussman Funds

The blue arrows illustrate four instances in which investors caught holding equities at the peaks paid profoundly. In each case, the big dip is followed by a recovery—the break-even point—followed by an extension of the rally that eventually fails. As though pulled by a tractor beam, the price revisits the original peak for the third and final time. Those arrows representing zero capital gains—treading water during the biblical flooding before finding terra firma from which to launch new gains—are 40–75 years! Let me repeat: on four separate occasions over the last 140 years, investors obtained zero inflation-adjusted capital gains for periods spanning half to three quarters of a century. The entire gains during those periods came from dividends eroded by a host of taxes and fees (see below). You will, however, get participation trophies too.

Don’t be deceived by analyses in which you start investing at the peak and invest throughout the ebbs and flows. These are calming words valid for millennials and Gen Zers. If you are a boomer with >80% of your lifetime savings already banked, however, there is little cost averaging in your future. Full return analyses in which dividends are included are less scary (Figure 7) but almost never account for the massive erosional costs discussed below.

Figure 7. Inflation-adjusted total return with dividend reinvestment by Mike Lebowitz uncorrected for fees and taxes.

“First law of finance: In the long run, returns must revert to the average.”

~Jason Zweig (@jasonzweigwsj), columnist at the Wall Street Journal, in 1997

You can keep your support lines and technical indicators. You can keep your crash fears too; they are rare technical events. All I care about are valuations. It has been said that "record-high equity valuations don't mean poor returns are imminent, only inevitable." The big risk is buying poor assets during good times. Although 2007–09 was painful, the 2007 market wasn’t even an equity bubble but rather a real estate and credit bubble caused by the Fed keeping rates too low for too long. The Mullahs of Macro's response to the collapse was to keep rates way lower for way longer. Paradoxically, it seems both moronic and, for now, effective, but is it? Or are we in another bubble? Before answering these questions, let’s take a quick peek at what one can expect out of equities ignoring valuations.

“Anyone who says stocks are guaranteed to outperform bonds or cash is an ignoramus.”

~Benjamin Graham, mentor of Warren Buffett and author of The Intelligent Investor

Last year, I obsessed over why stocks persistently return several percent more than U.S. treasuries and concluded it must be the awesome power of the State—rules forcing government debt into portfolios of compliant victims. My back-of-the-envelope calculations suggested that equities would sustainably provide 4–5% inflation-adjusted returns—not 7–8%—over many cycles spanning many decades. Headline-grabbing nominal returns must be corrected for fees, taxes on real and inflated gains, disasters (full-cycle, not partial-cycle, analysis), survivorship bias within indices, and demographics (1.4% growth in pie sharers). With that bug still buzzing, the Baader–Meinhof phenomenonref 47—the tendency to notice things only after the initial awakening—ushered in some new confirmation bias.

A stupendous paper by retired economist Edward McQuarrie shows how claims of 6.6% inflation-adjusted returns over the long term—100–200 years—are profoundly deceptive because they hide nasty periods of many decades in which returns are disastrous.ref 48 McQuarrie does not account for taxes, fees, and demographics, all of which will conspire to bring that 6.6% much lower; others have attempted such corrections.ref 49 Mark Spitznagle takes 2% more off reported headline indices because of highly “non-ergodic” compounding.ref 50 In an article from 1999, Marty Zweig noted that “funds charge annual expenses of 1 percent or so; then it costs them another 1.5 percent to 2 percent to buy and sell their stocks each year.”ref 51 I assumed 1% total. He also said the oft-stated 9–11% compounded returns is “guano” and that small caps sustainably beating large caps is “a crock.” Rob Arnott, eight-time Graham and Dodd Award winner managing over $200 billion and said by Howard Marks to be “one of the real thinkers in our field,” calculates a sustainable 3.1% annual inflation-, tax-, and fee-adjusted return.ref 52 Graham-Buffett-Zweig, in the latest Intelligent Investor (see “Books”), put the long-term gains at 4% before taxes and fees. It would appear, therefore, that folks claiming much higher returns have carried out incomplete analyses or are serving up the surf ’n’ turf combo platter (fishy analysis slathered with bullshit).

“I love equities, I'm not a weirdo, and I don’t live in a bomb shelter. But in a very real sense, the compounding of stock returns over long periods is a fraud. It really is. No one has ever gotten those returns.”

~Ted Aronson, January 1999, Aronson and Partners

You may have noticed that none of these analyses assume corrections for valuations. Changes in valuations can offer up an additional +4% compounded gains above the norm, providing a tailwind pushing investors up the Wall of Worry to the valuation summit during a secular bull market. Shrinking valuations can hit investors with  gale-force –4% compounded losses, representing a headwind as investors take the express elevator to the gates of hell pistol whipping themselves the whole way during the secular bear market. Thus, valuations matter a lot. According to Buffett's iconic 1999 must-read article,ref 53 multi-decade periods of collapsing valuations correlate with secular rises in interest rates, whereas the coveted valuation expansions are fueled by secular drops in interest rates. Thus, interest rates matter a lot too. Once rates have plumbed the lows or highs, you are at a turning point. Market extremes occur when it becomes “too expensive in the short-term to play the long-term.” Cliff Asness seems to contest this model by noting that falling rates do not justify high valuations,ref 54 but he notes that “to pay higher prices as a result of lower interest rates to avoid a very painful outcome requires that interest rates remain low indefinitely.” I infer that Asness and Buffett agree.

“Exponentially rapidly rising or falling markets usually go farther than you think, but they do not correct by going sideways.”

~Bob Farrell, former Merrill Lynch legend

Let's ponder what some of the contenders for the Wall Street Fat Bear Championship have to say. Many focus on the awkward evidence suggesting the ’roid rage of ’09–present was largely a growth in valuations and profit margins. The market über-bears all use essentially the same assumptions: (1) normal growth in GDP and no catastrophic events (no world wars), (2) regression to the mean, a force of nature, will do its thing while largely ignoring the inevitable regression of valuations through the mean, and (3) investors will hold for 7 or 10 years. They include corrections for inflation, but none include corrections for taxes and fees. Note that using longer durations (up to 20 years) allows assumed 3% GDP growth to cosmetically mask the bad optics of negative compounding while investors consume 50% of the approximately 40-year investing life expectancy.

  • Rob Arnott's estimated +3.1% return does not include valuation changes. Regression from current valuation to historic norms predicts –3% compounded losses over a decade.ref 55

  • Jeremy Grantham sees a precipitous drop of –48% or, if spread over 7 years with standard GDP growth, a drop of –5% compounded losses over the next 7 years (a 30% correction with positive GDP growth overlaid).ref 56 His most sanitized version points to small positive annualized returns over the next 20 years.

  • John Hussman sees a –57% loss in the Nasdaq, which is somewhat less than his expected losses in the S&P 500 (–64%), Russell 2000 (-68%), and Dow (–69%) over this cycle.ref 57 He also sees dead people.

  • Robert Shiller cautions that he is not predicting major calamity for the market but rather a much lower level of returns, in the 2.6% annual range over the next 10 years.ref 58 But this estimate appears uncorrected for anything except mean-regressing valuations. Any correction would be “probably not as bad as 1929, but it could be disruptive."

  • Goldman’s “bear market indicator” suggests –3% per annum prospective total returns for 5 years, placing it in the optimistic camp.ref 59

  • Mike Lebowitz of 720Global projects a drag of –7% per annum on capital gains over the next 10 years, leaving GDP growth and dividends to mitigate the damage.ref 60

“According to the Buffett yardstick, stocks are currently priced to deliver an annualized return of –3% over the next decade including dividends. Compare this to the 3% yield on the 10-year Treasury note and you’re looking at a –6% differential.”

~Jesse Felder (@jessefelder), former hedge fund manager and author of The Felder Report

“I expect the S&P 500 to lose approximately two-thirds of its value over the completion of this market cycle.”

~John Hussman

There are a gazillion valuation metrics. On the optimistic end you have peak idiocy and fibbing when price-to-earnings (P/E) ratios are quoted using non-GAAP forward earnings. Since markets are forward looking, why not five-year forward earnings? Why not ten? These are just Wall Streeters and corporate chieftains looking for bonuses. Let’s look at the ones that make the bears so fearful. What you’ll notice is that all metrics are normalized by dividing something (usually price) by something else (a metric of value) to give you a number that, unless you have good reason to think otherwise, should flop around some historic mean without trending up or down. Many will show that the last time we touched the historic mean was in ’09, and it stayed marginally below it for about 15 minutes. The last time we emerged from a protracted stay below the historic mean—we should reside below the mean half the time if my sixth grade math hasn’t failed me—was many years earlier (the early 90s). Bear in mind the latest edition of The Intelligent Investor confirmed that stocks were still overvalued after the 2000–2003 bear market, suggesting they had more correcting to do. As we shall see, the 2009 low was, by historical standards, near the historical mean, and the run from ’09 to ’18 was largely about elevating valuations. Regression through the means will take you into the dark mind of John Hussman. As I bang through some graphical measures of valuation, don’t lose sight of the fact that a 2× overvaluation requires a 50% correction to the mean and a 100% gain to recover. A 75% correction requires a 300% rally to recover. If you keep this arithmetic straight, it starts to get a bit ugly.

“The price of the market is 'highly dubious' right now . . . the next recession will be frightening.”

~Paul Tudor Jones, former hedge fund legend

The most deceptive and quite viral plot of the year (below) makes it look like you should never sell. Stocks almost always go up and a lot more than down. This little artifact derives from the non-linearity of the downside—100% down means you’re broke and need infinite returns to get even. The more conventional subsequent plot shows problems, but the normalization to the mean is obscured just like McQuarrie discusses (see above).

“We are at the top of the valuation range by any measure except for interest rates.”

~Stan Druckenmiller, former chairman and president of Duquesne Capital, compounding 30% returns over 34 years

The Shiller P/E with 10-year smoothing of earnings and analogous Crestmont P/E show >2× overvaluation relative to historic norms. Some say these will get tame looking as ’08–’09 earnings roll off the back end. Others did the mathref 61 and say the effect will be marginal because 10 years is a decent sample size. . . .

“If the Fed keeps on tightening, or if inflation breaks out and bondholders take fright, this latest and perhaps greatest of bubbles will also come to burst.”

~Edward Chancellor, author of Devil Take the Hindmostref 62

Doug Short’s composite valuation metric is parked at >100% overvaluation...

“It is a source of some concern that asset valuations are so high.”

~Janet Yellen, former chair of the FOMC, as the door is hitting her in the ass

Tobin’s Q, essentially a measure of price-to-book value, is approximately 2× the mean, sitting at a level commensurate with only the highest peaks and exceeded only by the 2000 bubble. The market cap-to-GDP (Buffett) indicator for the Wilshire 5000 is in the 99th percentile and sets a new world record. . . .

“Equities are currently more overpriced on dependable valuation measures, such as total market value to GDP and on a replacement cost basis (Tobin’s Q), than at any time save for the 2000 dot-com bubble. American corporations have also been borrowing like there is no tomorrow.”

~Edward Chancellor

Price-to-revenues and price-to-sales reached all-time highs. . . .

“A 40% crash looks justifiable . . . effectively a retracement to prior technical support levels, the S&P 500 highs of 2007 and 2000."

~Scott Minerd (@ScottMinerd), CIO at Guggenheim Partners

Price-to-PEG and price-to-EBITDA (earnings with all bad stuff excluded) have exceeded the 2000 high-water marks. . . .

“Equity exposure today on U.S. personal balance sheets has only been exceeded once before and that was in the late-1990s tech craze. I just don’t get it. But if you’re still long U.S. equities, please have a different reason than this drivel about this being a hated and under-owned asset class.”

~David “Rosie” Rosenberg

Corporate profit margins are soaring and said to be notoriously mean regressing. Hussman’s valuation model is a profit-margin-adjusted CAPE. Crudely speaking, if mean reversion occurs for both the profit margins and the CAPE, we are looking at a >60% correction. . . .

“Every market cycle in history has taken the most reliable valuation measures we identify (those best correlated with actual subsequent S&P 500 market returns) to less than half of current levels.”

~John Hussman

The number of stocks trading above 10× revenues for both the S&P and the Russell 2000 are at extremes. These are the same levels that Sun Microsystem CEO, Scott McNealy, was prompted to say about his investors, "What were they thinking?”

“The biggest market disasters happen when both leverage and securitization get mixed up with the same clever scheme.”

~Ben Hunt (@EpsilonTheory), former hedge fund manager and founder of Epsilon Theory

Price-to-corporate profits-GDP ratio (analogous to Hussman) suggests that Hussman is an optimist. The ratio of financial assets to real assets indicates a pronounced financialization of the indices. . . .

“The S&P 500 is trading at about a 93% premium to the long-run median. Falling to median therefore involves a 48% fall.”

~Jeremy Grantham, founder of Grantham, Mayo, van Otterloo & Co. (GMO) asset managers

Household equity ownership versus disposable personal income seems like good news until it mean reverts. Hours of work needed to purchase the S&P is also extreme. . . .

“Assuming you have the requisite capital and nerve, the big and relatively easy money in investing is made when prices are low, pessimism is widespread, and investors are fleeing from risk . . . this is not such a time.”

~Howard Marks, Oaktree Capital Management

Financial sector assets as a percent of GDP and margin debt versus GDP illustrate the financialization of the economy and the role of margin debt to achieve it. . . .

“There are two bubbles. We have a stock market bubble and a bond market bubble. At the end of the day, the bond bubble will be the big issue.”

~Alan Greenspan, former chair of the FOMC, January 2018

Some of these graphics come from the Big Brokerages who make tons of money marketing stocks and pension accounts. Figure 8 shows a table that nicely summarizes valuation metrics. They look awfully tame—so much so that you should just keep buying the dips.

Figure 8. Sanford Bernstein’s valuation models.

“And although I read recently that bull markets don’t die of old age or collapse of their own weight, I think sometimes they do.”

~Howard Marks

David Rosenberg estimates that >13 million worker bees have entered the finance industry since the ’09 bottom.ref 63 They have never actually been through a “bear market cycle. The boomers have; the next will be their third. They could get pretty skittish. For now, they are all-in for the ride.

Bloomberg’s Alix Steel: “Is there a magic-hedge that would help you if you owned the S&P 500?”

Mark Spitznagel: “Own less of it.”

On the off chance there are young ’uns reading this, I have altogether different advice. Save your asses off. Pick an asset allocation that smells right: I would think 60:40 or even 70:30 equities-to-fixed income sounds good. Allocate at that level. At the end of each year, don’t try to rebalance your portfolio immediately: Selling winners and buying losers is psychologically too hard. Simply change your allocation to bring it back to your set proportion. If bonds outperform, allocate to stocks. Make allocation changes once a year. The boomers’ risks are not your risks.

“The lapse of time during which a given event has not happened is . . . alleged as a reason why the event should never happen, even when the lapse of time is precisely the added condition which makes the event imminent.”

~George Eliot in Silas Marner

Broken Markets

JP Morgan’s top quant warns next crisis to have flash crashes and social unrest not seen in 50 years

~Headline, CNBC

“Stocks could surge 19% this year because investors are the right kind of cautious.”

~Bank of America Merrill Lynch

“When reward is at its pinnacle, risk is near at hand.”

~John Bogle, Vanguard and creator of index funds

“We are in the throes of a burgeoning financial bubble. If I had a choice between holding a U.S. Treasury bond or a hot burning coal in my hand, I would choose the coal.”

~Paul Tudor Jones, founder of Tudor Investment Management

Central banks dumped $20 trillion of backstop into the markets over the last decade; what do you expect to happen? I honestly can’t say because nothing like this has ever happened before. Unlike the mortgage crisis, which many of us saw coming from years back, I don't know anybody who knows anybody who saw this level of central bank intervention—the Bernanke Put—adopted by every central bank. It is instructive to simply look at what did happen.

“The recent divergence in the performance of U.S. equities versus the rest of the world is unprecedented in history. . . . This has never happened before . . . this is a market condition that will not persist.”

~Marko Kolanovic, JPM

Not even King Canute will be able to hold back the next bear when it’s time. Somebody calls in a bomb scare, panic starts, cashless (cushionless) exchange-traded funds (ETFs) sell immediately, and leveraged speculators are right behind. The markets are narrowing, with many domestic equities and most global markets considerably off their highs. As I am typing, tremors are undeniable. When they start shooting the generals—selling the increasingly rare market leaders—which they did in the early spring and again starting in September, it’s time to get nervous. We are also in a rate-hiking cycle, and history shows that the Fed will continue pulling on that trigger until they blow somebody’s head off.

@StockCats: How do they get these trendlines so perfect?
@RampCapitalLLC: Because we all draw the same ones.

Frothy Markets. The markets have been riding bareback—condom-free—for a decade now, and bull markets do die of old age—platitudes and an interesting and oddly Bayesian analysis by Larry Summers aside.ref 64 We went a decade off the ’09 lows without a single 20% correction. How could investors not buy into the euphoria? The fact that this run has been supported by an annualized 2% GDP growth doesn’t matter when shares are rising. Hedge funds shorting and snorting trying to time the top—good luck with that one—keep getting squeezed (like in May). When legends like David Einhorn lose for several years in a row and massively this year (–28% year to date), what is the message? Are these former geniuses now garden-variety idiots for doubting one of the greatest runs in history? They should have watched this hilarious and must-see commercial for “Hindsight Capital.”ref 65

“The market is cyclical, and given the extreme anomaly, reversion to the mean should happen sooner rather than later; we just can’t say when.”

~David Einhorn, founder of Greenlight Capital

“It has been one giant short-squeeze market.”

~Jim Chanos (@WallStCynic), Kynikos Associates (short seller)

The euphoria creates the fear of missing out (FOMO), causing a wave of articles explaining what a dumbass you are for not jumping on board. History shows the big gamblers during the bull—the twenty-somethings—get hurt the most at the inevitable conclusion, but these guys have never read the dusty archives so cannot fathom the chapter about to be written about them. Some random top-calling headlines:

"Stock Market Bears Are the Dumbest Thing on Wall Street"

~TheStreet.com

"Value’s for chumps as market puts momentum ETFs into overdrive"

~Bloomberg

"Are you missing out on the great market melt-up?"

~Bloomberg

"The stock market never goes down anymore"

~Bloomberg

"Market trends: bull run could last 20 years, optimists say"

~USA Today

"Stop freaking out about the Dow"

~@CNBC

What about all those corporate profits? Only the old guys remember the 1960s when 71% of IPOs paid a dividend. (Those senile old coots probably don’t either.) Some profits reported this year may be legit, albeit floated on huge mean-regressing profit margins and from tech companies that tend to have higher profit margins (for now, at least.) Margins are also riding the wave of cheap capital and stagnant wages. Regression of margins to historic means could stem from rising rates (check) and wage inflation (check). The huge profit repatriations from offshore are also blurring our beer goggles.

“We have intentionally constructed Berkshire in a manner that will allow it to comfortably withstand economic discontinuities, including such extremes as extended market closures.”

~Warren Buffett, 2017 annual report

What is stalling this day of reckoning besides recency bias observed at all market tops? Passive investing keeps a wall of money bidding up—not flowing into—markets. (Money doesn't “flow,” contrary to what 99% of pundits say.) The Swiss National Bank keeps putting bids under shares with freshly printed Swiss francs, which is insanely anathema to the concept of free markets.ref 66 The numbers don’t seem that large, but share prices are determined at the margins and every little bid helps. The storyline behind this particular bull run—central banks and their gargantuan interventions have our backs covered in perpetuity—is the most pathetic and insane bubble narrative in history, but it is now deeply ingrained in the market’s psyche. The late-cycle tax cuts and repatriations from abroad have probably stalled Armageddon (although to argue this money was sitting dormant, not influencing asset prices, is putty-headed). At the end of November, Jerome Powell blinked. The Powell Put was born when our new Fed chair kowtowed to nervous markets (or Trump).

“Interest rates are already doing damage; people just haven’t noticed. Leverage in the U.S. is grotesque for this stage of the cycle. At the moment, you’ve got peak leverage at peak prices. It’s not like you have to dig deep to find a problem.”

~Andrew Lapthorne, head quant at Société Générale (SocGen)

Buybacks. Share buybacks are hailed as a tax-friendly way to return profits to investors. They broke records this year and were often used to goose share prices the way announced stock splits did in the late 90s. Some say that the share buybacks are hoarding capital from the economy.ref 67 In defense of buybacks, Cliff Asness cogently notes that this argument is nuts.ref 68 It’s not like the money was sitting dormant. However, the claims that repatriation of overseas profits this year would boost the economy by facilitating construction of factories and jobs in the US are equally nuts. They already had access to capital and weren’t doing that. Some would like to get those repatriated profits as worker compensation. Indeed, that, too, was already possible and not happening. You won’t be getting ponies for Christmas either.

“Market sell-off is about 80 percent over and will be reversed by share buybacks.”

~JPM analyst, October 17, 2018

Buybacks are like stock splits: What they giveth in share reduction, they taketh back in shrunken balance sheets. Efficient markets would recognize the trade-off. The companies are merely pair-trading their diversified investment portfolio for their own shares. This is not irrational, but it certainly depends on which is a better value. They may be making the mistake that employees make by keeping their 401Ks bloated with shares of their employers. Robert Shiller recently called share buybacks “smoke and mirrors.” There is even a legislative push to ban them again. (They were legalized in 1982.)ref 69

Here are my gripes about the buybacks.

  • The huge tax breaks that facilitated buybacks mean that taxpayers—whether present or future—funded the share buybacks.

  • The notion that buybacks “return profits to investors” is a ruse. It’s not like you can reinvest them in better opportunities like beer, hookers, and shares of Netflix.

  • The executives are conflicted; they win if share buybacks support option prices and lose if money escapes their containment field as dividends.

  • Comparing share counts before and after the buybacks often show a shocking lack of share count reductions because they are being used to offset options issuance to executives. That’s not exactly returning capital to investors.ref 70

  • Share buybacks maximize at market tops (Figure 9), suggesting that the conflict is causing the buybacks to be dumb money (buying high). Oracle, for example, spent $15 billion buying back shares at $18 per share that they had allocated as options at $3 per share. Steve Eisman says Oracle will be issuing equity in 2019 (sell low).ref 71 In 2017, Deutsch Bank authorized buybacks and is now insolvent.

“Do these idiots ever do buybacks during the panic bottoms, when it actually makes more sense? Of course not.”

~Mr. Skin, anonymous market kingpin posting at Fleckenstein Capital

Figure 9. Share buybacks.

And here is the Big Unknown. Even if all share buybacks used only real cash flow and actually reduced share counts, the gains in price owing to share count reduction should be predictable with recourse to 5th-grade math: they should be zero. Yeah. That's right: zero. It is impossible, however, to know what effects a perpetual bid under corporate shares will have on price, particularly given non-linear amplifications in market-cap-weighted ETFs. When a truck driver in Peoria pays one cent more for a share of Apple than the previous bid, the market cap just rose $50 million. Price is determined at the margins. Years ago, Kodak jumped $2 on a 200-share trade—the last trade of the day—prompting the SEC to pretend to care. What is Apple’s buyback program doing? You cannot say, but it is surely price positive and could be massively so.

“Whenever we have forced selling to take place, the buyers disappear and the sellers have to sell no matter what. And corporate buybacks are not going to be enough.”

~Matt Maley, Miller Tabak & Co.

How about that wave of debt-based buybacks—not the debt that was incurred waiting for the Great Repatriation, but real debt (leverage)? Analysts at SocGen showed that all net debt issuance in the twenty-first century has been used to pay for stock buybacks.ref 72 That’s just fraud—a covert leveraged buyout by the creditor. But, as Jesse Felder notes, “When you have captive buyers [passive investors] who are entirely price insensitive, there is really nothing to stop you from leveraging your balance sheet.” How do I wrestle with the fact that Warren Buffett says he might buy back shares? As I’ve said on many occasions, watch what he does; The Orifice of Omaha is a hoser of a higher order.

“The fact that something is able to be sold legally, or the fact that there’s a market for it, can be very different from the fact that it can always be sold at a price that’s intrinsically fair or close to the last price at which it sold.”

~Howard Marks

“The S&P 500 is the only major market to have defied gravity, lifted by the financialization of America’s economy, whereby artificially cheap interest rates fueled stock buybacks, and desperate pensions turbocharged a leveraged private equity boom. With the Fed now reversing course, will we not have a chance to buy stocks materially cheaper?"

~Kevin PetersCIO of One River Asset Management

Let’s look at some of the silly, idiosyncratic events that happen when investors lose their minds:

  • As noted below (see “Bitcoin”), companies doubled their market caps by adding blockchain to their name or issuing a cryptocurrency.ref 73

  • An 18-year-old launched a hedge fund from his bedroom in suburban New Jersey.ref 74

  • Equities ran 300+% off the lows while the GDP tracked the Great Depression, compounding at 2% per year.

  • Value investing strategies have performed in the bottom 1 percentile since 1990.ref 75

  • The S&P ran 14 months in a row without a monthly loss.ref 76

  • Boeing rose 250% in two years.

  • Blue Apron IPOed at $10 a little over a year ago; it’s now at $1.23 and nobody has been indicted.

  • Tilray, a cannabis company reporting $28 million in sales, doubled in value in three trading days and rose tenfold in 2 months to a market cap of $20 billion before cutting in half.ref 77 As Scott McNealy would say, “What were they smoking?”

  • Solid Biosciences has no revenues and disclosed that one of its clinical trials was put on hold before its IPO in January.ref 78 The company sported a $1 billion market cap.

  • Domino’s Pizza added 35% to a 20-fold, 10-year run aided by a debt-funded buyback program.ref 79

  • Yulong Eco-Materials, a tiny Chinese manufacturer of eco-friendly building products, rallied 950% in one day after the company acquired a gemstone for $50 million.ref 80 The company claims the 17.9 kilogram Millennium Sapphire is worth up to $500 million, although the price suggests it’s worth . . . $50 million.

  • World Wrestling Entertainment (WWE) tripled in the first 9 months of 2018, sporting a trailing P/E of >100.ref 81

  • 60% of corporate debt issued by companies in the Russell 2000 is rated as “junk.”ref 82

  • GM pays its investors a dividend yield of 4.1% with a negative cash flow.ref 83

  • Uber has never turned a profit, but it’s about to go public at $120 billion.ref 84

Nike. Let’s take a peek at Nike. What’s not to like? It’s chart is totally parabolic, rising 20-fold in as many years. It got there, in part, aided by massive share buybacks. It’s sitting at a lofty trailing P/E of 100 on increased competition and faltering sales; regress that to 20 and you get an 80% loss. That would sting. Its edgy ads—Colin Kaepernick in particular—got elevated to meme status and prompted one sheriff to make all perps where Nike shirts for their mug shots.ref 85 Most disturbing, Nike is part of the “footwear index”—yes, there is a footwear index —which has risen >1300% in <20 years (Figure 10). Did we just discover the merits of shoes in the third millennium? Of course, after the company pioneered the Air Mercury line (Figure 11), the share price never looked back.

Figure 10. Shoe index.

Figure 11. A 2000-year-old Nike Air Mercury dug out of a Roman excavation.

“The market value of Elon Musk’s firm overtook BMW’s even though the profitable Bavarian luxury carmaker produced 30 times as many cars last year as the loss-making Tesla. . . . With so much dumb money about, one of Silicon Valley’s new mantras is ‘spray and pray’.”

~Edward Chancellor

Tesla. The newest entry to the automotive industry has a market cap larger than Honda’s and is headed by Elon Musk, the modern era’s Leonardo da Vinci or Thomas Edison. Why not jump on this can’t-fail opportunity? Again, there are niggling little details. Tesla’s shares took off in 2013 when the company announced the Model S. Musk is burning cash in the billions, except for the most recent and highly suspect quarter when earnings appeared just as new funding was needed (Figure 12).ref 86 Tesla began hemorrhaging senior executives right before the suspect earnings report.ref 87 The cash burn prompted Tesla to ask suppliers to give back some of their money,ref 88 rendering customer security deposits a little less secure. Tesla is supposedly making state-of-the-art cars in the desert in what are tents,ref 89 affording them an analyst-pleasing high sales-to-tent ratio. (I hasten to add that P. T. Barnum made some serious coin in tents.) Tesla had a fire at one of its factories.ref 90 What? No flame retardant on the tents? The Tesla Model 3 had a first-pass yield—the percent of cars requiring no additional work—of 14% during the last week of June compared with an industry norm of 80%. The tent-constructed cars, after making it through a rigorous inspection, began to spontaneously lose bumpers,ref 91 lock owners out of their cars,ref 92 and, on bad days, blow up.ref 93 Tesla owners are rumored to be fabricating unavailable parts to fix their own cars.ref 94 Note to Elon: hire those guys. Musk seems to have cut a few corners, like terminating “brake tests.”ref 95 The company also forgot to tell investors that the DEA (not the SEC) was investigating alleged meth and cocaine sales running through its Nevada Gigafactory.ref 96

“Tesla is the perfect metaphor for where the U.S. economy is at: a company stuffed with debt plus government subsidies, unable to deliver the wished-for miracle product—affordable electric cars—whirling around the drain into bankruptcy."

~James Kunstler, Kunstlercast

Figure 12. Cash burn.

Musk showed evidence of brain cell burn along the way, causing some to suspect that he was popping too much Ambien, downing too many mushroom pizzas, or going heavy on the poppy seed bagels at the Nevada Gigafactory. Before-and-after videosref 97 make the new-era Musk look more like Dave Chappelle's homeless character with the white stash. He started harassing analysts on conference calls for their “boring, boneheaded questions” about, oh, useless crap like “inventories.”ref 98 Harassment of the shorts included forcing an insider posting as “Montana Skeptic” (Lawrence Fosse) to shut down his Twitter feed by complaining to Fosse’s bosses.ref 99 Elon sent one of his detractors, David Einhorn, a pair of “shorts” to mock him. Late night (early morning) Tweets include gems like jokes about being bankrupt and insolvent,ref 100 which prompted fast response from the SEC (just kidding). He routinely taunted the SEC’s inability to reign him in.ref 101

“Musk is at it again. He’s doubling down on his pedophile comment.”

~James Chanos, Kynikos Associates

“You don't think it’s strange he hasn’t sued me?"

~Elon Musk tweet, prompting a lawsuit for the “pedophile” comment

“Despite intense efforts to raise money, including a last-ditch mass sale of Easter Eggs, we are sad to report that Tesla has gone completely and totally bankrupt. So bankrupt, you can't believe it.”

~Elon Musk tweet

“When you’re massive negative free cash flow, your 7-year bonds are trading $86 bid, and you need debt capital markets financing . . . you don’t joke about bankruptcy.”

~David Tamberrino, Goldman Sachs, on his “sell” recommendation

The fateful moment came when Musk announced that he was considering taking Tesla private at $420 per share, well above the asking price, causing a gargantuan wad of money to change hands in the short squeeze:

“I think the Thomas Edison of our age has come off the rails. ‘Funding secured’ means he has the money lined up, or he’s guilty of market manipulation.”

~Scott Galloway, author of The Four

“Funding secured” reached meme status, and the SEC did wake up this time. Elon and Tesla scrambled to find somebody to pretend like they were the ones tendering the offer (to no avail), eventually settling with the SEC for a $20 million fine and the requisite temporary demotion of Musk from CEO to CBW (Chief Bottle Washer).ref 102Of course, that triggered another massive short squeeze,ref 103 yet again hurting those betting against Musk. Charlie Gasparino says Tesla could be bracing for “billions of dollars in potential liability from private lawsuits," from both market longs, shorts, and, of course, cave-dwelling pedophiles. The street hasn’t yet figured out how to price Tesla’s shares (Figure 13). I think Tesla will eventually be auctioned off for parts on the courthouse steps. Of course, all this chaos has had a huge deleterious effect on its current share price (Figure 14).

“He claimed there is a specific source of funding, so that better be true. He also claimed that there is a specific amount available for funding, so that has to be true; otherwise even if it’s not manipulation it would be fraud.”

~Harvey Pitt, former SEC chairman

Figure 13. Chick fight over a few decimal points.

Figure 14. Tesla share price.

The VIX. I obsessed about the VIX—the so-called “volatility index”—last year.ref 104 It was important as both a reflection of and a cause of market frothiness. You could short the VIX at will—a one-decision trade—and make a lot of money, they said. Everybody extolled the virtues of shorting the VIX—“selling vol”—using vehicles like the XIV (clever anagram) or SVXY. There was historical precedence: Folks at LTCM loved shorting vol.ref 105

“References to exceptionally high ‘risk-adjusted returns’ leave me wondering: How do you adjust for risk on the vol trade?”

David Collum, YIR 2017

“Should I kill myself?”

~Online investor after losing $4 million on XIV

“People say congratulations, you called the short-vol trade. No, nothing has happened yet. This is just the appetizer for the unwind that is about to come. I think this is what people should be really afraid of . . . it will be quite disorderly and ugly.”

~Chris Cole, getting credit for calling the vol implosion

There were an estimated $2 trillion vol shorts last year. Seemed like that game had to end, but when? On February 5th, 45 minutes after the markets closed on a 15% one-day loss, the VIX short trade collapsed (Figure 15). We are not talking “crushed” or a “crash ’n’ burn.” It went to zero in fifteen minutes. Credit Suisse “terminated” the XIV trading vehicle.ref 106 TradeStation clients were sent an email terminating “futures trading” and told that margin accounts were “subject to immediate liquidation.”ref 107 Nomura shut its trading down.ref 108A number of funds blew up.ref 109 The speculation was that trading firms would collapse, but that did not materialize. Chris Cole had described in lurid detail how the VIX and $2 trillion of implicit and explicit vol bets could blow up about a week before it blew up.ref 110

Figure 15. Collapse of the XIV, a VIX short ETF.

Who lost? Various pensions proved to be the vol sellers, including University of Hawaii and the Illinois pension funds.ref 111 Harvard got out in time. Are they lucky, connected, or just “wicked smaht”? Who won? That’s harder to say because not all wish to take credit. A small hedge fund made 8,600% on a wildly improbable bet the XIV would go to zero.ref 112 Discussions of serious market manipulations surfaced,ref 113 suggesting that VIX shorts got spread over the five boroughs like Fredo. And when the dust settled, there was Goldman, sitting like the fat bastard at Donner Pass, chewing a toothpick with a $200 million profit.ref 114 Goldman had predicted the problem, almost like they knew something. Oddly enough, soon after vol shorters became full-time gene pool cleaners, the SVXY vol shorting vehicle was resurrected and is attracting a new batch of suckers who can't resist touching the stove too.

End of Cycle. The free market has caught up to a few hooligans. After 100 years, the iconic Sears is now a carcass being picked over by its creditors. Far more shocking, General Electric, the dominant industrial super power is –80% off its 2016 high and –88% off its 2000 all-time high (requiring an 700% gain to return), hitting levels not seen since 1994. It has been removed from the Dow and replaced with Walgreens,ref 115 which is sitting at its all-time high with the same market cap as GE. For those keeping score, GE bought back its own shares all the way down, which probably explains why its pension fund is the third largest holder of GE shares.ref 116 The $170 billion dollars of GE debt (depends on how you count) could be one of GE's toaster ovens being tossed into the pool and may be what spooked Powell into backing away from an overtly hawkish stance—"the birth of the Powell Putref 117" (which, as of December 19th, is said to have died).

“General Electric is the most admired company for the sixth time in the past decade.”

~Forbes, 2006

For the most part, the markets have made conservative investors—what we call Cassandras, Chicken Littles, Grumpy Old Men, and Nouveau impoverished—look like fools. Has the top reared its ugly head this year with the entertainment just beginning? If not, when?

JPM's Kolanovic says that the next meltdown in stock prices could cause the next financial crisis and has coined the name "Great Liquidity Crisis" to describe the phenomenon. Charles Hugh Smith suggests that 10 years of reckless behavior will “unleash a non-linear avalanche of reversions to the mean and rapid unwinding of extremes.” I think he's saying it will be fast. Rates are rising, the cycle that was never fundamentally impressive (or even sound) in the first place is getting very long in the tooth, markets seem awfully jumpy, and the algo bus fueled by unprecedentedly easy monetary policy that drove us to the summit may have no brakes for the trip down.

“The bulls don’t seem to acknowledge the artificial nature of this bull market in risk assets in general—no other cycle had such interference from central bank incursions and support by their balance sheet expansion. . . . The tax cuts have helped buy the bulls a little bit of time, but history shows that monetary policy is far more powerful and exerts its influence with lags that are typically long, variable, and insidious.”

~David “Rosie” Rosenberg

They say that nobody rings a bell at the top or bottom, but some would argue that is untrue. If you believe that valuations are ridiculous, the journey could be fast and hair-raising. Please do not blame hiking rates for a rout. The Fed laid the ground work over decades. And, by the way, if you think that you can hide from a washout by staying in the lower deciles of valuation, dream on. Hussman showed that the pain will be severe in all 10 valuation deciles.ref 118 When valuations plumb the lows, half the equities will be valued even lower. How about emerging markets? They seem cheap. Yes, but they will get cheaper. On the bright side, maybe I’m just wrong.

“The complex world financial system has so detached itself from underlying economic reality that it simply cannot continue without a catastrophic discontinuity.”

~Tony Deden

FAANGs

“When wireless is perfectly applied the whole earth will be a huge brain. We shall be able to communicate with one another instantly, irrespective of distance.”

~Nikola Tesla, 1926

One couldn't possibly miss the influence of the five FAANGs—Facebook, Apple, Amazon, Netflix, and Google—on collective global equity markets and, in turn, the perceived Wealth of Nations. The lowest interest rates since the Pharaohs walked the earth juiced world equity markets with hot money drawn to inflating assets. Non-linear gains owing to market-cap-dependent passive investing put the FAANGs on a tear (Figure 16). The euphoria has been palpable; the Bank of Montreal launched a triple-levered FANG ETF.ref 119 (Ding! Ding! Ding!) While the S&P rallied >200% off the 2009 lows, the FAANGs put up >600% gains, giving them a market cap greater than the UK’s FTSE index. At one point, Amazon alone accounted for >30% of the S&P 500’s gains for the year while putting 70% on its market cap in 165 trading days.ref 120 Market pundits breathlessly watched Apple and Amazon race to be the first company to reach a trillion-dollar market cap (willfully blind to PetroChina, which reached that high-water mark in ’07).ref 12 Somebody was bidding them up like they were signed copies of the Bible. A photo finish gave the win to Apple on September 2nd followed by Amazon two days later.ref 122 Am I the only one who finds this too coincidental? Does it seem odd that September 4th was also the high-water mark for Amazon?

Figure 16. FAANG index as of mid-2018.

Meanwhile, everything is not perfect in cyberspace. Insiders were locking in profits with record share sales.ref 123I also question whether these five companies are equipped to drive economies of the twenty-first century. Can the FAANGs create wealth like Standard Oil, General Motors, U.S. Steel, and General Electric did in the twentieth century? Will the FAANGs create wealth tangible enough to provide the needs of pensioners, feed millions, and sustain the American Empire? Most have valuation and balance sheet issues that certainly would leave value investors wondering if their IQ tests came back negative.

“If the DOJ had not moved in on Microsoft in the late 90s and warned them to stop killing small firms such as Netscape in the crib, we would not have Google, we would have Bing.”

~Scott Galloway

Meanwhile, all but Netflix are facing political and regulatory pressures that could prove catastrophic. The selective censoring of social media users based on political biases is now epidemic proportions and undeniable. Twitter's algorithms are so dumb that they censored their own CEO, Jack Dorsey (@jack) briefly.ref 124 I suspect that it won’t be long before First Amendment cases against Facebook, Google, or Twitter will be taken to the Supreme Court.ref 125

“I think that this certain situation is so dire and has become so large that probably some well-crafted regulation is necessary.”

~Tim Cook, Apple CEO, on the Facebook scandals

“God only knows what it’s doing to our children’s brains.”

~Sean Parker, former president of Facebook on the influence of Facebookref 126

Facebook. Here we have a trailing P/E in the 20s and no debt, making Facebook seem reasonable. My own concern is that it has a trendiness like a teenage clothing chain. Scandals with Cambridge Analytica have given it a serious black eye,ref 127–129 starting an anti-Facebook movement endorsed by Jan Koum, billionaire founder of WhatsApp, when he announced, “It is time to #deletefacebook.”ref 130 Half of millennials are said to have removed the Facebook app from their phones.ref 131 Whether Facebook dropped the millennials' phones from Facebook's apps is an altogether different question. Its usage has been cut in half from its peak owing to censoring, mounting evidence that it is Deep-State personified, and its triggering of dopamine responses like crack cocaine.

Mark Zuckerberg is being drawn and quartered by those who want to be protected from fake news—news that is not in somebody’s political interest—and those who abhor censorship as a crackdown on free speech. Zuckerberg himself—that True Blood “Suckerberg” look—and his antics creepier than a Boston Dynamics robot. Facebook is now positioning to manage data for the healthcareref 132 and banking industries.ref 133 If either is allowed, the term Orwellian will elevate to new levels. On the bright side, the Zuckerberg presidential run has returned to the netherworld from whence it came. Facebook looks like a long-term sell to me.

“Mark doesn’t care about publishers but is giving me a lot of leeway and concessions to make these changes. We will help you revitalize journalism . . . in a few years the reverse looks like I’ll be holding hands with your dying business like in a hospice.”

~Campbell Brown, head of news partnerships at Facebook

“They don't need to identify suckers anymore; Facebook does it for them.”

~Analyst on Facebook’s program to assist fake product ads

Amazon. Of the five FAANGs, this is the 500-pound gorilla. Amazon has essentially no earnings (P/E > 200) and operating margins below 2%, but its business model appears to be (a) pay no taxes, and (b) buy or destroy allcompetitors.ref 134 Once brick-and-mortar competitors have taken the caravan to the light, don’t be surprised if Amazon brings back brick-and-mortar under new management.

Figure 17. Amazon revenue versus profit.

“I can’t explain the valuation of big tech companies. . . . [T]o justify the multiple that Amazon trades at today, the company would have to be worth 25% of the US economy five years from now.”

~Sam Zell, commercial real estate god

Some would call Sam’s quote a prediction, not a valuation warning. Amazon’s risk is regulatory and antitrust also. It is priced as a monopoly. Should sovereign states (possibly in Europe) decide Amazon is too ruthless and try to break it up, the company will be hobbled for years.ref 135 Amazon would become profitless pieces (and some profitable pieces) that do not enjoy monopolistic power. Who decides it is a monopoly? Some politically motivated judge looking over his shoulder at an angry mob that’s given up fighting Walmart and Occupying Wall Street.

“There is nothing conservative about big corporations; they are the backbone of the left.”

~Tucker Carlson, journalist

Amazon’s image got bruised by its deal with the U.S. Postal Service for shipping rates that put the USPS in the red.ref 136 Arguments are being made that government subsidies such as food stamps to underpaid employees in general (and Amazon’s employees in particular) are really just government subsidies to defer Amazon’s salary costs.ref 137 In an effort to mitigate a backlash about poor treatment of employees, Amazon offered raises and then, rather inexplicably, announced they would be paid for by removing bonuses.ref 138 Amazon hastily reintroduced a new cash bonus of $1,500–$3,000 for employment milestones of 5, 10, 15, and 20 years. If all 500,000 employees hit all benchmarks, it will cost Amazon a couple billion dollars in total. If higher pay starts shrinking that 2% profit margin, Bezos will automate even more. Of course, an employee may be at risk of being laid off in years 4, 9, 14, and 19.

We went full oligopoly when a triumvirate of three profound monopolists—Berkshire Hathaway, Amazon, and JPMorgan Chase—proposed to partner up to convert the healthcare system into “an independent company that is free from profit-making incentives and constraints.”ref 139 No offense, but if you buy that “free” part you’re an imbecile. The Nation didn’t and took them to task.ref 140 The article also did a nice job of beating Buffett with the ugly stick, which I have tried to do a few times myself.ref 141 Amazon is also deeply embroiled in the privacy battles, as their hot new product, Alexa, records conversations within your home and sends the key data to advertisers.ref 142 A camera that follows you around the houseref 143 is being called “the Eye of Sauron.”

Amazon announced two new corporate headquarters, one in Long Island City.ref 144 Whether the deal cut by Cuomo sold NY state’s souls to the devil remains to be determined. The placement right next to Cornell’s new tech campus gets my selfish juices flowing.

Apple. I love Apple products but am getting closer to bailing on them. Scott Galloway, author of The Four, says Apple is successfully branding itself as an elite product line like Cartier. Maybe so but only those who bought Apple shares at the bottom can afford the 20–25% price hikes.ref 145 Paying $1,000 for a phone, $1,500 for a basic MacBook Air, and $2,000 for a MacBook Pro or iMac seems egregious. The $400 Apple watch—the Cartier of the digital world—is competing with the $25 watch that I get at Target. Apple’s revenue growth rate has slowed to an average of less than 4% annually over the past 3 years.ref 146 Jesse Felder notes that Apple’s stock trades at its highest ever price-to-free cash flow ratio while the company’s 5-year average revenue growth is the lowest in its history.ref

“So excited for the Apple Watch. For centuries, we’ve checked the time by looking at our phones. Having it on your wrist? Genius.”

~Ellen DeGeneres, talk show host

At least the company hasn’t saturated the marketplace with innovative new products. Bill Fleckenstein reminds us the iPhone 6, the latest product to dazzle the world, just had its sixth birthday! They grow up so fast. Tech analyst Fred Hickey calls Apple’s new iPhone rollout “disastrous”. Price cuts in Japan after only a month and collapsing sales in China are ominous. Buybacks are said to be keeping the shares afloat—or were until the swoon of >20% and moving faster than I can type. Apple is selling fewer phones than a few years back,ref 147which is reflected in inventory numbers. What is the company’s response to drooping iPhone sales numbers? Stop reporting sales numbers!ref 148 Seems like those 20–25% price hikes on all products are working their magic on demand. Maybe Apple’s cloud presence will save it, but the cloud also offers arbitrage opportunities (narrowing profit margins). Apple seems like a money-printing machine now, but the law of large sizes alone puts it at risk of, at best, going nowhere. In a wonderful video, Steve Jobs explains how once you have a monopoly, new products don’t help you, only better marketing. Soon, marketing people are running the company and what made it great is gone.ref 149 Indeed, what made it great is gone. They miss you, Steve.

Netflix. A trailing P/E of >200, a price-to-revenue ratio of 10, a high cash burn rate for its new content,ref 150 a commitment of another $18 billion for more new content (some parked off balance sheet) earning the moniker “Debtflix (Figure 18),”ref 151 and a share price that reached 70% above its 200-day moving average put Netflix at risk. Disney is pulling its content from Netflix in 2019.ref 152 A Netflix spokesperson noted, “we expect to be free-cash-flow negative for several more years (Figure 18)."ref 153 Fixed income investors had auto-callable debt with a huge 20% yield, but the notes were recalled, leaving investors with a net loss owing to 2.7% in fees.ref 154 Well, the bankers did OK. Future debt issuance could get dicey.

Figure 18. Netflix cash flow and debt.

“Google and others are suppressing voices of Conservatives and hiding information and news that is good. They are controlling what we can & cannot see. This is a very serious situation-will be addressed!”

~Donald J. Trump, President of the United States

Google. The share price of Google is up a tame 600% from the ’08 lows. With control of 90% of the search market, further penetration will have to come from other sources. Scott Galloway sees antitrust activity ramping up, although it seems to me like a weaker case than the one against Amazon.ref 155 Google is accused of biasing search results toward advertisers that pay more, which may pose an optics problem but is also how capitalism works. Leaked emails showed that Google helped Hillary with biased search results,ref 156 although not enough apparently. Its participation in deep-state filtering including ham-fisted if not downright abusive attacks on right-wing YouTube sites could lead to fines (a sarcastic BFD) or antitrust activity (a real BFD). Strong ties with the NSA are consistent with the widely held belief that all social media companies offer back doors to the Deep State.ref 157 (If you are confused as to why I keep referring to the Deep State pejoratively, you've got some catching up to do.)ref 158 To get dominance in China, Google appears to be signing off on a platform that allows totalitarian-state-level censorship (code-named Dragonfly).ref 159 Squeals from within the Google employee echo chamber urged Google to drop its military-funded drone program. As a compromise, it dropped its 17-year-old guiding catch phrase, “Don't Be Evil,”ref 160 replacing it with “Be Evil.” A $5 billion fine was a wrist slap.ref 161 Tangible constraints on them may be less benign.

Brand blemishing from firing James Damore last year got another smudge when a post-election video showed the high command at Google self-righteously spewing political views as truths and nothing but the truths.ref 162The former head of public relations says that Google suffers from serious truth issues.ref 163

“Give us a hundred years and us billionaires will show what wealth disparity looks like.”

~Sean Parker, former president of Facebook

As I type, the markets are having their way with the FAANGs—a “FAANG bang.” Maybe it’s just more jiggles en route to $2 trillion market caps for all...or maybe not.

Gold

“You very rarely, if ever, hear a serious discussion of the role of gold in the system going forward. I don’t see any appetite within that community to revisit that issue.”

~William White, formerly at the Bank for International Settlements

“The major gold-producing nations are tired of an international gold price that is determined in a synthetic trading environment having little to do with the physical gold market.”

~Sergey Shvetsov, deputy governor of the Bank of Russia

“If gold is a relic of history, why do central banks and the IMF still hold over $1T of gold? If it’s meaningless, why is everybody still holding it?”

~Alan Greenspan, May 2018

Gold has been boring for years, lurking in what a friend calls “the Collum range . . . oh, about $1,200." (Figure 19). It will be tested during the next downturn and consequent stimulus effort, but until then I’ve largely stopped reading articles about why gold will tank or soar. If it hedged against monetary idiocy, I would be living on my own Island in the Caribbean. Occasionally, however, I stumble across a nugget. Gold dropped linearly from April to August (Figure 20). Maybe that's normal or maybe Bernie Madoff whistleblower Harry Markopolos is right: Linearity in finance is fraud. (A 21-day linear drop in silver was even more awesome.) Hedge funds went net short,ref 164 suggesting correlation if not causation, possibly fueling the brief dip below $1,200. Evidence of horseplay appeared in the form of 260,000 futures contracts—$34 billion notional value—monkey-hammering gold in 4 hours in June.ref 165 Nobody even blinks at these anymore, especially not the regulators. Of course, a couple of gold-rigging charges were made—one guy even admitted that it had been happening at the industrial scale for years—but they were disposable traders and got acquitted anyway.ref 166 Canada’s Scotiabank will pay $800,000 to settle charges of “spoofing” (fake bidding).ref 167 Wow. $800,000. HSBC has been caught four times rigging the price of gold, promising four times to never do it again.ref 168 For those interested in buying allocated gold, the Texas Bullion Exchange has opened its vaults.ref 169 You get the convenience of a debit card while still enjoying the projectile-vomit-inducing price fluctuations of gold. There are others such as the Tocqueville Bullion Reserve.ref 170

Figure 18. Ten-year gold price.

Figure 19. Linear drops in gold.

“You can feel the dejection among hard core gold owners. They’re finally starting to ask themselves why there don't seem to be any kind of market conditions in which gold *works* as an investment or hedge.”

~Mark Dow (@mark_dow), hedge fund manager and gold bear

The debate about the future of gold in the global monetary system rages on among the 10 people who care. Craig Hemke (TF Metals Report) was early to notice an apparent pegging of the yuan to gold (Figure 20).ref 171Could be true or just goldbug pareidolia; regardless, it seemed to end this fall. Canada sold every last ounce of sovereign gold by 2016,ref 172 putting their holdings below those at the Bank of Dave. China, Russia, Poland, Hungary, Pakistan, Egypt, and Mongolia kept accruing the Bar-B-Qued relic.ref 173 Hungary cranked its inventories 10-fold with an affiliated repatriation from foreign vaults.ref 174 Turkey decided its gold was safer at the Istanbul Exchange than in JPM's vaults in New York.ref 175 Rumors that Russia and China have outlined plans to create a 100% gold-backed currency system to replace the U.S. dollar as the world’s dominant currency are wild speculation and provocative (Figure 21).ref 176 They certainly trust gold more than the dollar-denominated global banking cartel.

Figure 20. Yuan-gold peg and gold in U.S. dollars.

Figure 21. Russian and Chinese gold acquisition.

You really can’t put a value on gold (or eat it), but there are technical indicators suggestive of future price movements. The so-called speculators—the dumb money, whatever that means—went net short for the first time since the 2001 bottom, while the banks—the smart money (?)—went net long for the first time in history. We are parked at an all-time high of >500 claims against each ounce of gold at the COMEX vaults,ref 177 which could leave some wondering who Madoff with their gold.

“In recent years, bullion inventories have fallen materially, and last summer Charlie and I concluded that a higher price would be needed to establish equilibrium between supply and demand.”

~Warren Buffett, on silver, 1997

“We have a very similar situation in gold . . . it appears that a higher price is needed to establish equilibrium between supply and demand. . . . This won’t matter till it matters. Whenever it does, it will likely be too late to do anything about it.”

~Jesse Felder

For the gold-is-real-money crowd, the market value of all above-ground gold as a percentage of U.S. financial assets currently stands at 3.4%, which is well below the historic peaks of approximately 16% and not too far from the historic lows of approximately 2%.ref 178 In the spirit of bear markets die of boredom, Vanguard Gold Fund dropped “gold” from its name at the 2001 bottom and dropped the fund altogether this year.

In the world of human interest that even non-goldbugs can appreciate, the Rooskies dropped 3 tons of gold all over the runway when taking off at the Yakutsk Airport.ref 179 “Risk” players know that nothing good happens in Yakutsk. An amphora containing hundreds of fifth-century gold coins was found in excavations in Italy, while a Spanish galleon containing an estimated $17 billion in gold may have been located.ref 180

"Gold could be in a prolonged tailspin."

~Barron’s headline

Silver got pummeled a bit but, fortunately, nobody owns any (except me). The industrial demand keeps my relatively small position intact. Solar now consumes about 10% of annual silver production,ref 181 and silver is found in non-recoverable form in every electronic device. The gold–silver ratio has soared from 16:1 by weight in the ground to 80:1 by price in the market.ref 182 The notion that it should somehow price in proportion to supply is hotly debated, although the consumption of silver but not gold would logically give silver the relative boost in my opinion. JPM is said to control over 50% of the COMEX silver inventories—new-era Bunker Hunts or simply their clients’ silver.ref 183 For now, I watch with bemusement.

“The question as to whether the Fed can engineer yet another cycle (as it was able to in 2009) or whether the coming crash will be the end of the Supercycle will determine whether gold (and the miners) go up a lot or whether they rise to a terrifying degree.”

~Daniel Oliver, founder and managing director of Myrmikan Capital

Bitcoin: Tales from the Crypt

“Don’t put any money into bitcoin that you can’t afford to lose. But I don’t think we should ban it—the green bills in your pocket don’t have an intrinsic value, either.”

~Sheila Bair, former chair of the U.S. Federal Deposit Insurance Corporation

“Cryptocurrencies do not fulfill any of the three purposes of money. They are neither a good means of payment, nor a good unit of account, nor are they suitable as a store of value. They fail dramatically on each of these counts.”

~Agustín Carstens, general manager of the Bank for International Settlements

In the battle of gold versus cryptos—the Bugs versus the Crypts—I am in the bug camp, but I am sympathetic and respectful of the cryptophiles. Against the current monetary regime, the enemy of my enemy is my friend.

”Millennials are afraid stocks are too risky, so they’re investing in bitcoin.”

~MarketWatch

The strongest case I can make for cryptos is karmic: I don’t own any. It’s still the Wild West, but that’s not to say this sector can’t make doubters look like boobs going forward. Some speculate that the loss in volatility—the onset of boredom—will be their demise, but I completely disagree. If they are to become currencies, they mustcalm the hell down. That plateau in the $6K zone in Figure 22, therefore, seemed “highly constructive”—until the bottom fell out. Shaking youthful day traders from the “space” is also constructive. Start with George . . .

Figure 22. Bitcoin price.

From Figure 22 we see that the cryptocurrencies got pegged this year as investors spit the bit. The trip from sublime to supine did not take long. After bitcoin was driven above $20,000 in late December 2017 (on its trek to $1,000,000, of course) it has now pulled back to about $3,200, which I believe is below the estimated $8,000 to mining it.ref 184 (It is said that crypto mining uses more energy per year than Ireland does.ref 185) The founder of the cryptocurrency called Ripple became richer than Zuckerbergref 186 before a little market inefficiency got cleaned up by handing Ripple a 90% drop in two days.ref 187 (Now if only we could get some market efficiency on FAANGs.)

Dogecoin, invented as a spoof four years ago,ref 188 hit a market cap of $2 billion in January, eventually pulling back 90%.ref 189 It seems indisputable that the vast majority of cryptos will find strong technical support at zero. KuCoin, with a market cap of <$50,000, can’t be long for this world. Obviously the beatings took some of the piss and vinegar from Cryptomania, but The Big Three—Bitcoin (BTC), Ethereum (ETH), and XRP—retain a combined market cap of $80 billion at the time of this writing, and there are more than 2,000 cryptos listed at CoinMarketCap.com.ref 190 Since its inception, the crypto space has taken beatings that would make Whitey Bulger blush (or die), yet they have shown remarkable anti-fragility.

“If authorities do not act preemptively, cryptocurrencies could become more interconnected with the main financial system and become a threat to financial stability. . . . Accordingly, authorities are edging closer and closer to clamping down to contain the risks related to cryptocurrencies. . . . Cryptocurrencies are, in a nutshell, a bubble, a Ponzi scheme, and an environmental disaster.”

~Agustín Carstens, BIS

There are, however, some serious problems that pose existential risks. The authorities—every developed sovereign state and central bank in the world—have oligopolies on creating money and taxing money flows. If they can’t assimilate the Crypto Collective into the Borg Collective, they will try to destroy it. Crypto "hodlers" (hang on for dear lifers) stand defiantly (Figure 23), but it would scare the bejesus out of me. My Texas Hold ’em all-in bet would be on the awesome power of the State.

Figure 23. Tommy Lee lowering his expectations, predicting a 250% rally in Bitcoin in the last two months of 2018.

The State will try to tame Bitcoin before just crushing the crypto bastards garishly. Given that ignoring the cryptos wasn’t working, we witnessed subtle efforts to mainstream them. First, the banks had to stop the use of credit card purchases of cryptos for obvious reasons: the crypto collapse would (and did) cause people to default on their credit cards.ref 191 Banks then began introducing new crypto products—crypto futures, brownies, and vapes. This set the stage for the Commodity Futures Trading Commission (CFTC) to ride into Dodge City to get control.ref 192 During the routs this year, there were some huge buyers stepping in to provide what appeared to be J.P. Morgan-esque support. We’re talking $500 million purchases.ref 193 However, a federal judge ruled that cryptocurrencies are "commodities”ref 194 and, unlike all other markets on the planet where manipulation runs unchecked, the authorities promised to mete out some jail sentences. The SEC is “probing investment advisers for potential misconduct involving cryptocurrencies, signaling a new direction in its oversight of this emerging market.”ref 195 Ominously, Google announced a ban on all crypto and initial coin offering (ICO) advertising. This is the power of the State using Google as a stalking horse. (I capitalize state to get you to say, "Oooooh" and shake with fear.)

The IRS declared the gazillions of crypto transactions are merely gazillions of taxable events creating gazillions of miles of red tape and gazillions of new criminals, tipping risk–reward calculations decidedly toward risk.ref 196Can you imagine if every time you bought a product with dollars it became a line item on your tax return? (Of course not: the dollar purchasing power monotonically drops.) How about all those cool toys, houses, and Lamborghinis bought with liquidated Bitcoins? They've got the goods and huge capital gains tax bills.ref 197Could be worse, as Saxo Bank has pointed out: Some particularly resilient consumers purchased the toys on credit, comforted by the cushion of Bitcoins priced at $2,000 apiece.ref 198 They’ve now got the toys, debts, and crypto cushions that are more like donuts.

Claims that hackers from Russia were interfering in the crypto markets means the crypto space is a national security concern.ref 199 The NSA is now tracking the cryptos—they always were, silly—which means the whole privacy thingie is hooey.ref 200 (Hooey is Russian slang for horseshit.) It is also the rallying cry for more State intervention.

What would a mania be without human folly, self-inflicted wounds, and some serious humor? North American Bitcoin Conference organizers in Miami stopped accepting bitcoin payments for conference tickets owing to network fees and congestion.ref 201 A long position in bitcoin futures in Hong Kong’s OKEx crypto exchange processed a $416 million trade.ref 202 The exchange was “unable to cover the trader’s shortfall as Bitcoin’s price slumped.” Rob Arnott says bitcoin futures are 10–20× leveraged,ref 203 which accounts for the big moves both ways. CNBC had a guest whose firm offered a 100× leveraged bitcoin product.ref 204 I’m guessing they are now untraceable in the blockchain (like Lawnmower Man). A company called Proof of Weak Hands Coin, referring to themselves as “a Ponzi scheme” on Twitter complete with a pyramid avatar, raised $800,000.ref 205 Hackers promptly drained its funds. Another Ponzi scheme was so bad that the Russians shut it down, but it has resurfaced and is thriving in the Heart of Darkness (Africa).ref 206 A video promo for BitConnect was produced Gangnam style—some serious sleaze on display.ref 207 BitConnect turned out to be a Ponzi scheme and, unlike the other Ponzi schemes offered by Wall Street, actually collapsed.ref 208 There is no BitConnect without Bitcon. The miracle of creative destruction is on full display as Uber scooped up the influx of new drivers.

Legitimate (albeit pathetic) companies added “blockchain” to their names, causing their market caps to soar.ref 209 Eastman Kodak announced a crypto coin, causing shares to take off in flash. “Long Island Iced Tea” became “Long Island Blockchain." Smith Corona changed its name to Smith Coinola and did an ICO. (OK, I made that one up.) After a brief spike, the Kool-Aid swillers gave it all back, of course.ref 210 There are, however, emerging legitimate uses of blockchain. The LegalFling app, for example, records consensual sex agreements (blockchain keys to the chastity belts).ref 211 As Jim Rickards said, “Have fun, kids.” Here's some funny satire.ref 212

Real Estate

“There is a tsunami of supply comin’ down the road. If someone on this panel can tell me where the demand is gonna come from to meet that supply, then we got something to talk about.”

~Sam Zell

Seems like a truism to me that as rates drop, real estate prices will rise—and vice versa. It’s not shocking that big real estate bubbles occurred in the 1920s and 2000s during periods of loosening policies. And, of course, rates being too damned low for too damned long should goose prices too damned high, but I don’t sense that buyers and lenders have completely lost their minds this time. With mortgage rates at a 7-year high and rising (Figure 24), we will soon find out.

Figure 24. Thirty-year mortgage rates.

Some think we will have another crippling real estate bust. My canaries in the coal mine are the single-family rentals. As Joe and Jane Six-pack drove away from the burbs in ’09 watching their former abode shrink in the rearview mirror, the rest of you witnessed the absurdity of rising home prices in the face of falling occupancy (Figure 25). Nobody slipped you acid. The private equity guys jumped in to buy the houses at steep discounts and then drove the prices higher.ref 213 Mind you, single-family rentals are a terrible business that works only when the paper-thin capitalization rates (profit margins) are amplified by leverage—cheap money—relying on low interest rates. The obvious risks are, of course, rising interest rates. That risk didn’t stop Cerberus from increasing its portfolio with a $500 million expansion of FirstKey Homes.ref 214 I suspect, however, that the boom (and Cerberus) may die as rising interest rates and commensurate falling cap rates cause the private equity guys to decide the game is over and start liquidating their large shadow inventory to flood the real estate market. For now, however, we are witnessing more froth than fragility. For those interested, that image in Figure 25 in which two normally correlated prices diverge is called “alligator jaws.” There are a lot of 2018 charts from all over the financial universe that look like that. Alligator jaws are known to slam shut without much warning. It is not a subtle metaphor.

Figure 25. Home ownership rate versus price.

The enthusiasm for housing did get a bit manic, with a third of U.S. homebuyers (or should I say buyers of U.S. homes) bidding sight unseen.ref 215 A five-story Manhattan townhouse sold for a new record of $37.2 million—quadruple what the buyers had paid in 2012.ref 216 Credit unions are once again offering 0% down for mortgages up to $2.5 million.ref 217 I saw a show this morning describing how a divorced couple who had a house-flipping show during the last bubble have gotten past their hatred and contempt to restart the show. (Ding! Ding! Ding!) Real estate analyst Mark Hanson lays out city-by-city plots showing serious froth (Figure 26). These numbers are not inflation corrected.ref 218

Figure 26. Mark Hanson analysis.

Despite surveys showing a willingness of the majority of California residents to at least consider leaving the state,ref 219 the California housing market is on fire! (OK, that was tasteless.) As we witness a net population exodus from The (shit-stained)ref 220 Streets of San Francisco for the first time ever,ref 221 the cost of a median single-family dwelling in San Francisco rose to $1.6 million (Figure 27).ref 222 An 804-square-foot house in nearby Palo Alto sold for $100K in 2003 and $5.3 million in 2018.ref 223 A 900-square-foot bungalow near downtown Palo Alto listed for $2.6 million,ref 224 below the median listing in Palo Alto of $3 million.ref 225

Figure 27. San Francisco housing and their feces reports.

Evidence of housing market softening, however, is very real. Shares of homebuilders have been getting crushed (losses of 29–55%) in an economy said to be booming.ref 226 According to prominent economist Lakshman Achuthan, the national home price index was contracting by mid-year.ref 227 I—a friggin' chemist—saw the subprime and banking crisis as far back as 2002. ref 228 Bank and credit analyst Chris Whalen reminds us that the bust was clear by 2005.ref 229 He now says “nothing changed since 2008, but as in 2006, we have convinced ourselves that everything is just fine.” Total real estate sales in Manhattan fell 11% year over year.ref 230 Offers are coming in well below asking prices.ref 231 The drop was attributed to an acute oversupply of luxury units as foreign buyers sat on their hands, rising material costs of construction, and changes in tax deductibility of mortgage payments.ref 232 This latter point is important: If you can only deduct $10,000 per year of your state taxes on your Federal return, the prices of higher-end housing will necessarily adjust downward.

Canada never really experienced a bust when the U.S. did. It seems like they have rolling booms and busts as hot money moves from city to city. While the British Columbia median prices rose 9.2% year over year, the once-hot Vancouver housing market dropped over 40%.ref 233 The two biggest Canadian banks cranked up lending rates right before 50% of all Canadian mortgages were poised to reset.ref 234 Stay tuned. Toronto buyers were feeling their oats, as people were flipping their pre-sale houses—tripling the money on their down payments before the sale even closes.ref 235,236 The down payments were acting like levered options. That game may have ended. A 3,500-square-foot lot with a 650-square-foot house sold for only $1.1 million because it is too close to a highway.ref 237 The Carlyle Group is committing a $225 million senior secured loan to Canadian homebuilder Empire Communities.ref 239 Timing seems sketchy, eh? This turn-key, ready-for-occupancy gem in Vancouver is listed for $4 million:

Figure 28. Vancouver handy-man's dream.

The price of a house in London has increased fourfold in 20 years.ref 240 It appears as though Brexit, political upheaval, and mounting consumer debt may finally be causing the formerly red-hot London market to drop precipitously.ref 241,242 Spain’s housing bubble seems to have burst too.ref 243 China’s cap rates are in the razor-thin 1–3% range. Down in the Woop Woop of Australia, the credit bubble and housing boom seems be a bit of a boomerang, leaving homeowners a bit crikey and stonkered. Australian house prices are down 14% from their peaks and may not even be halfway to the lows,ref ref 244 which would pose way more systemic challenges than 30–45% drops in equities.

Another housing bust will call for more government intervention. It will be as feckless as the last:

Pensions

“If you were going to look for what’s the possible real crack in the financial architecture for the next crisis, rather than looking in the rearview mirror, pension funds would be on our list.”

~David Hunt, CEO of $1.2 trillion asset manager PGIM

“But if you look at these state pension funds, they’re a mess. These bills have got to be paid. . . . [A] good rate of return today of 2.5% to 3.5% doesn’t do the job. A big fear to me is who the hell in their right frame of mind would be buying bonds now?”

~Ken Langone, former CEO of Home Depot, on quantitative easing (QE)

"U.S. pension fund collapse isn't a distant prospect. It could come in 5 years"

~Bloomberg headline

"Why your pension is doomed"

~Wall Street Journal headline

"42% of Americans are at risk of retiring broke"

~CNBC headline

In ancient Rome, Augustus set up a military pension fund using the equivalent of $500 million of his own money and put ex-military trustees in charge. It got pilfered.ref 245 We have pilfered essentially every modern-day pension plan as well. Underfunded pensions are a form of leverage, and the pensioners are the creditors. Looming defaults will be devastating. Headlines focus on the risk posed by Social Security that, in conjunction with Medicare, is leveraged $50 trillionref 246 backed by a tax base racking up >$1 trillion (6–7%) annual deficits. The state, municipal, and corporate pension plans and private retirement accounts (401Ks and IRAs) are where the real bodies are buried. More than 100 million working-age Americans who should be progressing toward a stable retirement have saved precisely zero.ref 247 As you read the anecdotes below, keep in mind that pension holes are based on aggressive assumptions of 7–8% returns. The only safe bet is that those rates of return are not safe bets. The targeted balances—the balances the pros say you will need to retire comfortably—in personally funded accounts are pathologically understated.ref 248 If we really are in the Mother of All Bubbles (MOAB), what happens if it bursts?

The states’ unfunded pension liabilities have grown sixfold since 2003, and are now exceeding $1.4 trillion with the pedal to the metal. State pension costs are swallowing >25% of general revenues. The underfunding is estimated to eventually impose a surcharge to each household ranging from $30,000 for Tennessee to $180,000 for Alaska.ref 249 Kentucky has 16% of the funding needed, becoming the topic of a Frontline episode that made officials there look like a bunch of gullible hicks.ref 250 California's CalPERS is funded to <70%, with every private citizen in California owing >$100,000.ref 251 Illinois owes >$100 billion to its pension funds—six times the annual state revenue—and the liabilities are on track to double every 6 years (11% compounded).ref 252 It is said that if the Illinois state government put 50% of state revenue toward debt, pensions, and retiree healthcare, it will reach full funding in 30 years.ref 253 The state could raise taxes, but the Fighting Illini (tax payers) are already ranked #1 in the nation. Go team! New Jersey has $80 billion socked away to pay for $280 billion of future liabilities.ref 254 (The funding ratio fell from 93% in 2003 to approximately 30% in a dozen years.) Michigan, Pennsylvania, Florida, Ohio, Oregon, Colorado, Kentucky, and Rhode Island are said to not have the biggest actuarial problems but are at risk of running out of cash first.ref 255 I’m not even sure what that means. For 28 states, accrued liabilities have grown by 50% since 2003, way faster than their statewide GDPs.

Figure 29. Six states with problematic pension–GDP gaps.

What are states to do? The California Supreme Court will decide whether pensions can be cut on government employees.ref 256 I’m gonna guess no. The Illinois Supreme Court blocked state pension reforms in 2015, consistent with the idea that you cannot selectively screw one class of creditor.ref 257 CalPERS voted to increase the amount cities must pay, leading cities to foreshadow Chapter 9 bankruptcies.ref 258 Governor Jerry Brown wanted to crank up gas taxes by 40%, which could move him markedly closer to retirement.ref 259 Illinois wants to borrow $100 billion to speculate on equities.ref 260 That ought to help its already junk-level credit rating. The League of California Cities urged CalPERS officials to think “out of the box” to improve on their already aggressive 7% presumed annualized returns.ref 261 Short the VIX, dudes! It’s a one-decision trade. The state will be “totally bankrupt by 2021–2022.”ref 262 Between 2006 and 2017, Kentucky’s bond portfolio has grown from <1% junk bonds to 53% junk.ref 263

Reaching for yield is never a good idea, despite being forced at gunpoint by the Fed. Connecticut is broke: It may hock (sell) $2 billion worth of its buildings and lease them back at 7.5%.ref 264 Meanwhile the Fed has designed a bailout of the insolvent PBGC (Pension Benefit Guarantee Corporation)—a bailout mechanism in its own right—but one that does not cover state pensions.ref 265 My suspicion is that the Fed will loan the states money knowing full well it will never be paid back.

Figure 30. Total state pension deficits (dated data but trending).

The local (municipal) plans aren’t doing much better. New Orleans firefighters can expect 10 cents on the dollar based on their 10% funding level.ref 266 Wilkes Barre’s police and firemen’s pensions are <50% funded.ref 267Courts ruled that they couldn’t stick the pensioners. Next up: Chapter 9 restructuring, which is the legally correct solution. Cops and firemen in the tiny burg of Central Falls, Rhode Island, agreed to forfeit >50% of their pensions to escape insolvency.ref 268 New York, Philly, LA, Houston, and Phoenix all have $20,000–$30,000 per-capita pension IOUs coming due.ref 269 The murder capital of the country, Chicago, has a pension funded to 30%.ref 270 While the equity markets tripled from 2009 to 2018, Chicago’s liabilities more than doubled. Each Chicagoan is on the hook for more than $50,000 in pension debts and >$100,000 in total debts—not to mention the bar tab from the state.ref 271 Chicago’s problems are a little vague because Chicago’s and Moody’s bean counters disagree by a factor of two owing to different actuarial assumptions. Rahm Emanuel is taking a lifeboat—retiring...on a good pension—to distance himself from the Titanic problems. Before leaving, however, he wanted to borrow $10 billion to dump into the equity markets, but that got put on hold.ref 272 Maybe Illinois will lend you the money, Rahm. Similar strategies sent Detroit, Stockton, and San Bernardino into insolvency.ref 273

Figure 31. Municipal pension deficits versus tax revenue for 10 major cities.

There are countless reasons why we’re in this mess, but let’s just look at a bulleted list of waste that illustrates part of the problem, while retaining a comedic touch.

  • The head of the Oregon Health & Science University retired on a $913,000 per year benefit, while the poor University of Oregon’s retired football coach of 15 years only gets only $560K per year.ref 274 There are 2,000 Oregonians who get more than $100,000 per year.ref 275

  • The pooper scoopers who are charged with cleaning up shit off the streets in San Francisco make $184,000 per year.ref 276

  • The mayor of Ithaca, Svante Myric, is proposing that the city provide “free” child care. (I know Svante: He is a young man who I think will run for president someday. His platform will likely include some freebies.)

  • Illinois has been generous. The top 10 pensioners are each expected to pull an estimated $8–10 million from the state pension plan before they die (unless they visit Chicago). One gets over $400,000 per year as the superintendent of a school district with 1,200 kids.ref 277

  • Illinois taxpayers will be on the hook for more than 20,000 six-figure annual pensions for educators. Their pension benefits have compounded at 9% annually for nearly 30 years.ref 278

  • More than half the states have grown their pension promises at >5% annually since 2003.ref 279

One could make the argument that some of that is odious debt—debt incurred by somebody else (usually sovereign leaders) that is so odious that you say, “Screw it: I'm not paying.”ref 280 I believe, however, that the courts are unlikely to consider odiousness at lower levels.

Self-directed retirement plans—so-called defined contribution plans—are in brutal shape. Data from the Saint Louis Fed (Figure 32) show that the median retiree has almost nothing ($1,100),ref 281 and the highly indebted boomers with little time left to correct the error in their ways are altogether unready for retirement. The rallying cry that 80 is the new 50 ignores the harsh reality that 50% of retirements are forced by personal circumstances to retire,ref 282 and folks who do seek post-retirement employment—that's not retirement—take a 25% pay cut.ref 283 Most people have not been adequately trained to be their own human resource specialists.

Figure 32. Median retirement account and median boomer accounts.

On the bright side, the millennials are getting the memo early enough to act. The challenge is that the message seems to be either “Don't worry; be happy” or “Don’t bother.” Surveys show that even those with retirement accounts seem to have saved little. Those same millennials, not known for letting reality encroach on their world, want to retire, on average, at 56 years old.ref 284 Time to cut back on the bottled water, pumpkin spice lattes, and, for that matter, any form of food. It’s time to stop being a bunch of dingleberries, put your phones down, and pay attention.

On that latter point, there is a new group called FIRE—“financial independence, retire early.”ref 285 Members of the group want to work hard, cut costs, and then retire in their 30s and 40s to travel the world:

"How to retire in your 30s with $1 million in the bank"

~New York Times headline

“Nothing was wrong with the job—it was a great company, good money, six figures. I was 26 and I said, ‘Why am I going to spend my 20s sitting at a desk?’”

~Mason, 29-year-old retiree

There are over 400,000 subscribers to FIRE on Reddit,ref 286,287 sharing tips like “how to survive a Minnesota winter without shoes, gloves, or coats.” Suze Orman blew out both ovaries noting, “I hate it. I hate it. I hate it. I hate it.”ref 288 This group will be positioned perfectly for the Great Attitude Adjustment (GAA).

Well at least we have the corporate pensions to fall back on, but they are underfunded as well (Figure 33). Corporations could always top off their pensions if they diverted funds from share buybacks and other forms of financial engineering. Ironically, that would cut into the multi-sigma profit margins, crush share prices, and, ironically, shrink everybody’s pensions plans. That’s swell. Pension coffers should be bloated with FAANG-based returns as we near the end of this investment cycle. They obviously are not.

Figure 33. Corporate pension shortfalls.

The aforementioned PBGC bailout plan does not cover the state-funded (or should we say state-unfunded) plans. There are discussions of using Puerto Rico as a beta test to introduce Chapter 9 legislation to allow for state bankruptcies, which are currently not allowed under the federal bankruptcy code.ref 289 Bankruptcy laws are designed for precisely when available assets are insufficient to cover liabilities. Private defined-contribution pensioners—the IRA/401K crowd—are gonna be investing doggie style and playing a lot of Dialing for Dollars.

Debt

“It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on, would save one-half the wars of the world.”

~Thomas Jefferson

You have a debt problem when you have more debt than the capacity to pay it off. It arises from consumptive debt that is non-self-extinguishing. As far back as David Ricardo in the nineteenth century, we have known that debt-financed spending is not constructive to GDP. The debt problem goes global when the collective promises of sovereign states to their masses cannot be satisfied by future output. Not everybody can live the metaphorical American Dream no matter what global leaders have promised. There is a paradox in that you can save at the local level—personal, municipal, state, and even national—by having others outside your defined group owe you future goods and services (albeit accounted for using units of currency). You cannot, however, save globally. Because sovereign-level debt problems are PAYGO (pay-as-you-go) plans by definition, we’ve been trapped by compensation mechanisms that have increasingly relied on unfulfillable promises in the future rather than payment in the present. Now we find ourselves in a putative global asset boom—one that I find to be a sandcastle built by central bank largesse—while concurrently having debt problems. In the U.S., for example, average household net worth is soaring while the median family needs credit for basic needs and has squat for retirement savings.

“The great bond bull market began waaay back in 1982—36 years. And as governments were able to keep financing at lower and lower rates, they kept promising more and more.”

~Capitalist Exploits on the social justice movement

In the following sections I treat debt and savings as two sides of the same coin while somewhat arbitrarily separating corporate, personal, and sovereign debt problems from a looming global pension crisis and, for that matter, problems in the real estate market. I suspect that the Fed's pathological aversion to letting the economy sink or swim on its own may stem from its PTSD-levels of fear of the next recession, which—I hasten to add—is as inevitable as death and taxes. The Wall Street Journal worries that we will burn a decade recovering from the next recession. I worry that they are optimists.

All this debt has accumulated with a tailwind of relentlessly falling interest rates from a 36-year secular bull market in bonds. The blowoff phase of the bond bull is a decade of rates wrestled to 5,000-year lows by central bankers. Now we are in a rising-rate environment. The gyrations across global markets are just the trailer. If the secular bear market in bonds goes wheels up—if rates begin a multi-decade upward march because of our modern-era guns-and-butter policy—many of us may not be around to see resolution.

?Corporate Debt

“This time around, the big bubble is the extreme leverage on the corporate balance sheet, where the chart of debt-to-GDP looks a lot like the mortgage debt-to-GDP in 2007.”

~David "Rosie" Rosenberg

“Corporate debt has soared, but most of it has been used for financial engineering. . . . Who knows how many corporate zombies are out there because free money is keeping them alive?. . . Competition is a better tool than price control for protecting consumers. That applies to Amazon and the bond market.”

~Stan Druckenmiller

It is clear that this is a very different corporate bond market, and history-based financial models will most likely be found wanting.”

~Louis Gave, cofounder of GaveKal

The corporate debt market is a complicated story because huge amounts of debt to financially engineer pump ’n’ dump schemes with share buybacks were waiting to be extinguished by repatriated savings (tax amnesty) from overseas. Assessing corporate leverage—debt net offsetting cash and other assets—is more important than usual. That said, from my perspective up in the nosebleed section, loose monetary policy managed to create a mountain of corporate debt, which is unsurprising to everybody but central bankers. Whocouldanode? The 54 AAA-rated companies in the S&P before the crisis have been reduced to only two because of leverage.ref 290Many—myself included—believe that the corporate bond market will be Ground Zero of the next crisis. In case I haven’t said it enough times, we are in a rising rate environment: The fuse has been lit. Net leverage normalized to EBITDA (earnings before interest, taxes, depreciation, and amortization) has doubled in only a few years. Tighter banking regulations acted like Prohibition, opening the door to hooligans, hedge funds, and other non-bank grifters with their own leverage. There is a so-called shadow banking systemref 291 that is so enormous, complex, and hidden from the light of day for us Philistines. Here’s a trick question: Who do they borrow from? These corporate-focused lenders will scamper away in a heartbeat in a downturn. The retail investor will see bids for corporate paper (debt) buried in their portfolios disappear, and it could happen in a matter of days, hours, or minutes.

Mario Draghi’s European corporate-bond-buying binge sent some corporate bonds into negative interest rates—companies were being paid to borrow—and the Bank of Japan has now joined in.ref 292 The global bond binge caused the premium spreads—the extra interest paid for buying total garbage like commercial-mortgage-backed securities versus AAA bonds—to reach lows not seen since early 2007.ref 293 Those spreads are now widening. Companies are citing higher interest expenses chewing into earnings, which will amplify the credit spreads. Over $2.5 trillion—50% of the investment-grade corporate debt market—is rated just one notch above junk.ref 294Exchange-traded notes (ETNs) based on corporate debt are unsecured, subordinated debt that trades daily. A day will come when they don’t trade. The volume of covenant-lite corporate bonds—bonds with lower levels of constraints than the stuff we call garbageref 295—has soared and poses a huge risk because of (not despite) the fuzzy name. U.S. firms sold $9.2 trillion in bonds since 2013, a non-trivial $3.5 trillion being used for share buybacks ($850 billion in 2018).

Is this really a systemic problem? I think so. As I am writing, GE and Deutsche Bank are gasping their last breaths—debt rattles—while doing laps around the drain. GE has $170 billion in debt owing to years of financial engineering.ref 296 Its productive assets will live on in the hands of new owners, but current holders of its debt and equities will be dealt with severely. Deutsche Bank is so huge that it seems likely to be nationalized. Rumors of a merger with Commerzbank just surfaced in what seems like one of those '08-esque shotgun weddings.ref 297Companies like GM and IBM are not far behind. These are Mothra-sized butterflies flapping their wings.

“The debt load for U.S. corporations has reached a record $6.3 trillion, according to S&P Global. The good news is U.S. companies also have a record $2.1 trillion in cash to service that debt.”

~CNBC headline

What CNBC seems to have missed is that borrowing money (the $2.1 trillion part) to pay the interest on the $6.3 trillion is a Ponzi scheme,ref 292 and I’m not speaking metaphorically or hyperbolically. Individual companies that don't have the cash flow to make interest payments are called zombies, implying that they are dead but somehow still stumbling around the planet posing existential risks to the living. Of course, they are rare, right? Well, 20% of the Russell 2000 index and 14% of the S&P 500 are zombies.ref 299 Passive index investors own the shares of these gems and, if not, are financially linked to clowns called “counterparties" who own them. The problem is, as noted by the Bank for International Settlements (BIS), zombies do not come back to life.ref 300Unlike real zombies in which all you need to do is tie the recently departed's shoelaces together, these Walking Dead require the free market metes out shots to their heads.

The beginning of what looks like a serious bond bear is hammering risk-parity funds—bond funds that used leverage to seek the risk of equities.ref 301 Congrats, guys: You found it! And then there is the “leveraged loan market,” in which companies too weak to access the junk bond market go and borrow from a guy named Vinnie. These are the payday lenders for corporations. Retail investors with this crap in their retirement accounts will be toe-tagged and bagged.

“The selloff in GE is not an isolated event. More investment-grade credits to follow. The slide and collapse in investment grade debt has begun.”

~Scott Minerd, CIO at Guggenheim Partners

Let’s finish by taking a special look at GE’s debt. In 2002, I predicted that GE was headed for trouble in an email to a friend at Goldman.ref 302 Years of financial engineering finally worked their magic.ref 303 GE survived ’08–’09 with a lot of help from the authorities but appears to be on life support now. It is getting crushed by debt estimated at $40–$170 billion depending on who is doing the bean counting. The confusion is probably caused by off-balance-sheet debt . . . just like Enron. A bunch of GE debt is still investment grade, but it is “trading like junk,” which means we’re waiting for the rating agencies to read them last rites. To avoid bankruptcy, GE eliminated its quarterly dividend, causing double-notch bond rating downgrades.ref 304 The debt burden owing to a Hail Mary strategy of borrowing heavily for M&A (mergers and acquisitions) is probably now too high. GE is said to be “locked out of the commercial paper market,”ref 305 which means it’s time to call Vinnie. A default is said to be “unthinkable,” posing systemic risks as well as sentimental risks owing to a fall of an American Icon. On that note, Sebastian Mallaby gave us a "Crisis for Dummies" description of how cascading failures happen.ref 306

Personal Debt

“How do you make poor people feel wealthy when wages are stagnant? You give them cheap loans.”

~Vincent Daniel in The Big Short

According to a Federal Reserve study, Americans have $1 trillion of credit-card debt, $1.5 trillion of student debt (Figure 34), $1.5 trillion of auto loans, and $13.5 trillion in mortgage debt.ref 307 So many zeroes: What the hell does that even mean? We can manage the mind warp by bringing it down to the family level. The average household has $140,000 in total debt.ref 308 This number does not included unfunded liabilities at the municipal, state, and federal levels. The student debt is disturbing in that 40% of it is held by senior citizens and who are defaulting with troubling frequency (37%),ref 309 and the boomers now owe more than the millennials: “Thanks, Mom and Dad. I’ll swing by on my way to Fort Lauderdale this spring.” There are 101 individuals with over $1 million of student debt, and one dentist owes >$2 million.ref 310 The $100,000 student debt club has 2.5 million members. Owed mortgage debt is almost 5× the yearly salaries of the owners.ref 311 Credit card debt has climbed back to its 2008 peak,ref 312 but the average interest rose 3% to a lofty average 15.5%. Consumers are paying $100 billion a year in interest payments with their disposable income. One could argue that if you have credit card debt, you have no disposable income.

Figure 34. Student debt or monetary policy?

Consumer debt is growing at 2× the rate of salaries (Figure 35) while 100 million Americans have no job to make such a comparison. The auto debt market continues to show stress fractures. Approximately 30% of trade-ins are in functional default (worth less than the loan balance.)ref 313 Trading in a beater for an improved newer model is a bad decision. An estimated $280 billion of subprime auto loans are defaulting, stressing the smaller subprime lenders.ref 314 A heavily cited stat this year was that 40% of Americans do not have enough money to cover an unexpected $400 expense without borrowing the money or selling something they own, and 60% can’t cover a $1,000 tab.ref 315 This is not a moral judgment, just the facts.

Figure 35. Household debt normalized to disposable income.

It’s hard to know whether the consumers are feeling the stress. The millennials are certainly in a rush to retire with <$20K saved (see “Pensions”).ref 316 Another survey showed that 41% of them spent more money on coffee than on investing in retirement last year.ref 317 No problem: There is a Congressional bill that would allow students to pay student loans with future Social Security money.ref 318 You get just deserts only after you eat your seed corn. Whoever hatched that plan should take some of that bank lobby money they obviously accepted and get professional help.

For every debtor there is a creditor. A global debt problem is less about some crazy form of owing too much but rather counterparty risk—the risk that debtors can’t pay. Good news: Somebody owes you $500,000. Bad news: It's your teenage son.

“Twenty years ago there was $40 trillion of debt in the world; today there is $250 trillion worth of debt in the world.”

~David Stockman, former Reagan economic advisor and Blackstone Group

“$20 trillion got to $21 trillion in 186 days: That is blistering. . . . Donald is pro-Warfare State, pro-welfare state and has just slashed Uncle Sam’s tax take to 16.6% of GDP—the lowest rate since 1950.”

~David Stockman

Sovereign Debt

“The only question is whether we are able to look reality in the eye and face what is coming in an orderly fashion, or whether it will be disorderly. Debt jubilees have been going on for 5,000 years, as far back as the Sumerians.”

~William White

The markets most important to the functioning of capitalism—the credit markets in which lenders and borrowers haggle to determine the cost of money—are damaged. Central banks have subverted price discovery, sending bizarre signals to market participants. I asked the Twittersphere what interest rate they would demand to buy a 30-year Treasury that they were required to hold for 30 years—no selling, trading, or hedging. The answer was telling:

Figure 36. Twitter poll about the term premiumref 319 that investors would require for 30-year treasuries.

It would appear that 30-year bonds are priced wrong because somebody will be holding these assets for 30 years. My personal answer is comfortably above 7%. The interest payments on U.S. debt rose by 14% over the last year owing to increased principal payments on inflation-protected securities ("just the TIPS"),ref 320 continued generalized debt growth motoring along at 6–7%,ref 321 and overall higher rates. We will add well over $1 trillion of debt before the year is over.ref 322 Stanley Druckenmiller submits that the next recession will usher in a $2 trillion deficit. Many say we should have issued century bonds—100-year treasuries—when interest rates were low. I disagree profoundly: Forcibly jamming rates low, eliciting fixed-income investors to do unnatural things with barnyard animals just to get income, and then stiffing your counterparties with such abominations would be bad karma. In any event, that ship may have sailed because sovereign holders of treasuries such as Japan, Russia, and China are now sellers.ref 323 We are on a path to our Minsky Moment at which debt overruns our capacity to make payments. We will just inflate it away, right? Maybe not. You create inflation by creating money, and you create money by creating debt. It makes me scratch my head.

“People who confidently think they know the consequences—none of whom predicted this—know what’s going to happen next? Again, witch doctors. How many in this room would have predicted negative interest rates in Europe?”

~Charlie Munger, Berkshire Hathaway

Global debt rose from 276% of global GDP in 2007, wallowed through the Great Recession, came out the other side topping 327% of global GDP, and continues to expand at >10% per annum.ref 324 Simon Black notes that while the economy grew 36%, the debt grew 123%.ref 325 The IMF blames the growth on a prolonged period of low interest rates—those foisted on us by central banks—for nearly a decade.ref 326 By early 2018, sovereign debt returning negative nominal interest rates—absurdities that should never exist in a functioning bond market—topped $10 trillion.

Figure 37. Negative interest rates on sovereign debt.

“If 2.60% is broken on the upside—if yields move higher than 2.60%—a secular bear bond market has begun.”

~Bill Gross, the former Bond King (2017) on the 10-year yield

“If we take out 3 percent . . . it’s bye-bye bond bull market. Rest in peace.”

~Jeff Gundlach, the new Bond King (2017) on the 10-year yield

Figure 38. Ten-year treasury yields.

Bank of America’s Michael Hartnett says, “the lowest interest rates in 5,000 years have guaranteed a melt-up trade in risk assets,” which explains the 600% wilding of the FAANGs off the ’09 lows. The rising-rate environment means that resolution and redemption—dead bodies—may start floating to the surface. JPM reported that the global bond yield curve inverted in June (Figure 39), which will trigger, sequentially, the following: (a) “yield curve deniers” will declare such inversions irrelevant, and (b) a potentially bone-crushing recession will arrive. There is also a big debt rollover coming in 2019–2028 (Figure 40). I've added the iconic plot of mortgage resets foreshadowing the ’08–’09 crisis just in case anybody else sees parallels.

Figure 39. Global bond yield curve turning negative.

Figure 40. Debt rollover, 2019–2028, versus mortgage resets, 2007–2012.

“Consider for a second that for the first time in 18 years (!), U.S. 10-year yields are trading at a premium (10 bps) to Australian comparables! The long bond at 3.21% is 6 bps above Italian 30-year yields. . . . America is an AAA credit, and Italy is BBB.”

~David “Rosie” Rosenberg

Europe seemed relatively quiet. Brexit looms, but I refuse to spend any more time reading about the carnage that will happen and patiently wait to see what does happen. The idiocy of central bankers is reflected by negative yields on Spanish sovereign debt, 10-year Swiss debt returning 0%, bonds maturing in 2055 returning 0.5%, emerging-market junk-bond yields that are now below U.S. junk-bond yields, and a Greek 10-year yield below that of the U.S. 10-year yield. Negative yields on Italian debt concurrent with the country’s budget imploding finally triggered a VIX-like response (Figure 41). Mario Andretti would be in awe of the acceleration on that price discovery. Meanwhile, the covenants underlying much of this sovereign debt are said to be weak.ref 327

Figure 41. Italian bond massacre.

“China is rewriting the economic history books because they have embarked on a view that they can simply borrow twice the amount of output growth as the growth in GDP.”

~Jim Chanos, Kynikos (on Real Vision)

The out-of-body experiences are found in the emerging markets. Emerging-market debt tripled during the last 8 years.ref 328 China’s bond market is opaque but said by many to be a profound risk to global markets. According to S&P, China’s local governments have $5.8 trillion of off-balance-sheet debt, representing “an iceberg with Titanic credit risks.”ref 329 Jim Chanos, who is a galaxy-class short seller, says that the Chinese are building two to three times the number of apartments that demand can absorb. Outstanding loans are growing by >10% year over year.

“My thesis is that over the next decade we will endure increasingly damaging debt crises that culminate in a coordinated global default—“The Great Reset,” as I call it. There are limits in how much leverage the world can handle and I think we are already beyond them. And that is before we have a global recession. The only question now is how we will manage the collapse.”

~John Mauldin, founder of Mauldin Economics

Japan doesn’t even have a bond market; it was nationalized by the Bank of Japan to the point that there are days in which not a single bond trades.ref 330 A market with a single buyer is called a "monopsony" (brought to you by Snapple.) Japan already spends a quarter of its tax revenue just to service its debt even though rates are ridiculously low.ref 331 If interest rates in Japan rose to 1% (not exactly usury), the nation’s annual debt service would literally exceed all government tax revenue. When what few private bondholders left sell causing rates to flicker higher, the BOJ intervenes (three times in a single week), buying up all the bonds.

Argentina defaults on its debt every 15 years on average.ref 332 In 2017 the country issued 100-year bonds—century bonds or what I call “Beanie Bonds”—that were oversubscribed by some of the biggest names in U.S. finance: Fidelity, BlackRock, Lazard Asset Management, and who knows how many multinational banks (Figure 42).ref 333 Gillian Tett of the Financial Times noted that these bonds “may end up being the government bond market equivalent of the Pets.com IPO during the 2001 tech boom—the sign of a bubble peak.”ref 334

Figure 42. Purchasers of Argentine century bonds.

It took less than 1 year for Argentina to functionally default.ref 335 Of course, its GoFundMe campaign secured $50 billion from the IMF to prevent global market turmoil by paying off its creditors.ref 336 Jim Rickards thinks the whole affair was a “backdoor way for China to lighten up on dollars. Yeah, it’s complicated.” That is outside my wheelhouse. What I do know is that it is never the country being bailed but rather the seemingly moronic creditors . . . which is not moronic if the creditors know bailouts are preordained. The IMF launders money from a number of countries to pay for such bailouts, but the primary sponsor is the United States—the U.S. taxpayer. Meanwhile, a 25% inflation rate and interest rates soaring to 40% are frying Argentina’s empanadas whether the country defaults or not.

“China reminded us that the tale of synchronized growth was false and that what we have been seeing in recent years has been synchronized growth of debt.”

~Daniel Lacalle, eighth-ranked “economic influencer” in the world!ref 337

I suspect that when the cost of money resets—when price discovery rears its fugly head—many of these assets will cease to exist. What’s left will likely have new owners.

Inflation and Deflation

“I just don’t see much inflation pressure.”

~James Bullard, president of the St. Louis Federal Reserve

“If I had to bet my life on higher or lower inflation, I’d bet a lot higher.”

~Warren Buffett

“We know how to deal with inflation. We don’t know how to deal with deflation in this country.”

~Gary Cohn, former CIO of Goldman Sachs and former chief economic advisor to President Donald Trump

“My generation gave former tenured economics professors discretionary authority to fabricate money and to fix interest rates. We put the cart of asset prices before the horse of enterprise. We entertained the fantasy that high asset prices made for prosperity, rather than the other way around. We actually worked to foster inflation, which we called ‘price stability.’ . . . We seem to have miscalculated.”

~James Grant, talking to our future selves and grandchildren, 2014

The Fed claims that a small amount of inflation is good and then wavers as to how much is optimal. Never mind that luminaries like Paul Volcker have denounced such thinking as delusional. I asked financial Twitter for the best arguments supporting the Fed’s ideas and got a host of answers, all of which had chards of truth and none of which made complete sense. The debate drew in big fish and little fry.

Some claimed that inflation is needed to coerce people to invest as though profit motive isn’t enough. Others said consumers will retrench if they know products are going to get cheaper, contrary to data on tech gadgetry and common sense aside. William White, formerly of the BIS, previously noted that “the widely held assumption that consumers and corporate investors will extrapolate from past price declines and hold off on making purchases as a result of deflation has essentially no empirical support behind it.”ref 338 Other Tweeters pointed to the dreaded deflation that has been MIA for almost a century. Of course, the reason deflation is so dreaded is that for it to appear against the headwinds of our inherently inflationary banking system means that central bankers already did way too much—they screwed the pooch.

Governments embrace inflation because they like to squander money they don’t have to buy votes and, as Milton Friedman said, "Inflation is taxation without legislation." They also like the covert tax of inflation, and love taxing nominal gains that are illusory.

“I hate the word deflation because it is only a symptom of the problem. It’s not the reason we have the problems we have today.”

~Richard Koo, chief economist at Nomura Research Institute, talking about Japan

Some chimed in that the psychological impacts of wage cuts are so devastating that they are better masked by positive nominal gains. Others believe paying somebody in debased money is better than laying them off; it is a sticky wage argument. The Wall Street Journal had made such an assertion:

“Higher inflation could have other benefits. It could help economies adjust after a downturn by lessening the need for outright wage cuts, because rising prices will erode wages anyway.”

~Wall Street Journal

The ultimate foolishness is that a Committee of Elders—the Fed—thinks it is better equipped than the Wisdom of Crowds—the free markets—at setting the price of capital. Its members appear to me to be just a bunch of fools making shit up based on hopelessly flawed Gaussian models claiming to be “data dependent.” It is odd that nobody in the mainstream seems to think that when deflationary pressures appear, maybe the markets are telling us that we need a dollop of deflation.

The article in the Wall Street Journal that enthusiastically endorsed inflation I found problematic and Tom McClellan found support for this monetary creationism inexcusable.ref 339 He attacked the Fed for trying to keep too many ligma balls in the air at one time:

The mystery of this most recent decade is that creating vast sums of new reserves in central banks—an estimated $20 trillion—did not generate high or even hyper-inflation (yet). I’m a goldbug; I thought inflation was coming. Ben Bernanke blamed the “savings glut” of our trading partners, which seems to be just looking for a scapegoat. Mervyn King (see “Books”), however, did a nice job of explaining that if our trading partners let trade imbalances chase financial assets rather than goods and services, you get a lousy economy and inflation in the financial assets. That’s exactly what we got. Of course, those who speculate in those financial assets love that kind of inflation until it unwinds (oftentimes violently).

“I’ve never bought into that.”

~William White, on the “savings glut” thesis

Just as deflation is demonized by the Fed, inflation is demonized by the blogosphere. Somebody called it the “the date rape drug of taxes.” Bloggers squealing about the dollar losing 97% of its purchasing since 1913, however, often forget that there are compensating mechanisms along the way in the form of nominal pay raises and nominal asset appreciations. David Andolfatto, vice president of the St. Louis Federal Reserve and who seems to function as an outreach coordinator for the Fed, addresses this in a thoughtful blog, noting that you are 97% poorer only if you took your 1913 dollars and stuffed them in a mattress.ref 340 Ironically, if they were in uncirculated condition, you would enjoy nominal gains of up to 200-fold in the numismatic marketplace. Andolfatto also makes the curious argument that high interest rates are anti-inflationary by stepping on the economy (check) but pro-inflationary by jamming gobs of interest into the system. Wait. What? That idea is new to me and creates a bit of a monetary paradox, but I keep thinking about it.

Michael Hartnett of Bank of America, noting 700 rate cuts and $14 trillion asset purchases by central banks since the Great Recession, sees parallels of 2018 and 1966.ref 341 Millennial chart monkeys will likely not appreciate that the years after 1966 witnessed virulent inflation, horrific real (inflation-adjusted) returns on financial assets, and an economic malaise that lasted until the early 1980s. The shift in preference from equities to hard assets and high-interest-rate bonds—notice I didn’t say “flow” into or out of anything, which is risible nonsense—caused severe turbulence. It was a terrible time to invest for most.

Official reports of inflation are starting to creep up, although by no means outside the Fed’s highly fluid comfort range. Anecdotal reports, however, are painting a more serious picture. The CEO of Sherwin-Williams said that “raw material inflation has been unrelenting and accelerating.”ref 342 Eric Cinnamond listens to hundreds of microcap investor conference calls each quarter and says that CEOs are all complaining of cost pressures.ref 343Companies like Caterpillar report that price increases are not keeping up with rising production costs.ref 344 The CEO of Lincoln Electric claims that “We’re in a very rapidly increasing inflationary environment.”ref 345

"J.B. Hunt says 10% raises are the antidote to the truck-driver shortage"

~Bloomberg headline

The tariffs discussed in the “Economy” section are causing companies to arbitrarily implement 15–25% price hikes anticipating raw material or finished goods costs emanating from China.ref 346 (I can’t help but wonder, admittedly with a low probability weighting, if the tariffs aren’t part of a covert bilateral agreement.) The wage pressures seem real. Teachers across America have been walking out of school classrooms to attend rallies in protest for higher salaries and improved classroom resources.ref 347 Jobs are going unfilled. Wage inflation scares macro bean counters. BIS economists suggest that a global shrinkage of the working-age population is causing inflation to trend up (more money chasing, fewer workers).ref 348 Paul Tudor Jones sees Fed chair Powell as George Custer, sandwiched between a mountain of debt on one side and inflationary pressures on the other.ref 349 He thinks Powell needs to hike rates pronto to curb margin debt in the markets and facilitate a more efficient allocation of capital.

“Volatility collapsed after the crisis because of central bank manipulation. That game’s over. With inflation pressures now building, we will look back on this low-volatility period as a five standard-deviation event that won’t be repeated.”

~Paul Tudor Jones

By now most have read about the distortions of substitution and hedonic adjustment foisted on us by the Boskin Commissionref 350 and unfoisted by John Williams.ref 351 I've already taken a bat to the MIT Billion Prices Project—I think there is an Achilles’ heel in it—and won’t return to it.ref 352 We also know that products that don’t last should be priced per unit function: They are not. Figure 43, showing the cost of various goods and services, blanketed the internet this year. Do you really think you can buy a TV for 4% of what you paid in 1990? Sure it’s a better TV (or at least a cooler TV), but you are not walking out of Best buy with an $8 TV even on Black Friday. Have prices of cars really not moved in 20 years? A Ford F150 cost $17,000 in 2007 and $40,000 in 2017. Yes, it now has a backup camera and anti-lock brakes, but it costs more than twice as much to move firewood, display our gun collections, and wield MAGA bumper stickers. Try Googling rents or single-family home prices: Are they really up only 61% since 1995? I am calling bullshit on this chart. It was undoubtedly created by hedonic-adjusting tools (economists).

“Americans are getting stronger. Twenty years ago it took two people to carry $10 worth of groceries; today a five-year-old could do it.”

~Henny Youngman, comedian

Figure 43. Hedonically adjusted prices.

I take a swipe at hidden inflation every year. The durable goods we buy have a programmed and accelerated senescence that borders on progeria. Your kids’ toys are cheaper, but do they last more than a few minutes? A toaster that cannot be repaired when it breaks is expensive, especially when it breaks fast. The quality reduction can be profound too. Processed food uses animal and vegetable parts that were previously fed to pigs. Food scientists have rendered them palatable through very clever tricks like adding buttloads of salt and sugar (or high-fructose corn syrup). The meat in Dinty Moore stew is disgusting. Cracker Jacks no longer are made from popcorn. Your appliances are shiny with lots of buttons that you never use, and they don’t last. Shrinkflation has been around for eons. Coke cut its 1.75-liter bottle to a 1.5-liter bottle and then raised the price. At some point, the company will offer a really large bottle (1.75 liters) for an even higher price. I still haven’t figured out how to account for laptops, iPads, iPhones, and internet service. For what you get, they are amazingly cheap. As a part of a family’s budget, however, they pose existential financial risk. How do you account for amazing technology that you must own—even the Mennonites own them—but that you cannot buy without a HELOC? Check out Figure 44. Try a little mental math on how much a paycheck could buy you in 1938.

Figure 44. Cost versus quality.

And here is a curious little anecdote:

1932 gold ounce = $20.67

1932 Yale University tuition, room, and board = $1,056 (51 ounces of gold)

2018 gold ounce = $1,225

2018 Yale University tuition, room, and board = $65,000 (53 ounces of gold)

Banks

“With mortgage applications declining, executives have a choice to make: Should underwriting standards be lowered? When volume becomes the defining metric for how loan officers and mortgage companies get paid, then loan quality deteriorates.”

~Chris Whalen, Whalen Global Advisors

“Your problem is that you are trying to understand it as an economic story. Once you think of it as a crime story, you’ll get it.”

~Insider to Matt Taibbi when writing about the subprime crisis

We’re told that the post-crisis banking rules were tightened to make the banks safe again, and now we are about to unwind these protections with the poorly named “Economic Growth, Regulatory Relief, and Consumer Protection Act” that would return the banks to their birthright as gigantic hedge funds.ref 353 A 1982 declassified memorandum included Jack Anderson, a journalist, discussing the upcoming collapse of the banking system and the CIA’s risk assessment.ref 354 There were crises of course; the late 80s savings and loan crisis may have been what was spooking the spooks. Do the bankers never learn? Are they doomed to loop around this infinite Mobius strip? In a sense, yes. This year’s winner of the Nobel Prize in economics, Paul Romer, and some famous guy named Akerlof, wrote a 1994 paper titled, “Looting: The Economic Underworld of Bankruptcy for Profit.”ref 355 They describe how the inefficiency of the boom–bust cycle is exploited by the banks during both phases. During the boom, the bankers make huge fees and pay themselves handsomely because, well, they are wonderful stewards of capitalism. During the bust, profits stem from looting the system, cloaked by the chaos and pandemonium of bailouts. The bankers then pay themselves handsomely because they are wonderful stewards of crony capitalism too.

Recall in ’09 when huge bonuses were defended to keep talent around long enough to save the world from the Apocalypse caused by all this talent. Banking is like Danegeld—payments to the Vikings to stop them from looting and spreading their DNA around the Isle of Britannia. Soon the Danes wanted more money and hot chicks. I suspect we have finished the boom half of the cycle again and are now looking for the raping and pillaging phase to commence. What will trigger the next crisis? Bank analyst Chris Whalen already sees lenders bracing for problems and reducing staff in their consumer and mortgage lending businesses.ref 356 Eyes are on the European banking sector getting its market caps deracinated. One of the popular risk measures—the Libor–OIS marginref 457—is vibrating like the puddle in Jurassic Park.

“The Senate just voted to increase the chances your money will be used to bail out big banks again.”

~Elizabeth Warren (@SenWarren), insert politically incorrect Indian joke here

Despite regulatory constraints, the banks have managed to insert leverage into every orifice imaginable while moving the risks away from themselves or so they say. Bank loans to non-bank financial firms have increased sixfold since 2010.ref 358 Big banks are not making lots of subprime auto loans but rather lending to subprime loan bundlers who have jammed a record $345 billion of subprime loans.ref 359 In a crisis, the autoloans default first, and then the bundlers hit a bridge abutment. Hmmm . . . who is on the hook now? Increasingly popular and dubious loans to unsuspecting, near destitute, and likely to be transitory homeowners are called “non-qualified mortgages.”ref 360 Truth in advertising. That particular form of high-risk lending doubled in a year and is said to be on track to double again next year.ref 361 The direct risks posed by notional derivatives, which have grown 50% to $1 quadrillion since ’07, are watched nervously.

“Getting a lot of calls about DB today. Where to begin? A hedge fund in drag that pretends to be a bank. . . . Earth [to] Merkel."

~Chris Whalen

Bearing down on a few specifics, the systemically important financial institutions (SIFIs) are all wobbling in synch—precessing—while their credit default swaps (CDSs) have arisen from their slumber.ref 362 Deutsche Bank (DB), for example, is five times the size of the former Lehman when it brought the system to its knees. DB also has the largest derivatives book on the planet. Of special interest, it is trading like Lehman, having lost 94% off its ’07 high (Figure 45). An 80% drop in earnings in 1 year suggests that the bank is insolvent and headed for nationalization. DB fired 10,000 employees (10% of its workers), a drop in the bucket.ref 363 I think it’s time it changed its name to Deutsche Blockchain.

Figure 45. Deutsche Bank.

“The best thing that could happen to society is the bankruptcy of Goldman Sachs.”

~Nassim Taleb, author of bestsellers (see “Books”) and former Goldman trader

Banking is supposed to be boring, but there were a few humorous moments this year. Goldman got caught stealing billions from the 1 Malaysian Development Bank (1MDB),ref 364 but who cares about the impoverished Malaysians? That’s a rhetorical question: Other sovereign wealth fund managers seemed to care.ref 365 As Jimmy Carter said, “I guess you just can’t trust Goldman.” Danske Bank laundered over $200 billion according to whistleblowers.ref 366 That ought to generate a few fines and send a lot of business back to HSBC. Wells Fargo had a “glitch” that led to double dipping on some payments and even some accounts being emptied.ref 367 It got fined $2 billion for stealing from millions of customers. Since fines for committing felony on a gargantuan scale are considered a business expense, the bank will get a nice tax break.ref 368 It was downgraded by its bank brethren for having inadequate safeguards to prevent getting caught.ref 369 Once Wells emptied its coffers to pump shares with stock buybacks,ref 370 it had insufficient funds to keep 26,000 people on payroll.ref 371 On the bright side, the CEO got a 36% raise this year to ensure that he sticks around to clean up his mess.

Of course, Wells Fargo’s largest shareholder, Berkshire Hathaway, played activist and jumped in to bring some honor back to this once great institution. Yeah, right. Neither side of Warren Buffett’s mouth was available for comment, but the irrepressible Charlie Munger chimed in:

“Wells Fargo will end up better off for having made those mistakes. I think it’s time for regulators to let up on Wells Fargo. They’ve learned.”

~Charlie Munger

Yes, Charlie, we’ve all learned: Crime pays, and your bluntness is surpassed only by your ruthlessness. The miracle of modern medicine is that you can sleep at night. That Wells hasn’t been auctioned off for parts and its high command marched off to a gulag illustrates the efficacy of the Obama-era “No Banker Left Behind” (NBLB) program. Being owned by Berkshire is also a “protected class.” The most satisfaction customers will get comes in the form of checks to compensate them for their losses. I’ve gotten two such checks for settlements of class action suits. They both were <0.1% of my assets under management. You know what this means? I got screwed three times: (a) the brokerages slipped roofies to me Cosby-style and repeatedly jammed illegal hidden fees up my . . ., (b) the lawyers took half the settlement, and (c) the justice system settled for squat and didn’t hang any of the bankers with their genitalia stuffed in their mouths. Do I sound bitter?

Several academic papers concluded that Wall Street firms trade on inside information and that “changing the law to fix that may not even be feasible.”ref 372 (Academics actually get paid to come up with such epiphanies.) Bank of America (BofA) did not have a single day trading loss in the first quarter.ref 373 Seems like an improbable run in a straight game. BofA also got caught robbing safe deposit boxes again.ref 374 Recall that the state of California was emptying safe deposit boxes and selling the contents without even inventorying them first.ref 375BofA has also been freezing the accounts of people suspected of being illegal aliens, no doubt out of a deeply moral conviction and support for Trump’s immigration policies.ref 376 One of Morgan Stanley’s highly compensated bankers has been driving for Uber in his free time.ref 377 Any bets on who gets the >$100 billion Uber IPO? Finally, Jeffrey Skilling of Enron fame got out of prison.ref 378 The bankers who helped set up all the off-balance sheet scams have not been released because, well, they never got arrested.

The party isn’t rockin’ until somebody calls the cops or puts an eye out. Until then, the social IQ of the partygoers just keeps dropping. Although nothing is happening yet—the KRE banking index is comfortably 200+% off the ’09 lows and only –20% off its 2018 highs.ref 379 There are, however, stresses building within the banking system. SocGen analysts list four triggers: trade wars, significant market repricing, European policy uncertainty, and a hard Chinese downturn.ref 380 The FDIC monitors “assets of problem banks” and reported a 200% increase during the third quarter of 2018.ref 381 The four largest U.S. retail banks are witnessing consumer stress in the form of credit card losses.ref 382 Scott Minerd suggests that small hikes in lending rates will blow out the zombies (see “Corporate Debt”), causing a wave of defaults that are long overdue.ref 383 Minerd notes, “There are a lot of companies that are zombie companies that survived the last cycle. As these companies have their debt repriced by the market with rates going up, it’s going to be harder and harder (for them) to stay alive.” The credit system is surely at risk if corporate paper starts defaulting. Jesse Felder suggests that “a cottage industry has developed to explain what is behind the dramatic move in Libor.”ref 384 Something is stirring below the placid surface. (Cue the Jaws sound effects.) Europe in general and Italy in particular pose serious risks, as does China. Whalen Global Advisors claims that net interest income for all U.S. banks will be declining by early 2019 and that, “the superficial narrative parroted by Wall Street pundits that rising interest rates are good for banks and other leveraged investors will be shown to be complete nonsense.”ref 385 Cheap funding is over. “Banks in the U.S. are about to get caught in an interest rate squeeze of gigantic proportions,” causing shrinking profits and—wait for it—a recession! There will be 11 Wells Fargo employees who couldn’t care less because they won a half billion dollars in California’s Powerball.ref 386

“From the economy’s vantage point, instead of asking how the banks are to be saved ‘next time’, the question should be, how should we best let them go under.”

~Michael Hudson, Levy Economics Institute

The Fed

“You will never see another financial crisis in your lifetime.”

~Janet Yellen, spring 2018

"I do worry that we could have another financial crisis.?

~Janet Yellen, fall 2018

“The lower-for-longer approach promises, in effect, to allow the economy to boom. The FOMC needs to make a credible statement endorsing such an approach, ideally before the next downturn.”

~Janet Yellen

“We have undertaken to stabilize economic forces, to mitigate the effects of the crash and to shorten its destructive period. I believe, I can say with assurance that our joint undertaking has succeeded to a remarkable degree.”

~Herbert Hoover, 1930

“The Fed can change the way things look, but it cannot change what they are.”

~James Grant

“The last duty of a central banker is to tell the public the truth.”

~Alan Blinder, former U.S. Federal Reserve vice chairman

“For more than three decades, macroeconomics has gone backwards.”

~Paul Romer, winner of the 2018 Nobel Prize in economics

The Fed has been oversteering and overmedicating the economy since 1913. The Fed promptly spawned a credit bubble in the 1920s that led to the biggest crisis in our history and was, in my opinion, the primary cause of the Great Depression.ref 387 The emergence of Greenspan sent us through a series of micro-crises ultimately leading to the big one in 2008–09. (Actually, I think the Big One is coming, but that is conjecture.) Everybody agrees that Greenspan kept rates too low for too long, laying the groundwork for the crisis. In response, Bernanke and eventually all central bankers began coloring way outside the lines. What did he do? As Stan Druckenmiller puts it, “They tripled down on what caused the crisis, and [they] tripled down globally.”

“Data dependent Fed: average real GDP growth during QE was 2.2%. During no QE and the 5 rate hikes it’s averaged 2.1%.”

~@GreekFire23, smart guy—possibly in prison or Goldman (but certainly not both)

Now the central banking cartel has created what appears to be an epic bubble of equities, bonds, and pretty much anything denominated in dollars. Bernanke opened the tap; Yellen kept it open and went for a smoke. All central banks served up buckets of punch, and the global economy became a sloppy drunk. Jerome Powell was left with the job of getting everybody to the vomitorium and cleaning up the vomit. Some think he’ll blink and let the party resume, but don’t forget that in 2001, the Fed hiked rates 50 basis points—a monetary bitch slapping—with the Nasdaq already 40% off its 2000 highs. Let’s hope that as Jay moose-knuckles the rates higher he has a steady, consistent hand on the rudder:

“I think we are actually at a point of encouraging risk-taking, and that should give us pause. Investors really do understand now that we will be there to prevent serious losses . . . we look like we are blowing a fixed-income duration bubble right across the credit spectrum that will result in big losses when rates come up down the road. You can almost say that that is our strategy. I think there is a pretty good chance that you could have quite a dynamic response in the market.”

~Jerome Powell, chairman of the FOMC

“There’s no reason to think this cycle can’t continue for quite some time, effectively indefinitely.”
~Jerome Powell

“The US is on an unsustainable fiscal path; there’s no hiding from it.”

~Jerome Powell

“When it is time for us to sell [Fed assets], or even to stop buying, the response could be quite strong.”

~Jerome Powell, before becoming FOMC chair

As @GreekFire23 said—I can’t believe I just typed that—the average GDP growth during QE was only 2.2%. During the subsequent period witnessing multiple rate hikes GDP has averaged 2.1%. One might ask “What is it good for?” The answer could be “Absolutely nothing! Say it again!” Economists at the St. Louis Fed published a report card on the efficacy of QE and, shockingly, concluded that it was largely a bust.ref 388 The Fed made stone soup hoping that the free market would start bringing things to add substantial ingredients. While QE pushed up asset prices as intended, the economy limped along feebly. The Fed was trying to shove credit into a saturated credit market. This is how it plays out in my head:

Borrowers: “We would like to borrow some money.”

Savers: “OK. Here is what it will cost.” (Some haggling ensues.)

Savers: “We have a deal?”

Fed: “That price is too high. We know because we have PhDs! We’ll pound it lower.”

Borrowers: “Deal!”

Savers: “Dufuq?”

So how does QE actually work? In theory, banks can sell treasuries to get cash equivalents to be used as reserves for lending—treasuries are technically not considered reserves. Alas, that is a zero sum game because now cash is depleted elsewhere. When the Fed replaces long-maturity assets with short-maturity reserves via QE, no cash drains and the banks now have larger reserves against which they can lend more money with a 10- to 12-fold multiplier. Richard Koo noted that the 19-fold increase in reserves risked a 19-fold inflation and got . . . crickets.ref 389 Indeed, there was some lending, but arguably not lending conducive to economic growth (share buybacks, for example), and banks stored these reserves at the Fed in interest-bearing accounts more like an annuity to kick off a steady cash flow. The Fed economists who wrote the QE report seemed to question the practical consequences of QE and even the theoretical underpinnings:

“It is not clear that QE should have any effect and it might actually be detrimental to the efficiency of the financial system. . . . QE works much as conventional accommodative policy does—it lowers bond yields and increases spending, inflation, and aggregate output. But we should be skeptical of this interpretation.”

Frequent and willing sparring partner and vice president of the St. Louis Fed, David Andolfatto, often tells me that this cash-for-treasury swap is no big deal:

“I do not think QE facilitates credit creation. QE simply relabels the public debt as ‘interest-bearing reserves’ instead of ‘interest-bearing treasuries’.”

~David Andolfatto, vice President of St. Louis Federal Reserve

By the end of the ensuing debate, I find myself asking something like, “Then why did they do it?” I guess we will find out if it is no big deal in reverse, too, as they dehydrate the markets (drain liquidity) via quantitative tightening (QT). But I am ahead of myself.

Charles Gave notes, “purchasing government bonds from domestic banks, so flooding them with reserves, the Fed can engineer an increase in the U.S. monetary base." OK, but as Andolfatto would say, "so what?" Based on efforts in the U.S. and in Japan, where QE was big, or in Canada, where no QE is undertaken, the skeptics in St. Louis wondered whether there was any evidence that QE increases inflation or, more important, real GDP: “Evaluating the effects of monetary policy is difficult, even in the case of conventional interest rate policy. With unconventional monetary policy, the difficulty is magnified . . . perhaps the private sector can do a better job than the central bank in turning long-maturity debt into short-maturity debt.” We also got a report out of Deutsche Bank claiming that, with respect to “unconventional” monetary policies such as QE and negative interest rates, “the impact on the economy was negative.”ref 390 Prominent economist Daniel Lacalle concurs: Monetary stimulus does not work.ref 391

“In my view it failed, 100 percent. It caused the stock market to go up because people took all that liquidity and invested it in the stock market, but it did not cause the economy to grow even 10 basis points faster.”

~Steve Eisman on the effect of QE

One can only imagine what’s coming next and how we get out of this monetary lobster trap. Maybe QT will be a bust just like QE—no big deal. Oddly, Richard Koo claims he could find no papers whatsoever describing how to exit QE and submits that it might be quite a bitch—a Hotel California moment. Some say the Libor rate that determines corporate borrowing rates is already tightening ahead of the Fed. This is way above my pay grade, but the folks at BMO Capital Management seem seriously concerned.ref 392 They say a slow, methodical and putatively painless natural unwind by paying 2.5% on reserves will add $50 billion to our already bloated deficit every year. Why? Because it will deplete the cash flow from the Fed to the U.S. Treasury, which uses the cash flow to pay bills. Many don’t realize that the “FAST Act”, which authorized the U.S. government to plunder excess capital from the Federal Reserve, established a mechanism for the Fed to monetize Federal debt.ref 393

“Fed officials will be under enormous pressure to accommodate swelling federal deficits—even if it means pretending that the central bank is a source of revenue to the Treasury. The operative model of political economy here is Argentina in the 1970s.”

~Chris Whalen

“One of the characteristics of a struggling republic is the inability to separate its central bank's resources from the fiscal largesse of the federal government. Using central bank resources to avoid addressing funding of the government is a sure path to runaway inflation, economic decline, and periodic financial crisis.”

~David Kotok, co-founder of Cumberland Advisors

“Stop talking about ‘The Fed’. Talk about central banks. . . . Their balance sheets are the highest they've ever been.”

~Jim Bianco, founder of Bianco Research

Jim’s point is that everything you see the Fed doing is being done across the globe. The Bernanke QE model was implemented on industrial scales without even beta testing it. QT will be carried out with equal care and preparation.

“The success of our institution is really the result of the way all of us carry out our responsibilities. We approach every issue through a rigorous evaluation of the facts, theory, empirical analysis, and relevant research.”

~Janet Yellen

“Congress has taken away some of the tools that were crucial to us during the 2008 panic. It’s time to bring them back.”

~Bernanke, Paulson, Geithner

“Rubbish, they had all the tools necessary. They just never recognized beforehand that the economy was a massive credit bubble—just like it is now.”

~Albert Edwards, Societe General (SocGen), in response to the Bernank

Let’s finish with some quotes that give me pause and may give a few bloggers some quote porn.

“Although we work through financial markets, our goal is to help Main Street, not Wall Street.”

~Janet Yellen

“If the Fed can cause a 500-basis-point change in interest rates, it is absurd to wonder if monetary policy is important.”

~Paul Romer

“The Federal Reserve may have to press harder on the brakes at some point over the next few years. If that happens, the risk of a hard landing will increase.”

~Bill Dudley, former president of the New York Federal Reserve and former economist at Goldman Sachs

“Central bankers are like stupid magicians: They are as surprised as the audience when they pull a rabbit out of their hat that they just put there.”

~Sean Corrigan (@TrueSinews), Cantillon Consulting

"History suggests that if the Fed waits too long to remove accommodation at this stage in the economic cycle, excesses and imbalances begin to build, and the Fed ultimately has to play catch-up."

~Robert Kaplan, president of the Dallas Federal Reserve

“I see roughly equal odds that the U.S. economy’s performance will be somewhat stronger or somewhat less strong than we currently project.”

– Janet “Yogi” Yellen

“We’ve become so complacent about central bank policies that we’ve quietly tolerated a rise in financial asset prices to the point where even a little inflation would devastate portfolio returns.”

~Eric Peters, CIO of One River Asset Management

“We have been suppressing rates. If rates rise it’s a ticking time bomb.”

~Richard Fisher, former President of the Dallas Fed, speaking in 2015

“Everything we see about the near-term outlook is quite strong.”

~Ben Bernanke, July 2018

“The Fed has acknowledged no failures. All the experiments have been successful, every one: no failures, no negative side-effects, no perverse consequences, only diminishing returns.”

~Peter Fisher, former official at the New York Federal Reserve

“Try to publish an article critical of the Fed with an editor who works for the Fed.”

~J. K. Galbraith, Harvard University and author of The Great Crash, 1929

“Even when things happen in the economy that would otherwise have triggered inflationary episodes, they don’t today because financial markets trust the Fed to do the right thing to keep inflation under control.”

~James Bullard

The yield curve will soon be inverted
As many have clearly asserted
When everything tanks
The fault? ...central banks
Their policies? ...clearly perverted

~@TheLimerickKing

Human Achievement

“Opportunities don’t happen; you create them."

~Chris Grosser

We are now transitioning from economics and markets to the political and social events of 2018. As noted at the outset, I have over a hundred pages of quotes, notes, and anecdotes about Trump, Russian collusion, and the nefarious activities going on in the Deep State. It has grown progressively harder to wrap my brain around what I am actually witnessing. I can no longer write a chapter or two. I may be able to write a book, but certainly not in the months of November or December. It is what it is. I have focused on what catches my eye and what is achievable.

Random topics that come across my field of view that I capture are loosely defined as "Human Achievement". Who could forget the heroics in Thailand as cave divers saved the Thai soccer team?ref 394 Buddhist teachings by their coach helped them cope with stress and lower their oxygen intake for two weeks. Two heroic cave divers found them.ref 395 Divers from around the world suffering from toxic masculinity—no pussy hats or man buns on those guys—pulled them out. Meanwhile, Elon Musk was show boating with a useless submarine and calling one of the heroes a pedophileref 396 and then gets sued.ref 397

Although watching sports is too time consuming for me, I catch a lot on the fly. 2018 had some unlikely sports heroes. A 36-year-old accountant, Scott Foster, was called to play goalie for the Winnepeg Jets. The night before he was playing rec league for "Johnny's Icehouse" and probably did so the following weekend. On that one memorable night, however, he played 14 scoreless minutes in the Big League.ref 398 A 32-year old rookie got called up to play for the LA Lakers, came off the bench, and drained 19 points.ref 399 (It's not quite like those six three-pointers by the autistic kid,ref 400 but it's still amazing.) The winning Superbowl coach was coaching high school football nine years earlier.ref 401 (Trivia point: years ago, Cornell fired one of a long string of marginally successful football coaches. He was George Seiferth. You can't get talent into the Ivies.) The Boss of the sports world was an approximately 12-year-old fan who, when handed a game ball by the infielder, had the smarts to give it to a seriously hot chick sitting behind him... but not before switching it with the ball he bought from Dicks Sporting Goods.ref 402 That's metagame.

The PyongChang Olympics had six Cornell alums (mostly women's hockey).ref 403 In my opinion, women's hockey is as good to watch as men's hockey. Meanwhile, American Elizabeth Swaney achieved everybody's dream by competing for Hungary in the half pipe while being awful—seriously wretchedly bad.ref 404 She spotted a seam in the rules that qualified her for the Olympics by amassing top-30 finishes at international events. She traveled the world competing in all half-pipe competitions with fewer than 30 entrants.ref 405

Other bulletable achievements included:

  • Tiger won his first tournament since 2013. It's all about redemption.
  • Jordan Bohannan tied Chris Street's University of Iowa record for most consecutive free throws, 34, that had withstood two decades. Chris had died in a car accident 3 days after graduation. Bohannan, stepping up to the line to set a new record, looked at his brother in the stands, bonked it against the iron, and pointed to the sky: "It was not my record to have." Superheroes don't always wear capes. I am tearing while I type.ref 406
  • In March madness, #16 seeded UMBC beat #1 seed University of Virginia 74–54, busting every March Madness Bracket in the World.ref 407
  • Drexel came back from a 34-point deficit, setting a new comeback record for Division I basketball.ref 408
  • LA Tech football team lost 87 yards in a single play.ref 409
  • Watch this kid play catcher; you wouldn't notice if I didn't tell you he has only one arm.ref 410(hotlink) I hope he applies to Cornell.

"I think the question we have to ask ourselves is this: What is the right way to behave to honor our sport and to respect our opponents?"

~Martina Navratilova, returning Serena Williams' serve

And then there were the darker moments. Serena Williams reached hero status by delivering her latest kid and in the blink of an eye making it to the finals of the US Open Singles Championship.ref 411 In the final match, however, a serious shitfit at the line judge put a dark smudge on the game. The authorities kowtowed (which is a Chinese term that translates to "acted like pussies"), causing much of the glory to be taken away from the winner, Naomi Osaka.ref 412 It wasn't Williams' first outburst.ref 413

And for some more Bullets from the Dark Side:

  • Phil Michelson six putted (if you include the two-stroke penalty for whacking a moving ball) and then claimed (admitted) it was tactical to avoid an even worse outcome.ref 414 The Mets signed him because he could hit a moving ball.
  • USA Gymnastics admitted it had more coverups of pedophilia than the Catholic Church.ref 415
  • Khabib Nurmagomedov—Khabib for short and for obvious reasons—beat Conor McGregor in the UFC. (Khabibe literally wrestled grizzly bears as a kid,ref 416 so it was not a shock.) Risk was brought to a new level when a huge and arguably most dangerous sports brawl in history broke out.ref 417
  • A Russian curler was charged with doping using a well-tracked substance.ref 418 Something is fishy...so many questions.
  • Another female Russian Olympian donning a shirt stating, "I don't do doping" tested positive for doping.ref 419
  • Nigerian soccer star Emmanuel Eminike divorced Miss Nigeria 2013 to marry Miss Nigeria 2014.ref 420
  • The first zero-emissions solar-powered boat is said to be circumnavigating the globe this year.ref 412Correct me if I am wrong but one of Magellan's zero-emissions wind-powered boats made it around some time back. Contrary to popular opinion, Magellan did not.

"The art world is the biggest joke going. It’s a rest home for the overprivileged, the pretentious, and the weak."

~Banksy

Away from sports, Banksy punked the art world when, seconds after the auction gavel fell on one of his $1 million paintings, a mechanism hidden in the frame shredded it.ref 422 The art world punked him back by declaring the painting's value just doubled.ref 423 A guy jumped from 25,000 feet without a parachute and landed "safely" in a net.ref 424 Another got the coveted hat trick when, after having been mauled by a bear and bitten by a rattlesnake, he got attacked by a shark.ref 425 While astronomers recorded the first video from the surface of an asteroid,ref 426 others identified a new type of aurora and named it "Steve".ref 427 Watch this girl playing a concerto on the violin with a prosthetic arm connected from her collar bone.ref 428 That is toxic femininity! This woman piloting a passenger jet has the engine blow off the plane and blew a hole in the plane sucking a passenger out. She displayed nerves of steel.ref 429(hotlink)

If you dig long and hard, you eventually find the bottom of the barrel. A couple raised $400,000 for a homeless vet and just squandered it before the courts could intervene.ref 430 The author of "How to Murder Your Husband" was arrested for allegedly murdering her husband.ref 431 A man who thought he was possessed by crocodile hunter Steve Irwin was arrested for tranquilizing and raping alligators.ref 432

In the non-hominid division, Beadnose (Bear #409) displayed impressive salmon-sourced cellulite, toppling the reigning champ, Otis (Bear #480), in Alaska's 2018 Fat Bear Championship (Figure 46).ref 433 The Flying Dog Championship witnessed a new jumping world record of 31 feet.ref 434 I'd like to see Beadnose try that.

Figure 46. Beadnose Bear at top feeding weight.

Had to save two for last. Ten players and two coaches of the Humboldt Broncos Youth Hockey Team coming from Humboldt, Saskatchewan were killed in a bus crash.ref 435 They were dominant on the ice. GoFundMe raised a $15 million memorial fund,ref 436 but I don't know how that town of 5,578 inhabitants will recover. RIP boys. (I'm tearing again.) Keep it in perspective folks.

You know all those fires in Boston that lit simultaneously due to an over-pressurized gas line (without a peep from the news questioning terrorism)?ref 437 My son was at the "red dot" chatting with me on the phone when they started. Like I said, keep it perspective.

Nature

"I know what it means to know something, and it's hard."

~Richard Feynman, physicist

Every year nature takes a bat to us in predictable and not-so-predictable ways. I have long stayed away from the global warming (or climate change, whatever) debate just because it is too rancorous, and I have little to offer. I once told the Secretary of Energy I was agnostic. After cleaning snot off my glasses I explained that I had not put in the 10,000 hours needed to form an educated opinion. For that matter, few have. Thus, all my colleagues in science with relatively few exceptions will sign off on the notion of anthropomorphic global warming with what is a vote of confidence in their scientific brethren but inadequate self study, providing an overstated scientific consensus. Here's what I will say. There are highly credible scientists on both sides now, not just whackadoodles looking for ten minutes of fame. I was shocked when I started Googling some of the deniers on this list to find out they they are both prominent and disbelievers.ref 438 Let me be equally clear because I am a wuss and so you don't hang some PC label on my sorry butt:

If I had to bet a paycheck, I would bet anthropogenic global warming is real. If I had to bet ten paychecks, I would bet that we are going to do the experiment despite the best intentions of those who worry. Resource depletion is what scares me.   

Let me make one important point: you can't watch the weather or make any anecdotal observations and say, "See. I told you so. You guys are full of crap." You sound like an idiot to anybody who is not an idiot (unless you are being a snarky punk, which is fine). Hundreds of hurricanes have hit North America in the last century; nothing says the last 20 are anthropogenic. Snow in October and warm days in January mean nothing:

"This week in 1936, North Dakota was 121 degrees. This week in 1913, California was 134 degrees. This week in 1901, hundreds of New Yorkers died in the streets from the heat."

The warming trend, even if raging and eventually creates wind chill factors of 114 °F, is well inside the detection limits of simple human observation. With 365 days in a year, 100 years in a century, and more metrics of weather than pregnant teenagers, do you know how easy it is to break an all-time record? Those who claim to see patterns are being Fooled by Randomness. And the celebrities all know there is global warming. Remember when the star in TV medical drama "Quincy, M.E.", Jack Klugman, testified to Congress about health care? Most celebrities are idiots as are members of Congress. Why do you think they didn't study robotics or bioengineering? Only good science supported by good data analysis can tease signal from the noise. And what may prove to be the most ironic part of the global warming debate is that NASA scientists have found that a "big crack opened in the Earth's magnetic field and plasma started pouring in."ref 439 Meanwhile, a disturbing lack of sun spots and solar flares suggest an impending mini ice age is coming.ref 440 "Men plan, God laughs" or as Emily Litella would say, "Never mind."

Why don't I worry about climate change? It is for practical reasons. Humans are not proactive; they follow the Law of the Commons, also known as the Law of Selfish Bastards. Look how happy the French are after being told they will get to pay a nominal energy tax to stop global warming. There was some serious heat on the streets of gay ol' Paris. We are going to do the experiment.

We had lots of hurricanes this year, with Hurricane Michael being the headline grabber. As it wiped out Mexico Beach, Florida,ref 441 it appears to have whacked a handful of our stealth bombers inside a hanger.ref 442Although there is a nice tutorial on why not every stealth bomber can be moved on short notice,ref 443 it's less obvious why you would store billions of dollars worth of hardware in a hanger that was not hurricane proof. Moving on to Hurricane Florence and North Carolina, we find that only 3% of homeowners have flood insurance and those that do also have counterparty risk; the Federal program providing flood insurance is $20 billion in the hole.ref 444 On a funny note, Hurricane Florence appeared to be ravaging a reporter struggling to hold his ground against gale-force winds to get a story...until two guys strolled by in shorts:ref 445

Figure 47. Risking life and limb.

Of course, fooled by randomness applies to other events like activity on the Ring of Fire. For those not paying attention, we are not talking about a Bangkok-hot curry but rather the ring circumnavigating the Pacific Ocean loaded with volcanic and other geological events. Seems to be acting up a lot lately. This year's Hawaiian volcano reminded homeowners that their houses built on formerly red hot lava might get squeegeed away, and they may no longer own ocean front property. Where some see disaster others see opportunities: can you buy futures on land that is not yet above sea level? I also waited with bated breath for Paul Krugman to write about his "broken pineapple fallacy". The Yellowstone caldera—an ancient super volcano—keeps rising a lot and spewing reminders that rare events happen.ref 446 By the way, "Krakatoa" by Simon Winchester is a great book and offers a fascinating description of plate tectonics.

The anti-vaxxers may have a case, but the evidence against a number of claims is profound (convinced me). I have zero doubt that, all things considered, vaccinations save lives. In regions where anti-vaccination campaigns have gotten legs, we are starting to see epidemics reappearing for the first time in many years.ref 447Disturbingly, polio has reappeared in Venezuela.ref 448 I guess we didn't eradicate it after all. I'd be vaccinating against that one. The only thing that scared me as a kid were (a) my Dad's stink-eye, and (b) images of iron lungs and polio wards:

Contrary to popular opinion, scientists in Big Pharma would love to cure diseases; there is no conspiracy there. Popular opinion is also correct that marketing teams will try to get you to snarf down as much healthcare as theoretically possible. We continue to be seriously outnumbered in our battle against bacteria. I think those in the know are worried. Bacterial resistance to antibiotics is appearing before the drugs hit the marketplace. They are becoming non-cost effective to produce. At the street level, new flesh-eating bacterial infections of the genitals are somehow linked to best-selling diabetes drugs, causing the flesh around the genitals to literally rot away.ref 449 The CDC is now warning of an antibiotic-resistant strain of gonorrhea.ref 450 An oral cancer epidemic in men is linked to oral sex.ref 451 The message is clear: abstain. A mind-controlling parasite—yes, these things are precedented in biology and can have wildly cool effects on animal behavior—has been found in cat feces.ref 452If you are eating cat feces you now officially have shit for brains. On the bright side, the virus has been linked with an almost reckless entrepreneurial spirit (not joking). It has been identified and named Elon Muskovitis (joking).

Of course, Nature's wrath amplified by Man's poor judgment was on full display as fires ravaged California. I was in a house fire in high school; I jumped out of a second story window into –2 °F weather buck naked (but who hasn't done that a few times.) People are dying from watching TV shows about fires. You have seconds to get the hell out. When your neighborhood is on fire, get out. Pepperdine University made the call to leave all students on campus.ref 453 That could have been a tragedy of a higher order. Some criticize the administration for commandeering the resources of all firefighters in the area. Others criticize them for doing it on purpose to ensure the university was protected. It is an interesting hypothesis, but I cannot fathom that level of sociopathy, even at a university.

I watch people lamenting the loss of their house and memories and think, "You're alive, your belongings were tacky, and your memories are safe in the cloud. Get over it." It is altogether different, however, when your house, school, church, stores, and employer burn to a crisp like in the ironically named Paradise, California. You really do have nothing now. It's not Yemen, but it's bad. There are regions in California that got one inch of rain since May in a much more secular (multi-year) draught. It was only a matter of time. I have read that the 20th century was the wettest of the last ten centuries in the State of California. It seems possible that millions moved into a desert without realizing the consequences.

Humans are a durable lot; they do not take guff from Mother Nature without a fight. In a battle against the weather, Volkswagen shoots off "hail cannons" near their Mexican factory to prevent formation of car-damaging hail stones, denying Mexican farmers rain for their crops.ref 453 We managed to finally exterminate the last white rhino because, well, who needs another large mammal that doesn't even make good stew meat.ref 455 Round-up is suggested to not only be solving our weed problem, but also eradicating those damned bees.ref 456 I'm sure Monsanto will figure out how to pollinate everything at some nominal cost. We are winning the war against sea creatures by filling the oceans with remarkable heaps of single-use plastic, generating an enormous wad of crap called the Great Pacific Garbage Patch.ref 457  The Chinese are rumored to be planning condos or a military base. 

Middle East

“We’re going to take down seven countries in five years. We’re going to start with Iraq, then Syria, Lebanon, then Libya, Somalia, Sudan. We’re  going to come back and get Iran in five years.”

~Wesley Clark, Four-star general in 2002, quoting a peer

According to Ellen Brown, none of these countries is "listed among the 56-member banks of the Bank for International Settlements (BIS). That evidently puts them outside the long regulatory arm of the central bankers’ central bank in Switzerland. The most renegade of the lot could be Libya and Iraq, the two that have actually been attacked." And from an interview long, long ago...

Lesley Stahl: "We have heard that half a million children have died. I mean, that's more children than died in Hiroshima. And, you know, is the price worth it?"

Madeleine Albright: "I think this is a very hard choice, but the price — we think the price is worth it."

That 1996 60 Minutes exchange hasn't aged well.ref 458 In the sequel, we pick up the plotline in the same country by following the antics of Bush the Younger. Press secretary Ari Fleisher referred to it as "Operation Iraq Liberation",ref 459 somehow not seeing a problem with the acronym. I find our Middle East policy to be confounding except for one guiding principle: keep them all fighting. It is not really about oil but about war and banking. Following the collapse of the Soviet Union our multi-trillion-dollar defense industry needed a new foe. (Bombing Canada was a non-starter.) As we mow through conflict after conflict it all makes sense if you assume that our goal is to keep the Middle East in a perpetual state of war. Quadafi gets too strong? Kill him. Assad gets too strong, throw a false flag and bomb him. We also don't hesitate to remind those that we haven't bombed (yet) about the merits of the petrodollar: we agree to buy oil in dollars and, in return, they agree to fund our federal deficit and prop our asset markets with these dollars.

In case it isn't obvious, we don't really like democracies. As The Donald showed in 2016, we don't know how to control them. We are having issues with that will-of-the-people malarkey. They're tolerable for Europe but less developed regions—the shithole countries as the Donald is known to say—require focused targets for bribes and threats of death and dismemberment. Dictators are optimal—Shahs for example—but a small gaggle of warlords is manageable. Stephen Kinzer's Overthrow describes 13 explicit US-backed coups that overturned foreign leaders, including democratically elected ones.ref 460

Our adventures in the Middle East have cost us an estimated $6 trillion dollars. Some is salary paid to soldiers but most is going to companies as part of our No Defense Contractor Left Behind Program (NDCLBP). Take a look at the price chart of Boeing, Lockheed Martin, Halliburton, Raytheon, or any other defense contractor (Figure 48). They are well bid based on both past and future earnings. Trump promised to be the least militaristic president—a low bar—and then increased our military budget.

Figure 48. Share price of Boeing

The Saudi regime is ruthless. They fly planes into buildings, chuck gays out of windows, and behead people for non-violent crimes. Women are tortured who dare to drive a car, remove their hijabs, or have the audacity to get raped. If you are the wrong person in Saudi Arabia, Islamophobia is not even a theoretical construct because the fear is not irrational. You wanna see a hero in the flesh? She's Iranian (not Saudi), quite possibly dead, but now an iconic image of global feminism, a meme:

Figure 49. Principled when it's neither cool nor safe.

Meanwhile the Saudis are slaughtering Yemenis (Houthis specifically), risking starvation of as many as 18 million of them.ref 461 Let's go to CNN headquarters to get the latest on the global uproar:ref 462

Rand Paul: "We are refueling the Saudi bombers. So we are essentially part of the Saudi campaign. We are helping them choose targets. It is said that thousands of civilians have died in Yemen because of this. Yes, we need to have a debate over this."

Wolf Blitzer: "So for you this is a moral issue cause, as you know, there are a lot of jobs at stake certainly if a lot of these defense contractors stop selling war planes, other sophisticated equipment to Saudi Arabia. There’s going to be a significant loss of jobs and revenue in the United States. That’s secondary in your standpoint."

The stark truth of that must-see exchange slathered with latent sociopathy leaves me gagging on my vomit. The Pentagon insists we are minimizing civilian casualties when it's just infanticide masquerading as politics. "OK guys: let's keep it under 18 million if we can." US foreign policy is fostering this carnage by providing the Saudis with "the engines of death." You can blame Trump but don't you dare blame just Trump.

Enter one Washington Post journalist named Khashoggi. He gets suckered into an embassy, sliced into pieces, and fed to the camels.ref 463,464 The journalists kicked it into gear and denounced the horror.

"You gonna eat that?"

~Jeff Dahmer to Mohammed bin Salman

Here is my very unpopular take: It was a bit gruesome, but not by Saudi standards that we enthusiastically tolerate. He is also just one damned journalist. Let's put this in perspective: 18 million dying Yemenis versus One Dead Kashoggi (ODK). The world has gone collectively sociopathic on this one. You know why y'all care about some guy whose name you didn't even know six months ago and still can't spell? It is, in part, because Journalists Lives Matter (JLM), and psychopaths in high places are telling journalists to tell you what to worry about. Wake up or shut up. Let's get those priorities in order. And as happened before, Nassim and I have locked arms once again:

"A single journalist is a tragedy; ten thousand Yemenis is a statistic".

~Nassim Taleb channeling Joseph Stalin

Epilogue: The journalists are now starting to notice the carnage in Yemen. Alas, it was never about Khashoggi or Yemen. They are just chess moves.

Syria

“We’ll be coming out of Syria, like, very soon. Let the other people take care of it now.”

~Donald Trump

“A new confirmed chemical attack in Syria would pose a dilemma for President Trump, who … recently said he wants to get the United States out of Syria.”

~NYTimes

"Just so there's no confusion here, if the Syrian regime uses chemical weapons we will respond very stronglyand they really ought to think about this a long time."

~John Bolton

Three days after Trump's announced pull out there was a chlorine gas attack attributed to Assad. That is some serious bad luck. A leaked 2006 memo shows we have been trying to "election monitor" and destabilize Syria for quite some time.ref 435 For several years I have been writing about false flag attacks under the Obama administration trying to georelocate Assad's remains across the Levant. A Sputnik article predicted fake chlorine gas attacks were imminent.ref 466

Figure 50. 2014 Department of State tweet declaring "Mission Accomplished: "Heckuva a job Johnny!"

A disturbing trend is that those pulling off such scams are getting sloppy, relying increasingly on simply controlling the press coverage. There are, however, rogue pundits who refuse to play along. Seymour Hersh declared the chlorine attacks and anti-Syrian rhetoric to be a crock.ref 467 Tucker Carlson, as he so often does now, stepped out on a limb and gave a brilliant must-see diatribe denouncing the neocons for marching us toward a military conflict.ref 468  Pat Buchanan joined with the doubters.ref 469 And, of course, Russia’s Ambassador to the EU in Syria declared it was a complete farce, a hoax concocted by the ‘white helmets’ to justify US forces to bomb Assad.ref 470 I did an RT interview on the chlorine gas attacks as follow up to the Skripal poisonings (see "Nerve Gas Poisonings"). I was so brain dead trying to keep it all straight that I Freudian slipped into a Skripal poisoning plotline before the interviewer reeled me in.ref 471 German Chancellor Angela Merkel denounced the attacks as evidence we failed to eradicate Assad's chemical arsenal, but Germany refused to enter the fray.ref 472 British ambassador to the United Nations, Karen Pierce, blamed the Russians of course.ref 473 (She must have slipped plotlines too.)

Social media dismembered the story. You would have time to run from the house, admittedly coughing and feeling really crappy, maybe even dying later.ref 474 The stacks of bodies inside the house smelled wrong, and the notable absence of sick survivors was odd.ref 475 The bodies were in different states of decay, showed assorted traumas, and displayed blood accumulating in the wrong places. (I'm sure there are Middle Eastern startups that provide bodies on-demand—there is no shortage—but the quality control might be lacking.) Most tellingly, the same bodies were being recycled for different photos.ref 476 One kid claimed he was walking along the street (probably staring at his cell phone), grabbed without warning, and hosed down in front of camera-wielding observers capturing his ordeal.ref 477 An intrepid western reporter, Robert Fisk, actually went to the scene—I'm surprised too—and found nobody knew about the attacks.ref 478 That's a special kind of PTSD. The public seems to not buy into these stories. Mike Krieger of LibertyBlitz blog caught a Fox News Twitter poll asking whether people were for or against attacking Syria because of the chlorine gas attack.ref 479 With 49,000 votes tallied—a non-shabby sample size—69% did not support action. Within two hours, 140,000 pro war supporters joined in and supported the attacks (Figure 51). We are all getting duped.

  

Figure 51. Fox poll swinging wildly (h/t @LibertyBlitz)

Who are these "unarmed and impartial" good Samaritans—these caped crusaders—known as the "White Helmets" who clean up the messes caused by pro-Assad bad guys?ref 480 They are called the Syrian Self-Defense Group. Max Blumenthal, a journalist with considerable experience in the Middle East, calls them a "shadowy group" who also appear to be creating the messes (the arsonist-firefighter combo platter.)ref 481 White Helmeted caped crusaders by day, dark villain mad bombers by night. According to Max, the group is part of a well-funded larger organization called the United States Agency for International Development (USAID) that travels the globe intervening in places like Cuba and Venezuela. The Netherlands figured this out and pulled their support.ref 482

I repeat my original assertion: our interest in the Middle East is more about war than oil. Eisenhower nailed it in his farewell address.ref 483 It's about money and power—the military-industrial complex. I found this Creature from Jekyll Island-like documentary about banking and war to be entertaining.ref 484

Nerve Gas Poisonings

A former colonel in Russian military intelligence who turned MI6 agent and his daughter Yulia were found unconscious on a public bench in Salisbury, England. Headlines flashed that a novichok-class nerve agent put the Skripals into comas. They eventually recovered and were whisked away to a secret location for their safety.ref 485 This is just spy versus spy stuff at best, but Prime Minister Theresa May and the British authorities were quick to condemn the Rooskies:

"It is now clear that Mr. Skripal and his daughter were poisoned with a military-grade nerve agent of a type developed by Russia. This is part of a group of nerve agents known as novichok. Based on the positive identification of this chemical agent by world-leading experts at the Defense Science and Technology Laboratory at Porton Down, our knowledge that Russia has previously produced this agent and would still be capable of doing so."

~Theresa May, Prime Minister of the UK

This is a heap of Moose and Squirrel feces. "Hey. There's novichok in the mass spectrum; let's start World War III!" The authorities were lying their asses off. The hyperbolic language—"military grade" to distinguish it from the crap sold at Walmart—and the suggestion that only the Rooskies know how to make it is hogwash. These novichoks are some of the simplest organic molecules with biological activity.ref 486 They are no harder to synthesize than Tylenol, so I called them out:

Although that tweet got picked up later,ref 487 it was crickets at the time. As the international sabers began to rattle loudly, I took another Tweet at it:

"That Russia Tweet was a fkn DAISY CUTTER man you are controversial. I applaud it."

~Tony Greer, @TGMacro  

That "f*cking daisy cutter" did the trick. It was all over the international press that a Cornell chemist threw a flag. As a nouveau Roosky apologist I found myself on George Galloway, Russia Today (RT),ref 488 Stranahan and Nixon on Faultlines,ref 489 Scott Horton,ref 490 and a missed opportunity to hit Al Jazeera. I was warned by nervous Cornell authorities about the propaganda machine RT, to which I asked, "Worse than CNN?" It also brought Tweeters into my feed from intelligence organizations prompting me to STFU.

The UK authorities say that the incidents in Amesbury and Salisbury are linked, but Professor of Chemistry at Cornell University, Dave Collum, told RT that “it’s impossible to make a connection as there’s been no data presented” to the public to back those claims. He also reiterated that London’s statements of only Russia being capable of producing the novichok chemical were “totally false.” He described the nerve agent as “a simple compound,” which is actually just “three steps from commercially available materials." “I’ve put it on a final exam in my course… and they [the students] all got full credit. It was so easy, I knew none would lose credit because it’s like asking a bunch of bakers to make chocolate chip cookie recipe,” the US chemist said.

~RTref 491

The boys and girls at Britain's Porton Down—the nerve center of the UK chemical weapons program(me)—refused to finger the Rooskies,ref 492 causing the rhetoric to target motive:

"There is no doubt the nerve agent used in the attack was the military-grade nerve agent from the Novichok series. This has been confirmed by specialists, our specialists,...There is also no doubt that the Novichok was produced in Russia by the Russian state. Russia has investigated ways of delivering nerve agents likely for assassination purposes. Part of this programme has involved producing quantities of Novichok agents. The fact that the Novichok was produced in Russia and the fact that Russia has a history of state-sponsored assassinations and the fact that Russia has responded with the usual playbook of disinformation and denial left us with no choice but to conclude that this amounts to an unlawful use of force by the Russian state against the United Kingdom. All of the UK's actions have been fully consistent with our obligations under the Chemical Weapons Convention."

~Dr. Laurie Bristow, British Ambassador to Russia

Who had the skill and motivation? Russia and any country interested in making it look like Russia did. That narrows it down to pretty much every sovereign state in the World, including, in the vernacular, the "shitholes." According to a private communication from a physicist in Finland, novichoks appear to have been made by the US, Iran, UK, Canada, Czech Republic, France, Israel, Sweden, The Netherlands, and Germany. The head of the military laboratory said his lab had made 'novichok'-related chemicals for testing. His statement was called "unfortunate" by the country's Prime Minister, and then he got fired.ref 493

To test my theory that it was easy to make, I put a question on the final exam of my first-year graduate-level organic chemistry course:

Figure 52. 2018 Final exam in Chem 6660, Synthetic Organic Chemistry.

All got full credit except one kid who obviously will never cut it as a terrorist. It's worse than that: I think you could pour the four critical ingredients in a bucket simultaneously and end up with a punch that would flatten way more than just a bunch of fraternity brothers (at Yale). These nerve agents weren't state secrets: their structures were reported in an eight dollar bookref 494 (that apparently only the Russians can afford) or, if you are particularly tech savvy, Wikipedia.ref495

I wasn't standing alone in my doubt. Craig Murray, former UK ambassador to Uzbekistan, was screaming at the top of his lungs.ref 496 The Spiez Laboratory at the Swiss Federal Institute for NBC-Protection, a division of the Federal Office for Civil Protection, got a sample and claimed it wasn’t even a novichok that whacked the Skripals but rather a substance used by the United States, the United Kingdom, and other NATO states.ref 497 Seymour Hersh didn't buy it:ref 498 “When the intel community wants to say something they say it…High confidence effectively means that they don’t know." Famous British journalist, John Pilger, called the Skripal poisoning "total bolox" and wondered "Why do we journalists write down what governments tell us?"ref 499 (That's a trick question: they are made men and women, many of whom on payroll.) The Ron Paul Institute noted that the British claim of Russian assassinations "reads like another desperate repetition of the falsehoods and insults towards Russia issued by Theresa May’s lame-duck Government."ref 500 The most interesting theory is that the Skripals got shell-fish poisoning from a seafood restaurant they ate at that day.ref 501

The Rooskies blamed Porton Down, which is only eight miles from Salisbury and had recently cut 132 staff (motive), prompting their spokesperson to say, “There’s no way that anything like that would ever have come from us or leave the four walls of our facilities.”ref 502 The internet sleuths dug in. Nobody could understand how a contaminated door nob at the Skripals could fail to kill the Skripals—there is a non-lethal dose, of course, so that logic is wrongref 503—and why nobody else got sick.ref 504 Before long, Skripal was being connected to the Steele Dossier.ref 505 I am not joking. I dissed that idea until more evidence emerged.ref 506

"One should be mindful that the chemical components or precursors of A-232 or its binary version novichok-5 are ordinary organophosphates that can be made at commercial chemical companies that manufacture such products as fertilizers and pesticides."

~Ex-Soviet Scientistref 507

This ex-Soviet scientist who wrote "the book" on Soviet nerve agents was remarkably obtuse, seemingly playing both sides.ref 508 Go figure. One exchange was particularly entertaining:

Mirzayanov: It is obvious to me that Moscow hoped that no one would catch them.

Interviewer: But you published the formula for novichoks eight years ago.

Mirzayanov: I don’t know if the FSB [Russia's security group] saw my book.

As the story began to die down and people were left pondering the whereabouts of Yulia Skripal—maybe with that Vegas security guard?—it happened again. Another couple in Salisbury got poisoned supposedly by somebody filling her Chanel perfume dispenser with eau du novichok.ref 509 She died; he recovered. Theresa May was at it again:

“No other country has a combination of the capability, the intent, and the motive to carry out such an act.”

~ Prime Minister Theresa May on the Salisbury poisonings

“Mr Speaker, we are quite clear that Russia was responsible for this act. As I set out for the House in my statements earlier this month, our world-leading experts at the Defense Science and Technology Laboratory at Porton Down positively identified the chemical used for this act as a Novichok – a military-grade nerve agent of a type developed by the Soviet Union. We know that Russia has a record of conducting state-sponsored assassinations and that it views some former intelligence officers as legitimate targets for these assassinations. And we have information indicating that within the last decade, Russia has investigated ways of delivering nerve agents probably for assassination, and, as part of this programme, has produced and stockpiled small quantities of Novichoks.”

~Theresa May on the Salisbury poisonings

This time they rounded up a couple of Roosky assassins, but that story began to fall apart almost immediately. The two patsies were fingered by two officers who were said to have a "rare skill in memorizing faces."ref 510Hokey Smokes, Bullwinkle: now the are just lying like teenagers. The residue detected in the assassins' hotel room found two months later could not be detected the following day.ref 511 That's not how chemistry works, folks. As they separately walked down the jetway at the airport a camera caught them at the exact same position in the jetway with the exact same time stamp to the second (Figure 53).ref 512 If they were even a second apart, one picture would necessarily show two men. Camera's showed them walking around London far away from the crime scene minutes before the putative crime, walking in the wrong direction.ref 513 The camera angles were also wrong.ref 514 If this was a Russian hit, they have lost their groove; real assassins get the job done (bumper sticker). One disturbingly knowledgeable tweeter noted that serious assassins have an independent team do the reconnaissance.

Figure 53. Fake photos showing two spies at the same place at the same time.

So what is it all about? More sanctions. More Russophobia. More demonizing of Putin. The New Cold War. Theresa May’s Government imposed sanctions on Russia, including the expulsion of 23 diplomats.ref 515 While France refused to play along,ref 516 the US chummed the water:

"This attack on our Ally the United Kingdom put countless innocent lives at risk and resulted in serious injury to three people, including a police officer...To the Russian government, we say, when you attack our friend you will face serious consequences."

~US State Department's Official Statement

The Russians weren't happy:

"The Skripal poisoning was not an incident but a colossal international provocation… Any threat to take ‘punitive’ measures against Russia will meet with a response. The British side should be aware of that."

~Maria Zakharova, Russian Foreign Ministry Spokeswoman

“I simply don’t have any normal terms left to describe all this...expulsions won't go unanswered...I said that the United States took a very bad step by cutting what very little still remains in terms of Russian-American relations."

~Sergei Lavrov, Russian Foreign Minister

Rob Slane of Blogmire blog summed up the situation nicely:ref 517

"It’s all remarkably clever, and it seems to have been specifically designed to generate the impression to the uninitiated that investigators are simply making it up as they go along.”

Any Russian will tell you that when things look bleak, drink vodka. A Bristol distillery promptly offered a new product, "Novichok Edition." Staggering from withering criticism, they found themselves apologizing, as often happens when alcohol is involved.ref 518                                   

Kavanaugh versus Blasey Ford

“We now live in an age that risks a new form of sexual McCarthyism. . .  The best way of assuring that we don’t is to accord every person, regardless of his status, the kind of fundamental fairness we would expect for ourselves if we were accused.”

~Alan Dershowitz, Harvard University

At risk of life, limb, and all forms of appendages, although I punted the ball on a lot of political topics this year, I've got to write about the Kavanaugh hearings because I believe the casual observer missed most of the plot. Quick disclaimer: As a pro-choice atheist I probably have a few bones to pick with Kavanaugh’s politics. Highly respected journalist Ambrose Evans-Pritchard described his dealings with Kavanaugh in unflattering terms years back during the Vince Foster and Whitewater investigations.ref 519,520 (That just got weird fast.) Unfortunately, hearings that were supposed to vet his credentials to be a Supreme Court justice were reduced to one simple question: Is Brett Kavanaugh a drunken serial rapist? Kinda gives me pause.

The protests against Kavanaugh began the minute his nomination was announced. Protesters hired by companies like Crowds on Demand to “astroturf” any issueref 521,522 sifted through stacks of signs opposing all possible nominees to pull out the anti-Kavanaugh signs.ref 523 As the story goes, Christina Blasey Ford (CBF) contacted Senator Dianne Feinstein about a sexual assault by Kavanaugh when she was 15. The details were both sketchy and fluid, possibly because she had forgotten about the whole affair until 2012 counseling sessions dredged up suppressed memories.ref 524 Feinstein paid for a lie detector test and then sat on the story until the time was right to pounce. I suspect that CBF thought she could drop a quick grenade and move on to a new career as a decidedly elevated heroine of the progressive community. As so often happens, all bets are off once the first shots are fired. Her name was leaked, and the journalists were off and running.

Reinforcements showed up. A woman claimed Kavanaugh swaffled her in the face at Yale, but she was decidedly fuzzy on details and it was a bit late to swab her face for DNA.ref 525 Another showed up with the Lawyer of the Porn Stars, Michael Avenatti, claiming she witnessed a dozen Kavanaugh-sponsored gang rapes until she realized how self-incriminating that sounded.ref 526 In an odd coincidence, she had previously filed a sexual harassment suit against New York Life . . . using the attorneys representing CBF.ref 527 (Wait. It gets weirder.) She and Avenatti are now under investigation for bearing false witness.ref 528 A guy claimed he witnessed Kavanaugh rape a woman on a boat until the FBI entered the scene. He lost his bearings fast and found himself out on the gangplank.ref 529 A new Jane Doe sent an anonymous letter describing being raped by Kavanaugh in a car, but she’s now not-so-anonymously heading for an altogether different hearing after admitting it was a fib and that she had never met him but was pissed off.ref 530 NBC knew that at least one of his accusers was lying like a dog but ran with the story anyway.ref 531 I’m old enough to remember when NBC was staffed by respected journalists.

“We have already reviewed your client’s allegations. We focus on credible allegations. Please stop emailing me.”

~Mike Davis, U.S. Senate Committee on the Judiciary, to Michael Avenatti

Kavanaugh detractors asked inane rhetorical questions like, “Why would they lie?” You just can't fix stupid I guess. The anti-Kavanaugh #MeToo team submitted that all those accusers, no matter how non-credible when in isolation, couldn’t all be lying. Recall that over 100 people found syringes in their Pepsi cans.ref 532 Why would they lie? They were all convicted of fraud. The pundits seemed to forget that rapists are determined by 12 of their peers in courts of law. With the accusers’ stories getting scalded by the light of day as non-hyperbolically summarized by The Weekly Standard,ref 533 David French,ref 534 Byron York,ref 535 and others.ref 536 the future of the Supreme Court came down to just two people in an epic he said–she said battle in the Congressional Octagon.

“I only drank beer to excess one time in college. When? If I’m remembering right, it was from 1977 to 1981.”

~Andrew C. McCarthy, contributing editor of the National Review

“I do not believe that the temperament of Kavanaugh can be judged from this one, unique circumstance. He was accused, among other things, of leading a virtual rape gang in high school. That would leave most people rather ticked and angry.”

~Jonathan Turley, constitutional law scholar at George Washington University

Kavanaugh threw early punches trying to make the case in a pre-game interview that he was a choirboy, but nobody bought it. His yearbook showed an amazing résumé but included jargon-rich comments typical of young men, showing he might have been a hooligan at an all-boys prep school. Allusion to a girl dubbed “Renate Alumnius” mentioned by name only (except to those who do not know what that semi-colon thingie is) was inferred as evidence that she was a favorite among the boys—a slut in the vernacular—but she was also one of the 65 female signers of a letter of support saying they knew Kavanaugh and he was honorable.ref 537 Police records from New Haven showed that Kavanaugh may have chucked a glass of ice on somebody at a bar while at Yale.ref 538 That proto-ice bucket challenge was morphed into a violent-drunk plotline. CBF had a yearbook too that was scrubbed but retrieved by the WayBack Machine.ref 539 It is said to be salacious, but I didn't bother to look; it's not relevant.

During the hearings Kavanaugh threw what appeared to be tantrums. I think they were ill-advised in retrospect, but I have no doubt that they were advised, not just spontaneous outbursts. Many say his bahavior was unbecoming of a judicial nominee. Here's how I see: If I am being falsely accused of such heinous crimes, I would get so medieval that my next hearings would be in a court of law looking at serious time spent in a condo that locks from the outside.     

“There is something deeply unsettling in the scene of a United States senator going through the yearbook entries written by a teenage boy in High School as a material issue for a confirmation to the United States Supreme Court.”

~Jonathan Turley

In a matter of a few months, Kavanaugh had been reduced from the lofty position of Supreme Court nominee to mean, beer-guzzling gang rapist displaying violent mood swings. As to the accused assault of CBF, he pulled out a calendar showing that he was out of town when the alleged assault took placeref 540 and has acute CCHD (compulsive calendar hoarding disorder). The dog piling came from every direction and was astonishing. USA Today accused him of being a pedophile (Figure 54). The American Civil Liberties Union (ACLU) committed $1 million dollars to keep a Supreme Court nominee off the court. Wrap your brain around that irony. Kavanaugh’s current employer, Harvard University, managed to start a Title IX charge against him and implied that if he did not get confirmed, he would be unemployed.ref 541

Figure 54. Fair and balanced

The battle was fierce. Lindsey Graham put on a now-legendary tirade:ref 542

“This is the most unethical sham since I've been in politics. . . . Boy, y'all want power. Boy, I hope you never get it. I hope the American people can see through this sham, that you knew about it and you held it.”

~Lindsey Graham, US Senator from South Carolina

Oddly enough, the media immediately began omitting, “Boy, y’all want power. Boy, I hope you never get it.” I think it had a little too much truthiness.

The day of CBF's testimony finally arrived, and what a show! Rachel Mitchell, the questioner with 25 years’ experience prosecuting sex crimes, allowed the skanky old white guys with sordid pasts and taxpayer-funded slush funds to bribe their own victimsref 543 to sit back and watch. The PTSD that caused CBF to forget the entire event until it was resurrected by therapy in 2012 gave way to lurid details with “100% confidence.”ref 544 She described how she had a second door installed in her house out of feelings of insecurity from the decades-old event and leaving family members baffled at what was going on in her head. Even flying was said to be a horrifying experience. CBF described her lie detector test as a bewildering new experience. Mitchell followed up with an equally bewildering question as to whether CBF had ever helped anybody else take one.ref 545 WTF was that about? Hold that thought. Mitchell subsequently summarized her concerns in a letter,ref 546 concluding that CBF’s testimony did not pass Mitchell’s smell test (although the GOP did hire her.) The court of popular opinion had a few opinions of its own, expressed in thoughtful, measured tones:

The press referred to her testimony as emotional, gripping, compelling. She described the trauma of being thrown on a bed and barely escaping. So what is the problem here? Let’s just hang the bastard. I’m gonna open big: I don’t care what all the sycophantic virtue-signalizing pundits had to say, CBF was not credible. I know enormous numbers of women in academics. They all have gravitas. Teaching anywhere from 40 to >100 lectures a semester grooms stage presence and amplifies the gravitas. Her résumé shows that she is rather accomplished.ref 547 Although I could quibble over factual errors in what she said (and there were a quite a fewref 548) the problem was in the presentation. She spoke like a 9-year-old girl, a rather pathetic one at that. We all had childhood memories that were ruined by our childhood, and then we #moveon. I grew up with a drunk mother—a face-in-her-mashed-potatoes drunk mother. It groomed independence. Oh, now I can hear you saying, “But Dave, you privileged punk: You've never been sexually assaulted," and you would be wrong. When I was about 8 years old—even unresurrected memories get a little fuzzy in detail—my brother and I were molested by an eye doctor named Dr. McGraw who grabbed our nuts for an hour straight. “First or second? I’ll take neither, you goddamned perv!” If I had been a little older, I probably could have reshaped his Prince Albert with a ball-peen hammer. Instead, we told my dad, ate dinner (probably mashed potatoes), and sat down to an episode of Mr. Ed (“Willlburrrrrr”).

When a well-known voice actress called out CBF’s fake voice—her “fry”—on YouTube, the actress was promptly fired.ref 549 I tried to find footage of CBF lecturing and came up with a goose egg. I’m waiting for some to show up after the fact, showing her in her natural state. Some screen grabs of her RateMyProfessor.com evaluationsref 550 provided insight into her unedited and unflattering demeanor. For example:

“Prof. Ford is unprofessional, lacks appropriate filters, and I am honestly scared of her. She’s made comments both in class and in e-mails, if you cross her, you will be on her bad side. I fear to think of the poor clients that had to deal with her while she got her MSW and her LCSW. Absolutely the worst teacher I ever had.”

~RateMyProfessor.com from a furry screen grabref

Supporters cried, “Fake!” OK, but how would we know? The originals got scrubbed from the website (probably with help from the Googleheads.)ref 551 Be my guest: go check.

And when you thought it couldn’t get weirder, her friend of 10 years and boyfriend of 6 years said in a sworn affidavit that CBF never mentioned the assault and flew in planes (including some sketchy ones) many times without fear.ref 552 The new front door installed to alleviate her PTSD just so happened to allow her to illegally rent part of her $3 million house to affluent Google techies, and its timing failed to match her claims.ref 553 The question about helping others with a polygraph is the plot thickener. The boyfriend testified that he witnessed CBF coaching a friend on how to pass a polygraph test.ref 554 Pretty good for somebody who has never taken one. Must have worked, because that friend soon thereafter joined the FBI and stayed until soon after Trump’s win “triggered” her resignation. CBF’s decidedly shifting memories of the assault that had been suppressed until 2012 are curious given that she is a psychologist. By the way, what is her research specialty? Glad you asked: suppressed memories and how one can shape them and even create new ones.ref 555,556

Then it gets super weird. CBF is said to have CIA ties, FWIW.ref 557 Sounds like internet legend, but renowned pundit David Icke seemed to buy it.ref 558 Her parents also have been tied to the CIA.ref 559 Her FBI buddy and handler, Monica McLean,ref 560 worked for Preet Bharara,ref 561 a highly political former prosecutor. One of McLean’s superiors answered to Jim Margolin, who just so happened to be working the Michael Cohen case.ref 562 Another CBF handler during the hearings had also helped Anita Hill take on Clarence Thomas.ref 563 Politics is a very dirty business indeed. CBF’s brother has been tied to Fusion GPS,ref 564 the same clowns who faked the Trump–Russia collusion dossier. My head just exploded, destroying yet another keyboard.

Let’s wrap this up, ACLU claims aside, to make a case against somebody, you need data. Otherwise, it’s just a lynch mob. Just ask Tom Robinson. Some subset of the #MeToo movement doesn't agree with this, but they are wrong. It is a profound problem that sexual assaults often leave no evidentiary trail. I hasten to add that if you read Martha Stout’s The Sociopath Next Door,ref 565 you’ll learn that an estimated 1 in 25 people are said to be clinical sociopaths. Stir in dirty politics, and the odds of flawed testimony soar. You’re welcome to blindly take people at their word, but on issues of such polarizing importance, you would be a fool (or, worse, a virtue signaler). In short, I will not just believe you in the absence of evidence. That’s not how Western justice works.

The final chapter may be unfinished. The democrats took a beating for tactics that seemed evil even among independents.ref 566 Of course, they blamed Avenatti, not themselves.ref 567 After Stephen Colbert asked, “So how did our politics get so poisonous?” one of his staffers, Ariel Dumas, expressed the left’s horror at their failure and solace in their pyrrhic victory:

Oh dear Ariel. You are a hateful person. I hope I haven't offended you. I presume you already know this.

The political establishment has no further use for CBF. It did, however, leave her with a GoFundMe campaign, which kept the spigot cranked open even after everything quieted down, raising over $867,000 to pay off whatever bills and costs were incurred during the ordeal (which is none because the DNC picked up the entire tab).ref 568 I’m sure it helped her remember why she did it.

One could argue that the Kavanaugh story is one of redemption—a potentially precocious teen showing some questionable judgment. Whoopie Goldberg, Malcolm X, Nelson Mandela, and Tim Allen did. I’m willing to let the ambiguity of what Kavanaugh may or may not have done as a teenager be corrected by time as well.

A GoFundMe campaign also left Kavanaugh with >$500,000, which he promptly and certainly mandatorily donated to charity.ref 569 Kavanaugh is now a justice on the Supreme Court of the United States. Those on the left may try to impeach him.ref 570 If they fail, maybe they will take the case all the way to the Supreme Court. Pundits on Fox enjoyed the final victory by, no kidding, downing a couple of beers on air.ref 571 Lindsey Graham seems to have recovered, displaying what may be the smuggest look I have ever seen. That pedophilic eye doctor in need of a beating with a ball-peen hammer is probably dead, but his legend lives on in his nickname: Quick Draw McGraw.

Epilogue: A video of Kavanaugh and his wife celebrating with Trump brought up one last serious question: Does he beat his wife? Oh FFS! Women claiming to work with battered women, however, say they have seen the look a million times. I confess that I watched the damning footageref 572 it quite a few times and, while the narrative is a reach, I could be convinced. This one is gonna live rent-free in my head for awhile.

Political Correctness: Adult Division

“Political correctness is elevation of sensitivity over truth.”

~Bill Maher, comedian

The construct of political correctness finds its roots in 1930s communism, in which it was “a semi-humorous reminder that ‘the Party’s interest is to be treated as a reality that ranks above reality itself.’”ref 573 A national survey showed that 80% of American adults think that political correctness is a problem,ref 574 suggesting that a relatively minor 20% are highly educated virtue signalers. Technically, I am a doctor of philosophy, but I identify as a medical doctor and can write you a prescription for a new pair of gonads. Virtue signaling—saying things to impress those around you to show that you are thinking correctly—is said by Taleb to be like paying for indulgences. It is a form of lying that, according to late evolutionary biologist John Maynard Smith, is a way of getting laid. He called it the “sneaky fuckers strategy.”ref 575 But am I not also virtue signaling to the 80% when I pejoratively call the signalers a bunch of wankers? No, because I may be dead wrong but I’m not lying.

A malign interpretation of political correctness—PC for short—is how the politically far left and left-wing power structure exert control over the population. Don’t blame me: I got this little thesis from Malcolm X:ref 576

“If you study the structure of the negro community—economically, politically, civically, psychologically, and otherwise—it’s controlled by the white liberals who usually pose as the friend of the negro who actually differs from the white conservative. . . . I’m suspicious of whites who join negroes and always have to be in the lead. Who always have to be at the top. Who always have to be in negro organizations. Let them give some advice to negroes and stand on the sidelines. . . . [Negro leaders] are puppets who have been put in front of the negro community.”

~Malcolm X, Nation of Islam and civil rights activist

PC encompasses all sorts of oddities, including cultural appropriation and overt disdain for the hat trick of evil—white/heterosexual/male. The blunt but highly effective tool is to hang a repugnant-sounding label on your opponents—misogynist, racist, homophobe, or Canadian—which is guaranteed to send them scrambling for safe spaces (or Jonestown). If the label sticks, you’ve vanquished the bastards.

2018 may have been a turning point. One senses that pushback will not necessarily get you fired. (Keep your savings account topped off, just to be safe.) The Supreme Court ruled that wedding cake bakers do indeed have constitutional protections.ref 577 We saw the emergence of Jordan Peterson, a decidedly no-frills University of Toronto psychologist who cut his teeth opposing mandated PC speech.ref 578 All imaginable labels have been tattooed on Jordan’s ass, but the guy has thought deeply about his beliefs and is a worthy foe. In what became an epic must-see interview—a meme in the making—he eviscerated Cathy Newman.ref 579  Newman was so brutalized by his logic and her inability to brand him by shoving words in his mouth that she embarked on a post-debate victim march and enrolled herself in a concocted witness protection program.ref 580 No, Cathy: Your beating was painful but only metaphorical. The left’s hatred of Jordan helped sell millions of copies of his book that would have sold a few hundred copies to friends and family otherwise (see “Books”). As is so common nowadays—what kind of word is nowadays?— ideas pose a threat. We can’t have any of those! Peterson’s ideas took root so fast that his personal YouTube channel was closed down but then reinstated.ref 581 I watch his interviews like a coach watches game films to see how not to get beat by skullduggery. Cathy would have owned my sorry ass.

Let’s take a peek at the year’s PC Follies in the adult world using a bulleted list—Can I use the word bulleted?—revealing what the “batshit crazies” got into this year. You may find yourself checking the mirror for facial drooping and listening for slurred speech:

  • A rapist identified as a trans woman was incarcerated in a women’s prison, where she sexually assaulted four more women.ref 582
  • A survey claims that 50% of millennials are socialists and that 75% of those don’t know what it means.ref 583
  • The #MeToo movement has spread to corporate America, wherein men supposedly meet to “talk through their feelings, allowing themselves to grow more vulnerable, and, yes, to cry together.”ref 584 I’m tearing up just thinking about it (sob). Despite the fact that this is clearly hyperbolic crockery, some have expressed concerns that these are men’s-only groups.
  • A woman hired by Facebook to review content flagged as highly dubious has sued Facebook for being “exposed to highly toxic, unsafe, and injurious content” that caused PTSD.ref 585
  • A controversial release of a pedophile on bail got the perp’s decapitated corpse delivered to the judge’s front door.ref 586 That, by the way, is not PC.
  • Transgender women continue to do shockingly well in women’s sporting events, including a gold medal at the 2018 UCI Masters Track Cycling World Championships.ref 587 To all you moms and dads who drove your daughter to practices—to the moms in the must-see iconic P&G “Thanks, Mom” Olympic commercialref 588—just remember that everybody is a winner.
  • Columbus Day celebrations were canceled in Columbus, Ohio.ref 589
  • The pink pussy hat has been deemed offensive to transgender women and gender non-binary people who don’t have typical female genitalia (pussies) and to women of color, whose genitals are not always pink.ref 590
  • GOP candidate Ron DeSantis got slammed for telling voters not to “monkey it up” by voting for his gubernatorial opponent in Florida (who happens to be black).ref 591 The left went nuts, saying they have never heard of this phrase or, apparently, this thing we call Google. Obama showed his white-nationalist roots by saying he “monkeyed around” with something.ref 592
  • NASCAR’s Conor Daly lost sponsorship of Lilly Diabetes owing to a racially insensitive remark made by his father in the 1980s.ref 593
  • Silicon Valley elites are spending $20 per gallon on raw water—water that is fully untreated.ref 594 An old SNL spoof ad sold Swill, mineral water from Lake Erie.ref 595
  • The Miss America pageant is removing the bathing suit competition.ref 596 Major news outlets reporting the story invariably showed pictures of prior contestants in skimpy bathing suits. They are replacing this leg of the competition with a quantum mechanics exam and calling it the Cal Tech Admissions Pageant.
  • A Canadian restaurant manager booted a customer for wearing a MAGA hat. Customers choked down their bear-meat omelets and left irate.ref 597
  • A woman tried to hang her kid in the basement—we’ve all done that one—and struck a bicyclist and a car driven by a pregnant woman while being pursued. The judge gave her probation.ref 598 I must confess that she is statistically unlikely to repeat that again.
  • The new celebrity fashion trend is to get facials made from cloned baby foreskins.ref 599 The nickname "Dicknose" seems appropo although something more subtle like Smegyn would work.
  • People are squealing for the rights of sex dolls to not be abused.ref 600
  • The Brits, never bashful about asking somebody to hold their beers, are discussing whether to make misogyny a hate crime or just let the birds fend for themselves.ref 601 Some note that “everything in the UK has been criminalized except crime.”
  • Microsoft is warning customers using Office, Xbox, Skype, and other products that the company is prohibiting offensive language and inappropriate content. Can I use phrases like "totalitarian", "Stalinist", or even "rot in hell fascist pigs?"ref 602
  • The mayor of London tweeted that “there is never a reason to carry a knife. Anyone who does will be caught, and they will feel the full force of the law.”ref 603
  • A restaurant in Britain charges white customers £13 more than people of colour—it's spelled color, you plonkers—to challenge racial wealth disparity.ref 604 I would guess that the owners personally helped narrow the wealth gap.
  • The French had their hold-my-Chablis moment: They are considering a bill to make cat-calling of women a crime punishable with a €750 fine.ref 605
  • A Polish brewery, The Order of Yoni, produced a beer marketed as being brewed using vaginal secretions from two smoking-hot models.ref 606 Yoni is Sanskrit for vagina. (I’m not joking . . . and it’s not PC either.)
  • Students in Indonesia are making moonshine out of used Tampons.ref 607
  • Black Lives Matter and former NAACP kingpin Shaun King was exposed for having some very white parents.ref 608 Rumors of a romance with Rachel Dolezal remain unconfirmed.
  • #MeToo activist Asia Argento is said to have paid off a 17-year-old (underage) actor to shut him up about an affair. She now claims her underage love muffin assaulted her.ref 609
  • Rhode Island is pondering a one-time $20 fee to access porn sites or other “offensive material” online.ref 610 That really sucks.
  • High fashion’s latest trend is said to be male models wearing prosthetics to look pregnant and macho men wearing bras.ref 611 The marketing head at Target says they can’t keep them in stock.
  • Literature published by a California health information provider, in an effort to deal with modern gender issues, refers to the vagina as the “front hole.”ref 612 Those who hatched this idea are now called “A-holes.”
  • A Roanoke City social services worker was fired and escorted from the building for having a concealed carry permit.ref 613 Not the gun; just the permit.
  • Nurses in South Africa have to acknowledge their white privilege before treating aboriginal patients (or get their heads hacked off).ref 614
  • The BBC is reducing the salaries of some male journalists after criticism over unequal pay.ref 615 Can’t say I saw that one coming.
  • Craigslist shut down personal ads—“SWM looking for hot monkey love”—after Congress passed a bill on sex trafficking.ref 616
  • The Manchester Art Gallery took down pre-Raphaelite paintings of naked nymphs to appease the pervs who think other pervs can’t look at them as just art.ref 617
  • To fight obesity, the UK wants to legislate that pizzas shrink or lose their fattening toppings.ref 618 Are you guys trying to have a revolution?
  • I personally heard a rumor that an employee at one of the FAANGs got reprimanded by human relations for calling a tall colleague a “long drink of water." The correct greeting is, “Hey, Stretch!”
  • A judge meted out a 25-year sentence without parole for drunk driving in which nobody got hurt.ref 619 I imagine there was a chronic problem, but you get less for shooting your spouse. Something like house arrest with an ankle bracelet for tracking might have sufficed.
  • Team USA was criticized for cultural appropriation for having Native American motifs on their gloves at the Winter Olympics.ref 620 Lacrosse teams around the country are scrambling to figure out how to play without sticks.
  • The former head of the CDC grabbed the ass of a friend of 30 years at a party, apologized, and nine months later was arrested and fired.ref 621 The woman said she worried about hurting someone by coming forward . . . and then wrote an article in the New York Times.ref 622 It just so happens that he was up to his ass in the politically charged vaccine debate.
  • Swedish authorities pixelated the face in the photo of a man wanted for murder.ref 623

Anything called “The War on . . . " is likely to be a bad idea and ineffectual. The War on Big Gulp Sodas has given way to the War on Straws. Restaurant owners who hand out unsolicited straws in California are subject to $1,000 fines and 6 months in prison for each infraction.ref 624 The originator of the movement, Milo Cress, claimed that 500 million straws are handed out unnecessarily. Milo’s data comes from—wait for it—a phone survey of straw manufacturers he conducted in 2011 when he was just 9 years old.ref 625 The Raw Water lobby was unconcerned because it sells its products in plastic bottles. Some wonder if a plastic straw conviction will keep you from getting a gun permit.

Starbucks is remarkably progressive, but it discovered that the intolerant left eats its own. It got into a spat about whether several black customers were loitering.ref 626 It’s likely that mistakes were made. A corporate-wide policy change to tolerate all such loiterers has now converted Starbucks into a safe space for crackheads.ref 627The bathroom-dwelling coke-snorters will have to bring their own straws. Starbucks’s new inclusiveness training also warned employees not to “accidentally mistake scruffy-looking husbands for homeless men.” Finally, somebody defends me.

“Dumbass fucking white people marking up the internet with their opinions like dogs pissing on fire hydrants.”

~Sarah Jeong, journalist and New York Times editorial board

Journalist Sarah Jeong was brought onto the editorial board of the New York Times. The newspaper claims to have been fully cognizant of her polarizing tweets over the years. How polarizing? She supported killing cops, killing men, and being remorseful that she will reach the end or her life without having killed a single guy.ref 628,629,630,631,632 The defense that she was fighting trolls by illustrating troll tactics fell apart when the vile tweets just kept surfacing spanning years.ref 633 Vox noted that “a lot of people on the internet today [are] confusing the expressive way antiracists and minorities talk about ‘white people’ with actual race-based hatred, for some unfathomable reason.”ref 634 The Verge, where Jeong still worked, described any assertion of racism in Jeong’s tweets as “dishonest and outrageous.”ref 635 Slate, a publication just slightly left of Putin, came to her defense referring to the work of conservative trolls.ref 636 Of course, she was fired immediately and booted off Twitter. Just kidding. She kept her job and got verified on Twitter because we couldn’t possibly know whether it was her or just some generic hateful, foul-mouthed troll. She hit peak irony when old tweets trolling her current employer surfaced in vast numbers.ref 637

“After a bad day, some people come home and kick the furniture. I get on the Internet and make fun of The New York Times.”

~Sarah Jeong

I didn't write about media this year—I had plenty of material but not enough time—but I will say that with Constitution protections offered to journalists come Constitution-level responsibilities. So many of you really suck now. I am talking the bottom-of-the-barrel, "suck the chrome off a trailer hitch" levels of suck.

There is nothing more sanctimonious than Hollywood multi-millionaires shaking their Oscars and talking about oppression. I find it odd that every TV show and movie now includes profound violence and multiple scenes where a lead actor sweeps off the top surface of a desk or kitchen table, plops some starlet’s yoga-tightened ass down, and bangs her lights out. Aren’t they supposed to ask permission—“May I touch your breast?”—or is that rule negated when your paycheck is on the line? Let’s see what Hollywood was up to this year:

  • In the moon-landing movie First Man, actor Ryan Gosling refused to plant the American flag. 
  • The BBC faces backlash for its decision to cast able-bodied Charlie Heaton in its adaptation of The Elephant Man rather any one of dozens of seriously deformed men who decided their best option was to go to USC’s acting program.ref 638
  • Hollywood pulled Scarlett Johansson from the role of a transgender man in Rub and Tug because she is not a transgender man.ref 639 That’s why it’s called acting. Daniella Greenbaum defended casting her, but then quit at Business Insider when it pulled her column.ref 640 On the bright side, it was a principled call because they surely didn't boot Scarlett to pump up the box office proceeds.
  • Bill Cosby was found guilty of sexual assault. Good riddance.ref 641
  • ABC executives regret their “knee-jerk” decision to fire Roseanne Barr because of a few tweets (that I happen to think had no racial intent) after realizing that destroying its best show (and her career) was an expensive blunder.ref 642 Norm MacDonald defended Roseanne for saying the #MeToo movement has gone too far and then was promptly pulled from a Tonight Show appearance.ref 643
  • The Weinstein Company filed for bankruptcy, ending all non-disclosure agreements. This could get interesting.ref 644
  • Elijah Wood had spoken out boldly about pedophilia in Hollywood saying, “It was all organized. There are a lot of vipers in this industry, people who only have their own interests in mind. There is darkness in the underbelly . . . victims can’t speak as loudly as the people in power. That’s the tragedy of attempting to reveal what is happening to innocent people: They can be squashed.”ref 645 Elijah now declares no direct knowledge of pedophilia in Hollywood.ref 646 The pervs got to him. 
  • Having attained predator status as an alleged pedophile, Kevin Spacey got written out of the script of House of Cards.ref 647 His new movie, somewhat ironically named Billionaire Boys Club, which was already in the can, opened in eight theaters and made $287.ref 648 That is not a typo. It would have been less if the one guy who went and sat in the back pleasuring himself—let's call him just "Kevin"—also bought a large Coke and popcorn. (How do you know when it is bedtime in the Spacey house? When the big hand touches the little hand.)
  • The Academy Awards hit an all-time low Nielsen rating—a 24% drop year over year—because sanctimony doesn’t sell.ref 649 Remember the olden days when they would defend victims like Juanita Broaddrick? Me neither.
  • The new Jack Ryan series was “blasted” for pushing “masculine American heroism” and “white male entitlement.”ref 650
  • My wife dragged me off to see Mama Mia (the sequel). The four men in the theater that night were literally congratulating each other for falling on their swords. By movie's end, I wondered if Hollywood may start delivering us leading men—three in this case—lacking any semblance of masculinity.

PC loses its humorous component when it goes violent. Antifa seems to have taken over Portland, Oregon. I never expected to read about “The Battle of Portland.”ref 651 This liberal enclave seems to be unprotected by the police, who were told to stand down.ref 652 Antifa has now been declared “domestic terrorists” by the authorities.ref 653 Portland citizens cheered as a squad of police scrubbed the streets of Antifa rascals harassing passersby.ref 654 Antifa vandalized the Metropolitan Republican Club in New York City and sees no irony in talk about punching Nazis.ref 655 A professor of philosophy who cold-cocked an unsuspecting person is out on $200,000 bail.ref 656 Apparently, if you are a prominent republican, you are no longer eligible to dine in public because the intolerant left has the right to make you miserable. A rare unmasked Antifa thug screamed vile insults to the widow of a 9/11 victim (a fireman).ref 657 The assailant escaped harm by a razor-thin margin. The Unmasking Antifa Act of 2018 proposes laws prohibiting protesting with a mask.ref 658 I’m fence-sitting that one. An investigative journalist undercover probing Antifa appears to have been whacked shortly after he vowed to expose George Soros.ref 659

A friend of the family supported this no-rules approach to politics, prompting me to “lose my shit” and state, “You are declaring war. Do you realize that my team has all the fucking guns?” This prompted my wife to send me to the store on an errand.

There is a really ugly side to the gender battles that I had underestimated until now. Let’s open with a tweet that sat in my notes for months:

“Well, I don’t want to go up and talk to her, because I’m going to be called a rapist or something.”

~Henry Cavill, actor who plays Superman in the DC universe films

Mike Pence, darling of the left (not), noted his policy to never have dinner alone with a woman who is not his wife.ref 660 This got called the Pence Rule and led to some investigative journalism. What they discovered is that corporate America, in addition to all the misogynist white men, is heavily populated with men fearing that they will be accused of something without cause.ref 661 Some said that they won’t ride alone in an elevator with a female colleague. Others have age cutoffs, below which the women are avoided. This is truly horrifying—what economists might call a negative externality of higher order. Young women need access to mentoring and opportunity. Fear of association—call it a phobia if you wish—is profoundly destructive. One gent said that the solution is obvious: “Just don't be an asshole.”ref 662 He is trivializing this paradox (and virtue signaling). We are moving women and minorities into positions of power and authority. Society hasn’t completely worked out some of the details.

Political Correctness: Collegiate Division

“The wind of freedom blows.”

~Stanford University’s motto

“You can’t spend your whole life worrying about your mistakes. You fucked up! You trusted us.”

~Otter in Animal House

Many administrators, professors, and students are working their asses off to get it right, going about the business of scholarship and education. Parents hand us their kids and ask us to equip them with technical and social skills needed to become functional adults. They also ask us to keep them healthy and safe for their first road trip. Most exceed our expectations outside the control of their parents (at least before cell phones). Forget not that these students descended from mammoth hunters. The headlines you read and YouTube clips you see of faculty and students acting like assholes belie the thousands of success stories that would make you proud and that Make America Great. (OK. Maybe I’m pressing my luck now.) There is, however, a creeping Tyranny of the Few—noisy whack jobs—who can alter the tenor of campus life. When they start throwing their feces, all hell breaks loose. I would call it Tyranny of the Minority, but that might be misconstrued as some racist dig, and I would find myself in front of a tribunal or angry mob (which I file in the Department of Redundancy Department).

“The darkest part is not the rise of radicalism, but the passive acquiescence of the vast majority of faculty and students.”

~Lee Jussim, professor of psychology at Rutgers University

“When they come to you—your kids—and say, ‘I’d like to study critical race theory and intersectionality and bullshit 101 whiteness.’ Then you say, ‘Yeah, well, you are going to pay the $60,000 because I am not going to pay the money that I have amassed through my hard work for you to be polluted learning about nihilistic academic fields that are intellectual terrorism.”

~Gad Saad, professor at Concordia University

Universities suffer from a host of self-inflicted wounds. Surveys show that what was a 2:1 left-wing lean among some faculty now tips the scales at anywere from 10:1 to well over 50:1.ref 663 Some colleges are said to have no conservatives. (I suspect they are in closets.) The rallying cry is that faculty members are all left leaning because of their great intellects. There is a core group of academics (students and faculty) that seems to have an insatiable need to gripe about wide-ranging topics that have been codified as “grievance studies.”ref 664 If your kid’s major ends in the word “Studies,” you might want to peek at the curriculum. Actions that are so insignificant as to be called “microaggressions”—mathematically one-millionth of a normal aggression—are now campus horrors to be strangled in the crib. In a grand bargain to create the most inclusive communities, universities are dismantling freedom of association of like-minded students.ref 665 Removal of such self-assembled support groups—think fraternities, for example—is forcing students to suffer an odd crowded isolation. If you oppose this new order, be ready to be tagged with a pejorative label that ends in “–phobia,” “–archy,” or “–ist.” Society is also trying to remove all semblances of hierarchies as being unfair or not inclusive, ignoring the fact that they are biological and cultural evolution's mechanism to minimize conflicts.

“My daughter is looking for a summer job. She’s a millennial so she’s hoping to find part-time work as a CEO."

~Brian Kiley (@kileynoodles)

We as a nation measure our intellectual worth by numbers of college graduates. Of course, students and their parents are loading up on mountains of debt to spend four or more years to “find themselves.” The military or Peace Corps will do so more cost-effectively, and for a mere $150,000, I will personally find your kid and save you a lot of money. The proliferation of college experiences that leave students with little or no chance of discharging their debt after graduation has done irreparable damage to a generation. This is not hyperbole: irreparable damage. I suspect that replacing half of our college degrees with technical training would provide huge benefits. An elevator repair guy told me that after a five-year paid apprenticeship, he will make a six-digit salary. What does four or five income-free, debt-laden years in college guarantee you?

“Whereas the University of Chicago has traditionally sought to cultivate an intellectually robust and diverse student body by seeking out creative and unconventional thinkers, the introduction of a pre-professional business major would attract applicants who view their education primarily as a preparation for lucrative careers.”

~An activist’s letter, nailing it!

The Department of Education claims that administrative positions have grown at 10 times the rate of tenured faculty positions.ref 666 The University of Michigan currently employs a staff of 93 full-time diversity administrators.ref 667 More than 25% earn in excess of $100,000—as much as elevator repair techs. These soaring added costs are exacerbated by an arms race to provide better food, dorms, study and safe spaces, and gym facilities. Schools either upgrade or watch the talent head off to greener pastures. Jonathan Haidt and Greg Lukianoff (see "Books") say that colleges crossed the Rubicon when they began thinking of students as consumers, and we all know the consumer as King. The unwillingness of college administrators to stand up to precocious and, at times unruly, consumers has been called an “epidemic of cowardice.”

“Universities are becoming ungovernable.”

~Anonymous university president

Now let us wander through anecdotal disasters that occasionally visit college campuses—stories that should touch a wide range of emotions, including the fear somebody slipped you a roofie. Colleges and universities constitute the mothership of political correctness.  Let’s begin with just some seriously goofy shit. Bear in mind that some of these ideas get attributed to universities when they are more likely emanating from university-sanctioned organizations—student clubs—that are given the coveted right to free speech, which they promptly exploit to suppress free speech from others:

Standardized tests are being removed so that objective measures of skill and merit can be replaced with more subjective measures of things like, oh, ideological conformity.

  • A Michigan State University study concluded that Latinos who support meritocracy, hard work, and independence are perpetuating a bias problem.ref 668
  • A Clayton State University professor offered students extra credit to attend an event of the Democratic Party's gubernatorial candidate: The school intervened.ref 669
  • Gonzaga University hosted an “International Day of Tolerance,” urging students, particularly “white people,” to ask themselves, “Am I a tolerant person?” and “Do I stereotype people?”ref 670 There is a concept rich in irony.
  • The University of Colorado-Boulder has removed the term “illegal aliens” from its library catalog in favor of “more ethical subject headings” to foster an “inclusive atmosphere.”ref 671 I have thoughts on what else you could remove from where.
  • University of Texas treats masculinity as a “mental health issue,” empowering young men to “break the cycle.”ref 672 I'm guessing the Alamo is no longer in the curriculum.
  • Clapping has been banned at the University of Manchester student union to avoid triggering anxiety and improve accessibility. It has been replaced with “jazz hands.”ref 673

  • A Fresno State professor followed a series of dubious tweets—we've all done that— with one baiting people to call her. The phone number she posted was for a mental health hotline instead.ref 674 Bet that worked well for this high-function moron.
  • Students at law schools are being triggered by curricula covering entire branches of study. Lectures on rape law, for example, are popular targets.ref 675 These same activists are likely to speak out in support of rape victims, albeit in total ignorance.
  • Emotional support dogs are growing by leaps and bounds.ref 676 That’s cool; I have three Labrador retrievers, although I would not call them supportive.
  • George Washington University students launched a petition to change the school’s mascot from the Colonials to the Hippos because Colonials is too evocative of colonization and oppression.ref 677 Hippos are really fat: aren't you fat shaming and culturally appropriating hippos?
  • Princeton put on (packed on?) a “fat-positive dinner” to discuss “fat-positive programming for the spring semester.”ref 678 The university also offered a course to help students fight “fat phobia” through dance. I'm more than a few pounds heavy now, and my wife fat-shames the heck out of me.
  • “If someone calls you fuckin’ fat, they may be bullying you, but you might be fuckin’ fat.”
  • ~David Goggins, former Navy Seal
  • I did the math: The famous “Freshman 15”—the pounds gained from all-you-can-eat buffet-style dining—causes Cornell’s North Campus housing to gain 45,000 lbs. every fall semester. I wonder if building codes accounted for this.
  • Students at Lee University petitioned to disinvite Vice President Mike Pence, declaring that Pence’s political views are “at odds with Christian values.”ref 679 What would Jesus say?
  • A professor who teaches politics and global security at Virginia Tech tells us that fossil fuels are contributing to a warped sense of “masculine identity” and “authoritarianism” among men, coining the phrase “petro-masculinity” to describe what she sees as a convergence of “climate change, a threatened fossil fuel system, and an increasingly fragile Western hypermasculinity.”ref 680 Nailed it.
  • A group of UCLA students earning $13 an hour to promote diversity on campus started a “Toxic Masculinity Committee.”ref 681 I'm guessing that they don’t lift weights together.
  • A St. Mary’s College professor offered a term project instead of a real final exam on topics ranging from “environmental racism,” “the Green Movement in Africa,” and “eco-normativity in Western environmental campaigns.”ref 682
  • Mount Holyoke College, an all-women’s school, is discouraging calling female students “women” to promote a “gender neutral” classroom environment.ref 683
  • A Cornell student gave her senior thesis defense in her underwearref 684 because her professor—a progressive and widely respected female faculty member—suggested that what she was wearing in her practice talk was potentially inappropriate.ref 685 Yeah, well, I was Cornell’s first streaker, running through Bio 101 in the fall of 1972.

“I tell 18-year-olds, ‘Six years ago you were 12; what the hell do you know?’”

~Jordan Peterson, Professor of Psychology and author of 12 Rules for Life

  • A University of Wisconsin student filed a dreaded “bias report” after a peer hogged weights at the campus gym then yelled at him to back off.ref 686
  • A website entitled, “Make them scared UW,” run by University of Washington students, allows individuals to anonymously accuse people of sexual assault with no evidence.ref 687
  • A Marquette University student group is telling “white folks” to “stop calling the cops” when they feel threatened. “Hey, what do ya say you put down your dukes and give me a big hug?”ref 688
  • A math paper was withdrawn in an uproar because it tried to model the genetics of gender differences.ref 689 (There’s an “irrational number” joke in there somewhere.)
  • A paper suggesting that males have fat-tailed intelligence bell curves—they tend to occupy the extremes of the spectrum—created such a ruckus that the National Science Foundation wanted acknowledgement of support removed. The paper got retracted.ref 690
  • A professor at Wilfred Laurier University wrote a book with a chapter entitled, “When a Man’s Home is Not a Castle: Hegemonic Masculinity Among Men Experiencing Homelessness". The detailed description does not clarify the idiocy.ref 691
  • A professor who was charged and pleaded guilty to a work-unrelated domestic violence charge years earlier was written up in the school newspaper. A shitstorm ensued, and he killed himself.ref 692 Y’all have blood on your hands and maybe lucky he turned the gun on himself. There are good articles on “academic mobbing” and other neo-Stalinist behaviors.ref 693
  • A paper on gender dysphoria by a Brown University assistant professor drew so much attention that Brown distanced itself from the work. A dean at Harvard hammered the president of Brown for being a coward (my words).ref 694
  • The University of Minnesota is considering introducing a “Pronoun Rule.” Professors, staff, and students who use the wrong pronouns (he, she, ze) risk firing or expulsion.ref 695 Zat is nuts.
  • Food workers at NYU’s dining facility celebrated Black History Month with “racially insensitive” meals.ref 696 The employees are African-American. Seems like it ought to provide some cover. The real crime was that the girl—can I call a teenager a girl?—said she—can I say she?—was “ignored.” A woman scorned...

“[T]his modern-day trend of cultural appropriation of yoga is a continuation of white supremacy and colonialism, maintaining the pattern of white people consuming the stuff of culture that is convenient and portable, while ignoring the well-being and liberation of Indian people.”

~Shreena Gandhi, a religious studies professor at Michigan State

“Nothing could be more asinine than outrage against ‘cultural appropriation’.”

~Steven Pinker, professor at Harvard University

  • A psychology study by researchers at San Francisco State University claims that 25% of millennials have PTSD because of the 2016 elections.ref 697 Heterodox Academy says it is the Gen-Zers, not the millennials, that began disrupting campuses abruptly in 2014-ish.ref 698
  • Hofstra students want to remove a Thomas Jefferson statue (because he was such a douche).ref 699
  • The removal of a Civil War statue at North Carolina State by protestors took hours, but campus police did nothing. Turns out the protestors were outside agitators, not students.ref 700
  • Students at Baylor University will receive training in microaggressions.ref 701 This training includes “talking to the victim” and “educating the attacker.” Recall that complimenting a woman on her shoes is considered a microaggression, so maybe the term "attacker" and "victim" is just a wee bit hyperbolic.
  • Feminists at Yale University are lobbying the administration to force all-male fraternities to open recruitment to women while not pushing to integrate sororities.ref 702
  • University of Wisconsin-Stevens Point will be cutting programs to "recognize a growing preference among students for majors with clear career pathways".ref 703 Tenured faculty in Art, English, Geography, History, Philosophy, Political Science, and Sociology will be packing their bags. I'm speechless.

“I cultivate a cutting-edge approach to human geography through a theoretical edifice that foregrounds emerging thematic concerns within the discipline by incorporating both poststructuralist critique and a radical revival of anarchist philosophy.”

~Simon Springer, professor and anarchist-geographer at the University of Victoria

Hyper-active political correctness is not unique to the United States. Lecturers in Britain have been told “not to use words in capital letters in course assignments because it might ‘frighten students’.”ref 704 BOO! Made ya flinch. A journalism school’s staff have been told to mollycoddle students by “writing in helpful, warm tones, avoiding officious language and negative instructions."ref 705 The memo refers to “enhancing student understanding, engagement, and achievement” and listed frowned-upon words. A Dutch university mob protested the appearance of Jordan Peterson because of “his politically-incorrect worldview.”ref 706

Three academics totally punked the grievance studies community by writing a bunch of fake papers—getting a few published and another pile accepted—before they pulled back the curtain.ref 707 My favorite podcaster, Joe Rogan, interviewed two of the perpetrators, Peter Boghossian and James Lindsay (Helen Wilson was not present).ref 708 This is 2 hours of eye-watering hysteria. They describe fake papers about gendering dogs at dog parks and putting men on leashes. They used the search-and-replace command on Hitler’s Mein Kampf to replace “Jew” with “white male” and then wrote a paper using the new sentences. A paper titled, "Going in Through the Back Door" described the desensitization of heterosexual men to homophobia by inserting various objects into their butts. The referees’ suggestions, without fail, made the papers even nuttier. They learned to “problematize” the target thesis and use “word laundering” to take a normal word and give it special meaning. (If you like binge-watching stuff, try Joe Rogan's 1200 podcasts.)

“There is no such thing as black racism.”

~A professor at Florida Gulf Coast University

Psst. Professor. Come here. Closer...YOU'RE AN IDIOT! Goofy ideas begin to do damage by leaking into the curriculum. As told by one of my favorites, Campus Reform, Berkeley offers courses about white privilege to “confront uncomfortable conversations about privilege and positionality” and to “understand where white bodies have the responsibility to be in movements against white supremacy and in solidarity with marginalized peoples and groups of color."ref 709 Berkeley offers over 150 student-taught courses, which helps keep the lights on and is said to be “an excellent way of meeting the University’s minimum unit requirement." One can only imagine the course content. A course at Salisbury University in Maryland titled, “Pyramid of White Supremacy” teaches students about—I don’t know—maybe pyramids of white supremacy?ref 710

Those little twinges of bias can get rather specific. A gender studies professor at Northwestern University suggests we should be able to “hate men.”ref 711 I can sign off on a few. If you surmise that the professor is referring to women, you might be wrong. Self-loathing and virtue signaling is considered admirable among young men. A University of Maryland support group called “White Awake” was designed to help white students who may “sometimes feel uncomfortable and confused before, during, or after interactions with racial and ethnic minorities.”ref 712 Pressure caused the University to change the name to “Anti-Racism and Ally Building Group.” How about just “Race Baiting 101”?

One of the big stories is that Harvard is getting pounded in court for racism in its admissions.ref 713 When a school bends over backward to accept underrepresented kids, it necessarily excludes others. Society decided long ago that, in moderation, this is an acceptable price to pay. Apparently, those of Asian descent—what we call Asian Americans—are taking the brunt of it, and numbers showing the bias are compellingref 714 and drawing fire from the courts.ref 715 I once personally stepped on a rake by claiming just such a latent bias exists. I can't even fake the PC thingie I guess. Evidently, kids with Asian-sounding names were scoring rather poorly in the subjective categories involving personality. I think universities have the right to accept only Americans if they want, whether such a policy is advisable is an altogether different story. They do not, however, have the right to discriminate against those named Chang, Chen, Lee, or Park.

“The greatest threat to free speech is no longer governmental.”

~Bret Weinstein, former professor at Evergreen State College

“This is beyond free speech; this is disrespectful.”

~President of Fresno State University

Probably the largest and most consequential political shift is the move away from free speech. One survey showed that 50% of students would support a law making it illegal to say offensive things in public.ref 716 Another revealed that only 35% of female college students think free speech is more important than “diversity and inclusion.”ref 717 A Gallup poll showed that the majority of American college students support “disinviting” speakers they don’t like; 37% support shouting them down; and 10% support using violence to silence them.ref 718 Anti-abortion clubs have been banned because the ideas being discussed are considered subversive.

“Identity” politics—the decidedly left-wing idea that you subsume your identity to that of the group and, thus, necessarily forfeit independent thought—arrived on campuses with little warning around 2013–14. Scholars like Haidt and Lukianoff have burned a lot of ATP trying to understand from whence it came and why. I have a theory! Kids are influenced profoundly during their formative years—their Wonder Years. What book series totally dominated the childhoods of current college kids? That’s right: Harry Potter. Early in the first book, the little wand-wielding wizards are assigned a group for the rest of their stay at Hogwarts by a magic hat. Once assigned, they assume the behavioral norms of their group. May God have mercy on your soul if you become a Slytherin. This is the stuff of Harvard psychology PhD theses showing how quickly people form group identities. It’s the classic prisoner–guard experiment.ref 719 It’s what inspires normally sane people to sit in –20°F weather in Green Bay wearing a cheese hat while rooting for a team full of guys with whom they have absolutely noshared ideals or experiences. We are witnessing the Slytherins coming of age and arriving on campuses.

“Apparently, all that is required to throw a student out of school is that some other student claims to feel unsafe."

~Gregory Germain, professor of law

The Title IX program that began with normalizing college commitments to women’s sports has morphed into a commitment to women’s rights more generally. It’s a great idea on paper. In the hands of activist university administrators, however, it can be nightmarish.ref 720 On the heels of a tenure case at Cornell in which an unsubstantiated assertion arguably cost an assistant professor tenure according to the courts,ref 721 the young accuser—Jane Doe, of course—subsequently exacted retribution on one of the faculty member’s graduate students, slamming the brakes on his PhD defense by filing yet another Title IX complaint.ref 722 Two dozen Cornell law professors interceded, demanding that Cornell grant the student his PhD and stop the bullshit (my words, not theirs).ref 723 As I've said before, if you ever run into John Doe or Jane Roe, for heavens sake stay away. Nothing good can happen.

A decidedly progressive sociology professor at University of Michigan, after accusing a student of plagiarism, was accused of harassment.ref 724 In a world where accusations are so vague and difficult to sort fact from fiction, Oberlin has a 100% conviction rate.ref 725 That is what they used to call "a hangin' judge". The courts are routinely beating up universities and exacting large fines when due process drops below minimally acceptable levels. Courts are demanding universities up their games on due process, which is sorely lacking on some campuses. This long-overdue pushback against unchecked Title IX cases has the most militant supporters of the #MeToo movement angry. After years of sexual harassment and abuse at the hands of men, they feel that women’s evidence-free accusations should suffice. Nearly 100 students at the University of Southern California demanded a tenured professor be fired after he sent a reply-all email noting that “accusers sometimes lie.”ref 726Others hold the quaint view that trying to destroy somebody’s life is a problem regardless of the weapon of choice. Cases of demonstrably false accusations keep piling up in numbers not approaching legitimate accusations but sufficient to underscore the importance of due process.ref 727 Here is my bottom line: If you have no data you have no case, regardless of how heinous the crime. I repeat: It’s how our system works.

“Racism is a serious issue, and unfortunately what we found were many examples of students willing to use that charge in an attempt to get back at their peers in everyday squabbles.”

~Chris Rochester, director of communications at MacIver Institute

I chose not to describe dozens of grisly stories, including many false accusations, and instead finish by noting that progress toward normalcy is detectable. We are starting to have discussions about identity politics. The now legendary Evergreen State College appears to be going even further down the rabbit hole toward totalitarianism and headed for insolvency.ref 728 That’s probably a win. Nationally recognized progressives including Alan Dershowitz, Steven Pinker, John McWhorter, Bret Weinstein, Heather Heyling, and Jordan Peterson—collectively referred to as the “Intellectual Dark Web”ref 729—are now defending against leftist McCarthyism on college campuses. Betsy DeVos, secretary of education, is attempting to tighten up some of the details of Title IX (much to the horror of fuming progressives).ref 730 Nicholas Christakis, one of the controversial Yale professors who found himself in the middle of Social Justice Warfare by supporting the idea that Yale students are capable of choosing their own Halloween costumes, has been awarded one of Yale’s Sterling Professorships, the highest honor a faculty member can receive.ref 731 Right-wing activist group TPUSA has watchlists of left-wing professors. That would look like a telephone book and is very bad idea for a bunch of free-speech libertarian types.ref 732 Princeton University has become the second Ivy League school, after Yale, to face a federal Title IX investigation into allegations that some of its programs discriminate against male students.ref 733 This too shall pass.

“We’ve been paid to leave a burning building.”

~Heather Heyling, commenting on her and her husband Bret Weinstein’s severance packages to leave Evergreen State College

Political Correctness: Youth Division

“Prepare the child for the road, not the road for the child.”

~Jonathan Haidt, author of Coddling the American Mind

No generation is completely ready for the next one. Certainly the Greatest Generation was ill-prepared for the arrival of drug-addled boomers who trusted nobody over 30. The latest generation of young punks has discovered porn on their phones, rendering back issues of National Geographic obsolete. Cyberbullying is acute, especially for girls who seem to be more at risk and are more prone to destroying social structures without having to resort to formal violence according to Haidt and Lukianoff (see "Books").ref 734 (When you Google this you will get articles about the girls as victims without clear statements about girls as perpetrators.) The boys, taking cues from the Jackass series, impale themselves from skateboards, dive into bonfires, and eat Tide Pods (killing more than one of these Tide Podlers).ref 735 Procter & Gamble is making its Tide Pods even less appetizing, if you can imagine that.ref 736 The sport of snorting a condom and pulling it out of your mouth probably has a funny back story.ref 737 Efforts to test boundaries are now “hold my phone” moments. Although Darwin Awardees in Training are not new, one wonders how many fatalities uploaded to the cloud are caused by the iPhone.

What has changed, however, is what the boomers will do to protect the little dumplings, inadvertently doing more damage in the process. These protective measures range from sketchy to moronic. (Sorry: If the shoe fits wear it, pinhead.) Parents are now monitoring their kids’ calls, email, and phone messages. Phone apps now exist that make the kid check in, or the cops get called and the phone tracked.ref 738 “We found your kid, Mr. and Mrs. Stalin. Their battery had died. Would you like us to take them to the Gulag anyway?" What happened to “be home for dinner by six and don’t be late?” An Edmonton day care is requiring kids bring helmets to protect them on the playground.ref 739 Sugared drinks are being mandated by law to be removed from children’s meal menus at restaurants.ref 740 Several towns have made it unlawful for a 12-year-old to trick or treat,ref 741 presumably to protect the littler kids who are, without fail, now accompanied by dozens of adults. A fine of $25 or “up to 6 months in jail” seems a bit weird. "I’ll take the $25, your Honor." We check the kids’ candy to make sure there are no razor blades or poison, unaware that every documented case of such attempted infanticide has been traced to a family member. “Honey, I poisoned the kids.” In one county, 10- and 11-year-olds must have at least one parent “get to the choppers” (helicopter parent) when the kids are outside playing.ref 742 Disney’s Sleeping Beauty is finally drawing scorn for the scene in which Prince Charming ravages the sleeping girl with a non-consensual kiss.ref 743 Hey, Amnesty International: Don't you have bigger fish to fry?

Of course, once the kids hit high school, it’s time to give some slack to the leash. Yeah, right. One high school declared that oral presentations in class are an unreasonable burden for those with anxiety.ref 744 Jonathan Haidt notes that we have about 100 kidnappings per year—most by a pissed-off divorcee parent—while 10 kids per day are killed texting and driving. One Girl Scout got the clever idea of selling her cookies in front of a pot dispensary.ref 745 I suspect a boomer parent hatched that plan. She sold 312 boxes to the stoners. Girl Scouts of America declared it “not cool.”ref 746 The GSA administrators in the Colorado chapter, however, declared that it was "totally cool, Dudette."ref 747 One teacher decided that the term “Ma’am” was inappropriate in the current PC culture. When the kid just couldn’t shake this rural nicety, she made him write the word repeatedly (which seems kinda backward) and have his parents sign it.ref 748 The teacher also said that if she had had something, she “would have thrown it at him.” I can only imagine that parent–teacher conference. Schools are banning children from using the term best friend over fears that some really unlikeable, spoiled little douche may feel left out. This also ensures that kids will not form tight, lasting relationships. A teacher in Florida was fired for refusing to give students a grade of 50% even though the assignments were not turned in.ref 749 The school had an unstated “no zero” policy. Ironically, the school was run by a bunch of zeroes.  

Most of these are marginally harmful lobotomizations that may not leave scars (provided the kid doesn’t become a cutter). However, many child psychologists suggest that increasing academic problems in young boys stem from repeated chastisement for acting like, well, young boys. Schools are denouncing toxic masculinity in kindergarten.ref 750 Kids caught “sexting”—sending semi-lewd or lewd pictures via cellphone—are being charged with trafficking in child porn.ref 751 One elementary school passed around flyers denouncing “white privilege.”

The institutionalization of PC not only hurts the kids but also infringes on parents’ rights to add any post-genetic finishing touches and determine levels of risk. A mom was investigated for letting her 8-year-old walk the dog around the block. Another received a visit from the police because her kids were playing in the front yard “unsupervised.” She noted that, "For something like this to happen to me, there’s something really wrong." Ya think? Something like this once happened to my wife and I, and a woman from social services showed up. Once this sanctimonious piece of human detritus—Do I sound like I’m over it?—started citing the scriptures in a decidedly sanctimonious way, I told her that "I am fighting the urge to throw you out the door on your fucking head." My wife suggested my comments were counterproductive. I thought I showed great restraint.

Schools are throwing Common Core math at them, ensuring that they will all share a common denominator: total mathematical ignorance including not knowing what “common denominator” means. After dropping $400 million on its development, the Gates Foundation declared common core math a total failure.ref 752 It is still in use, lobotomizing children across the country. I suspect its deep-seated purpose was to forcibly engineer equal outcome at any cost. So much for inclusivity. Ian McEwan, an award-winning author, began to wonder about the system as a whole when after helping his son with an essay about his own novel his son received a C.ref 753

“If you breastfeed your sons, you are training them to be rapists when they grow up. You’re basically teaching them that they can touch a woman’s body whenever they want. If you oppose rape, stop breastfeeding boys!”

~Shaykha Alia (@AliaAbheed), activist, not joking

Schools are increasingly filled with boys, girls, and fence sitters. I must confess that sexual and gender ambiguities must be traumatic for kids who are already in traumatic periods of their lives. I watched my son for at least 5 years wondering if and when he would come out (even to his family). He waited till it was time. Nobody else gets to make that call. Let the parents ponder how to raise the kid in the most nurturing and constructive manner possible.

I even support parents who are serious loons doing stuff I think is sketchy because it’s not my kid. A new class of child called “theybies” are babies and kids raised gender neutrally, ensuring that they will consume copious quantities of mental health services later in life.ref 754 One woman fought gender norms by naming her son Vagina.ref 755 Middle school may get a little rough. Didn’t Johnny Cash write a song titled, "A Boy Named Vagina"? There are, however, some real consequences moving down to the younger age brackets. Pediatricians and psychologists are battling it out over gender dysphoria, what it means, and what to do about it. Scientists are using fMRI to study transgenderismref 756 (sounds good) to aid earlier "transition" (gettin’ a little sketchy), possibly as early as age 3.ref 757 Hold your horses there, Buckeroos: You might want to wait till they can talk and get through a whole day without Pull-Ups (gender-neutral colors, of course.) Some worry about “social and peer contagion” of the gender dysphoria;ref 758 this is not like some passing lesbian phase sophomore year in college. One judge removed a 17-year-old transgender teen from her parents because they refused to allow hormone treatments.ref 759 All of this reminds me of the Saturday Night Live skit with the doctor who delivered 4,000 girls in a row. Half needed only a minor postnatal surgical procedure. One thing is clear, if your son transitions to become a girl, get ready to pay more for toys and clothes.ref 760 Somehow the free market has figured out that there is a recessive X-linked gene for insensitivity to price. If, on the contrary, your daughter transitions to a boy, you will be able to afford college. Jazz hands!

When I was a kid we had one rule: Be home for dinner. I was riding my bike miles from home by age 8 and groping young girls (not like Brett Kavanaugh!) and hitchhiking with permission at 12, drinking without permissionat 13, smoking pot at 14, and dropping acid at 15. I started to study at 17, graduated from Cornell with a degree in genetics at 22, and got my PhD in chemistry at 25. (Yes folks: That is a 2.7-year PhD from Columbia and no post-doc, all with damaged chromosomes to boot.) Nobody broke my spirit by declaring me flawed. My peer group played copious quantities of only self-supervised sandlot sports until middle school. We laid out the field, made up the rules, refereed the games, and had some Lord-of-the-Flies moments. This peer group generated a three-time first-team All-American lacrosse player at Syracuse, the 12-year center for the Dallas Cowboys, and probably the only faculty member in the modern era to have been an assistant or head coach of two collegiate sports (me).

How about some solutions or suggestions, Dave? OK. Since you asked. First, read Jonathan Haidt’s and Greg Lukianoff's book, Coddling the American Mind (see “Books”). I sent it to one of Cornell’s deans, and he said it described the problems landing in his office to the letter. Let them go outside, get hurt, cause trouble, and pay some consequences. No broken bones or lost eyes? That was a good day. Stop depriving kids of constructive play by inserting vast numbers of résumé-boosting activities with oppressive levels of adult supervision. I’ve read college and graduate admissions applications for many years; most parents haven’t a clue about what really matters. Watch the movie Stand by Me or the often overlooked Tree of Life. That was my childhood. And don’t you dare say those were simpler times; that’s a load of garbage asserted by helicopter parents.

Others are also taking action. The French are talking about banning phones in school. At first I flinched, but I realized that they’re onto something.ref 761 A woman named Lenore Skenazy has started the free-range parenting movement, which supports the type of parenting that used to be considered normal.ref 762 I am also now an enthusiastic supporter of school choice. If you insist on indoctrinating kids, at least give the parents the choice of which gulag to ship them off to every morning. And on the more micro level, give families some choice: (a) common core math versus actual math; (b) learning how to write versus reading books like Waiting for Godot, and (c) secular or religious philosophical underpinning. Parents shouldn’t have to pay double for private schools at least in the more populated areas where multiple tracks and schools are already necessary; there would be no added cost. Finally, let the kids determine their peer groups—let’s call them “boys” and “girls”—and let them play separately without adults force-feeding inclusion. Are what we called “cooties” now microaggressions with “attackers” and “victims”? There will be plenty of time in the later years for coed binge drinking and teen pregnancies. If none of this makes sense, that’s OK, but may God have mercy on your soul, mofo.

Conclusion

Bad times create strong men.
Strong men create good times.
Good times create weak men.
Weak men create bad times.

It’s safe to say we have tough times ahead, because that has always been true. If equity markets regress to the mean while the 38-year-old bond bull market turns into a bear, we will witness some serious wealth destruction. I could be wrong, of course, but if the case for overvaluation in both equities and fixed incomes is sound, I remind you that gravity always wins. It is undefeated. China seems on the cusp of the first serious lesson about the downside of capitalism. The European Experiment of a super-sovereign world may falter when fill-in-the-blanxits start leaving. If the U.S. finally comes to terms with its debt problem through a mechanism I haven’t yet imagined, the 12-step program will not include excessive consumption on the back of more debt (hair of the dog). Boom–bust cycles are normal, but this one could be a bit too synchronous for comfort, and it follows a supernatural monetary policy.

“I think the next downturn is going to be a different kind of downturn. I think it will be more severe in terms of the social-political problems. It will be harder to handle. . . . It will have bigger international implications."

~Ray Dalio

“There is a numbness out there, there is an ambivalence out there that’s concerning. . . . When the next turn comes—and it will come—it’s likely to be more violent than it would otherwise be if we let some pressure off along the way.”

~Michael Corbat, Citigroup CEO

Here’s what is bugging me. There has been a growing malaise since the ’08–’09 crisis manifesting upheavals that seem correlated. I blame Obama and his Department of Justice in part. This is not because of his politics—they shockingly never bugged me that much, and I like the guy—but rather because he let the bad guys go by policy. They stitched up festering wounds that laid foundations for social upheaval (mixed metaphorically speaking). The Occupy Wall Street movement was toothless but a beta test. Now we have Antifa, which is a combination of dangerous people and gullible followers. Presumably there are right-wing analogs, but I find them harder to identify as coherent groups.

“Liberals claim to want to give a hearing to other points of view, and are then shocked and offended when they discover there are other points of view.”

~William F. Buckley, founder of The National Review

I think the reason that those on the left are so prominent on my radar right now is that they went berserk when Hillary—the first female presidential contender—got beaten by the most repugnant opponent they could imagine. You don’t have to look hard to see educated and intelligent people—they are not one and the same—saying some of the most vile things. From the left has spawned an intolerant liberal left. There seems to be a prevailing wisdom that if you know you have the moral high ground (who doesn’t think that?), there are no rules. You first label your opponent—white, male, conservative, heterosexual, neo-Nazi, fascist, insufficiently progressive, or all of the above—and then attack verbally and even physically. I reached out to a decidedly progressive faculty member who was being eviscerated unjustly—scorn, hate mail, the whole enchilada. I’ve done this many times simply to let them know they’re not alone. When I noted the irony that it was coming from the left, they responded:

“The harsh criticism on my role in the story (as reported by the media) is not coming from folks on the left, it’s coming from liberals. There’s a big difference, as you know.”

What a fascinating response. As I understood it, liberals were compassionate and tolerant, albeit a little rich in fanciful ideas. The graphic in Figure 55 shows that everything has changed.ref 763 As your political opponents move to the extreme, you move to the other extreme. We were OK in 2004, quite healthy actually. By 2017, however, we had polarized.

Figure 55. The growing political and social divide.

“War is when your government tells you who your enemy is, and revolution is when you discover it for yourselves.”

~Source unknown

When the riots in France started, they were reputed to be about an energy tax. You would be shocked at the number of journalists and bloggers trolling Twitter trying to find someone who could explain what was reallyhappening. Here is my answer: Government is like a fiat currency. Once faith in it is lost, you will witness cascading failures that are too complex to comprehend in detail. Arab Spring began when one highly flammable Tunisian lit himself on fire. As Billy Joel says, “We didn’t start the fire.” Avalanches, explosions, earthquakes, and fires all thwart serious efforts to model them. Metastable systems—systems displaced markedly from equilibrium waiting for the right spark or trigger—return to equilibrium unexpectedly, quickly, and often violently. Social movements start small (by definition) and unexpectedly, but they move quickly and can end violently. France has been down this path. Edmund Burke was one of the few who saw the social movement in late eighteenth-century France as the first rumblings of a murderous rebellion. The Rodney King–sparked LA riots started to spread; we got lucky when they burned out. When everyone is grumpy and some guy decides to light a car on fire, don’t be surprised when others join in. They all share a common denominator: they're PO’d.

“The collapse is fundamentally due to the unstable position; the instantaneous cause of the crash is secondary.”

Didier Sornette, Professor of Entreprenurial Risks, ETH Zurich

The solution is to have strong social institutions and social capital that unifies the populace. This gets to my criticism of the left, not the people but rather the leaders and power brokers denounced by Malcolm X (above). When you deem it your job and derive power from providing goods and services to the masses, self-governing and self-sufficient groups represent risk. It’s a turf war. Under the guise of inclusion, people are now being discouraged from self-assembly. Men and women as well as boys and girls are not allowed to have their own sports. The Boy Scouts of America, where fathers and sons congregated to train and civilize a new generation of responsible fathers, is no longer just fathers and their sons.

Fraternities are an interesting case study in social cohesion. They are on the lam from society. You house a few dozen 18- to 22-year-old men away from their parents for the first time. A few mishaps are a certainty. Statistically, if you select a few dozen men from a campus randomly, give them a Greek label, and monitor their behavior they will collectively look like a dumpster fire. I will admit there is also groupthink that amplifies behavior and drops average IQs to levels that can shock adults. They also represent legal bull’s-eyes for lawyers when things go bad. Some universities have replaced fraternities with communal living units. Why do other schools support this increasingly polarizing Greek communal system? First, the nouveau communal units are not as cohesive as those that are self-assembled. I have a data-less theory: If universities analyzed suicides on campuses—they are common on all campuses because of the risky age bracket—they would find that the suicide rate in fraternities is low. When things go poorly—a flunked exam or being dumped by a girlfriend—the dejected kid goes back to his fraternity and gets shitfaced with dozens of his friends. It is a support group unlike any others (except for maybe in the military). From these collectives of incorrigible crazies emerge future leaders, not only of corporate America but also of university alumni organizations. I am stunned by what the Bands of Losers I lived with turned into as they got older. During reunions, fraternities fill with old friends sharing common stories—stories that are common even if they didn’t overlap in college—while independents wander the campus looking at new buildings or don’t bother to return at all. Are these really organizations you want to dismantle?

Let’s swing our gaze elsewhere for a moment. I always viewed gentrification of dilapidated neighborhoods in big cities as a rebirth of sorts, a spontaneous urban renewal. Out with the old, in with the new. I recently stayed with a friend (Andy Huszar) in Harlem. My life expectancy would have been 5 minutes when I was in grad school. What a miracle. What I failed to realize, however, was that those dilapidated buildings were part of neighborhoods, not just dwellings. Neighborhoods are like Cheers where “everybody knows your name.” Gentrification forces people to find cheaper housing elsewhere. They will find it, of course, but they won’t find a community. You can hear the fabric tearing.

"We live in a society of decreasing circles. More and more of us know fewer and fewer of us. We live alone and eat by ourselves, often with a TV or computer rather than a human being for company."

~The American Conservative (@amconmag)

Now I will go where no rational man has gone before: religion! I have been a pro-choice atheist my whole life—just a pagan with a busy sword—and am unlikely to switch sides now. As a scientist, extreme Christian views on creation and evolution are never gonna make sense. Over the years, however, my thinking became more nuanced as an accumulated broader historical perspective caused cognitive dissonance to encroach. The Church in medieval Europe certainly has plenty of blotches on its record, but in a “World Lit Only by Fire,” the church brought order where there would have been only chaos. Vivid imagery of Hell that made medieval life look cushy by comparison kept the nobles from abusing the peasants. How about the Spanish Inquisition? Well, they were legally trained well above the norm of their time. A documentary on the massive "inquisitor archives" showed that the inquisitors executed fewer people over four centuries than the state of Texas offed over a far shorter span. There is also evidence that the inquisitors viewed religion as outside of their jurisdiction during some periods. Why the bad rap? Every time Spain got into a war, which was quite often, the opposing team would pull out horrific tales of the inquisitors to rally the troops. Also, the norms for the era were pretty damned bad anyway (see Pinker in "Books").

How about all the scientists that got oppressed by the Church? A little history of science shows that gets a little fuzzy too. Leonardo da Vinci carved up people in the basement like John Wayne Gacy without getting flack. When scientists discovered something new, the Church would often say, “God is even more grand than even werealized.” A savvy scientist would say, “You betcha, Pope.” The scientists who got into trouble may have lacked the self-control to avoid pushing the Church’s buttons. I know enough scientists like this to say that my thesis is in the realm of possibility.

“Defending rights against the encroachments of the government saves the common liberties of the country.”

~Alexis de Tocqueville, 18th century French diplomat, historian, and political scientist

When Alexis de Tocqueville came to America, he marveled at how much freedom Americans enjoyed and how religious they were. He also marveled at the lack of lawlessness (brawling aside, which he noted was way too consensual). The message was that our strong Constitution and limited laws gave us unprecedented freedom while religion gave us the will not to abuse it. You resisted stealing from your neighbor simply because it was wrong. You helped your neighbor because it was right. Charles Murray in Coming Apart (see "Books") paints in graphic detail how the last half-century has witnessed a stunningly abrupt replacement of morality for rules. What happens when we have lots of rules but nobody feels morally obliged to follow them?

From the left there is a relentless push to remove Christmas from schools, denounce those who support the American flag, control what is taught to children and where, emasculate men, move decisions from the local to the centralized national government through rules and regulations, take away our freedom of choice with whom to do business, confuse abstract feminism with women's rights, take away parents' rights to choose what is best for their children, and decide with whom we can affiliate and who we get to exclude. These institutions and ideas represent a critical social glue. Be careful what you take away.

Thus, I am an atheist living in a unique society that was built on strong moral values that find their roots, at least in part, in religious convictions that I do not share in their detail. I should be very careful, however, to not lose sight of the fact that I am reaping what I did not sow. I should have more faith in those who already have faith. I am now a cognitive dissident. And with that, my work here is done. You're welcome.

“Maybe our favorite quotations say more about us than about the stories and people we're quoting.”

~John Green (who?)

Acknowledgements

There are so many people from the world of finance and markets who patiently allow me to invade their space with inane comments and questions. Many are household names—real legends—even outside of the finance world. One year I tried to thank a ton and found out how many more I excluded. As The Donald would say, “I love all of you” (but Rudy, you are the best. I love ya, man.) That said, people do reach out, and I’m happy to chew some fat. My email is dbc6@cornell.edu. If I don’t answer an email, it’s either because MSFT Outlook has filtered yet more emails (thanking Steve Sinofsky, friend and former president of Microsoft under Ballmer, for that one) or because I just screwed up. And if I know you, I’ll cook you burgers on our deck overlooking Cayuga Lake if you come to Ithaca. Some of you already have standing offers. People, not places or experiences, are what fill my bucket list. And, by the way, send your kids to Cornell because it is a truly wonderful school. How wonderful? We have more departments in the top ten than any other school in the country . . . and “everybody knows your name.” I have no strings to pull, but I do understand the system if you want some advice.

There are always new additions. That’s Sean in the middle sleeping on Grandpa, Miles on the left, and Liam on the right in the photo on the left. Sean’s a boy until he’s old enough to decide for himself. In the right-hand photo is Claire, a rescue from a breeder. This picture is after we peeled 25 pounds off her. She identifies as a Lab, our third, although similarities to bear #409 (Beadnose) are inescapable.

Figure 56. Three punks in training and The Master (left) and “Claire” aka “Claire the Bear” aka “The Tank” aka “Butterball” and The Master of that too (right). 

Books

“Moses wrote one book. Then what did he do?”

~Sidney Morgenbesser, Columbia University philosopher

I would have read more books when I was younger if the ones they made us read didn't suck salty balls and if it were not for acute CLCS (chronic lip cramping syndrome). I was a typical boy on the lower end of the reading scale with a highly targeted curriculum:

As an adult, career and family have kept my reading list short (outside of volumes on chemistry). Enter the audiobook. Snobs say it’s not reading, to which I say, “Bite me." I use my ears; you use your eyes. Hellen Keller used her damn fingers. I can get through a dozen per year just commuting a 24-minute round trip to work. When my wife asks me to go to the store, it's like asking me to read for a few minutes. And even if the books are mediocre—I try to be selective—they just keep marching forward monotonously to the finish. I have failed to finish very few (no fading Post-its). I burn them to disk for $10 a pop via Amazon Prime so that my colleagues can mooch them. The books all profess to be non-fiction, although I have my doubts sometimes. Topics include history, markets, economics, science, psychology, anthropology, and college-level courses from the Teaching Company. I’m trying to get through American history through the eyes of presidential biographers (even with Chester Arthur in my sights). Simple treatises on complex topics (like Mervyn King’s latest below) show me how to formulate and articulate complex ideas simply.

The Fifth Risk by Michael Lewis

Those who hate books that are one-third book and two-thirds fluff should appreciate Michael Lewis for brevity. Lewis’s treatise blends several plotlines without bringing much of his typical comedic flare. The primary plotline is to hammer Donald Trump for his poor transition in taking over the federal government. Some of the loons Trump put in key staff positions do indeed seem to be inexcusable. I think Lewis does a credible job, although it seems a little light on awareness that (a) Trump had no clue that he would win, and (b) his transition team had support from neither political machine. The second, dominant plot is to describe some of the amazing things federal employees do that we haven’t a clue about. He does this well, although he again glosses over the estimated 2 million federal employees who are not brimming with skill and productivity. The book was informative.

https://www.amazon.com/The-Fifth-Risk/dp/B07GNTDQJQ/ref=sr_1_1?ie=UTF8&qid=1540764617&sr=8-1&keywords=The+fifth+risk

Coming Apart: The State of White America, 1960–2010 by Charles Murray

Stan Druckenmiller said that Charles Murray’s book “scared the hell out of me.” Murray, you may recall, is the putative alt-right whackadoodle who wrote The Bell Curve and was physically attacked at Middlebury College in 2017. I would be hard pressed to pigeonhole this book as leaning to the right. It is a great story about how the fabric of social structure is fraying badly. We’ve replaced morality and a sense of social cohesiveness with a far less effective rule- and law-based society. It’s an important book. (Jonah Goldberg admitted to me that his newest book channels Murray’s, albeit dripping with sarcasm. It’s on my list.)

https://www.amazon.com/Coming-Apart-State-America-1960-2010/dp/B007A5GPI4/ref=sr_1_1?ie=UTF8&qid=1540766157&sr=8-1&keywords=coming+apart

The Intimidation Game: How the Left Is Silencing Free Speech by Kimberley Strassel (@KimStrassel)

Kimberley Strassel is no friend of the left, so it’s not a surprise that she would focus on the evil deeds of only left-wing politicians. She does a credible job of laying out the political hijinks, which are decidedly disquieting. The emphasis is on how they use government and law as a weapon against the right. If one were to assume the right wing is equally guilty, you probably get an accurate view of how awful politics inside the Beltway has become. It was too lopsided for me to endorse it enthusiastically.

https://www.amazon.com/s/ref=nb_sb_ss_c_1_17?url=search-alias%3Daps&field-keywords=kimberly+strassel+intimidation+game&sprefix=kimberly+strassel%2Caps%2C899&crid=KTNBKEVY0EKG

Antifragile: Things That Gain from Disorder by Nassim Taleb (@nntaleb)

To the list of terms “fragile” (easily broken) and “robust” (hard to break), Nassim Taleb suggests the term “antifragile” (grows more durable under stress). The most obvious and intuitive example is the immune system. Taleb venomously attacks those he disrespects (economists), and his prose is an acquired taste. Many will find the vitriol too much. He makes interesting arguments about how our efforts to protect ideas, objects, people, and institutions inadvertently weaken them. He reinforces maxims like “stability breeds instability” or “that which does not kill us makes us stronger.”

https://www.amazon.com/Antifragile-Things-That-Disorder-Incerto/dp/0812979680/ref=sr_1_1?s=books&ie=UTF8&qid=1540766748&sr=8-1&keywords=nassim+taleb+antifragility

Skin in the Game: Hidden Asymmetries in Daily Life by Nassim Taleb (@nntaleb)

Nassim Taleb tees off on those in our world who get to call the shots and reap rewards but do not pay the price of failure. This heap of targets includes politicians, economists, and bankers. One of his strong supporters over at Amazon referred to Taleb as "rude and angry". Detractors hold a mirror up to him and ask if his disdain for advice givers isn’t some form of hypocrisy. As always, I enjoy reading his books, but bring a thick (antifragile) skin.

https://www.amazon.com/Skin-Game-Hidden-Asymmetries-Daily/dp/042528462X/ref=pd_sim_14_4?_encoding=UTF8&pd_rd_i=042528462X&pd_rd_r=3dd4538b-db03-11e8-8a27-e7c97784a407&pd_rd_w=H6BYO&pd_rd_wg=1XNLh&pf_rd_i=desktop-dp-sims&pf_rd_m=ATVPDKIKX0DER&pf_rd_p=18bb0b78-4200-49b9-ac91-f141d61a1780&pf_rd_r=00R3KDQCS3P0ZFCG8BQX&pf_rd_s=desktop-dp-sims&pf_rd_t=40701&psc=1&refRID=00R3KDQCS3P0ZFCG8BQX

The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google by Scott Galloway (@profgalloway)

Scott Galloway is an entrepreneur, venture capitalist, and New York University professor. He knows his way around the tech world. In this book he critiques the FAANGs (ex-Netflix). Although it seems to be intended as a tell-all description of the dastardly deeds of these monopolistic, civil-liberty-encroaching companies, he cannot hide his awe. Clearly Amazon is at the top of his leaderboard as a completely mind bending and society-changing wielder of unchecked power. Apple is praised for marketing itself as a well-branded provider of elite products. (I was left unconvinced of its durability.) Facebook and Google draw fire for their powerful incursions into our daily lives. I am unconvinced that any of them are as durable as Galloway thinks. The backlash to their power may be surprising. I only wish I had this book 15 years ago; I would have made a killing as a true-believing investor.

https://www.amazon.com/Four-Hidden-Amazon-Facebook-Google/dp/0735213674/ref=sr_1_1_sspa?s=books&ie=UTF8&qid=1540768834&sr=1-1-spons&keywords=scott+galloway+the+four&psc=1

The Coddling of the American Mind: How Good Intentions and Bad Ideas Are Setting Up a Generation for Failure by Jonathan Haidt (@JonHaidt) and Greg Lukianoff

Jonathan Haidt and Greg Lukianoff are evolutionary psychologists at the vanguard of the fight to push back against political correctness and the strange form of social activism that appeared abruptly on campuses around 2014 (and, I hasten to add, graduate programs around 2018). He is openly liberal while claiming that he no longer recognizes what is called liberalism in this era. The book describes in lurid detail what is happening, how it happened, and its profound consequences. If you’re the parent of young children, you should read it before it’s too late for your kids. Great book. I sent it to one of our deans, and he said that what Haidt describes is what he deals with every day, and it has caused him to rethink his child-rearing tactics.

https://www.amazon.com/Coddling-American-Mind-Intentions-Generation/dp/B079P7PDWB/ref=sr_1_1?ie=UTF8&qid=1540769381&sr=1-1&keywords=coddling+the+american+mind

The Marshall Plan: Dawn of the Cold War by Benn Steil (@BennSteil)

I read this book twice, the first time in draft form while it was being written and the second in audiobook form after publication. Benn Steil is a bestselling author hailing from the Council on Foreign Relations (CFR) which gives him a remarkable view of the world and access to unparalleled human resources. After piecing together how John Maynard Keynes and Harry Dexter White negotiated the new global currency order in his bestselling, Battle of Bretton Woods, Steil charges into the task of probing the political machinations required to establish the global political order. He describes in scholarly detail (read: not for the faint of heart) how the Russians and the U.S. went headlong into the Cold War. The Marshall Plan to save Europe from imploding in the post-war era was politics on steroids—less humanitarian and more global positioning. The politics within the U.S. and Europe were as complex as any. What I still have not grasped, however, is why West Berlin, deeply embedded in the Eastern Bloc, was so important.

https://www.amazon.com/Marshall-Plan-Dawn-Cold-War/dp/B078F1H2SP/ref=sr_1_1?ie=UTF8&qid=1540769828&sr=1-1&keywords=the+marshall+plan

12 Rules for Life: An Antidote to Chaos by Jordan B. Peterson (@jordanbpeterson)

Jordan Peterson has had a growing presence in the culture wars. He came to prominence fighting a Canadian law that would mandate the use of pronouns for all the gender fence sitters. Peterson then rocketed to fame after a series of interviews with liberal attackers (notably Cathy Newman) in which he systematically dismembered their ideas. (I watch his interviews as though they were game films.) This book describes a series of guidelines on how to live your life and raise your children to avoid becoming insufferable with insufferable children. The lessons are sound. The book is a good read that would have died in obscurity if not for his rise to fame, which has led to millions of copies sold. Cathy Newman made him wealthy.

https://www.amazon.com/12-Rules-Life-Antidote-Chaos/dp/B0797Y87JC/ref=sr_1_1?ie=UTF8&qid=1540771653&sr=1-1&keywords=jordan+peterson+12+rules+for+life

The Undoing Project: A Friendship That Changed Our Minds by Michael Lewis

At some level, this book is a recycling of ideas of Michael Lewis’s Moneyball (the book, not the movie!) and Daniel Kahneman’s Thinking Fast and Slow, both of which are brilliant books. Lewis goes into considerable depth describing how Danny Kahneman and Amos Tversky worked as “the odd couple” for many years to create the ideas underlying Thinking Fast and Slow, which won Kahneman the pseudo Nobel Prize in economics. The Undoing Project is about the two men. In my opinion, this book will likely lose a lot of appeal for readers who are unfamiliar with Kahneman’s and Tversky’s work. Thus, read Thinking Fast and Slow and Moneyball first, then decide about The Undoing Project.

https://www.amazon.com/Undoing-Project-Friendship-Changed-Minds/dp/0393354776/ref=tmm_pap_swatch_0?_encoding=UTF8&qid=1544929043&sr=1-1

The Better Angels of Our Nature: Why Violence Has Declined by Steven Pinker (@sapinker)

Pinker wrote what could have been titled, The Comprehensive History of Violence. It covers all facets from crimes, brutal punishments, wars, domestic violence, you name it. Steven Pinker makes a strong case that we have become less violent over the centuries. He deals with those who point out atrocities of the twentieth century by invoking a per-capita metric and describing hugely violent periods that are largely unknown to most of us. The horrific stats on violence in the past are sobering, occassionally forcing me to take breaks during the more gruesome parts. To paraphrase Pinker, “I could have Adolf Hitler standing in front of me, and I would not have thought of doing that to him.” The book could have been shorter, but it certainly is enlightening and serious scholarship.

https://www.amazon.com/Better-Angels-Our-Nature-Violence/dp/0143122010/ref=sr_1_fkmr0_1?ie=UTF8&qid=1524771442&sr=8-1-fkmr0&keywords=steven+pinker+the+better+angels+among+us

Red Notice: A True Story of High Finance, Murder and One Man’s Fight for Justice by Bill Browder (@Billbrowder)

I ran across Bill Browder ever so briefly last year as I wrote about the Magnitsky case in which the U.S. put sanctions on Russia for torturing Sergei Magnitsky to death. This affair got tangled up in the Clinton–Russia dealings. Browder describes his efforts at dealing with Russian oligarchs as he was an early entrant to Russia after the fall of the Soviet empire. You can’t help but notice that Browder is very much like the oligarchs he describes, strip mining Russia of assets on sale in the post-empire chaos. After reading the book, I began to run into bloggers who view Browder in a much darker light and paint him as the true villain. I am altogether uncertain about where fact and fiction meet in this book.

https://www.amazon.com/Red-Notice-Finance-Murder-Justice/dp/B00T567KIA/ref=sr_1_1?ie=UTF8&qid=1540773044&sr=8-1&keywords=red+notice+by+bill+browder

The Selfish Gene by Richard Dawkins (@RichardDawkins)

This 1970s classic describes how evolution works at the gene level rather than the group level. (This book was a natural choice for me as a former genetics major with a fondness for evolution and various nature–nurture battles.) Dawkins’s gene-level evolution was pushed so strongly that it stifled contrary theories—group-level natural selection—to the point that it took decades for them to re-emerge and eventually usurp Dawkins’ model. The book is a little dated, but I enjoyed it. His most lasting legacy is the idea that humans pass along non-gene-level information (ideas) through cultural evolution. He called these ideas “memes.” And now you know the rest of the story.

https://www.amazon.com/Unknown-The-Selfish-Gene/dp/B004U8NB2M/ref=sr_1_1?ie=UTF8&qid=1540773425&sr=1-1&keywords=the+selfish+gene&dpID=51ovAOjmklL&preST=_SX342_QL70_&dpSrc=srch

The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham, Jason Zweig (@jasonzweigwsj), and Warren E. Buffett

This, folks, is the bible of investing. Graham was Warren Buffett’s mentor. This revised edition has updates from Zweig and Buffett, but it seems faithful to Graham’s original edition, which I read so many years ago that I had no idea of its importance and wisdom. Modern investors who read this will say either, “OMFG!” because they understand its importance or, “This thinking blows” because they’re still swilling new-era Kool-Aid. The book convinced me that I should probably never buy a common stock unless I am willing to throw a Hail Mary because I could not possibly do the analysis adequate enough to be called an “intelligent investor.” My best hope is to go for sectors. On the battle of stocks versus bonds, I was struck by the claim that people who think they will necessarily make more money in stocks than in bonds in the long run are “delusional.” Debunking this belief has been my white whale for a couple of years. I think the authors are correct, but the era of interventionist (arrogant) central banking has made their maxim seem wrong for a good long time. This book is a must read for those who think they are hotshot investors. Dismiss their wisdom at your peril.

https://www.amazon.com/Intelligent-Investor-Definitive-Investing-Essentials/dp/0060555661/ref=tmm_pap_title_0?_encoding=UTF8&qid=1540773969&sr=1-1

The End of Alchemy: Money, Banking, and the Future of the Global Economy by Mervyn King

Mervyn King's view of the financial crisis and monetary policy on both sides of the crisis is either precious—he is the former head of the Bank of England—or garbage, because he is one of “them.” Maybe he’s just trying to salvage his legacy, but King is remarkably critical of central banking and monetary policy. He knows that consumption is unsustainably high, and it cannot be solved with stimulus. That game is over. The level of the book is low—I think I could have written much if not all of it—but this level of “honesty” from one of the global elite is shocking. They way he articulates ideas with clarity makes the book highly entertaining.

https://www.amazon.com/End-Alchemy-Banking-Future-Economy/dp/B01GQNTC8K/ref=sr_1_1?ie=UTF8&qid=1540775043&sr=1-1&keywords=mervyn+king

Hoover: An Extraordinary Life in Extraordinary Times by Kenneth Whyte

I’m attempting to complete a history of the United States through the eyes of presidential biographers. Hoover was a natural given that he was POTUS during an economically disastrous four-year term. There are many myths propagated by Hoover owing to this little bit of bad timing that came to a head with Roosevelt beating him like a rented mule in the 1932 election. In a nutshell, Hoover was extraordinarily qualified as a businessman and, when called to service, a focused and highly competent civil servant. The guy got the job done. He has been vilified because of a largely erroneous role played during the Great Depression and because Roosevelt was a dick. Hoover saw it coming, spotted the metastability of the credit and stock markets, and sweated the details. He did everything in his power to mitigate the damage, stopping short of big-government solutions. He also didn’t pander to the masses for love or votes, which carried with it a high price politically. I was left with the sense that Hoover was one of the greats.

https://www.amazon.com/Hoover-Extraordinary-Life-Times-ebook/dp/B01MZAAX0M/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1543698108&sr=1-1&keywords=herbert+hoover+biography

Sapiens: A Brief History of Humankind by Yuval Noah Harari and Derek Perkins

I mowed through two books by Yuval Noah Harari and Derek Perkins that seem to ponder the meaning of life. Sapiens got the bulk of the press. The book wanders through the cultural evolution that led from hunter-gatherers to what we are today. One of the more interesting concepts is that you would have trouble arguing life got better until we reached the era of modern medicine. We merely got better at packing more people into tight places. I have this odd paradox: I enjoyed wandering through the story but within a matter of months could not for the life of me tell you what it was about. Some books are sticky: The ideas stay with you. This one was not of those for me (a little like a pleasant dream that leaves your memory moments after waking). One Amazon reviewer possibly caught the spirit of my concerns noting, “Rather than being the interesting synthesis I’d hoped for, this turned out to be a series of disjointed bits touching on nearly every aspect of society.”

https://www.amazon.com/Sapiens-Brief-History-Humankind/dp/B0741F3M7C/ref=sr_1_3?ie=UTF8&qid=1543699009&sr=1-3&keywords=homo+deus

Homo Deus: A Brief History of Tomorrow by Yuval Noah Harari and Derek Perkins

As the sequel to Sapiens, it suffers from the same disconnected wandering through a stream-of-consciousness presentation of entertaining ideas. Once again, I enjoyed it like one might enjoy listening to a symphony, but in the end, the notes blur together. One hopes that part of this disappointing lack of stickiness is merely how the human mind indexes information. Maybe the ideas are in in my skull—part of my cultural DNA—but only retrievable when a cue from the environment resurrects them, allowing me to molest somebody with my globality.

https://www.amazon.com/dp/B01BBQ33VE/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1

The Oxford Dictionary of Allusions by Andrew Delahunty

An allusion is “an expression designed to call something to mind without mentioning it explicitly; an indirect or passing reference.” There you have it. I worked my way through a book of allusions for fun. Most aren’t that good, but I hit a couple of gems. The book is not for Philistines. (Did you catch that allusion?)

https://www.amazon.com/Oxford-Dictionary-Allusions-Andrew-Delahunty/dp/0198600313

The Myth of Capitalism: Monopolies and the Death of Competition by Jonathan Tepper

I read only a handful of draft chapters while this book was being written. Based on that foreshadowing, I suspect the overall message—oligopolies, not just monopolies, are destroying capitalism—will be a compelling story. I'll let you know a year from now.

https://www.amazon.com/Myth-Capitalism-Monopolies-Death-Competition/dp/1119548195/ref=sr_1_cc_1?s=aps&ie=UTF8&qid=1543701902&sr=1-1-catcorr&keywords=jonathan+tepper

The whole beast can be downloaded as a single PDF Here...

Published:12/22/2018 11:12:05 AM
[Markets] Trump Is Considering Firing Fed Chair Powell

if amid the barrage of negative news hitting the market this quarter there has been one outstanding item which would have sent it sharply (even) lower, that would be a flashing red headline - or a tweet from the president - announcing that Trump has fired Fed Chair Jerome Powell.

And while to many such an act would seem unthinkable, even from someone as unorthodox and unpredictable as Trump, it now appears that's precisely the outcome the market will have to worry about next as Bloomberg reports that the president has discussed firing Federal Reserve Chairman Jerome Powell "as his frustration with the central bank chief intensified following this week’s interest-rate increase and months of stock-market losses", citing four people familiar with the matter.

While advisors in Trump's inner circle have rightfully warned him that firing Powell would be a "disastrous move" for stock prices, and instead are "hoping that the president’s latest bout of anger will dissipate over the holidays", the sources reveal that the president - who is facing the imminent departure of two of his closest advisors, chief of staff Kelly and secretary of defense Mattis - has talked privately about firing Powell many times in the past few days.

Still, even Trump likely realizes that any attempt to push out Powell would have a devastating effect on the one barometer of his presidency he holds dearest to his heart - the stock market - and not only that, but terminating the Fed chair would likely send a shockwave across global financial markets, resulting in a collapse of risk asset prices and undermining investor confidence in the central bank’s ability to guide the economy without political interference. Worse, it would come at the worst possible time, just as markets are in freefall in recent weeks, with the Nasdaq just entering a bear market and the S&P less than 3% away from being 20% down from its all time highs.

It is likely that any move against Powell would be met by considerable legalistic resistance as it is unclear how much legal authority the president has to fire Powell, as the Federal Reserve Act says governors may be "removed for cause by the President" and since the chairman is also a governor, that umbrella definition also extends to him. Even so, the rules around firing the leader are legally ambiguous according to Peter Conti-Brown of the University of Pennsylvania notes in his book on Fed independence.

Additionally, while the Fed is independent only on paper, and history is replete with examples of presidents influencing monetary policy in the past, most notably when LBJ literally attacked then Fed chairman William McChesney Martin, there has yet to be an instance of an acting Fed chair being fired by the president.

Such a move would represent an unprecedented challenge to the Fed’s independence. Though he was nominated by the president, Powell was thought to be insulated from Trump’s dissatisfaction by a tradition of respect for the independence of the central bank.

That separation of politics from monetary policy is supposed to instill confidence that Fed officials will do what’s right for the economy over the long term rather than bend to the short-term whims of a politician.

The reason behind Trump's ire is simple: he sees the Fed's rate hikes as the cause behind the market's recent slump, and after explicitly "urging" the Fed not to hike rates last week, saying Powell was "being too aggressive, far too aggressive, actually far too aggressive" and telling Reuters the central bank “would be foolish” to proceed with a rate hike, he may well see Powell's "not so dovish" rate hike as an open act of defiance - usually a career-ending move for anyone who ultimately is accountable to Trump.

The irony is that just over two years ago, Trump attacked Powell's predecessor, Janet Yellen, for creating a stock market bubble with her dovish policies: in Sept 2016, Trump accused the the Fed of "keeping the rates artificially low so the economy doesn't go down so that Obama can say that he did a good job. They're keeping the rates artificially low so that Obama can go out and play golf in January and say that he did a good job. It's a very false economy. We have a bad economy, everybody understands that but it's a false economy."

Two years later, when the same "false economy" belongs to Trump, the president has changed his tune, and his ideal Fed chair would be none other than Janet Yellen (whom Trump refused to reappoint for being "too short.")

The even bigger irony is that Powell finds himself in a lose-lose situation: one one hand he can merely perpetuate the unsustainable asset bubble created by his predecessors Greenspan, Bernanke and Yellen whose inevitable bursting would have devastating consequences on the financial system (which, however, he can leave to his successor as both Bernanke and Yellen did), or he can bit the bullet and be the one responsible for at least attempting the renormalization of monetary policies, an even which inevitably lead to far greater pain for those who invested in said bubble.

Furthermore, when Trump signed up for the presidency he should have picked one of the two options: the fact that he did not and two years later decided to continue on the autopilot set previously by the Fed is precisely why it is Trump who will now have no choice but to be the fall guy for the mess prior administrations, and previous Fed chairs created.

Trump’s public and private complaints about members of his administration have often been a first step toward their departures -- including former Attorney General Jeff Sessions, his first Secretary of State Rex Tillerson and outgoing chief of staff John Kelly.

And while it's not just Powell who is on the chopping block as some of Trump’s recent anger has also been directed at Treasury Secretary Steven Mnuchin for his part in persuading the president to select Powell to lead the Fed, the fact that Powell's tenure is now in jeopardy and that the Fed Chair could be fired after even a mere sharp drop in the market - with an S&P500 bear market looming as a likely psychological catalyst - will lead to a self-fulfilling prophecy as traders will now sell merely on the fear of, and frontrunning the news that Trump has fired Powell precisely as a result of such selling.

Published:12/22/2018 8:41:19 AM
[movies] Lethal Weapon 5 (Paul Mirengoff) Republicans celebrated the passage of the jailbreak legislation known as First Step with an event at a trendy restaurant in Washington. Naturally. What’s the use of passing feel-good, virtue-signaling bipartisan legislation unless you have a great party afterwards? Politico reports that Van Jones introduced Jared Kushner, the man of the hour. Jones, you may remember, was too leftist even for the Obama administration. But he’s not too leftist for Kushner. Published:12/21/2018 8:07:49 PM
[Entertainment] Barack Obama Stars in New Hamilton Song Remix: Listen to It Here Lin-Manuel Miranda, Barack ObamaGuess who? Lin-Manuel Miranda has for the past year released a new Hamilton-themed song every month as part of a HamilDrops series. His final installment, "One Last Time (44...
Published:12/21/2018 11:05:07 AM
[Markets] Ron Paul: Warmongers Upset With Trump's Syria Decision

President Trump shocked Washington this morning when he Tweeted confirmation of rumors that he would order the removal of US troops from Syria. According to his spokesperson, the order has already been given. The neocons are not happy, with Sen. Lindsey Graham Tweeting that removing troops is an "Obama-like" move. Will Trump's own staff rebel? What about the fine print? Are we really leaving? 

One thing is for sure, the hawks are having a meltdown...

* * *

As a case in point, Josh Rogin at the Washington Post ranted Trump undermines his entire national security team on Syria. And CNN emphasized as part of a "hard news" report that Trump has supposedly handed Syria over to Iran and Russia.

According to Rogin:

Trump appears to be discarding his entire Syria and Iran strategy at a single stroke, giving up any and all U.S. influence in the region — and disregarding the advice of his top national security officials.

If he follows through, writes Rogin, there will follow "devastating and dangerous consequences for the United States." And further: "Trump is now contradicting what all of his other top national security officials have been telling the world for months," says Rogin. So the President of the United States can't make a command decision without a nod from the 'deep state'? 

Meanwhile the CFR talking heads note Trump has "overruled" the "other voices"...

Early reports suggest the troops could be home for Christmas after Trump has declared victory over ISIS, with one Pentagon official giving Reuters a 60 to 100 day timeline for troop withdrawal, and the same report noting the U.S. State Department is evacuating all its personnel in Syria within 24 hours.

America's Syrian Kurdish partners on the ground are said to be "shocked" and scared, given that Turkey is poised to immediately invade. However, US "options" are aptly summarized in the following recent intelligence study"The prospect of US being militarily involved in Syria, caught in middle of one of most complex conflicts in recent memory, with shifting objectives & ambiguous endgame, has been met with congressional indifference and public apathy." 

Yet the usual hawks and pundits act as if the sky is falling, as Eric Jones, a former US Army soldier and Afghan war combat veteran rightly puts it:

To interventionists, the US military is used as a strategic fire-and-forget weapon: deploy forces somewhere, then react hysterically to an impending apocalypse when someone calls for the troops to be withdrawn. Both parties are addicted to military force as a first and only foreign policy option.

And further on Wednesday's surprise Syria decision out of the White House, Jones slams the commentariat current gnashing their teeth over Trump's draw down:

It is always enjoyable to see people who cannot be bothered to pay attention to the longest war in US history, Afghanistan, suddenly jump to provide their uninformed opinions on military deployments way back in the civilian rear when it comes to demanding US forces fight in Syria.

As Ron Paul is now urging in the wake the announcement... "don't Buckle Mr. President"!

Published:12/20/2018 8:05:15 PM
[Markets] Soros Drops $1.35 Million On "Nonpartisan" Watchdog Group Hitting Trump With Lawsuits

A government watchdog group claiming to be "nonpartisan" - while sharing employees with Democratic activist group Media Matters, accepted $1.35 million from billionaire George Soros.

The group, Citizens for Responsibility and Ethics in Washington (CREW), has hit President Trump and other prominent Republicans with high-profile lawsuits, while its members appear regularly on television to attack members of the administration.

Founded by Normal Eisen - a law school classmate of former President Obama (who became Obama's ambassador to the Czech Republic), and longitme Democrat operative Melanie Sloan, CREW accepted donations from two Soros groups; $1.25 million from the Foundation to Promote Open Society, and $100,000 from the Open Society Policy Center, according to the Washington Free Beaconwhich obtained tax filings for the watchdog group. 

Read the rest below via the Free Beacon:

***

The drastic uptick was a byproduct of its planned expansion as Trump took office, documents handed out by Brock to deep-pocketed donors at a January 2017 retreat revealed. The gathering was attended by more than 100 wealthy liberals who huddled alongside Brock at the posh Turnberry Isle Resort just outside Miami as they mapped out how they would "kick Donald Trump's ass" in the upcoming years.

The Free Beacon was on site for the retreat and obtained the confidential documents that show how the seasoned liberal operative planned to damage Trump using Media Matters, American Bridge, Shareblue, and CREW.

Brock chaired CREW's board from 2014 to late 2016 but stepped down from the position as he did not want the organization to appear overly partisan as Trump was entering the White House.

"Due to my stepped-up political activities in the American Bridge opposition research super PAC, I decided to step off CREW's board to ensure its public reputation for non-partisanship," Brock said at the time. "I'm very proud of the work CREW has accomplished during my two years on board, and its work is more relevant now than ever."

Brock's influence on the organization can still be felt, however.

The internal memo explained how CREW would focus on afflicting Trump with "a steady flow of damaging information, new revelations, and an inability to avoid conflicts issues," forcing the Trump administration to defend "illegal conduct in court," reducing the influence of powerful industries and interest groups, and making dark money a political liability in key states.

The documents boasted of CREW's communications team placing regular stories in the Washington PostNew York TimesWall Street Journal, and other publications. The organization also gloated that the group partners "with top reporters to move major stories forward."

Its budget was set at $5.8 million for 2017, which would "double" its size from the previous year, to allow them to expand its staff and scope of their investigations.

"In 2017 CREW is planning to expand to a staff of at least 38," the documents read. "We will more than double the size of our legal team, and add to our research and communications shop (including web and social media). We will also expand our administrative and paralegal capabilities. The increased budget will also cover outside legal services, web and social media services, and research and investigative resources."

In October of this year, as CREW was renewing its registration in North Carolina, the group submitted an independent auditor's report that reveals they share employees with Media Matters, a search of state records found.

"The organization shares employees and other related expenses with Media Matters for America (MMFA), a not-for-profit organization exempt under section 501(c)(3) of the Internal Revenue Code," the report states. "As of December 31, 2017, $4,790 was owed to MMFA, which is included in accounts payable in the accompanying Statement of Financial Position."

CREW's address on its 2017 tax forms is the same as Media Matters, American Bridge, and Shareblue. However, the address listed on its website is a different location that is a 10-minute walk from Brock's main headquarters. This is due to the group leasing office space at two locations, according to the auditor's report.

CREW's spokesperson did not respond to emails seeking comment on the Soros donation, the group being located at the same address as Brock's other organizations, and its sharing of employees with Media Matters after Brock "left" the group.

CREW is an approved organization of the Democracy Alliance, the left's biggest secretive dark money donor network whose members each vow to steer hundreds of thousands in funding to its network of progressive groups each year.

Soros, a member of the alliance, and Brock were both in attendance at the alliance's 2017 fall investment conference in Carlsbad, Calif. The Free Beacon was also present at the resort during its gathering and obtained its confidential agenda, which did not list Brock, although he was spotted at the resort. Media Matters is also an approved group of the secretive club.

CREW has been involved with a number of complaints and lawsuits against Trump since he took office, including the recent high-profile suit accusing Trump of violating the Constitution's emoluments clause, which bars foreign governments from paying U.S. officials through his private businesses.

The lawsuit was filed by the attorneys general in D.C. and Maryland and mimicked an earlier suit filed by CREW in New York that was ultimately dismissed by a federal judge.

The suit was identical in nature because it was aided by top executives from CREW.

Noah Bookbinder, CREW's executive director, and Stuart McPhail, CREW's litigation counsel, are both listed on the original lawsuit under the respective attorneys general.

CREW reported spending $1,645,270 on "large scale litigation" and filed "numerous ethics complaints and administrative complaints and legal complaints with the Office of Government Ethics, the Department of Justice, and other agencies against executive branch officials and members of Congress" throughout 2017. The group additionally reports filing complaints with the Federal Election Commission, Internal Revenue Service, and other agencies "concerning violations of finance and tax laws" by government officials.

In a fundraising email this week, the group took credit for its "pioneering legal and investigative work" and an IRS complaint they say laid the groundwork for the New York Attorney General's investigation that recently led to the Trump Foundation agreeing to shut down its operations.

Soros's spokesperson did not reply to an inquiry on the donations from the financier and his relationship with Brock by press time.

Published:12/20/2018 6:33:11 PM
[Markets] MObama & W - This Isn't News. This Is War Crimes Apologia

Authored by Caitlin Johnstone,

The fact that George W Bush has given Michelle Obama two pieces of candy is once again making headlines in mainstream outlets like TimeThe Hill, and Newsweek.

He has not given her any new pieces of candy since the last time he did so at his father’s funeral. He also has not ceased to be the man who facilitated the murder of a million Iraqis and inflicted a whole new level of military expansionism and Orwellian surveillance upon our world. As near as I can tell, the only reason this story is once again making headlines is because Michelle Obama and the mainstream media have decided to bring it up again.

“He has the presence of mind and the sense of humor to bring me a mint, and he made it a point to give me that mint right then and there and that’s the beauty of George Bush,” Obama said of the war criminal in conversation at the SAP Center over the weekend, which we apparently need to know about because the news is telling us about it.

“We’re all Americans. We all care about our family and our kids, and we’re trying to get ahead,” Obama continued.

“And that’s how I feel about [Bush]. You know? He’s a beautiful, funny, kind, sweet man.”

If you’re starting to feel like attempts to rehabilitate George W Bush’s image are being aggressively shoved down your throat by the mass media at every opportunity, it’s because that is exactly what is happening. Every few weeks there’s a new deluge of headlines explaining to consumers of mainstream media why they should love the 43rd president because he’s such a cutesy wootsey cuddle pie, and completely forget about the piles upon piles of human corpses he is responsible for creating for no legitimate reason at all. The last Bush appreciation blitz was less than two weeks ago.

And there is a reason for this. Make no mistake, this relentless, aggressive campaign to rehabilitate George W Bush whether you like it or not is actually a campaign to rehabilitate what he did and the mass media’s unforgivable complicity in it.

The mass media failed spectacularly to practice due diligence and hold power to account in the lead-up to the illegal and unconscionable Iraq invasion, not just the ghouls at Fox News but respected centrist outlets like CNN, the New York Times and the Washington Post as well. Bogus government reports were passed on uncritically and unquestioned, antiwar demonstrations with hundreds of thousands of protesters were ignored and downplayed, and the words “Saddam Hussein” and “9/11” were deliberately mentioned in the same breath so frequently that seven out of ten Americans still believed Saddam was responsible for the September 11 attacks months after the Iraq invasion had occurred.

In an environment where the New York Times is instructing its readers how to “help fight the information wars” against Russia, the BBC is coaching its audience to scream the word “whataboutism” whenever a skeptic of establishment Russia narratives brings up Iraq, and the US Secretary of Defense is claiming that Putin is trying to “undermine America’s moral authority,” the massive credibility hit that imperial media and institutions took by deceiving the world into the destruction of Iraq matters. Propaganda is a lot more important in cold war than in hot war since avoiding direct military confrontation limits the options of the participants, and Iraq is a giant bullet hole in the narrative of US moral authority which Moscow is rightly all too happy to point out.

Without the claim of moral authority, none of America’s manipulations against Russia make any sense. It’s absurd for America to spend years shrieking about Russian election meddling after it openly rigged Russia’s elections in the nineties, unless America claims that it rigged Russia’s elections for moral reasons while Russia rigged America’s elections for immoral reasons. It makes no sense to have mainstream western media outlets uncritically manufacturing support for wars and coaching their audiences on how to help government agencies fight “information wars” against Russia while also criticizing RT as “state media”, unless you can say that western media functions as an arm of the US government for moral reasons while RT does so for immoral reasons. It makes no sense for the US to criticize Russian military interventionism when the US is vastly more guilty of vastly more egregious forms of military interventionism, unless the US can claim its interventionism is moral while Russia’s is immoral.

For this reason it’s been necessary to rehabilitate the image of the Iraq invasion, and since there is no aspect of the Iraq invasion itself that isn’t soaked in blood and gore, they are rehabilitating its most recognizable face instead. Mainstream media outlets are doing this both to restore their own credibility and the credibility of the US world order they serve, in order to help secure crucial narrative control as we slide ever closer to a direct military confrontation with Russia and/or China.

Whoever controls the narrative controls the world, and Iraq is a major weak point in the US-centralized empire’s narrative control. When you see a political insider like Michelle Obama constantly facilitating the mass media’s fixation on how cuddly wuddly George W Bush has become, you are not witnessing a heartwarming moment, you are not witnessing redemption, and you are most certainly not witnessing the news. You are witnessing war propaganda, plain and simple.

*  *  *

That was fun. So, the best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for my website, which will get you an email notification for everything I publish. My articles are entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics on Twitter, throwing some money into my hat on Patreon or Paypalpurchasing some of my sweet new merchandise, buying my new book Rogue Nation: Psychonautical Adventures With Caitlin Johnstone, or my previous book Woke: A Field Guide for Utopia Preppers.

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Published:12/20/2018 5:00:19 PM
[Middle Column] Deep State undermines Trump? Career US diplomats working ‘to implement the Paris Agreement’

Former Obama UN climate envoy Todd Stern: "A perception floats in public that under President Trump the US has stepped out of the Paris Agreement. But, at [the] Katowice, [Poland UN climate summit] we find that the US is as deeply engaged at the moment in several negotiations behind closed doors."

Another prominent climate activist not worried that the U.S. will actually withdraw is former Vice President Al Gore. See: Gore not worried about Trump’s UN Paris exit: No exit until after 2020 election – ‘A new president could simply give 30 days’ notice, and we’re right back in’

Published:12/20/2018 10:55:25 AM
[Markets] Is The Fed Actually Trying To Cause A Stock Market Crash?

Authored by Michael Snyder via The Economic Collapse blog,

The Federal Reserve has decided not to come to the rescue this time. 

All of the economic numbers tell us that the economy is slowing down, and on Wednesday Fed Chair Jerome Powell even admitted that economic conditions are “softening”, but the Federal Reserve raised interest rates anyway.  As one top economist put it, raising rates as we head into an economic downturn is “economic malpractice”.  They know that higher rates will slow down the economy even more, but it isn’t as if the Fed was divided on this move.  In fact, it was a unanimous vote to raise rates.  They clearly have an agenda, and that agenda is definitely not about helping the American people.

Early on Wednesday, Wall Street seemed to believe that the Federal Reserve would do the right thing, and the Dow was up nearly 400 points.  But then the announcement came, and the market began sinking dramatically.

The Dow Jones Industrial Average lost 720 points in just two hours, and the Dow ended the day down a total of 351 points.  This is the lowest that the Dow has been all year, 60 percent of the stocks listed on the S&P 500 are in bear market territory, and at this point approximately four trillion dollars of stock market wealth has been wiped out.

We haven’t seen anything like this since the last financial crisis.  This is officially the worst quarter for the stock market since the fourth quarter of 2008, and it is the worst December that Wall Street has experienced since 1931.

It is insanity to raise interest rates when stocks are already crashing, but the Federal Reserve did it anyway.

They knew what kind of reaction this would cause on Wall Street and in other global markets, but that didn’t stop them.  The financial world is in utter turmoil, and this move by the Fed has definitely added fuel to the fire.

Could it be possible that they actually want a stock market crash?

Some are suggesting that the reason why the vote was unanimous was because they wanted to send a “strong signal” to President Trump.  He has been extremely critical of the Federal Reserve in recent weeks, and this could be a way for the Fed to show Trump who is really in charge.

They are calling this “the Trump economy”, but that is simply not true.  And when Barack Obama was in the White House, it wasn’t “the Obama economy” either.  Ultimately, it is the Federal Reserve that is running the economy, and they fiercely guard their independence and their authority.

President Trump knows that the only way that he is going to win in 2020 is if the economy is doing well, and he also understands that higher interest rates will slow the economy down.

So essentially the Federal Reserve has a tremendous amount of political power in their hands.

During the Obama era, the Fed pushed interest rates all the way to the floor and kept them there for many years.

But now the Federal Reserve has raised interest rates seven times since Donald Trump took office, and four of those rate hikes have been under current Fed Chair Jerome Powell.

Needless to say, it certainly doesn’t take a lot of imagination to figure out how Donald Trump is feeling about Powell at this moment.

Meanwhile, we continue to get more indications that the U.S. economy is heading for difficult times.  Just consider the following news about FedEx

FedEx shares are plunging after what Morgan Stanley called a “jarring” cut to its annual forecasts, suggesting global growth is slowing far more than most expect – in fact, the bank hinted at the possibility of a “severe recession” unfolding – and prompting expectations of an “uber-dovish hike” by the Fed.

The global logistics bellwether slashed its outlook just three months after raising the view, reflecting an unexpected and abrupt change in the company’s view of the global economy amid rising trade tensions between the U.S. and China. Not only were the cuts were deeper than the Street expected according to Morgan Stanley analyst Ravi Shanker, but everyone is pointing to the following comment from the press release: “Global trade has slowed in recent months and leading indicators point to ongoing deceleration in global trade near-term.”

To see the term “severe recession” used in such a context is more than just a little bit alarming.

The last time the U.S. economy went through a recession, millions of Americans lost their jobs and we saw a wave of mortgage defaults unlike anything we had ever seen before in modern American history.

Are we about to go through something similar?

Earlier today, a CNN article also used the term “recession”, and it discussed the fact that investors now want big corporations to focus on paying down their debts instead of buying back shares of stock…

Fears of an economic slowdown — or even recession — have turned a spotlight on the debt that businesses piled up during the past decade, when borrowing costs were historically low.

For the first time since the Great Recession, investors want companies to prioritize paying down debt rather than investing in the future or share buybacks and dividends, according to a Bank of America Merrill Lynch survey of global fund managers.

But stock buybacks are one of the only things that has been propping up the stock market.  The only way for the bubble to continue is for corporations to go into dizzying amounts of debt in order to fund massive stock buybacks, because the Federal Reserve clearly does not intend to support the markets right now.

At least for the short-term, the Federal Reserve could have calmed the markets and encouraged economic activity by leaving interest rates alone.

In the end, they decided not to do that, and that makes one wonder what they are really trying to achieve.

Published:12/20/2018 10:55:24 AM
[Markets] US, Allies Planning Unprecedented Sanctions Against Beijing Over Cyberespionage

The steady drumbeat of indictments of Chinese companies, hackers and even bad actors allegedly working on behalf of China's Ministry of State Security in recent months has provoked whispers that sanctions against Beijing in retaliation for its hacking and espionage efforts - something that has become a sticking point in the US-China trade war - could be in the offing.

Now, it appears that moment has finally arrived, according to a story in the Washington Post. To wit, several western government officials reportedly told WaPo that the Trump administration and more than a dozen of its allies are expected to condemn Beijing on Thursday over the MSS's campaign to steal other countries' trade secrets and advanced technologies, as well as its efforts to compromise sensitive government and corporate computer networks.

White House

The "gesture" suggests that the rest of the world is gradually coming around to President Trump's insistence that China isn't playing fair - it's not abiding by internationally recognized norms for trade and fair play - and that its path to becoming a global super power and economic and technological leader was greased by cheating. The denunciation portends a long-awaited indictment of Chinese intelligence agents who have allegedly led a long-running campaign to infiltrate communications networks in the US and other countries (something that was foreshadowed by the US's efforts to convince its allies to abandon telecoms equipment manufactured by China's Huawei).

But more importantly, sanctions related to China's cyberespionage efforts are expected to be announced - a decision that will almost certainly infuriate Beijing. The process of coming together to condemn China was led by presidents and prime ministers of the countries that are taking part.

Reports emerged earlier this month that the DOJ was preparing to indict Chinese intelligence officials who are believed to be members of a hacking group known as ATP10 ("Advanced Persistent Threat 10"). As we explained at the time, ATP10 is believed to have broken into "managed service providers" in various countries in an effort to worm their way into secure corporate and government networks.

Trump is also reportedly preparing to go after China for breaking its promise to the Obama administration to refrain from further state-sponsored hacking - a promise made after the infamous infiltration of the US's Office of Personnel Management's system, which is believed to have compromised the identities of US intelligence assets.

Also known as APT10, the hacking group broke into so-called "managed service providers" in the United States, Britain, Japan, Canada, Australia, Brazil, France, Switzerland and South Korea, among other countries. The goal: to worm their way into the networks of the service providers’ clients to gain access to their intellectual property and sensitive data.

Also expected is a condemnation by Trump administration officials of China for allegedly violating a landmark 2015 pact to refrain from hacking for commercial gain. Taking part in the administration’s actions are the State and Homeland Security departments.

The gesture is part of a concerted effort by the US and its allies in Europe and Asia to push back against China's aggressive military and economic stance.

It also risks complicating trade talks between China and the US, as Beijing has warned that any further economic sanctions applied against China from the West could be a dealbreaker for any further cooperation. 

Published:12/20/2018 9:27:32 AM
[United States Defense and Military Forces] News Analysis: A Strategy of Retreat in Syria, With Echoes of Obama President Trump’s view that U.S. forces cannot alter the strategic balance in the Middle East was fundamentally shared by his immediate predecessor, Barack Obama. Published:12/20/2018 5:24:18 AM
[Markets] 2018: The Year Of "Putin-Nazi Paranoia"

Authored by CJ Hopkins via The Unz Review,

As my regular readers will probably recall, according to my personal, pseudo-Chinese zodiac, 2017 was “The Year of the Headless Liberal Chicken.” This year, having given it considerable thought, and having consulted the I Ching, and assorted other oracles, I’m designating 2018 “The Year of Putin-Nazi Paranoia.”

Not that 2017 wasn’t already paranoid. It was. It was completely paranoid, and otherwise clinically batshit crazy. But 2018 has been batshit crazier.

It started out with the Internet companies that control the flow of information that most of us now perceive as “reality” launching an all-out War on Dissent, purportedly to protect the public from “divisive” and “confusing” content, and other forms of Russian “influencing.”

Twitter started sending out scary emails warning customers that there was “reason to believe” that they had “followed,” “retweeted,” or “liked the content of” accounts “connected to a propaganda effort by a Russian government-linked organization.” Facebook launched its own Ministry of Truth, manned by “a dedicated counter-terrorism team” of “former intelligence and law-enforcement officials” (also known as The Atlantic Council, NATO’s unofficial propaganda wing). Google stepped up its covert deranking of insufficiently Russia-hating and other “non-authoritative” websites.

This Orwellian corporate censorship campaign was enthusiastically welcomed by liberals and other Russia-and-Trump-obsessives, who by this time were already completely convinced that secret Russian Facebook agents were conspiring to transform the Western masses into zombified, Russia-loving neo-Nazis by means of some sort of irresistible Putin-Nazi hypno-technology that would melt their brains to oatmeal the second they clicked on one of those dancing cat GIFs.

But the paranoia was just getting started.

By the Spring, professional Putin-Naziologists were issuing warnings explaining that anyone using words like “globalist,” “globalism,” or “global capitalism” was an anti-Semite. There was no such thing as “globalism,” they told us. “Globalist” was just Nazi codespeak for “JEW!” Moreover, anyone criticizing “the media,” or mentioning “banks,” “Wall Street,” or “Hollywood,” or, God help you, making fun of “George Soros,” was clearly a Russia-loving, Sieg-heiling Nazi.

Meanwhile, in London, Blairites were busy combing through six year-old Facebook posts in an effort to prove that Jeremy Corbyn had transformed the British Labour Party into his personal Putin-Nazi death cultThe Guardian published over one hundred articles smearing Corbyn as an anti-Semite and “linking” Labour to anti-Semitism. The BBC jacked up the Russia paranoia, doctoring Corbyn’s hat on TV to make it appear more insidiously Slavic. Owen Jones sprang to Corbyn’s defense, explaining that, yes, the Labour Party was a disgusting hive of anti-Semites, but they were doing their utmost to root out the Nazis, ban all criticism of the IDF, and reverse the mass exodus of Jews from London.

All this was happening in the wake of the notorious Novichok Porridge and Perfume Attacks, allegedly perpetrated by two totally incompetent, pot-smoking, prostitute-banging “assassins” that Putin personally dispatched to Salisbury to miserably fail to take out their target and then waltz around getting photographed by every CCTV camera in Great Britain. According to the corporate media, Putin tried to cover the crimes of these Jason Bourne-like GRU assassins by ordering his network of Putin-Nazi Twitter bots to flood the Internet with disinformation. Sky News captured and mercilessly interrogated one of these alleged “Twitter bots,”who it turned out was just a feisty British pensioner by the name of Ian, or at least that’s what Putin wants us to believe!

Back in America, millions of liberals and other Russia-and-Trump-obsessives were awaiting the Putin-Nazi Apocalypse, which despite the predictions of Resistance pundits had still, by the Summer, failed to materialize. The corporate media were speculating that Putin’s latest “secret scheme” was for Trump to destroy the Atlantic alliance by arriving late for the G7 meeting. Or maybe Putin’s secret scheme was to order Trump to sadistically lock up a bunch of migrants in metal cages, exactly as Obama had done before him … but these were special Nazi cages! And Trump was separating mothers and children, which, as General Michael Hayden reminded us, was more or less exactly the same as Auschwitz! Paul Krugman had apparently lost it, and was running around the offices of The New York Timesshrieking that “America as we know it is finished!” Soros had been smuggled back into Europe to single-handedly thwart the Putin-Nazi plot to “dominate the West,” which he planned to do by canceling the Brexit (which Putin had obviously orchestrated) and overthrowing the elected government of Italy (which, according to Soros, was a Putin-Nazi front).

As if that wasn’t paranoia-inducing enough, suddenly, Trump flew off to Helisnki to personally meet with the Devil Himself. The neoliberal establishment went totally apeshit. A columnist for The New York Times predicted that Trump, Putin, Le Pen, the AfD, and other such Nazis were secretly forming something called “the Alliance of Authoritarian and Reactionary States,” and intended to disband the European Union, and NATO, and impose international martial law and start ethnically cleansing the West of migrants. That, or Trump and Putin were simply using the summit as cover to attend some Nazi-equestrian homosexual orgy, which The Times took pains to illustrate by creating a little animated film depicting Trump and Putin as lovers. In any event, Jonathan Chait was certain that Trump had been a “Russian intelligence asset” since at least as early as 1987, and was going to Helsinki to “meet his handler.”

In the wake of the summit, the neoliberal Resistance, like some multi-headed mythical creature in the throes of acute amphetamine psychosis, started spastically jabbering about “treason” and “traitors,” and more or less demanding that Trump be tried, and taken out and shot on the White House lawn. A frenzy of neo-McCarthyism followed. Liberals started accusing people of being “traitorous agents of Trump and Moscow,” and openly calling for a CIA coup, because we were “facing a national security emergency!” A devastating Russian cyber-attack was due to begin at any moment. National Intelligence Director Dan Coats personally assured theAssociated Press that the little “Imminent Russia Attack” lights he had on his desk were “blinking red.”

Into this maelstrom of monomania boldly slunk the Charlottesville Nazis, who had resolved to reenact their infamous national white supremacist tikki torch conclave right across the street from the White House this year. The Resistance and Antifa had been promoting this event as the long anticipated Putin-Nazi uprising, and Kristallnacht II, and other such nonsense, so it was a bit of a letdown when only twenty or thirty rather timid Nazis turned up. It felt like maybe the Great Nazi Panic of 2018 was finally over.

But no, of course it wasn’t over.

The Nazis had just gone underground. Weeks later, right there on national television, a Jewish-Mexican-American Nazi was spotted transmitting secret Nazi hand signals to her Nazi co-conspirators. One of them, a U.S. Coast Guard member, then relayed the secret Nazi signal to... well, it wasn’t entirely clear, perhaps the Underground Putin-Nazi Navy, which was steaming toward the Florida coast hidden in the eye of Hurricane Florence.

By the Autumn, with the midterm elections fast approaching, the Putin-Nazi terrorists finally struck. It soon became clear that those secret hand signs were just parts of a much larger Trumpian conspiracy to “embolden” a couple of totally psychotic wackos to unleash their hatred on the public. Wacko Number One accomplished this by mailing a series of non-exploding explosive devices to various prominent members of the neoliberal Resistance. Wacko Number Two stormed into a synagogue in Pittsburgh and murdered a lot of people. While the corporate media were unable to prove that Trump, Putin, or possibly Jeremy Corbyn, had personally “emboldened” these wackos, clearly, they had been “emboldened” by somebody, and thus were definitely domestic Putin-Nazi “terrorists,” and not just mentally disturbed individuals … like all the other mentally-disturbed individuals who go around murdering people all the time.

In November, at last, the tide began to turn. Despite the relentless “chaos campaign to undermine faith in American democracy” that the Russian bots and Nazis were waging, the Democrats managed to win back the House and rescue America from “the brink of fascism.”

Apparently, the War on Dissent was working, because the millions of Black people that the Russians had brainwashed into not voting for Clinton in 2016 with those Jesus-doesn’t-like-masturbation memes had all miraculously been deprogrammed.

Liberals celebrated by singing hymns to Special Prosecutor Robert Muellerand compiling lists of people to subpoena to testify before congressional committees in what will someday be known as “the Hitlergate Hearings.” The New York Timeseven published a “roadmap” that Mueller and his team can follow to “send incriminating evidence directly to Congress,” thus protecting this “evidence” from the Justice Department, which is totally infested with Russians and Nazis!

But it’s not quite time for liberals to break out the vuvuzelas and Trump effigies yet … or to let up on the paranoia. The Putin-Nazi menace is still out there! The Internet is still literally crawling with all sorts of deviant, division sowing content! And now the Russian bots have brainwashed the French into staging these unruly Yellow Vest protests, and the Putin-Nazis have “weaponized” humor, and the economy, and religion, and Brexit, and Wikileaks, and pretty much everything else you can imagine. So this is no time to switch off the television, and log off the Internet, and start thinking critically … or to forget for one moment that THE NAZIS ARE COMING, and that A DEVASTATING RUSSIAN ATTACK IS IMMINENT!

So here’s wishing my Russia-and-Trump-obsessed readers a merry, teeth-clenching, anus-puckering Christmas and a somewhat mentally-healthier New Year! Me, I’m looking forward to discovering how batshit crazy things can get... I have a feeling we ain’t seen nothing yet.

Published:12/19/2018 11:21:15 PM
[Markets] Don't Hold Your Breath On US Troop Withdrawal From Syria

Authored by Patrick Lawrence via ConsortiumNews.com,

The announcement on Wednesday that the U.S. will withdraw all remaining troops from Syria within the next month looked at first like a rare victory for Donald Trump in his admittedly erratic opposition to senseless wars of adventure.

“We have defeated ISIS in Syria, my only reason for being there,” the president tweeted with an unmistakable air of triumph.

Don’t get your hopes up. Just about everything in these initial reports is either wrong or misleading.

  • One, the U.S. did not defeat the Islamic State: The Syrian Arab Army, aided by Russia, Iran, and Hezbollah militias did.

  • Two, hardly was ISIS the only reason the U.S. has maintained a presence in Syria. The intent for years was to support a coup against the Assad government in Damascus—in part by training and equipping jihadists often allied with ISIS. For at least the past six months, the U.S. military’s intent in Syria has been to counter Iranian influence.

  • Last and hardly least, the U.S. is not closing down its military presence in Syria. It is digging in for an indefinite period, making Raqqa the equivalent of the Green Zone in Baghdad. By the official count, there are 503 U.S. troops stationed in the Islamic State’s former capital. Unofficially, according to The Washington Post and other press reports, the figure is closer to 4,000—twice the number that is supposed to represent a “full withdrawal” from Syrian soil.

It would be nice to think Washington has at last accepted defeat in Syria, given it is preposterous to pretend otherwise any longer. Damascus is now well into its consolidation phase. Russia, Iran, and Turkey are currently working with Staffan de Mistura, the UN’s special envoy for Syria, to form a committee in January to begin drafting a new Syrian constitution.

U.S. forces conducted a precision airstrike near Sarmada in northwest Syria Nov. 18 that Pentagon says killed a senior al-Qaida leader. (Army photo by 1st Lt. Daniel Johnson)

It would also be nice to think the president and commander-in-chief has the final say in his administration’s policies overseas, given the constitution by which we are supposed to be governed. But the misleading announcement on the withdrawal of troops, followed by Trump’s boastful tweet, suggest something close to exactly the opposite.

As Trump finishes his second year in office, the pattern is plain:

This president can have all the foreign policy ideas he wants, but the Pentagon, State, the intelligence apparatus, and the rest of what some call “the deep state” will either reverse, delay, or never implement any policy not to its liking.

Blocking Few Good Ideas

Syria is a case in point, but one among many. Trump announced in March that he would withdraw American troops as soon as the fight against ISIS was finished. By September the Pentagon was saying no, U.S. forces had to stay until Damascus and its political opponents achieved a full settlement. From the new HQ in Raqqa, The Washington Post tells us, U.S. forces will extend “overall control, perhaps indefinitely, of an area comprising nearly a third of Syria.”

This is how 2018 has gone for Trump. This president has very few good ideas, but we can count on his foreign policy minders to block those he does have if they fail to conform to the orthodox playbook—the foreign policy “blob,” as Barack Obama famously called it.

Reversal on Military Budget

Earlier this month Trump complained about the Pentagon’s out-of-control budget and pledged to cut it, if marginally, from its current $716 billion to $700 billion in the 2020 fiscal year. “I am certain that, at some time in the future,” he said in one of his inevitable tweets, “President Xi and I, together with President Putin of Russia, will start talking about a meaningful halt to what has become a major and uncontrollable Arms Race. The U.S. spent 716 Billion Dollars this year. Crazy!”

Raqqa Internal Security Force Training Class receive their initial issue of equipment after training in Ayn Issa, Syria, July 31 2017.(U.S. Army photo by Sgt. Mitchell Ryan)

Days later the president had a meeting with Defense Secretary James Mattis and the chairmen of the House and Senate Armed Services Committee. The White House announced immediately afterward that the three had agreed on a 2020 defense budget of $750 billion: from a 2 percent cut to an increase of nearly 5 percent in the course of one meeting.

Trump’s idea of improving relations with Russia has faced a wall of opposition from the first, needless to say. His summit with President Putin in Helsinki last July ignited a fresh uproar - and his suggestion that Putin come to Washington in the autumn still another. With Director of National Intelligence Dan Coats in the lead, that invitation was mocked to death within days. A New Year’s prediction: There will be no second summit with Putin, probably for the duration of Trump’s term in office.

Among the biggest disappointments of the year has been the administration’s failure to build on Trump’s effort to advance a settlement with North Korea after seven decades of tension in Northeast Asia. The Trump–Kim summit in Singapore last May did what initial encounters between heads of state are supposed to do: It established a working rapport. By that measure, any detached judgment of the meeting would have to count it a success.

But the U.S. press uniformly criticized Trump nonetheless for not coming home with the full details of the North’s nuclear disarmament. These same media have since treated us to the usual stories, sourced from the intelligence agencies, that the North is misleading us once again. Result: A second summit appears to have fallen off the White House’s agenda despite Trump’s statement at the UN last autumn that the two leaders would meet again “quite soon.”

One does not have to entertain any liking for Donald Trump to find this pattern disturbing. It suggests that our foreign policy cliques, wedded to an orthodoxy devoted more or less entirely to U.S. primacy, have positioned themselves—over the course of many administrations—to dictate America’s conduct abroad even to our presidents. There is danger in this, no matter who the occupant of the White House happens to be.

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Published:12/19/2018 10:30:32 PM
[News] Michelle Snarked About Melania’s Gift, But Turns Out She Did Same Thing

Laura Bush didn’t seem to have any problem handling the gift with grace. Michelle Obama first made a snarky comment about the Trump inauguration, then she put down Melania’s gift saying it was too much and given outside of protocol. But turns out she did the same exact thing, showing once again how hypocritical she ...

The post Michelle Snarked About Melania’s Gift, But Turns Out She Did Same Thing appeared first on Godfather Politics.

Published:12/19/2018 7:07:55 PM
[News] Michelle Snarked About Melania’s Gift, But Turns Out She Did Same Thing

Laura Bush didn’t seem to have any problem handling the gift with grace. Michelle Obama first made a snarky comment about the Trump inauguration, then she put down Melania’s gift saying it was too much and given outside of protocol. But turns out she did the same exact thing, showing once again how hypocritical she ...

The post Michelle Snarked About Melania’s Gift, But Turns Out She Did Same Thing appeared first on Godfather Politics.

Published:12/19/2018 7:07:55 PM
[Immigration] 18 Illegals Died in ICE Custody During Obama’s Reign, Media Did Not Care

18 illegals died while in ICE custody during Barack Obama's reign, but the media paid no attention, and no Democrat wanted any "investigations."

The post 18 Illegals Died in ICE Custody During Obama’s Reign, Media Did Not Care appeared first on Godfather Politics.

Published:12/19/2018 8:34:55 AM
[Immigration] 18 Illegals Died in ICE Custody During Obama’s Reign, Media Did Not Care

18 illegals died while in ICE custody during Barack Obama's reign, but the media paid no attention, and no Democrat wanted any "investigations."

The post 18 Illegals Died in ICE Custody During Obama’s Reign, Media Did Not Care appeared first on Godfather Politics.

Published:12/19/2018 8:04:28 AM
[9cb50a9d-960f-564c-b4a8-63069d9972a5] Andy Puzder: President Trump deserves all the credit for our soaring labor market Unemployment went down during the Obama years mostly because people stopped looking for jobs, not because they found them. Published:12/19/2018 3:33:34 AM
[Markets] Here's What Newly-Diagnosed Amnesiac James Comey "Did Not Recall" On Day 2 Of Testimony

Former FBI Director James Comey appeared December 17th, 2018, for a second round of questions by a joint House committee oversight probe into the DOJ and FBI conduct during the 2016 presidential election and incoming Trump administration.

The Joint House Committee just released the transcript online (full pdf below).

Director Blue blog's Doug Ross read through most of the septic backflow so you don't need to. You're welcome:

1. Double Standard: Obama vs. Trump

Trey Gowdy grilled Comey on his vastly different handling of comments by Trump and Obama. When Trump asked Comey whether he could see his way clear to easing up on Flynn, Comey memorialized the conversation in a memo and distributed it to his leadership team, including Andrew McCabe and James Baker.

However, when President Obama on 60 Minutes publicly exonerated Hillary Clinton's mishandling of classified information -- setting the stage for true obstruction of justice -- Comey did nothing. He never talked to the president about potential obstruction, he never memorialized his observations, and he didn't leak anything to the press. These were all things he did with Trump.

He might call it a "higher loyalty", but it looks to us peons like a true double-standard. Democrats get Wall Street Bankster treatment, while the rabble get tossed in the slammer.

2. According to Comey, Flynn had no right to counsel

This is interesting:

Mr. Gowdy. Did Mr. Flynn have the right to have counsel present during that interview?

Mr. Comey. No.

Oooooooookay.

3. Comey confirmed McCabe called Flynn to initiate "entrapment"; contradicts himself on counsel

And:

Mr. Gowdy. Why not advise General Flynn of the consequences of making false statements to the FBI?

Mr. Comey. ...the Deputy Director [McCabe] called him, told him what the subject matter was, told him he was welcome to have a representative from White House Counsel there...

So Comey is saying that Flynn didn't have the right to counsel (item 2), and then states that he does have the right to a White House counsel attending the meeting.

The lies are getting harder and harder to keep straight with this egregious individual.

4. Comey lied about McCabe's conversation with Flynn

When asked whether McCabe was trying to set Flynn up by asserting no counsel was needed in the interview, Comey claimed he was unaware of that critical fact. But McCabe, in a written memo, asserted that he told Flynn, "[i]f you have a lawyer present, we'll need to involve the Department of Justice".

In other words, McCabe was trying to ensure Flynn had no counsel present during the interview.

5. Comey still falls back on the Logan Act scam to justify his actions

Yes, the Logan Act. When former secretary of state John Kerry meets with various Mullahs while President Trump is unwinding the disastrous Iran deal, there's no crime there!

But let Flynn, a member of the Trump transition team, have a perfectly legitimate conversation with a Russian diplomat, we get:

Mr. Comey. And I hesitate only with "wrong." I think a Department of Justice prosecutor might say, on its face, it was problematic under the Logan Act because of private citizens negotiating and all that business.

What a lying sack of gumbo. At the time, Flynn was not a private citizen. He was a member of the incoming administration, and had anyone bothered to prosecute prior transitions for similar "crimes", the entire Obama and Clinton posses would be breaking rocks at Leavenworth.

6. Comey Throws James Clapper Under the Bus

When asked by Jim Jordan about his private meeting with the President to brief him on a very tiny portion of the "salacious and unverified" (Comey's words under oath) dossier, Comey claimed ODNI James Clapper had orchestrated the entire fiasco.

Mr. Comey. ...ultimately, it was Clapper's call. I agreed -- we agreed that it made sense for me to do it and to do it privately, separately. So I don't want to make it sound like I was ordered to do it.

He wasn't ordered to do it, but it was Clapper's call.

Oooooooookay.

7. Jordan Torches Comey Over His Dossier Comments

I'll just leave this here. Comey may need to put some ice on that.

Mr. Jordan. So that's what I'm not understanding, is you felt this was so important that it required a private session with you and the President-elect, you only spoke of the salacious part of the dossier, but yet you also say there's no way any good reporter would print this. But you felt it was still critical that you had to talk to the President-elect about it. And I would argue you created the very news hook that you said you were concerned about...

...it's so inflammatory that reporters would 'get killed' for reporting it, why was it so important to tell the President? Particularly when you weren't going to tell him the rest of the dossier -- about the rest of the dossier?

8. Comey Concealed Critical National Security Concerns About Flynn From the President

This is quite unbelievable: in a private dinner with the president, Comey neglected to mention that just three days earlier he had directed the interview of Trump's ostensible National Security Advisor.

Mr. Comey. ...at no time during the dinner was there a reference, allusion, mention by either of
us about the FBI having contact with General Flynn or being interested in General Flynn investigatively.

Mr. Jordan. That was what I wanted to know. So this is not just referring to the President didn't bring it up. You didn't bring it up either.

Mr. Comey. Correct, neither of us brought it up or alluded to it.

Mr. Jordan. Why not? He's talking about General Flynn. You had just interviewed him 3 days earlier and discovered that he was lying to the Vice President, knew he was lying to the Vice President, and, based on what we've heard of late, that he lied tyour agents. Why not tell his boss, why not tell the head of the executive branch, why not tell the President of the United States, "Hey, your National Security Advisor just lied to us 3 days ago"?

Mr. Comey. Because we had an open investigation, and there would be no reason or a need to tell the President about it.

Mr. Jordan. Really?

Mr. Comey. Really.

Mr. Jordan. You wouldn't tell the President of the United States that his National Security Advisor wasn't being square with the FBI? ... I mean, but this is not just any investigation, it seems to me, Director. This is a top advisor to the Commander in Chief. And you guys, based on what we've heard, felt that he wasn't being honest with the Vice President and wasn't honest with two of your agents. And just 3 days later, you're meeting with the President, and, oh, by the way, the conversation is about General Flynn. And you don't tell the President anything?

Mr. Comey. I did not.

Mr. Meadows. So, Director Comey, let me make sure I understand this. You were so concerned that Michael Flynn may have lied or did lie to the Vice President of the United States, but that once you got that confirmed, that he had told a falsehood, you didn't believe that it was appropriate to tell the President of the United States that there was no national security risk where you would actually convey that to the President of the United States? Is that your testimony?

Mr. Comey. That is correct. We had an --

The more we learn, the dirtier a cop Comey ends up appearing.

9. Gowdy Destroys the Double Standard of Clinton vs. Flynn

Check this out:

Mr. Gowdy. ...we are going to contrast the decision to not allow Michael Flynn to have an attorney, or discourage him from having one, with allowing some other folks the Bureau interviewed to have multiple attorneys in the room, including fact witnesses. Can you see the dichotomy there, or is that an unreasonable comparison?

Mr. Comey. I'm not going to comment on that. I remember you asking me questions about that last week. I'm happy to answer them again.

Mr. Gowdy. You will not say whether or not it is an unreasonable comparison to compare allowing multiple attorneys, who are also fact witnesses, to be present during an interview but discouraging another person from having counsel present?

Mr. Comey. I'm not going to answer that in a vacuum...

10. Comey May Have Been Involved With the Infamous Tarmac Meeting

Another interesting vignette, this time from John Ratcliffe:

Mr. Ratcliffe. Okay. So it would appear from this that there had been some type of briefing the day before, with reference to yesterday, June 27, 2016, where you had requested a copy of emails between President Obama and Hillary Clinton.

Mr. Comey. I see that it says that.

Mr. Ratcliffe. ...The significance of that is, as we talked about last time, June 27th of 2016 was also the date that Attorney General Lynch and former President Bill Clinton met on a tarmac in Phoenix, Arizona. Do you recall whether or not this briefing was held at the FBI because of that tarmac meeting, or was it just happened to be a coincidence that it was held on that day? Mr. Comey. It would have to have been a coincidence. I don't remember a meeting in response to the tarmac meeting.

Muh don't know!

11. Comey confirms Obama knew Hillary Clinton was using a compromised, insecure email server

Well, spank me on the fanny and call me Nancy!

Mr. Ratcliffe. ...Hillary Rodham Clinton and President Obama were communicating via email through an unsecure, unclassified server?

Mr. Comey. Yes, they were between her Clinton email.com account and his -- I don't know where his account, his unclassified account, was maintained. So I'm sorry. So, yes, here were communications unclassified between two accounts, hers and then his cover account.

Mr. Ratcliffe. ...Did your review of these emails or the content of these emails impact your decision to edit out a reference to President Obama in your July 5th, 2016, press conference remarks?

If Trump had done 1/1,000,000th of this crap, he'd be -- yes -- breaking rocks in Leavenworth right now.

But there's no double-standard, rabble! Just keep buying iPhones and playing Call of Duty!

...Aaaaaaaaand I'm spent.

Okay, done for now.

But let's recap the activities of Dr. "Higher Loyalty" Comey:

  • Did not investigate the felony leak to the press of the conversation between the Russian Ambassador and Flynn.

  • Did not advise Congress of the "investigation" into Trump-Russia collusion as required by statute.

  • Lied to the FISA court -- another felony -- about Carter Page being "an agent of a foreign power".

  • Wrote an exoneration memo for Hillary Clinton before more than a dozen witnesses, including Clinton herself, had been interviewed.

But, no, there's no double-standard for the aggressiveness of law enforcement when it comes to Democrats like Clinton and Obama.

Hat tip: BadBlue Uncensored News.

*  *  *

Published:12/18/2018 9:31:59 PM
[Immigration] Under Obama Border Patrol Agents Spent ‘Their Own Money’ To Buy ‘Basic Necessities’ For Migrant Kids

Brandon Judd who is the president of the National Border Patrol Council said that border agents spent money out of their own pockets to provide basic supplies such as diapers and formula to children in their custody during the Obama years. Listen to the audio below. But you won’t hear about this from any of the ...

The post Under Obama Border Patrol Agents Spent ‘Their Own Money’ To Buy ‘Basic Necessities’ For Migrant Kids appeared first on Godfather Politics.

Published:12/18/2018 7:31:42 PM
[World] A modest Middle East detente

MUSCAT

Perhaps Barack Obama deserves that Nobel Peace Prize after all. His achievement: Bringing Israelis and Arabs closer together. He produced that result by throwing both under the bus. While there, they had coffee and a little baklava, and recognized how much they actually have in common.

Evidence of this ... Published:12/18/2018 7:01:18 PM

[Immigration] Under Obama Border Patrol Agents Spent ‘Their Own Money’ To Buy ‘Basic Necessities’ For Migrant Kids

Brandon Judd who is the president of the National Border Patrol Council said that border agents spent money out of their own pockets to provide basic supplies such as diapers and formula to children in their custody during the Obama years. Listen to the audio below. But you won’t hear about this from any of the ...

The post Under Obama Border Patrol Agents Spent ‘Their Own Money’ To Buy ‘Basic Necessities’ For Migrant Kids appeared first on Godfather Politics.

Published:12/18/2018 7:01:17 PM
[Education] 5 Takeaways From the Trump Administration’s School-Safety Report

The Trump administration is calling for scrapping Obama administration regulations on school discipline, in a school-safety report issued Tuesday responding to school shootings. The Federal... Read More

The post 5 Takeaways From the Trump Administration’s School-Safety Report appeared first on The Daily Signal.

Published:12/18/2018 6:03:29 PM
[Education] Obama’s School Discipline Guidance Could Be Doomed. Here’s Why That’s Great News.

This year started with a reminder that we cannot take the safety of our children for granted, and Washington has ended the year by taking... Read More

The post Obama’s School Discipline Guidance Could Be Doomed. Here’s Why That’s Great News. appeared first on The Daily Signal.

Published:12/18/2018 5:31:42 PM
[US News] Barack Obama wins another award to put next to his Nobel Peace Prize and two Grammy awards

Barack Obama has seen a more peaceful world? Where is he looking?

The post Barack Obama wins another award to put next to his Nobel Peace Prize and two Grammy awards appeared first on twitchy.com.

Published:12/17/2018 7:25:29 PM
[Markets] Mueller Finally Releases Heavily Redacted Key Flynn Memo On Eve Of Sentencing

Having initially snubbed Judge Emmet Sullivan's order to release the original 302 report from the Michael Flynn interrogation in January 2017, Special Counsel Robert Mueller has finally produced the heavily redacted document, just hours before sentencing is due to be handed down.

The memo  - in full below - details then-national security adviser Michael Flynn's interview with FBI agents Peter Strzok and Joe Pientka, and shows Flynn was repeatedly asked about his contacts with former Russian Ambassador Sergey Kislyak and in each instance, Flynn denied (or did not recall) any such conversations.

The agents had transcripts of Flynn's phone calls to Russian Ambassador Kislyak, thus showing Flynn to be lying.

Flynn pleaded guilty guilty last December to lying to the FBI agents about those conversations with Kislyak.

The redactions in the document seem oddly placed but otherwise, there is nothing remarkable about the content..

Aside from perhaps Flynn's incredulity at the media attention...

Flynn is set to be sentenced in that federal court on Tuesday.

Of course, as Christina Laila notes, the real crime is that Flynn was unmasked during his phone calls to Kislyak and his calls were illegally leaked by a senior Obama official to the Washington Post.

*  *  *

Full document below

Published:12/17/2018 6:56:03 PM
[Markets] Christopher Steele Admits He Was Hired To Help Hillary Challenge 2016 Election

Former UK spy Christopher Steele admitted in a London court that he was hired to help Hillary Clinton contest the results of the 2016 election in case Trump won, according to the Washington Times.  

Steele assembled an anti-Trump "dossier" of opposition research investigative firm Fusion GPS, which was in turn hired by DNC law firm Perkins Coie LLP. The document used "a senior Russian Foreign Ministry figure," and "a former top level intelligence officer still active in the Kremlin," according to Vanity FairIn other words, Hillary Clinton - through Steele and other intermediaries - was working with Russians against Donald Trump. 

He said the law firm Perkins Coie wanted to be in a position to contest the results based on evidence he unearthed on the Trump campaign conspiring with Moscow on election interference.

His scenario is contained in a sealed Aug. 2 declaration in a defamation law suit brought by three Russian bankers in London. The trio’s American attorneys filed his answers Tuesday in a libel lawsuit in Washington against the investigative firm Fusion GPS, which handled the former British intelligence officer.

In an answer to interrogatories, Mr. Steele wrote: “Fusion’s immediate client was law firm Perkins Coie. It engaged Fusion to obtain information necessary for Perkins Coie LLP to provide legal advice on the potential impact of Russian involvement on the legal validity of the outcome of the 2016 US Presidential election.

“Based on that advice, parties such as the Democratic National Committee and HFACC Inc. (also known as ‘Hillary for America’) could consider steps they would be legally entitled to take to challenge the validity of the outcome of that election.” -Washington Times

During the election, Clinton told voters that Donald Trump would "threaten democracy" if he didn't promise to accept the results of the 2016 election - after Trump suggested he might not accept the results of a "rigged" contest. 

Now listen to Hillary when she thought she was going to win the election:

Meanwhile Clinton was open to challenging the election more than ten months after her historic loss - if only there were a way. "There are scholars, academics, who have arguments that it would be, but I don’t think they’re on strong ground. But people are making those arguments. I just don’t think we have a mechanism," Clinton told NPR in September 2017. 

The dossier Steele produced was used as the basis for an FBI FISA surveillance warrant application to spy on members of the Trump campaign. Notably, the agency never told the FISA court that the dossier their application hinged on was paid for by the DNC and Clinton's campaign, although it did indicate that it was opposition research. 

The mainstream media used still-unverified key claims within the dossier to fuel a conspiracy theory that President Trump conspired with the Russian government to win the 2016 US election. 

Meanwhile, as we reported earlier Monday, FBI and CIA sources told a Pulitzer Prize-winning Washington Post reporter that they didn't believe a key claim contained in the "Steele Dossier," the document the Obama FBI relied on to obtain a surveillance warrant on a member of the Trump campaign.

The Post's Greg Miller told an audience at an October event that the FBI and CIA did not believe that former longtime Trump attorney Michael Cohen visited Prague during the 2016 election to pay off Russia-linked hackers who stole emails from key Democrats, reports the Daily Caller's Chuck Ross. 

"We’ve talked to sources at the FBI and the CIA and elsewhere — they don’t believe that ever happened," said Miller during the October event which aired Saturday on C-SPAN. 

We literally spent weeks and months trying to run down... there's an assertion in there that Michael Cohen went to Prague to settle payments that were needed at the end of the campaign. We sent reporters to every hotel in Prague, to all over the place trying to - just to try to figure out if he was ever there, and came away empty. -Greg Miller

Meanwhile, Trump is still living under the spectre of Russian collusion, while Hillary Clinton actually colluded Russians in her plan to challenge the 2016 election.

Published:12/17/2018 6:24:55 PM
[Politics] 41% Say U.S. Heading in Right Direction

Forty-one percent (41%) of Likely U.S. Voters think the country is heading in the right direction, according to a new Rasmussen Reports national telephone and online survey for the week ending December 13.

This week’s finding is down two points from last week. This finding has been running in the 40s for most weeks this year after being in the mid- to upper 20s for much of 2016, President Obama's last full year in office.

(Want a free daily e-mail update? If it's in the news, it's in our polls). Rasmussen Reports updates are also available on Twitter or Facebook.

The national telephone survey of 2,500 Likely Voters was conducted by Rasmussen Reports from December 9-13, 2018. The margin of sampling error for the survey is +/- 2 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research, LLC. See methodology.

Published:12/17/2018 12:25:37 PM
[Markets] 70% Chance Of NATO-Russia Combat: "US Ready To Fight To The Last Brit"

Authored by Ann Garrison via ConsortiumNews.com,

Hungarian scholar George Szamuely tells Ann Garrison that he sees a 70 percent chance of combat between NATO and Russia following the incident in the Kerch Strait and that it is being fueled by Russia-gate.

An Interview with George Szamuely

George Szamuely is a Hungarian-born scholar and Senior Research Fellow at London’s Global Policy Institute. He lives in New York City. I spoke to him about escalating hostilities on Russia’s Ukrainian and Black Sea borders and about Exercise Trident Juncture, NATO’s massive military exercise on Russian borders which ended just as the latest hostilities began.

Ann Garrison: George, the hostilities between Ukraine, NATO, and Russia continue to escalate in the Sea of Azov, the Kerch Strait, and the Black Sea. What do you think the latest odds of a shooting war between NATO and Russia are, if one hasn’t started by the time this is published?

George Szamuely: Several weeks ago, when we first talked about this, I said 60 percent. Now I’d say, maybe 70 percent. The problem is that Trump seems determined to be the anti-Obama. Obama, in Trump’s telling, “allowed” Russia to take Crimea and to “invade” Ukraine. Therefore, it will be up to Trump to reverse this. Just as he, Trump, reversed Obama’s policy on Iran by walking away from the Joint Comprehensive Plan of Action, otherwise known as the Iran nuclear deal. So expect ever-increasing US involvement in Ukraine.

AG: NATO’s Supreme Commander US General Curtis M. Scaparrotti is reported to have been on the phone with Ukrainian President Petro Poroshenko “offering his full support.” Thoughts on that?

GS: There has been a proxy war within Ukraine since 2014, with NATO backing Poroshenko’s Ukrainian government and Russia backing the dissidents and armed separatists who speak Russian and identify as Russian in Ukraine’s southeastern Donbass region. But in the Kerch Strait the hostilities are between Russia and Ukraine, with NATO behind Ukraine.

A shooting war will begin if it escalates to where NATO soldiers shoot and kill Russian soldiers or vice versa. Whoever shoots first, the other side will feel compelled to respond, and then there’ll be a war between Russia and NATO or Russia and a NATO nation.

We don’t know whether NATO would feel compelled to respond as one if Russians fired on soldiers of individual NATO nations - most likely UK soldiers since the UK is sending more of its Special Forces and already has the largest NATO military presence in Ukraine. Russia could defeat the UK, but if the US gets involved, all bets are off.

Szamuely: U.S. ready to fight to last Brit.

AG: It’s hard to imagine that the US would allow Russia to defeat the UK.

GS: It is, but on the other hand, the US is the US and the UK is the UK. The United States might well be ready to fight to the last Brit, much as the United States is definitely ready to fight to the last Ukrainian. There are already 300 US paratroopers in Ukraine training Ukrainians, but the British would be well advised that words of encouragement from Washington don’t necessarily translate into US willingness to go to war.

AG: The US Congress passed a law that US troops can’t serve under any foreign commandso that would require US command.

GS: Yes, and without that, any British military defeat could be blamed on traditional British military incompetence rather than US weakness or foolish braggadocio.

AG: This latest dustup between the Russian and Ukrainian navies took place in the Kerch Strait. I had to study several maps to understand this, but basically neither Russian nor Ukrainian vessels, military or commercial, can get to or from the Sea of Azov and the Black Sea without passing through the Kerch Strait. That doesn’t mean that neither could get to the Black Sea, because both have Black Sea borders, but they couldn’t get from ports in the Sea of Azov to the Black Sea and back.

And neither Ukraine nor Russia can get from the Black Sea to Western European waters without passing through the Bosporous and Dardanelles Straits in Turkey to the Aegean and Mediterranean Seas, and then further to the Atlantic Ocean through the Strait of Gibraltar, which is bordered on one side by Spain and the British territory of Gibraltar, and on the other by Morocco and the Spanish territory Ceuta. So there are many geo-strategic choke points where Russian ships, naval or commercial, could be stopped by NATO nations or their allies, and Ukraine has already asked Turkey to stop them from passing through the Bosporus Strait. Thoughts on that?

GS: Well, of course Ukraine can ask for anything it likes. There’s no way in the world Turkey would try to stop Russian ships going through the Bosporus Strait. That would be a violation of the 1936 Montreux Convention and an act of war on the part of Turkey. It isn’t going to happen. As for the Kerch Strait, it is Russian territorial water. Ukraine is free to use it and has been doing so without incident since 2014. The only thing the Russians insist on is that any ship going through the strait use a Russian pilot. During the recent incident, the Ukrainian tug refused to use a Russian pilot. The Russians became suspicious, fearing that the Ukrainians were engaged in a sabotage mission to blow up the newly constructed bridge across the strait. You’ll remember that an American columnist not so long ago urged the Ukrainian authorities to blow up the bridge. That’s why the Russians accuse Kiev of staging a provocation.

AG: There’s a longstanding back channel between the White House and the Kremlin, as satirized in Dr. Strangelove. Anti-Trump fanatics keep claiming this is new and traitorous, but it’s long established. Obama and Putin used it to keep Russian and US soldiers from firing on one another instead of the jihadists both claimed to be fighting in Syria. Kennedy and Khrushchev used it to keep the Bay of Pigs crisis from escalating into a nuclear war. Shouldn’t Trump and Putin be talking on that back channel now, no matter how much it upsets CNN and MSNBC?

GS: Well, of course, they should. The danger is that in this atmosphere of anti-Russian hysteria such channels for dialogue may not be kept open. As a result, crises could escalate beyond the point at which either side could back down without losing face. What’s terrifying is that so many US politicians and press now describe any kind of negotiation, dialogue, or threat-management as treasonous collusion by Donald Trump.

Remember Trump’s first bombing in Syria in April 2017. Before he launched that attack, Trump administration officials gave advance warning to the Russians to enable them to get any Russian aircraft out of harm’s way. This perfectly sensible action on the part of the administration—leave aside the illegality and stupidity of the attack—was greeted by Hillary Clinton and the MSNBC crowd as evidence that the whole operation was cooked up by Trump and Putin to take attention off Russia-gate. It’s nuts.

AG: Most of us have heard Russia and NATO’s conflicting accounts of why the Russian Navy seized several Ukrainian vessels in the Sea of Azov. What’s your interpretation of what happened?

Poroshenko: Provocation with elections near?

GS: As I said, I think the Russians had every right to be suspicious of the intent of the Ukrainian vessels. The Ukrainians know that these are Russian territorial waters. They know that the only way to go through the Kerch Strait is by making use of a Russian pilot. They refused to allow the Russians to pilot the ships through the strait. Whatever the Ukrainians’ ultimate intent was—whether it was to carry out an act of sabotage, to provoke the Russians into overreaction and then to demand help from NATO, or simply to go through the strait without a Russian pilot in order to enable President Poroshenko to proclaim the strait as non-Russian—whatever Kiev’s intent was, the Russians were entitled to respond. The force the Russians used was hardly excessive. In similar circumstances, the US would have destroyed all of the ships and killed everyone on board. Recall, incidentally, Israel has seized Gaza flotilla boats and arrested everyone on board. In 2010, the Israeli Navy shot nine activists dead during a flotilla boat seizure, and wounded one who died after four years in a coma.

AG: Don’t the US, Ukraine, and the UN Security Council refuse to recognize the Kerch Strait as Russian territory, and insist that Russia’s claim to it violates various maritime treaties? I know the UNSC refuses to recognize the Golan Heights as Israeli territory, not that that does Syria any good.

GS: According to the 2003 agreement, Russia and Ukraine agreed to consider the strait as well as the Sea of Azov as shared territorial waters. From 2014 on, Russia considered the strait as Russian waters, though it’s made no attempt to hamper Ukrainian shipping. The Azov Sea is still shared by Russia and Ukraine. During the recent incident, the Ukrainian Navy acted provocatively, deliberately challenging the Russians. As for what the UNSC accepts, how would NATO respond if Serbia entered Kosovo on some pretext or other?

AG: OK, now let’s go back to NATO’s Exercise Trident Juncture, a massive military exercise on Russia’s Scandinavian and Arctic borders that concluded on November 24, one day before the Kerch Strait incident. The first phase was deployment, from August to October. The second phase was war games from October 25th to November 7th. The war games were based on the premise that Russia had invaded Scandinavia by ground, air, and sea. They included 50,000 participants from 31 NATO and partner countries, 250 aircraft, 65 naval vessels, and up to 10,000 tanks and other ground vehicles, and I hate to think about how much fossil fuel they burned.

The final phase was a command post exercise to make sure that, should NATO forces ever face a real Russian invasion of Scandinavia, their response could be safely coordinated in Norway and in Italy, far from the war zone.

So George, do Scandinavians have reason to worry that Russia might invade any of their respective nations?

GS: Not at all. This is ridiculous. It was the largest military exercise since the end of the Cold War, and why? Why did they do this? Russia isn’t threatening Scandinavia, but it’s more likely that it will if NATO continues conducting war games on its borders. Right now tension between East and West is escalating so fast that a single event could be like a match that triggers an explosion, and then there’ll be a war.

Stranger than Strangelove.

AG: There was a recent Russian exercise, or joint Russian and Chinese exercise, based on the premise that the US had invaded Korea, right?

GS: Right. But it wasn’t anywhere near Europe, so it wasn’t threatening the Europeans. It took place in eastern Siberia, so it shouldn’t have caused panic in NATO countries. It shouldn’t have caused panic in the US either, because the Pacific Ocean separates the US and the Korean Peninsula.

What’s striking about Trident Juncture is that it involved Sweden and Finland, both of whom are traditionally neutral. They were neutral during the Cold War, not joining any alliances. Finlandization came to mean a foreign policy that in no way challenged or antagonized the USSR. So now here’s Finland rolling back that policy and joining NATO in this massive military exercise to stop nonexistent Russian aggression.

AG: Has Russia ever attempted to seize territory outside its own borders since the end of the Cold War?

GS: No. Russia never attempted to seize territory outside its own borders. The case cited by the West is Crimea, but that was really an outstanding issue that should have been addressed during the dissolution of the Soviet Union. Boris Yeltsin, the drunken, incompetent stooge that the US installed, just neglected it.

The Russian-speaking and Russian-identified people of Crimea were unhappy about Ukraine claiming sovereignty over them. They had been an autonomous republic within the USSR, and after its dissolution, they still retained their constitutional autonomy. That’s what gave them the right to hold a referendum to join the Russia Federation in 2014.

If the West is involved in an uprising, as in Ukraine, it recognizes the “independence” of the government it puts in power. It won’t recognize the constitutional autonomy of Crimea, which predated the 2014 Ukrainian revolution or illegal armed coup, whichever you call it, because it wasn’t part of their plan.

AG: The NATO nations and their allies say that Russia invaded and occupied Crimea, violating Ukrainian sovereignty according to international law. Democracy Now’s Amy Goodman referred to the “illegal annexation” of Crimea at least three times after the Kerch Strait incident. How do you explain the presence of Russian soldiers in Crimea prior to the referendum?

GS: They didn’t invade and occupy Crimea. Their forces were there legally, according to a 25-year lease agreement between Russia and Ukraine.

Crimea had been a part of Russia for more than 200 years. For most of the time, during the USSR era, it was an autonomous republic within the Russian Federation. In 1954, Khrushchev transferred some degree of sovereignty over the Crimean Republic to Ukraine. I’m not entirely sure why he did that, but the issue wasn’t that important then because Ukraine, Russia and Crimea were all part of the USSR.

Khrushchev didn’t envisage an independent Ukraine walking off with such a prize piece of real estate. Crimea is not only a huge tourist destination, it is also the site of Russia’s primary naval base on the Black Sea in Sevastopol. Yeltsin failed to address the problem in 1991. Since then, every time Crimeans talked about holding a referendum on their future, Kiev threatened to use force to stop them. Kiev would have used force again in 2014 if the Russians in the Port of Sevastopol had not left their Crimean base and made their presence known.

AG: The US, aka NATO, has an empire of military bases all over the world, and troops right up against Russia’s borders as in Exercise Trident Juncture. Does Russia have anything remotely like it?

NATO practices war with Russia. Exercise Trident Juncture.
(Master-Corporal Jonathan Barrette, Canadian Forces Combat Camera)

GS: No. Russia does not have military bases outside its borders, which are now more or less as they were in 1939, when the USSR was surrounded by hostile states that were more than happy to join Hitler. So it’s ridiculous to tell Russia, “Don’t worry about our troops and war games all over your borders because we don’t really mean any harm.” Washington is calling Russia an existential enemy, and the UK is promising to stand shoulder to shoulder with its NATO allies and partners against “Russian aggression,” which is really Russian defense. So now we have an explosive situation on the Ukrainian and Russian borders that could easily turn into a shooting war.

AG: I read some US/NATO complaints that Russia was conducting exercises on its own side of the border. And last week NATO accused the Russian military of jamming its signals during its rehearsal for a war on Russia’s borders.

GS: Yes, that’s what the US considers Russian aggression, even though its troops and bases are all over the world and all over Russia’s borders.

AG: Competition between US and Russian energy corporations is one of the main undercurrents to all this. The US State Department even said that Europe should abandon the Nord Stream-2 gas pipeline project with Russia because of the Kerch Strait incident, but that received a cool response, particularly from Angela Merkel. What are your thoughts about that?

GS: Well, obviously, the Trump administration is determined to push the Europeans to give up on natural gas from Russia and to opt, instead, for US liquefied natural gas (LNG). The problem is that LNG shipped across the Atlantic is much more expensive than natural gas piped to Europe from Russia. So it’s clearly not in the interests of the Europeans to have a bigger energy bill. Look what’s happening in France. Ordinary people are not making so much money that they can afford to shell out more for energy, particularly when there is no need to do so. Some countries such as Poland are so imbued with hostility toward Russia that they’re willing to pay more for gas just to hurt Russia, but Germany won’t go down this path.

AG: Anything else you’d like to say for now?

GS: Yes, I think it’s amazing that this many years after the Cold War we’ve reached a point where there’s almost no public criticism of a policy that has led to the US abandoning a major arms control agreement, namely the Intermediate-Range Nuclear Forces (INF) Treaty signed in 1987.

There’s almost no public criticism of the US getting involved in an armed confrontation on Russia’s doorstep, in Ukraine, Syria, Iran, or conceivably even Scandinavia. There’s almost no public criticism of roping formerly neutral European powers like Sweden and Finland into NATO military exercises.

Given the fact that the New Strategic Arms Reduction Treaty that went into effect in 2011 will expire in 2021, and given that there’s nothing on the horizon to take its place, this is an extraordinarily perilous point in time.

And much of this has to be blamed on the liberals. The liberals have embraced an anti-Russian agenda. The kind of liberal view that prevailed during the Cold War was that we should at least pursue arms control agreements. We might not like the Communists, but we need treaties to prevent a nuclear war. Now there’s no such caution. Any belligerence towards Russia is now good and justified. There’s next to no pushback against getting into a war with Russia, even though it could go nuclear.

Published:12/17/2018 1:21:06 AM
[Markets] Signs Of Coming Collapse: Citizens Worldwide Revolt Against Taxation & Illegal Aliens

Authored by Jeremiah Johnson (nom de plume of a retired Green Beret of the United States Army Special Forces) via SHTFplan.com,

There are many serious issues to address, relevant to current events. Just to skim some of what has happened most recently, the Dow Jones (although a “lagging” indicator) has been extremely volatile within the past month, appearing to be headed toward a loss for the year overall. Spending is down, and the “bubble” of pseudo-consumer confidence prior to Thanksgiving seems to have dissipated.

The main focus: the unrest that is swiftly crossing national borders has a common denominator in France, and now in Belgium and the Netherlands. That common denominator is that of the populace being fed up with the amount of taxation, coupled with the politicos pushing illegal Muslim aliens into nations that have been predominantly Christian for almost a thousand years.

In countries such as Germany, Sweden, and Norway (whose ancestors were not known for playing “softball,” i.e. the Saxons and Vikings, respectively) we have been witness to rapes and beatings perpetrated by Muslim illegal aliens with the governments either looking the other way or encouraging it. Soros and those of his ilk in the EU have been pushing this “forced integration” of an invasion of illegals with a huge ethnic and religious gap between them and the host nations.

The controllers (oligarchs and politicos) are pushing these (numerically speaking) armies of aliens into previously stable nations…for several express purposes:

  1. The denigration of the nations’ borders, language, religion, family structure, and culture

  2. To reduce the nations’ original populace to a state of abandoning their nationalities and nationalism

  3. To place these aliens into a position where they will weaken the economies of the nations (by being forced onto the dole) and also utilizing their numbers for support when it comes time to “vote” in these nations.

We have been witnessing an internal conquest fomented upon each of these European nations more effective than any invasion with military resources. The controllers are “injecting” these aliens into the populations and allowing their destructive natures and habits (completely at odds with the host nation) to destroy those countries….from within.

On December 7, 2018, Zero Hedge published a piece entitled Viral Video Of French Students Lined Up Execution-Style Sparks Outrage; Protesters Want Macron’s “Scalp” that really bears looking at. The cops there are way out of hand. The most interesting part of the article, however, may be the interview that was conducted with a Parisian cab driver, and his stance in that interview summarizes the rage and betrayal felt by the French people. Here’s a piece of it for you, and the article highlighted some words in the excerpt…and I’m leaving them that way, as they are worth reading and keeping in mind:

One angry Paris taxi driver called for Macron’s “scalp” in a half-hour monologue, according to Bloomberg.

“We’re going out there to fight,” he said, adding: “I want Macron’s scalp, I’m not afraid of anything. I have nothing to lose. You have to risk your life or you don’t get anything from these people.”

And why does the cab driver feel this way about Macron? Read this other part, showing it is not “blind rage” for no reason:

For people like the taxi driver, there’s no limit when it comes to removing the youngest French leader since Napoleon who, as the country’s economy minister between 2014 and 2016, deregulated the taxi business and was a strong supporter of car-booking apps.

“He ruined us, he broke our business,” the taxi driver said. “He wants everything new, digital, the new world, and he did it all without thinking of the cost for us. Replace everyone, have everything young, new? Yeah, well that’s not how you do things. Now it’s payback time.”

Reminds me of Jesse Ventura’s words in the movie “Predator,” but you see the point: after they push you into a corner, you have to come out swinging. We are facing a similar situation in this country. The President has been holding his own, and it appears with the Mueller witch hunt and the Democrat Party gathering torches and pitchforks, the offensive is going to take a new direction. In January, the House (now Democrat-controlled) is back in control of defense expenditures, and that is going to place actions that the President is taking (troops on the border to halt the illegal alien “caravan of love,” and to build a wall) in danger of being halted and/or defunded.

Another article came out on December 3, 2018, entitled German biker gangs are standing up for their country’s women by beating the hell out of the Muslim ‘refugees’ in the[ir] midst who keep assaulting themby ludinfo24.com.

Here is an excerpt:

Days after the sexual assaults on German women in Cologne city came to light, local gangs are uniting in a “manhunt” of foreigners.  And just this weekend, two Pakistanis and a Syrian man were injured in attacks by gangs of people in Cologne, German police said. On New Year’s Eve, Cologne was the scene of dozens of assaults on women, a number that has grown into hundreds as more and women have come forward to register complaints. Local newspaper Express reported that the attackers were members of rocker and hooligan gangs who via Facebook arranged to meet in downtown Cologne to start a “manhunt” of foreigners.

You can plainly see the fawning media over there is no different than ours…as it labeled the bikers as “members of rocker and hooligan gangs.” Hooligans, eh? So, if they are “hooligans” for stepping up to the plate and defending their women, then what are the Polizei for permitting these crimes to occur against the women?

What they are: conspirators, who are complicit with the crimes committed by the controlling politico-oligarchy…the crimes of not protecting the German citizens from these Muslim invaders. Here’s the picture posted by ludinfo24.com with the article:

Look closely at the photograph. These guys are (even with the masks you can see it) pretty clean cut, dressed cleanly and normally…and they’re not “soy boys” by any stretch of the imagination. The prediction? German bikers 1, Arabs 0, plain and simple….and as it should be. It is a beautiful thing to see them stand up for their women…since their rights have been flushed into the toilet, or swept under a prayer rug or magic carpet.

When law enforcement fails to enforce the law and protect citizens from illegal aliens…then it is no longer law enforcement….it is an armed tyrannical enforcer of a dictatorship….voted into office legally, but pursuing actions that are not approved by the populace. Just as Marbury vs. Madison pointed out under our system, if something is onerous to the Constitution, then it is not to be considered lawful in any way, shape, or form. That also includes [mis]representatives who circumvent the will of the people by using the power of their position.

They were elected legally, but to represent the will of the people, not to accomplish the “fundamental transformations” of countries in stark contradiction to their constitutions, charters, and laws, and to the detriment and/or physical harm of their citizenry.

In previous articles I outlined 3 measures the globalists will take to collapse the systems and usher in a totalitarian global government (in order): A pandemic (fostered or artificially-created), an EMP event, or a Nuclear war.

You are seeing the final methods being used as a precursor to those three actions: the collapsing of the economies, the inculcation of the complete surveillance state, and the dissolution of the nations through internal subterfuge as has been outlined within this article.

One of the advantages that the European nations have in dealing with confronting their governments is ethnic homogeneity. This leads to a single-minded purpose, in which they will not settle for anything less than the capitulation of the government, and at a bare minimum, forcing the resignation of the leadership. Look at Merkel: not going to run for office again. Now look at Macron, one step from being shown the door by the angry mobs. They called out almost 90,000 police to deal with these riots in France, only to find that a great number of the police are siding with the populace!

Look at what is happening in the United States. Look at the crimes ranging from rape to murder that are being inflicted upon American citizens who live on our southern borders. Hungary has set up barbed wire and machine gun positions to keep out the illegals. We, on the other hand, send the National Guard…to do what? Play “Yahtzee” or “Scrabble” with the illegals? Best 3 out of 5 wins?

It is an invasion, plain and simple. The controllers originally intended for the U.S. to be where South Africa is now…with the reins of power taken away from white South Africans…and soon for them to be completely vilified and driven off of their land…and worse. It hasn’t happened that way here yet, but they have been pushing the destruction of the country through forced “immigration” for decades. Remember that President Reagan gave amnesty to a million illegals. Such actions are not monopolized by the Democrats and Obama. The former President they just buried was the one who created NAFTA….Clinton merely signed it into law.

In order for a nation to continue, it needs to maintain all of the elements that made it a nation. Those elements can be found within the borders, language, religions, and culture of its people. When the laws that are made within a nation to protect its citizens and maintain it are flagrantly disobeyed or circumvented by its politicians, courts, and legislators, it is time for that nation to return to the grass roots and exercise their rights. Just because a government is of and by the people doesn’t mean that it is “for” the people.

The instabilities we are seeing are a precursor of things to come, and the Parisian cab driver was correct... in order to change an evil, sometimes you have to be willing to risk everything you have. Let’s close with a quote from our recently-departed former President, George H.W. Bush that may stem the flow of the single tear coursing down the cheek in mourning:

“Sarah, if the American people ever find out what we have done, they would chase us down the street and lynch us.” – President George H.W. Bush to Sarah McLendon, Journalist, in 1992 Press Corps Interview, when he was asked about Iraq-gate and Iran Contra              

Published:12/16/2018 11:19:52 PM
[Trending Commentary] Here’s What Conservatives Say Are Outgoing Interior Secretary Ryan Zinke’s Biggest Accomplishments

By Michael Bastasch -

Interior Secretary Ryan Zinke’s allies, choecked by his resignation, touted his many reforms and policy changes. President Trump announced Zinke’s resignation Saturday amid a slew of ethics investigations. Zinke rolled back restrictive Obama-era policies and implemented Trump’s “energy dominance” agenda. President Donald Trump announced Interior Secretary Zinke’s resignation Saturday amid a ...

Here’s What Conservatives Say Are Outgoing Interior Secretary Ryan Zinke’s Biggest Accomplishments is original content from Conservative Daily News - Where Americans go for news, current events and commentary they can trust - Conservative News Website for U.S. News, Political Cartoons and more.

Published:12/16/2018 8:20:26 PM
[Markets] 76-Year-Old Joe Biden Is Officially The Frontrunner For 2020 Democratic Nomination

With just over 400 days left until the Iowa caucuses (set for Feb. 3, 2020), a recent poll confirmed what many Americans probably already suspected: despite the growing popularity of progressives and Democratic Socialists like Alexandria Ocasio Cortez (who won't be eligible to run for president until 2024), Vice President Joe Biden remains the most popular 2020 presidential contender.

Biden

To wit, a CNN/Des Moines Register poll released Saturday showed that former Vice President Joe Biden would likely win the Iowa caucuses if they were held tomorrow. He was followed by Bernie Sanders in second place, and Texas Congressman Beto O'Rourke in third.

Here's Bloomberg:

The poll shows Biden leading among a field of 20 potential candidates, followed by Vermont Senator Bernie Sanders and Texas Representative Beto O’Rourke. The poll asked likely caucusgoers who their top choice for president would be among potential candidates for their party’s nomination.

[...]

The Iowa poll found 32 percent of likely caucusgoers prefer Biden, with 19 percent selecting Sanders as their first choice, and O’Rourke at 11 percent. Featured lower in the list of possible Democrats were Senators Elizabeth Warren, Kamala Harris and Cory Booker.

Featured lower in the list of possible Democrats were Senators Elizabeth Warren, Kamala Harris and Cory Booker.

Brexit

Of course, as the last few Republican nominating contests have demonstrated, winning in Iowa, the first contest of the primary season, is no guarantee that a candidate will go on to secure the party’s nomination (though Hillary Clinton won Iowa in 2016 and Barack Obama won it in 2008).

And despite all of the talk about how the Democrats need "new blood" to have a shot at beating Trump, nearly half of poll respondents - 49% - said they would prefer a "seasoned hand", while 36% favored a "newcomer."

At 76, Biden is reportedly consulting friends and political allies about whether he is too old to run for president. If elected, he would be 78 years old when taking office, making him the oldest president-elect in US history. Meanwhile, O'Rourke said at a town hall in El Paso, Texas, on Friday that he hadn’t made a decision about whether to seek the presidency, according to the Associated Press.

And coming in at No. 7, former First Lady and once-and-future candidate Hillary Clinton still ranked higher than Michael Bloomberg and Amy Klobucher, which will likely keep Clinton's dreams of a return to the presidential arena alive - for now, at least.

Published:12/16/2018 12:52:05 PM
[Markets] Psychoanalysing NATO: Schizophrenia

Authored by Patrick Armstrong via The Strategic Culture Foundation,

NATO sorrowfully explains its problems with Russia on its official website:

For more than two decades, NATO has worked to build a partnership with Russia, developing dialogue and practical cooperation in areas of common interest. Cooperation has been suspended since 2014 in response to Russia’s military intervention in Ukraine but political and military channels of communication remain open. Concerns about Russia’s continued destabilising pattern of military activities and aggressive rhetoric go well beyond Ukraine.

None of this – of course – is NATO's fault: on the contrary NATO is concerned that

Russia’s military activities, particularly along NATO’s borders, have increased and its behaviour continues to make the Euro-Atlantic security environment less stable and predictable, in particular its practice of calling snap exercises, deploying near NATO borders, conducting large-scale training and exercises and violating Allied airspace.

Suffice it to say that this statement would have a closer relationship with reality if the words "NATO's borders" were replaced with "inside Russia". And I would be interested to hear the details of "violating Allied airspace". Why even the Daily Telegraph in 2015 with its suggestive headline of Mapped: Just how many incursions into Nato airspace has Russian military made? had to admit "The Ministry of Defence says the Russian bombers have never violated Britain’s sovereign airspace, which extends 12 nautical miles from the coast." Likewise Violated US Airspace 16 Times In Last 10 Days turns out to be Air Defence Identification Zones which is not the same thing at all. Or Most Russian Plane Intercepts over Baltics Due to Error: NATO General. So NATO's statement needs a further calibration so that "violating Allied airspace" becomes "flying in international airspace close to Allied countries' airspace".

Therefore, properly understood, NATO accuses Russia of 1) holding military exercises in its own territory, 2) flying in international airspace, 3) supporting secessionist movements in places that weren't part of Yugoslavia or aren't in the Middle East or North Africa. And they accuse it of invading countries that NATO didn't invade first. NATO projects its behaviourgaslights its audience and confirms its initial assumption when Moscow objects. But that's NATOLand for you – the unicorns roam free and all is sunny until the bear smiles.

There is a striking schizophrenia among NATO's members: Russia is, at one and the same time, so weak it's "doomed" and so strong that it's demolishing NATOLand.

Russia is forever, eternally, endlessly, doomed. Always on the edge of collapse. (But Russia has always been doomed here’s Time in 1927) and it was altogether finished in 2001. But doom dooms on. Has an ‘open society’ doomed Russia to fail? (September 2012)Russia Is Doomed (March 2014)Why Putin’s Adventure in Ukraine Is Doomed (April 2014)Putin’s Nationalism and Expansion Strategy Is Doomed to Fail (September 2014)Sorry, Putin. Russia’s economy is doomed (December 2014)Remember Russia? It’s still doomed (January 2015)Morgan Stanley thinks Russia’s doomed (February 2015); Secretary of Defense: Russia 'Doomed to Fail' in Syria (September 2015); Is Russia's Economy Doomed to Collapse? (July 2016)Why The Saudi-Russian Oil Agreement Is Doomed To Fail (September 2016)Putin’s Bridge to Crimea Is Doomed to Collapse (January 2017)Russia’s Su-57 Stealth Fighter Is Doomed to Fail (December 2107)The Russian economy looks doomed (March 2018)Russia is doomed to steadily fall behind the rest of the world (August 2018)Why Putin’s 5-100 project is doomed to fail (October 2018). And its soccer team too! Aging and Inexperienced: Why Russia Is Doomed to Fail (June 2018).

You'd think, with all this doom dooming away at Russia, that no one would be much worried about it. Except of course for the risk of getting bits of it spattered on you when it finally crashes down. Said collapse confidently predicted three years ago by Alexander Motyl, who, making his wish the father of his thought, declaimed that Russia might even "disappear":

As the new year begins, both Ukraine and Russia are making steady progress. The difference is that, while Ukraine is slowly, and more or less surely, adopting a raft of systemic reforms that will make it a normal Western market democracy, Russia is becoming a failed state. If current trends continue, as they probably will, Russia may even disappear.

But, amazingly, Russia has become more powerful than ever before. Not even Stalin in his wildest dreams imagined choosing the next US President. Yet, even as "weak and dying" Russia freefalls, Putin has done exactly that: "Vladimir Putin has a plan for destroying the West—and that plan looks a lot like Donald Trump" Trump being what Putin would design to "undermine American interests – and advance his own". "Trump is Putin's ally in Russia's war on the West". But even before he animated his Trumpenpuppet, his tendrils had slithered deep into Washington: "Putin’s Got America Right Where He Wants It: And that's bad news for Obama". So Putin, although he's no genius, just another Brezhnev, has a puppet in the White House.

But not just there: Putin (Aspergers, "gunslingers' walk", lonely psychopath that he is), through his "useful idiots", affects everything, everywhere. BrexitFrench electionItalian electionGerman electionAustrian electionDutch electionCanada's next electionCatalonian separatism.  Gilets jaunesHungary's Prime Minister is a Putinist. And it's more, so much more: Russia and the Threat to Liberal Democracy: How Vladimir Putin is making the world safe for autocracy. Moscow's unstoppable "Hybrid War" weaponising Information, Culture and MoneySeparatism, migrants, left wing right wing.

Sounds as if we're the ones who are doomed.

In this race of the doomed: who will get to the FINAL DOOM first?

Published:12/16/2018 6:15:49 AM
[US News] ‘Ohhhh the irony!’ Barack Obama makes ANOTHER promise about Obamacare (this time after a judge’s ruling)

AGAIN??

The post ‘Ohhhh the irony!’ Barack Obama makes ANOTHER promise about Obamacare (this time after a judge’s ruling) appeared first on twitchy.com.

Published:12/15/2018 11:43:49 PM
[World] [Josh Blackman] Understanding the New Obamacare Decision, Texas v. United States: Part I

[A guest-post by Prof. Josh Blackman (South Texas College of Law), a noted expert on Obamacare-related litigation. -EV]

Recently a federal district court found that the Affordable Care Act was unconstitutional. The reaction was swift and brutal. One prominent law professor at Harvard described the case as "a political objection in legal garb," and concluded that "there is every reason to believe that a strong, nonpartisan majority of justices will do their constitutional duty, set aside how they might have voted had they been members of Congress," and uphold the law.

Another Yale law professor likened the decision to the anti-canonical Dred Scott decision, which "distorted the Constitution, disregarded precedent, disrespected Congress and proclaimed that the basic platform of one of America's two major political parties was unconstitutional." A Slate columnist wrote that the decision should "force us to reconsider the role of the courts." She added, "perhaps it's an apt moment to re-examine first principles and think about why we believe in the judicial branch in the first place."

That decision, of course, was Florida v. HHS, decided in February 2011. Judge Roger Vinson of the Northern District of Florida found that Congress lacked the power to enact the Affordable Care Act's individual mandate. Further, he found that protections for people with preexisting conditions—known as guaranteed issue and community rating (GI and CR)—could not be severed from the unconstitutional mandate. And, of course, we know that in 2012, the Supreme Court narrowly upheld the ACA.

At times, covering the Affordable Care Act reminds me of the film Groundhog Day: the same script repeats itself over and over again, in slightly differently contexts. I wrote about the history of NFIB v. Sebelius in my first book, Unprecedented. And, in my second book, I wrote about the second attempt to Unravel the Affordable Care Act with King v. Burwell. Now, two years into the Trump Presidency, we are in the third phase of the never-ending efforts to undo Obamacare.

In Texas v. United States, the Northern District of Texas found that the Affordable Care Act (ACA) is unconstitutional. The opinion had two main components. First, because the Tax Cuts and Jobs Act of 2017 (TCJA) reduced the ACA's shared responsibility payment to $0, the mandate to purchase insurance could no longer be saved as a constitutional fundraising tax. Second, he found that the remainder of the ACA could not stand without the "essential" mandate. Therefore, the entire law was set aside.

I agree with the first part of the ruling. Judge O'Connor was correct to find that the individual mandate can no longer be saved. However, I part company on the second part. The court should have only set aside the mandate, as well as the GI and CR ratings. The remainder of the ACA can be severed. I detailed these views in a four-part series on this case (I, II, III, and IV), and in draft article forthcoming in the Texas Review of Law & Politics. (Judge O'Connor cited the latter in FN 34.)

Eugene was kind enough to let me write several posts about this important ruling. This first installment will place Texas v. United States in the context of the past eight years of Obamacare litigation. In many regards, Judge O'Connor's ruling resembles that of Judge Vinson. In both cases, a coalition of conservative Attorneys General filed suit in a favorable division in a favorable district—Pensacola and Ft. Worth, rather than Tallahassee and Austin. And, both judges found that the individual mandate and core provisions of the ACA were unconstitutional. Moreover, both courts declined to issue a nationwide injunction, such that the case could be appealed in the normal course without immediate disruption to the federal government.

However, there are also critical differences. First, Judge Vinson rendered a major constitutional law decision on a question of first impression: could a mandate to purchase insurance be supported by Congress's powers under the Commerce and Necessary and Proper Clauses. The Florida court went out on a limb to find that Congress lacked such a power. This decision was without precedent. Ultimately, his opinion was vindicated by a majority of the Court, but at the time, Professors Tribe and Amar (referenced above) savaged the decision. Indeed, the activity/inactivity distinction remains controversial in constitutional discourse.

In contrast, Judge O'Connor's decision is far less audacious. His constitutional analysis concerning the mandate was supported by a majority of the Supreme Court. Critics can disagree with the factual predicate of his ruling—that the individual mandate survived the TCJA—but his constitutional analysis stands on a firm foundation. Moreover, Judge O'Connor's ultimate conclusion on severability—that the entire ACA must fall if the mandate is unconstitutional—was supported by the NFIB joint dissenters. Assuming the intent of Congress in 2010 controls the severability analysis—I think it does, but the question is closer than many have recognized—Judge O'Connor's sweeping ruling has the foundation of four votes on the Supreme Court.

There is a second critical difference: timing. When Judge Vinson issued his ruling, the Affordable Care Act had not yet gone into full effect. At that juncture, there were some preliminary programs that had been rolled out, and the Administration was preparing to implement the remainder of the law. Seven years later, the ACA has been fully woven into the fabric of the American health care system. Pulling the emergency brake on the entirety of the law would be logistically impossible. For this reason, and many others, Judge O'Connor was prudent not to issue a nationwide injunction, as the states had requested.

Third, the political dynamics are fundamentally different. In 2010, Obamacare's unpopularity, fueled by the surging Tea Party, led to the Republicans winning the House of Representatives, and taking more seats in the Senate. The Republican party quickly coalesced around the legal arguments advanced by Randy Barnett and other members of this blog. In the words of Jack Balkin, the arguments concerning the mandate went from Off the Wall to On the Wall. 2018 is very different. The popularity of the ACA, in particular the GI and CR provisions, is well established. Republican politicians who voted to repeal the ACA struggled to defend their votes during the midterm elections. Many of these members lost their seats, in part at least, due to the efforts to unravel Obamacare. The Republican opposition to the law has faded significantly.

Fourth, we have very different executive branches. The Obama Administration was singularly focused on defending the ACA at every juncture. First under the leadership of Deputy SG Neal Katyal (then-SG Elena Kagan wanted nothing to do with the case), and later with Donald Verrilli at the helm, the administration mounted a coordinated effort to save the law. Now the situation is quite different. Then AG Sessions declined to defend the constitutionality of the mandate, and concluded that GI and CR cannot be severed.

Fifth, we have very, very different Presidents. President Obama viewed the ACA as the cornerstone of his domestic legacy. President Trump, in contrast, has targeted the repeal of Obamacare since he was on the campaign trail—but not really. He still favors protection for pre-existing conditions and other popular aspects of the law, but he opposes the unpopular aspects. Shortly after the decision, President Trump issued two celebratory tweets that maintain this ambiguous posture.

Obamacare bad. Pre-existing conditions good.

The sixth difference may be the most important. Had the Supreme Court set aside the ACA in June 2012, there would have been zero political appetite to restore the law in any regard. Republicans would have claimed the decision as a political victory, and moved on. Perhaps Mitt Romney would have won the election—we may never know.

2019 is every different. If the Supreme Court were to hold that the law's GI and CR provisions were unconstitutional, I suspect that Congress would re-enact those provisions with broad bipartisan support. There is no constitutional problem with Congress enacting these standalone insurance reforms, without the mandate. Indeed, to avoid any disruption, the Supreme Court could delay its ruling by a single tax year to give Congress a chance to act. (Justice Alito floated this option during oral arguments in King v. Burwell.)

Moreover, states can enact their own GI and CR provisions as a fall back in the event that Texas is victorious. Many states already have restrictions that are more protective of those under the ACA. Finally, unlike with King v. Burwell, where states were at risk of losing millions in federal funding, here the states can be proactive and ensure no gaps in coverage. In other words, now that Congress zeroed out the penalty, the political fallout from a decision declaring that GI and CR were also unconstitutional would likely be short-lived.

Seventh, in 2012, we had no idea what the Roberts Court would do with the ACA. However, NFIB told us what the Justices thought of the constitutionality of the mandate. And, recent reporting about the case suggests that Chief Justice Roberts was willing to set aside the mandate, as well as the GI and CR, but could not persuade Justice Kennedy to follow along with this narrower path. Now, Justice Kennedy is gone, and he is replaced by Justice Kavanaugh, who—based on the earliest of lights—may have a stronger respect for stare decisis than did his predecessor.

It is not unthinkable for a majority of the Court to hold that the predicate of the saving construction no longer holds—the exaction does not raise revenue. Therefore, the GI and CR provisions cannot be salvaged. This sort of decision would reaffirm the Commerce and Necessary and Proper analysis in NFIB—an important rule I agree with. Moreover, that ruling would demonstrate the saving construction was a proper application of the judicial role, rather than an ad hoc exception to avoid a politically unpopular ruling. (Six years later, I have come to grips with the bulk of the saving construction, but still cannot accept the Chief's analysis of direct taxes.)

In future posts, I will break down the technical details of Judge O'Connor's 55-page opinion. Here, my sole aim was to place this decision in the broader context of the ACA litigation, which I have been carefully covering for nearly 8 years.

Published:12/15/2018 7:48:12 PM
[Markets] US Medicare-For-All & Big-Tech: The Future Of Mass Patient Surveillance

Authored by Tho Bishop via The Mises Institute,

As tech executives continue to be grilled in front of Congress, the growing Bernie Sanders-wing of the Democratic Party is preparing to push its misnamed “Medicare for All” into the political mainstream after its political gains in the midterms. While these two stories seem to have very little in common, it’s not difficult to imagine a not-so-distant future where the two are dangerously connected. After all, so long as the scope of government grows, the continued politicization of all aspects of life will follow – the inevitable consequences of which could be quite horrific.

The State’s Shadow over Silicon Valley

First let’s consider some of the overlooked causes behind the increased censorship from Silicon Valley.

While Republican politicians relish in collecting cheap soundbites railing against the censorship practices of widely despised tech executives, few are willing to point out the obvious influence of government in Big Tech’s growing hostility to free speech.

For example, just recently Facebook announced it was following the lead of Tumblr by cracking down on “sexualized content” on its platform. While both decisions were widely ridiculed by users and pundits alike, largely ignored was the role that recent Congressional laws aimed at cracking down on sex trafficking played in sparking the new policy. Similarly, “anti-hate speech” laws from Europe had very real consequences for American social media users as mechanisms designed to police speech oversees are inevitably used to manage content throughout their global communities.

While tech censorship began with isolated bans on individual social media platforms, it has evolved over time into a far more sinister crackdown of modern-day thought criminals. Alex Jones, for example, saw multiple social media accounts closed in a coordinated campaign earlier this year in what’s been likened to a modern version of Orwell’s “unpersoning.” Increasingly we are seeing financial services platforms, such as PayPal and Patreon, become another particularly effective form of censorship for those found guilty of violating the norms of political correctness.

The traditional libertarian response to these issues is to simply build another platform, but that seems increasingly impotent in the face of the union between Big Tech and state.

Gab, for example, is a product that arose in direct response to increased censorship on Twitter. The app has found itself deplatformed from both major phone app stores, even before user Robert Barnes killed 11 people at a Pennsylvania synagogue earlier this year and heightened law enforcement’s attention to the site. It’s worth noting that Facebook, a prolific donor to America’s political class, did not receive similar treatment when it was used to broadcast torture and murder. Similarly, cryptocurrency exchanges have faced backlash from government officialstraditional financial services companies, and tech companies in their effort to build alternatives to state-controlled financial networks.

Of course the answer to this new era of Big Brother (Sister?) isn’t government regulation, as many on the populist right advocate. The history of government involvement in communication platforms has been one of increased censorship. Instead, the best way to confront the Silicon Valley’s censorship is to recognize the inherently perverse influence of government and pursue a separation of tech and state. For example, attack all forms of state privileges enjoyed by companies that don’t recognize freedom of speech: such as government contracts, and liability waivers. Additionally, allow private citizens to sue when companies violate their terms of service or mislabel themselves as “open platforms.”

Socialism and Political Correctness are a Dangerous Mix

Unfortunately instead of working to depoliticize tech, it’s far more likely that we will see increased politicization of other vital parts of American life – and perhaps none is more dangerous than that applied to healthcare.

While it is easy to mock the economic illiteracy of politicians like Alexandra Ocasio-Cortez, there is no question that her brand of democratic socialism is growing in popularity – and not just on the left. It’s worth remembering that only a few years ago candidate Donald Trump gave his own endorsement to a healthcare vision similar to that held by AOC and Bernie Sanders.  

Consider the troubling potential of a progressive government that drops all pretense of valuing free speech, and then giving that government complete control of the healthcare system.

While this perhaps sounds like the makings of an outlandish dystopian novel, imagine the sort of policies we’ve already seen come from the executive branch. Under the Obama Administration, we saw the use of the IRSDepartment of Homeland Security, and even intelligence agencies to target and punish political opponents. Meanwhile, the progressive left has increasingly identified those who believe the “wrong ideas” – such as skeptics of anthropogenic climate change – as dangerous threats guilty of the crimes equivalent to murder.

In an age where a new generation of doctors increasingly rejects the Hippocratic oath, a government take over of medical care – as the honest advocates of “Medicare for All” propose – could inevitably lead to politicized regulators making life and death decisions for Americans.

Now does this mean I think it's likely that a President Ocasio-Cortez would instruct a "political death panel" to not provide Alex Jones with life saving treatment? Not necessarily. The issue, however, is that the greater control the state has on medicine, the more decisions are influenced by the concerns of government, rather than the needs of patients. In such a dark timeline, if socialized healthcare forced America to face the sort of medical rationing that Britain’s prized National Health Service has been reduced to, it would be fair to wonder if Gavin McInnes would receive the same sort of treatment as an Ezra Klein.

At the end of the day the more socialist a country is, the greater the danger in opposing the narrative of the state.

As Mises warned in Omnipotent Government:

Within a socialist community there is no room left for freedom...There can be neither freedom of conscience nor of speech where the government has the power to remove any opponent to a climate which is detrimental to his health.

Now obviously the US is far away from such a terrorizing future, and there are far more immediate threats than the specter of political death panels. Can we be so confident about China, with its new social credit system? Or even the UK with the previously mentioned stress placed on its health system, and its own growing political polarization? It's fair to wonder. 

No matter where you are in the world, the danger is the same. Grow the scope of government and expand the weapons of the state that can be deployed against its political enemies.

It’s Big Tech today. Let’s not allow it be healthcare in the future.

Published:12/15/2018 6:45:04 PM
[Markets] How Will The Obamacare Ruling Affect Americans Covered Under The ACA?

A Texas federal Judge ruled on Friday that the entire Affordable Care Act (ACA), or Obamacare, was rendered unconstitutional after Congress eliminated the individual mandate - a federal requirement to buy insurance or face a penalty.

At issue in the case was the individual mandate, which requires people to have health insurance. The penalty for not having insurance was dropped to $0 in the most recent tax legislation, potentially undercutting the Supreme Court's decision in 2012 that the Affordable Care Act was constitutional because of Congress' ability to tax. 

With no penalty, there's no tax, the plaintiffs, a coalition of Republican-led states, argued in the Texas case. The plaintiffs also argued that the individual mandate is so essential to the entire law, so that if it's unconstitutional, the rest of the law must also be thrown out. U.S. District Court Judge Reed O'Connor agreed on that point, too. -CBS News

The ruling came just one day before the december 15 deadline to sign up for health coverage in 2019 through the ACA's marketplace. 

How will this the ruling affect people covered under the ACA? It won't, for now - and people can still sign up for coverage through Saturday. "Court's decision does not affect this season's open enrollment," reads a notice on HealthCare.gov. 

The Trump White House has said that the existing law will stand for now while the ruling works its way through the appeals process up to the Supreme Court - a process which could take years. Some, such as Vox's Ezra Klein, have suggested that since Congress removed the individual mandate with the intention of keeping Obamacare intact, the Texas ruling is judicial overreach and the ruling is unlikely to stand.

"We expect this ruling will be appealed to the Supreme Court. Pending the appeal process, the law remains in place," said White House Press Secretary Sarah Sanders in a statement, adding that Trump is now calling on Congress to replace the Affordable Care Act. 

That didn't stop Trump from throwing salt in the wound - tweeting on Saturday: "As I predicted all along, Obamacare has been struck down as an UNCONSTITUTIONAL disaster! Now Congress must pass a STRONG law that provides GREAT healthcare and protects pre-existing conditions. Mitch and Nancy, get it done!"

That said, if the law is ultimately invalidated, other well-liked sections of the law are likely to be scrapped according to CBS Newssuch as the provision allowing adult children to remain on their parents insurance coverage until age 26 - whether or not they live in the basement. 

Moreover, invalidating the ACA would eliminate the mandate that insurance companies cannot discriminate against pre-existing conditions, as well as the ban on annual lifetime limits for coverage. 

Democrats immediately jumped on the Friday night ruling to warn that health care coverage for millions of Americans was at stake due to the Republican-led lawsuit that sought to void popular parts of Obamacare, including protections for pre-existing conditions and a ban on annual lifetime limits. -Bloomberg

House Speaker-in-waiting Nancy Pelosi said that the ruling "exposes the monstrous endgame of Republicans’ all-out assault on people with pre-existing conditions and Americans’ access to affordable health care."

Trump, of course, celebrated - though not everyone agrees... "When Trump says this is ‘great for America,’ he’s forgetting the health care driven whipping Republicans got in the midterms," said Andy Slavitt - the man who oversaw the implementation of the ACA for the Obama administration, who added "Rather than let that heal, he’s making health care a 2020 prime fight and also putting Republicans in the Senate at great exposure."

Republicans struggled with the issue in the campaign. They vowed to support protections for Americans with pre-existing conditions, even if they backed the lawsuit or legislation that would undo those provisions. One prominent Republican ally of Trump said health care could be his “Achilles heel” in 2020, when he’s up for re-election. -Bloomberg

"I’m not sure Republicans even know what they’re fighting for right now when it comes to health care," said former GOP Congressman from Florida who is now an independent. "Opposing Obamacare has become reflexive GOP orthodoxy, but they just spent six months saying they’d protect pre-existing conditions. Hard to square GOP campaign promises with the court victory by GOP attorneys general," he added. 

The next step for the matter will be the Fifth Circuit Court of Appeals - the most conservative appellate court in the country, according to Bloomberg. If they uphold the decision, it's likely headed to the Supreme Court. On the other hand if the Fifth Circuit reverses the decision, the Supreme Court likely won't hear the case, according to legal experts. 

I can’t see who in the Fifth Circuit swallows this, and if they don’t,” the Supreme Court won’t take the the case, predicted Adler, who’s also a member of the conservative Federalist Society.

Nicholas Bagley, a professor at University of Michigan Law School, said he doubts the case will make it to the Supreme Court. By far the likeliest outcome is that it gets rejected on appeal at the Fifth Circuit, he said in an email, adding, “No serious conservative has yet endorsed this litigation. That includes very hard-line conservatives.” -Bloomberg

Republican Kevin Brady - the House Ways and Means Committee Chairman who assisted in the unsuccessful Republican bill to repeal Obamacare in 2017, said that the ruling was "not surprising," as the law was "embarrassingly designed. 

If Friday's ruling is upheld, Brady says "ultimately both parties should start over.

Published:12/15/2018 3:12:14 PM
[Democrats] When Obama Was Accused Of Pre-Election Hush Money Payoff Media Was Silent

The same press that's all over the Michael Cohen story today, was quiet when Barack Obama's campaign was accused of offering someone six-figures to shut up.

The post When Obama Was Accused Of Pre-Election Hush Money Payoff Media Was Silent appeared first on Godfather Politics.

Published:12/15/2018 11:11:00 AM
[Democrats] When Obama Was Accused Of Pre-Election Hush Money Payoff Media Was Silent

The same press that's all over the Michael Cohen story today, was quiet when Barack Obama's campaign was accused of offering someone six-figures to shut up.

The post When Obama Was Accused Of Pre-Election Hush Money Payoff Media Was Silent appeared first on Godfather Politics.

Published:12/15/2018 11:11:00 AM
[Uncategorized] ‘Your hubris is stunning’! Sen. Chris Murphy rushes to slam GOP over potential lost health plans, trips HARD over Obama

Self-awareness takes another holiday!

The post ‘Your hubris is stunning’! Sen. Chris Murphy rushes to slam GOP over potential lost health plans, trips HARD over Obama appeared first on twitchy.com.

Published:12/15/2018 9:40:15 AM
[Media] HERE WE GO AGAIN: Blue checks are sharing MSNBC video of CBP agents pouring out water, don’t mention it happened under Obama

We’re starting to see this video from January from Chris Hayes’ show on MSNBC making the rounds, but yet again, the blue checks sharing it aren’t telling the entire story. The clip shows how CBP agents routinely destroy water and other supplies left by aid groups for illegal immigrants crossing the desert. If you click […]

The post HERE WE GO AGAIN: Blue checks are sharing MSNBC video of CBP agents pouring out water, don’t mention it happened under Obama appeared first on twitchy.com.

Published:12/14/2018 9:40:48 PM
[Markets] The Real Reason Western Media & CIA Turned Against Saudi's MbS

Authored by Darius Shahtamasebi,

Forces are aligning against Saudi Arabia’s Crown Prince, lead by elements within the CIA and strong players in the mainstream media. But what is really behind this deterioration in relationship, and what are its implications?

Following the brutal murder of Washington Post columnist Jamal Khashoggi, western media and various entities, including the CIA, appear to have turned their back on Saudi Crown Prince Mohammad Bin Salman (MBS). In response to the scandal, the Guardian released a video which its celebutante, Owen Jones, captioned “Saudi Arabia is one of the biggest threats on Earth. Time to stop propping up its repulsive regime.”

The Guardian was not alone in its condemnation. 

“It’s high time to end Saudi impunity,” wrote Hana Al-Khamri in Al-Jazeera“It’s time for Saudi Arabia to tell the truth on Jamal Khashoggi,” the Washington Post’s Editorial Board argued. Politico called it “the tragedy of Jamal Khashoggi.”

Even shadowy think-tanks like the Council on Foreign Relations (CFR) and the Atlantic Council released articles criticising Saudi Arabia in the wake of Khashoggi’s death.

A number of companies began backing away from Saudi money after the journalist’s death, including the world’s largest media companies such as the New York Times, the Economist’s editor-in-chief Zanny Minton Beddoes, Arianna Huffington, CNN, CNBC, the Financial Times, Bloomberg, Google Cloud CEO, just to name a few.

The CIA concluded that MBS personally ordered Khashoggi’s death, and was reportedly quite open in its provision of this assessment. Antonio Guterres, secretary-general of the UN, also took time out of his schedule to express concern over Saudi Arabia’s confirmation of the killing.

At the time of the scandal, former CIA director John Brennan went on MSNBC to state that the Khashoggi’s death would be the downfall of MBS. Furthermore, the US Senate just voted in favour of ending American involvement in Saudi Arabia’s war in Yemen (a somewhat symbolic victory, though this is a topic for another article), but nonetheless was a clear stab at MBS personally.

The only person who appeared to continue to uphold America’s unfaltering support for MBS, even after all the publicly made evidence against MBS, was the US president himself. So after years of bombarding Yemen, sponsoring terror groups across the Middle East, Asia, the Pacific and beyond, why is it only now that there has been mounting opposition to Saudi Arabia’s leadership? Let’s just bear in mind that western media had spent years investing in a heavy PR campaign to paint MBS as a “reformer.”

Former national security adviser under Barack Obama’s second term, Susan Rice, wrote an article in the New York Times, in which she called MBS a “partner we can’t depend on.” Rice concludes that MBS is “not and can no longer be viewed as a reliable partner of the United States and our allies.” But why is this? Is it because MBS is responsible for some of the most egregious human rights abuses inside his own kingdom as well as in Yemen? Is it because of MBS’ support for groups such as ISIS and al-Qaeda? No, according to Rice, we “should not rupture our important relationship with the kingdom, but we must make it clear it cannot be business as usual so long as Prince Mohammad continues to wield unlimited power.”

One will observe that the latter segment of Rice’s article almost mirrors former CIA director Brennan’s word on MSNBC word for word who stated that:

“I think ultimately this is going to come out. And it’s very important for us to maintain the relations with Saudi Arabia. And if it’s Mohammed bin Salman who’s the cancer here, well, we need to be able to find ways to eliminate the cancer and to move forward with this relationship that is critical to regional stability and our national interests.”

In reality, this is probably the issue that western media and government advisors have taken up with MBS. Aside from the fact he allegedly held a huge hand in the brutal murder of one of their own establishment journalists (Saudi Arabia reportedly tortured and killed another journalist not long after Khashoggi, but western media was eerily silent on this incident) MBS is not opposed for his reckless disregard for human rights. With insight into Rice’s mindset, we actually learn that if the US were to punish MBS, he would be likely to “behave more irresponsibly to demonstrate his independence and exact retribution against his erstwhile Western partners.”

You see, the problem with MBS isn’t that he is a mass murdering war criminal, it is that he is too “independent” for the United States’ liking.

Last week, Saudi Arabia and the other major oil producers met in Vienna at the year’s final big OPEC meeting of the year. As Foreign Policy notes, Saudi Arabia remains the largest oil producer inside OPEC but has to contend with the US and Russia who are “pumping oil at record levels.” Together, the three countries are the world’s biggest oil producers, meaning any coordinated decision made between these three nations can be somewhat monumental.

However, it appears that one of these three nations will end up drawing the short end of the stick as the other two begin forming a closer alliance. As Foreign Policy explains:

“But Saudi Arabia has bigger game in mind at Vienna than just stabilizing oil prices. Recognizing that it can’t shape the global oil market by itself anymore but rather needs the cooperation of Russia, Saudi Arabia is hoping to formalize an ad hoc agreement between OPEC and Moscow that began in 2016, a time when dirt-cheap oil also posed a threat to oil-dependent regimes. That informal agreement expires at the end of the year, but the Saudis would like to make Russia’s participation with the cartel more permanent.”

Russian officials have been signalling their intention to formalise this agreement for quite some time now. Given the hysteria in western media about any and all things Russian, it is not too much of a stretch to suggest that this is the kind of news that is not sitting too well with the powers-that-be.

Earlier this year, Russia and Saudi Arabia announced that it would “institutionalize” the two-year-old bilateral agreement to coordinate oil production targets in order to maintain an edge on the global market.

While US president Trump has been supportive and incredibly defensive of MBS during this “crisis”, the truth is that the US only has itself to blame. It was not all too long ago that Trump announced that he had told Saudi King Salman that his kingdom would not last two weeks without US support.

Saudi Arabia is learning for themselves quite quickly that, ultimately, it may pay not to have all its eggs in one geopolitical superpower basket.

Saudi Arabia has been increasingly interested in Moscow since King Salman made a historic visit to Moscow in October 2017. While Trump has openly bragged about his record-breaking arms deals with the Saudis, the blunt truth is that the $110 billion arms agreements were reportedly only ever letters of interest or intent, but not actual contracts. As such, the US-Saudi arms deal is still yet to be locked in, all the while Saudi Arabia is negotiating with Russia for its S-400 air defence system. This is, as the Washington Post notes, despite repeated US requests to Saudi Arabia for it disavow its interest in Russia’s arms.

The economic threat that an “independent” Saudi Arabia under MBS’ leadership poses to Washington runs deeper than meets the eye and may indeed have a domino effect. According to CNN, Russia and Saudi Arabia “are engaged in an intense battle over who will be the top supplier to China, a major energy importer with an insatiable appetite for crude.”

The unveiling of China’s petro-yuan poses a major headache for Washington and its control over Saudi Arabia as well.According to Carl Weinberg, chief economist and managing director at High-Frequency Economics, China will “compel”Saudi Arabia to trade oil in Chinese yuan instead of US dollars. One must bear in mind that China has now surpassed the US as the “biggest oil importer on the planet,” these direct attacks on the US dollar will have huge implications for its current world reserve status.

If Saudi Arabia jumps on board China’s petro-yuan, the rest of OPEC will eventually follow, and the US might be left with no choice but to declare all of these countries in need of some vital freedom and democracy.

Therefore, ousting MBS and replacing him with a Crown Prince who doesn’t stray too far from the tree that is US imperialism may put a dent in pending relationships with Saudi Arabia and Washington’s adversaries, Russia and China.

Once we get over the certainty that the US media and the CIA are not against MBS for his long-list of human rights abuses, the question then becomes: why – why now, and in this manner, have they decided to put the spotlight on MBS and expose him exactly for what he is.

Clearly, the driving force behind this media outrage is a bit more complex than first meets the eye.

Published:12/14/2018 9:40:48 PM
[Political Cartoons] A.F. Branco Cartoon – Going Ballistic

By A.F. Branco -

Iran violates U.N. restrictions by testing ballistic missiles capable of carrying multiple nuclear warheads. Some are Curious as to how much of the 150 billion dollars Obama gave them was used for this project. Political Cartoon by A.F. Branco ©2018. A.F. Branco 2019 13-Month Calendar <—- Order Here See more Branco ...

A.F. Branco Cartoon – Going Ballistic is original content from Conservative Daily News - Where Americans go for news, current events and commentary they can trust.

Published:12/14/2018 4:05:42 PM
[World] [Jonathan H. Adler] Did Trump Violate Campaign Finance Laws?

Legal experts debate whether payments to kill stories about then-candidate Trump's affairs were undisclosed campaign expenditures.

In today's Washington Post, three prominent DC attorneys representing a range of political viewpoints -- George Conway, Neal Katyal, and Trevor Potter -- argue that President Trump likely violated federal campaign finance laws when he encouraged hush money payments to prevent potentially embarrassing stories about his extra-marital affairs in the final weeks before the 2016 election. Their article begins:

Last week, in their case against Michael Cohen, federal prosecutors in New York filed a sentencing brief concluding that, in committing the felony campaign-finance violations to which he pleaded guilty, Cohen had "acted in coordination with and at the direction of Individual-1," President Trump. And this week, prosecutors revealed that they had obtained an agreement from AMI, the parent company of the National Enquirer, in which AMI admitted that it, too, had made an illegal payment to influence the election. The AMI payment was the product of a meeting in which Trump was in the room with Cohen and AMI President David Pecker.

This all suggests Trump could become a target of a very serious criminal campaign finance investigation. In response, Trump has offered up three defenses. His first was to repeatedly lie. For quite some time, he flatly denied knowledge about the $130,000 payment to Stormy Daniels. But now he seems to be acknowledging that he knew (since his personal company reimbursed Cohen for the payment, he ought to). Now Trump and his acolytes have turned to two other excuses: They point to an earlier case involving former senator John Edwards to argue that what Trump did wasn't a crime; and they say, even if it was a crime, it wasn't a biggie — there are lots of crimes, so what, who cares.

The former is a very weak legal argument, and the latter a dangerous one. Indeed, the campaign finance violations here are among the most important ever in the history of this nation — given the razor-thin win by Trump and the timing of the crimes, they very well may have swung a presidential election.

As they note, the last time a federal court was faced with similar questions -- during the prosecution of John Edwards over alleged campaign finance violations related to the payoff of his mistress Rielle Hunter - the court accepted the legal theory that such payments could constitute campaign expenditures if made for the purpose of influencing a campaign. They also express justified dismay at the arguments, made in some circles, that it doesn't matter whether Trump violated the law because he has partisan opponents -- as if that is legally relevant or could somehow excuse otherwise illegal conduct. They conclude:

The bad arguments being floated in Trump's defense are emblematic of a deterioration in respect for the rule of law in this country. The three of us have deep political differences, but we are united in the view that our country comes first and our political parties second. And chief among the values of our country is its commitment to the rule of law. No one, whether a senator or a president, should pretend America is something less.

UC Irvine law professor Rick Hasen agrees that the case against Trump appears to be significantly stronger than that against Edwards. He writes:

Everyone knew that Edwards was on trial for having donors make payments to his mistress to help fund his campaign. This put Trump and everyone else on fair notice that federal prosecutors were treating such payments as reportable campaign expenditures in certain circumstances. Trump even tweeted about the case at the time. At the very least, the Edwards precedent should have caused Trump to seek advice of counsel on whether payments made to hush up mistresses timed specifically to help his election campaign were illegal.

Not only is the legal theory against Trump stronger because of the Edwards precedent; the facts of the Trump case appear much stronger than the Edwards case as well. Here there appears to be both testimony of Cohen and people from AMI (the National Enquirer parent company) who have said that they coordinated with Trump to make the payments in order to help Trump's election chances. There was no corroboration for Edwards but apparently plenty for Trump. And there's great evidence of consciousness of guilt: the use of the LLC and AMI to launder the payments; the denial for more than a year that the payments were made; the disguising of the reimbursements to Cohen from the Trump Organization as payments for legal services and technical services. This is no paperwork error like Obama or McCain made.

Trump of course would have the ability to show at any trial that he did not have the willfulness required for this to become a criminal matter, but it looks like there is plenty of evidence there to give the issue to a jury. The timing of the Daniels payment is particularly damning in proving this was campaign related and not primarily about helping Trump's personal life. Cohen and Trump refused to pay off Stormy Daniels until October 25, 2016, just before the election and after the release of the "Access Hollywood" tape, when Daniels had threatened to give an interview to a media outlet about their sexual encounter.

Not all legal experts are convinced the payments to Stormy Daniels and Karen McDougal constitute campaign expenditures under federal law. Former FEC Chairman Bradley Smith, for example, argues that such payments are simply not the sort of expenditures covered by current law. Back in August, he made this argument in the Washington Post:

regardless of what Cohen agreed to in a plea bargain, hush-money payments to mistresses are not really campaign expenditures. It is true that "contribution" and "expenditure" aredefined in the Federal Election Campaign Act as anything "for the purpose of influencing any election," and it may have been intended and hoped that paying hush money would serve that end. The problem is that almost anything a candidate does can be interpreted as intended to "influence an election," from buying a good watch to make sure he gets to places on time, to getting a massage so that he feels fit for the campaign trail, to buying a new suit so that he looks good on a debate stage. Yet having campaign donors pay for personal luxuries — such as expensive watches, massages and Brooks Brothers suits — seems more like bribery than funding campaign speech.

That's why another part of the statute defines "personal use" as any expenditure "used to fulfill any commitment, obligation, or expense of a person that would exist irrespective of the candidate's election campaign." These may not be paid with campaign funds, even though the candidate might benefit from the expenditure. Not every expense that might benefit a candidate is an obligation that exists solely because the person is a candidate. . . .

Yes, those payments were unseemly, but unseemliness doesn't make something illegal. At the very least, the law is murky about whether paying hush money to a mistress is a "campaign expense" or a personal expense. In such circumstances, we would not usually expect prosecutors to charge the individuals with a "knowing and willful" violation, leading to criminal charges and possible jail time. A civil fine would be the normal response.

The ultimate arbiter of this question may be Congress, rather than the courts, as it is exceedingly unlikely that Trump will ever be indicted for these alleged crimes. instead, these are questions to be considered if and when Congress opens an impeachment inquiry.

Published:12/14/2018 2:05:35 PM
[Donald Trump] Trump’s Approval Rating the Same as Obama’s At Same Time in Presidency

A recent poll found that Trump has about the same approal rating two years into his presidency as Obama did at the same point.

The post Trump’s Approval Rating the Same as Obama’s At Same Time in Presidency appeared first on Godfather Politics.

Published:12/14/2018 10:34:15 AM
[Donald Trump] Trump’s Approval Rating the Same as Obama’s At Same Time in Presidency

A recent poll found that Trump has about the same approal rating two years into his presidency as Obama did at the same point.

The post Trump’s Approval Rating the Same as Obama’s At Same Time in Presidency appeared first on Godfather Politics.

Published:12/14/2018 10:04:38 AM
[Markets] New Jersey Declares War On Its Residents: Plans Door-To-Door Gun Confiscation Campaign

Authored by Mike Adams via NaturalNews.com,

A New Jersey law that makes it a felony to possess a gun magazine capable of holding over 10 rounds of ammunition is now active.

This wildly unconstitutional law instantly criminalizes hundreds of thousands of New Jersey citizens who legally acquired normal capacity firearms magazines - which include 17-round pistol magazines and 30-round rifle magazines - as tools of self-defense against the very same violent criminals that are protected by the Democrats who passed the gun magazine ban.

Now, the New Jersey State Police have told Breitbart News they won’t rule out “house-to-house enforcement” of the new magazine ban, meaning they plan to conduct house-to-house arrests and gun magazine confiscations. These Nazi-style anti-gun operations will, of course, be carried out at gunpoint, further underscoring the entire purpose of the Second Amendment and the need for citizens to arm themselves with 30-round magazines to defend against government tyranny.

Breitbart News contacted New Jersey State Police on Monday to ask how they planned to enforce the newly enacted ban, reports Breitbart.com.

“The NJ State Police refused to rule out house-to-house checks. Rather, they responded: ‘We do not discuss enforcement strategies.'”

The very reason citizens need 30-round magazines is because the government wants to use coercion and the threat of violence to take away their legally-acquired firearms and magazines. If citizens surrender 30-round magazines, the next step will be New Jersey banning all magazines, followed by the banning of all semi-automatic firearms. Almost overnight, citizens of New Jersey will find themselves living under an authoritarian regime of pure tyranny and lawlessness… with no means to defend themselves against the state, which will then have a monopoly on effective firearms.

This is a repeat of Nazi Germany, which disarmed the Jews before mass murdering six million of them. It’s so much easier to murder people, after all, when the government disarms them first. And anyone going along with the disarmament is signing their own death warrant.

The purpose of the magazine ban is to make sure citizens can’t shoot back when the authoritarian government comes to take ALL their guns

The entire purpose of the gun magazine ban, of course, is to make sure that innocent citizens are unable to shoot back when the government sends gun confiscation teamson door-to-door raids, gunning down citizens and taking their firearms by force. Anyone who knows history will immediately realize that New Jersey is walking down the path of Stalinist Russia or Hitler’s Germany, weaponizing the power of corrupt government to disarm the very people that government will later target for mass arrests and mass murder.

Have no illusions: The aim of all Leftists in government is the establish an authoritarian government regime that holds a monopoly over all firepower, ruling over disarmed citizens who are taxed to death, silenced by the tech giants and criminalized for seeking to defend their own nation against tyranny. This will be combined with open borders policies that flood the nation with violent criminal illegal aliens who will all be granted absolute legal immunity from their crimes, even while American citizens are arrested and imprisoned for merely exercising their Second Amendment rights.

As the Founding Fathers repeatedly noted, all citizens of America have a constitutional duty to resist unconstitutional, illegal “laws” that deprive them of their constitutional rights. Just because New Jersey passes a magazine ban doesn’t mean the New Jersey government has the rightful authority to assert such a restriction. The right to keep and bear arms implies the right to keep and bear the ammunition and magazines required for those arms to function. In passing the gun magazine ban, New Jersey lawmakers prove that they are lawless tyrants who have zero regard for the Bill of Rights, the right of self-defense or the safety of citizens in their own homes. It also underscores why such tyrants must be removed from power by the voters and prevented from destroying the civil rights of the people.

How much blood are New Jersey State Police willing to shed to establish their dictatorial regime of absolute power?

All this raises an important question: How much blood are New Jersey State Police officers willing to shed in order to establish absolute power over the (disarmed) citizens? And who, exactly, is suicidal enough to run these door-to-door confiscation raids, demanding citizens turn over the very hardware they need to defend themselves against New Jersey government tyrants?

It now appears that New Jersey State Police are gearing up to wage mass shootings of gun owners who resist the magazine ban. This will all be carried out, of course, in the name of “public safety.” Thus, the government will engage in mass shootings while claiming to be stopping mass shootings. Such is the new tyranny of the deranged, lawless Left which believes no citizen should have the right to defend themselves against the wave of violent illegal alien criminals those very same Leftists want to see flood across the open border and invade U.S. cities.

This is the new reality is living under the tyrannical rule of Democrats who despise America and are doing everything in their power to destroy the nation and criminalize its patriots. If you dare attempt to defend yourself with a 30-round magazine against a group of illegal alien human traffickers who all have their own 30-round magazines, suddenly you are the criminal while the illegal aliens receive “sanctuary” status. Yes, it’s beyond insane, but this is precisely what left-wing lunacy has delivered in America. Now in New Jersey, no citizen is allowed to defend herself against violence, even as the state becomes a tool of violence against the citizens. Don’t forget, either, that under Barack Obama, the entire deep state apparatus, including the FBI and DOJ, was weaponized to spy on the Trump campaign, frame campaign officials for “crimes” and violate the civil rights of Trump associates via FISA warrants which were achieved using astonishing levels of deception and abuse of government power.

The government is a weapon against the people of America, and right now it’s only President Trump holding back the full force of tyranny that seeks to eviscerate any last shred of both the First and Second Amendments.

We must all now realize that the New Jersey government is waging war against its own citizens while protecting illegal aliens from prosecution. Thus, the government of New Jersey has, without question, become the enemy of the People. It won’t be long, I’d imagine, before we see New Jersey resistance groups designating New Jersey lawmakers as “enemy combatants” who have declared war on the people of New Jersey.

No good can come of this

A state government that believes it can assert the power to criminally arrest its own citizens for possessing legally-acquired “normal capacity” magazines must also believe it has the power to confiscate all guns, too. Thus, it’s only a matter of time before New Jersey lawmakers decide that no citizen should be allowed to own any gun at all. When that day comes — and it isn’t far off — will the law-abiding citizens of New Jersey do what they’re told and turn in all their guns, too?

Every government will take more and more power until it is forced to stop. There is no such thing as a government that has “enough” power. Its bureaucrats are forever hungry for more power, and they will continue to strip power from the citizens for as long as they can get away with it. The rise of tyranny is an inescapable human vector — a concentration of power that only snowballs into increasingly dangerous levels of tyranny and authoritarianism. Only when citizens stand up and say “Enough!” will bureaucrats ever back down and be humbled.

New Jersey is marching down the path of Stalinist authoritarianism. Have no illusions that New Jersey State Police will carry 30-round magazines, not 10-round magazines. The entire point of this magazine confiscation program is to incrementally disarm the citizenry and make sure that when the NJ government launches its all-out war on pro-2A citizens, those citizens are at a severe disadvantage in terms of magazine capacity. It’s so much easier to win a war, after all, if you force your enemy to carry 10-round magazines. And from the point of view of New Jersey lawmakers, the people are their enemy. YOU are already an “enemy combatant” in the eyes of NJ Democrats.

Giving up your 30-round magazines, in other words, is tantamount to surrendering to tyranny. No lawful government would ever attempt to take away your rifle mags. The very fact that New Jersey is going down this path proves that NJ bureaucrats plan to do much more in the near future. Ultimately, they don’t want the citizens to have any means to defend themselves whatsoever.

First they came for the magazines, and we turned those in to comply with the law.

Then they came for the guns, and we turned those in, too, to comply with the law.

Then they came for me, and there was no one left to speak for me (and no means to defend myself against lawless tyranny).

Published:12/13/2018 7:31:12 PM
[Markets] Iranian Hackers Targeted Treasury Officials, Atomic Scientists And...An Intern?

Move over China, Russia and North Korea - Iran is now vying for the title of America's most threatening cyber nemesis. According to a report in the Associated Press, an Iranian hacking group known by the codename "Charming Kitten" has been caught by a private security firm trying to break into the email accounts of US nuclear scientists and policy makers, presumably to try and figure out what the US knows about Iran's clandestine enrichment program, and what, exactly, is happening in the minds of America's most senior policy setters.

Iran

After Trump reimposed sanctions against Iran last month (while offering a crucial backdoor in the form of oil -export waivers), the Iranian government rushed to try and infiltrate the accounts of people tasked with enforcing them.

AP's report included a summary of information provided by Certfa, which tracked how the hackers, who have ties to the Iranian regime, have tried to infiltrate the email accounts of US citizens over the past month using a surprisingly crude methodolgy: The so-called "phishing" attacks that rely on counterfeit emails to trick people in giving up their login information. The news follows a report earlier this week that the Marriott hack was orchestrated by Chinese intelligence agents.

Google

Those targeted by the Iranians include: Treasury officials, high-profile "defenders, detractors and enforcers" of the Iranian nuclear deal, Arab atomic scientists, Iranian civil society figures and even an intern at a DC think tank.

"Presumably, some of this is about figuring out what is going on with sanctions," said Frederick Kagan, a scholar at the American Enterprise Institute who has written about Iranian cyberespionage and was among those targeted.

Kagan said he was alarmed by the targeting of foreign nuclear experts.

"This is a little more worrisome than I would have expected," he said.

In an entertaining twist, Certfa was able to capture evidence of the Iranian hackers' efforts after the group accidentally left its server open to the Internet last month. The server was promptly ransacked by the security firm, which extracted a list of 77 email addresses that had been targeted by the hackers.

The hit list surfaced after Charming Kitten mistakenly left one of its servers open to the internet last month. Researchers at Certfa found the server and extracted a list of 77 Gmail and Yahoo addresses targeted by the hackers that they handed to the AP for further analysis. Although those addresses likely represent only a fraction of the hackers’ overall effort - and it’s not clear how many of the accounts were successfully compromised - they still provide considerable insight into Tehran’s espionage priorities.

"The targets are very specific," Certfa researcher Nariman Gharib said.

In a report published Thursday , Cerfta tied the hackers to the Iranian government, a judgment drawn in part on operational blunders, including a couple of cases where the hackers appeared to have accidentally revealed that they were operating from computers inside Iran. The assessment was backed by others who have tracked Charming Kitten. Allison Wikoff, a researcher with Atlanta-based Secureworks, recognized some of the digital infrastructure in Certfa’s report and said the hackers’ past operations left little doubt they were government-backed.

"It’s fairly clear-cut," she said.

Perhaps the most alarming finding is that the hackers targeted nuclear scientists from rival Arab nations, a sign that the hackers had hoped to steal technology which could help Iranians speed up its enrichment of uranium.

Iran has previously denied responsibility for hacking operations, but an AP analysis of its targets suggests that Charming Kitten is working in close alignment with the Islamic Republic’s interests. The most striking among them were the nuclear officials — a scientist working on a civilian nuclear project for the Pakistan’s Ministry of Defense, a senior operator at the Research and Training Reactor in the Jordanian city of Ramtha, and a high-ranking researcher at the Atomic Energy Commission of Syria.

The trio suggested a general interest in nuclear technology and administration. Others on the hit list — such as Guy Roberts, the U.S. Assistant Secretary of Defense for Nuclear, Chemical, and Biological Defense Programs — pointed to an eagerness to keep track of officials charged with overseeing America’s nuclear arsenal.

"This is something I’ve been worried about," Roberts said when alerted to his presence on the list.

Aside from policy makers involved with the initial Iran deal negotiated under the Obama administration, the hackers also targeted a Honeywell employee in charge of the industrial giant's "emerging technology" unit...

Like the Russian hackers who have chased after America’s drone, space and submarine secrets, the list indicates that Iranian spies were also interested in the world of U.S. defense companies. One of those targeted is a senior director of “breakthrough technology” at the aerospace arm of Honeywell International Inc., the New Jersey-based industrial conglomerate; another is a vice president at Virginia-based Science Applications International Corp., a prominent Pentagon contractor.

Honeywell said it was aware that one of its employees had their personal account “exposed,” adding that there was no evidence that the company’s network was compromised. SAIC said it found no trace of any hacking attempt against its employee’s account.

...As well as - bizarrely enough - an intern at a DC think tank.

Another Charming Kitten target was an intern working for the Foundation for Defense of Democracies, a Washington think tank that has been one of the Iran deal’s fiercest critics. How the intern — whose email isn’t public and whose name appears nowhere on the organization’s website — crossed the hackers’ radar is not clear. The foundation issued a statement calling the revelation “yet another indicator that Iran must be viewed as a nefarious actor in all theatres in which it operates.”

And, of course, Treasury Department employees tasked with enforcing the sanctions against Iran.

An analysis of Certfa’s data shows the group targeted at least 13 U.S. Treasury employees’ personal emails, including one belonging to a director at the Financial Crimes Enforcement Network, which fights money laundering and terror financing, and one used by the Iran licensing chief at the Office of Foreign Asset Control, which is in charge of enforcing U.S. sanctions. But a few employees’ LinkedIn profiles referenced back office jobs or routine tax work.

That suggested “a fairly scattershot attempt,” said Clay Stevenson, a former Treasury official who now consults on sanctions and was himself targeted by Charming Kitten.

Cyberwarfare has been a feature of US-Iranian relations for decades (remember Stuxnet?). We now await revelations that, in addition to trying to steal nuclear secrets, the Iranians also sought to "destabilize" the US by circulating memes with pro-BML and pro-Hillary Clinton messaging.

Published:12/13/2018 5:29:13 PM
[World] [David E. Bernstein] Have Republicans Been Engaging in "Asymmetric Constitutional Hardball?"

In this essay in the Columbia Law Review, Professors Joseph Fishin and David Pozen argue that while "constitutional hardball" has generally increased, for the most part Republicans have been the aggressors and the Democrats quiescent.

In my response, I demur. Here is the abstract:

This Response addresses Professors Joseph Fishkin and David Pozen's Asymmetric Constitutional Hardball. Fishkin and Pozen argue that Republicans have engaged in "asymmetric constitutional hardball" since 1993. This Response accepts the authors' contention that Republicans have increasingly engaged in constitutional hardball but casts doubt on the purported asymmetry.

Part I questions whether one of the authors' primary examples of Republican constitutional hardball—government shutdowns resulting from tensions over spending and other matters between Presidents Obama and Clinton on the one hand and congressional Republicans on the other—supports the authors' thesis, especially given that the shutdowns could at least as easily be blamed on the Presidents as on Congress.

Part II highlights important examples of Democratic constitu­tional hardball, especially hardball by the Obama Administration, that are omitted from the authors' analysis. Part II also briefly reviews reasons why Democrats have been increasingly inclined toward constitutional hardball.

Part III discusses in some detail a particularly important example of Obama Administration constitutional hardball—its efforts to reach and implement, over significant opposition in Congress, a nuclear agreement with Iran. These efforts circumvented Congress and involved lying to the public, engaging in legally aggressive lifting of sanctions on Iran, and even spying on the agreement's domestic opponents.

Among other contributions I think my response makes, I believe it goes into more detail about the "constitutional hardball" the Obama administration played regarding the Iran deal than any other single article. Anyone who still believes that the Obama administration was a paragon of truth and the rule of law should address how it negotiated, sold to the public, and implemented the deal.

Published:12/13/2018 2:58:21 PM
[Markets] Watch Live: Clinton And Uranium One Whistleblower's "Explosive" Testimony On Capitol Hill

Several whistleblowers along with Judicial Watch's Tom Fitton - all of whom have compiled a trove of information on the Clinton Foundation and/or Uranium One, are testifying before the House Oversight and Government Reform Committee today. 

In addition to Fitton, the panel will hear testimony from Philip Hackney, Associate Professor of Law at the University of Pittsburgh who spent five years at the Office of the Chief Counsel of the IRS in Washington D.C. 

Also testifying will be DM Income Advisors managing partner Lawrence W. Doyle, and JFM and Associates prinncipal John F. Moynihan. 

Rep. Mark Meadows (R-NC), Chairman of the House Freedom Caucus, told Fox News's Martha MacCallum on Monday night that the whistleblowers have "explosive" allegations to share.

Watch live at 2pm EST: 

As we noted on Tuesday based on reporting by The Hill's John Solomon, the whistleblowers - who are former federal criminal investigators, have allegged that the Clinton Foundation was "engaged in illegal activities and may be liable for millions of dollars in delinquent taxes and penalties." 

We may also hear about revalations of pay-for-play at Thursday's hearing - as the Obama State Department, headed at the time by Hillary Clinton, authorized $151 billion in Pentagon-brokered deals to 16 countries that donated to the Clinton Foundation - a 145% increase in completed sales to those nations over the same time frame during the Bush administration, according to IBTimes

Meanwhile, Solomon reported on Tuesday that one whistleblower who submitted 6,000 pages of evidence through a firm composed of former federal law enforcement investigators, MDA Analytics LLC., has provided evidence of potential tax crimes as well as a "culture of noncompliance."  

That submission made with the IRS, and eventually provided to the Justice Department in Washington and to the FBI in Little Rock, Arkansas, alleges there is "probable cause" to believe the Clinton Foundation broke federal tax law and possibly owes millions of dollars in tax penalties. That submission and its supporting evidence will be one focus of a GOP-led congressional hearing Thursday in the House.

The foundation strongly denies any wrongdoing. But it acknowledges its own internal legal reviews in 2008 and 2011 cited employee concerns ranging from quid pro quo promises to donors, to improper commingling of personal and charity business. -The Hill

We will update this article with highlights from Thursday's Congressional testimony. 

Published:12/13/2018 1:01:40 PM
[Opinion] The Relativity Of Terms: Republicans Are Now The Radicals Seeking Change

By Dave King -

With American citizens belatedly becoming aware of the existence and danger of the Washington Deep State, designed and implemented by the radical and unconstitutional “Fundamental Transformation of America” that Barack Obama was able to impose on American politics, Republicans have now become the new proponents of change trying to restore ...

The Relativity Of Terms: Republicans Are Now The Radicals Seeking Change is original content from Conservative Daily News - Where Americans go for news, current events and commentary they can trust.

Published:12/13/2018 9:59:37 AM
[Markets] "Tool Of Terror": This Killer Opioid Could Be Used As "Weapon Of Mass Destruction"

Fentanyl is so powerful that a few milligrams can be fatal. It would take about 40 pounds of fentanyl to kill everyone in New York City and 1,515 pounds to kill almost all Americans. This killer opioid is so potent, according to Bloomberg it could be used as a "weapon of mass destruction," adding that national security experts are becoming increasingly alarmed at the prospect of it being used in the next terror attack.

A silent weapon of mass destruction: Fentanyl has already appeared on American streets, becoming the most dangerous drug blamed for sparking a public health crisis that has crushed the productivity of the workforce. American deaths linked to fentanyl increased more than 50% to 29,406 last year, from 19,413 in 2016, according to the National Institute on Drug Abuse (NIDA).

Relatively easy to make, the drug is mass produced in China and Mexico, then pumped into American communities. Additionally, Fentanyl is 50 times more potent than heroin. In its most active form, called carfentanil, a small dose can tranquilize an elephant. 

Law enforcement agencies have been warned across the country to handle fentanyl with extreme caution; some officers have almost overdosed after getting the substance on their skin. 

Even being near the substance is a significant reason why national security experts sound the alarm at the prospect of it being used in the next terror attack. The drug is “a significant threat to national security,” Michael Morell, the former director of the Central Intelligence Agency under President Obama, wrote last year. “It is a weapon of mass destruction.”

Bloomberg said the use of fentanyl as a biochemical weapon is nothing new. In 2002, 50 terrorists held more than 800 hostages in a crowded theater in Moscow, demanding the withdrawal of Russian forces from Chechnya. After days of failed negotiations, Russian special forces pumped the theater with fentanyl, to incapacitate the attackers, though more than 100 hostages died.

"As a tool of terror, the drug would work best in a closed space," said Daniel Gerstein, a senior policy researcher at Rand Corp. who served as acting undersecretary in the Department of Homeland Security’s Science and Technology Directorate in the Obama administration. "Open-air release likely wouldn’t be as effective, as the drug could become too diluted," he said.

"If ground-up fentanyl is placed on everyday objects, people could easily put their fingers in their mouths or rub their eyes and have a deadly reaction," said Josh Bloom, the American Council on Science and Health official."

Law enforcement officers and emergency medical officials have not been trained for a biochemical weapons attack involving Fentanyl. Nevertheless, these same agencies can barely keep up with thousands of opioid overdoses across the country on a daily basis.

Overdoses of the drug are extremely hard to reverse with Narcan nasal spray. Narcan is carried by law enforcement officers and paramedics, especially in hard-hit regions by the most recent opioid epidemic. Frequently, people overdosing on fentanyl require multiple doses of Narcan.

The U.S. Biomedical Advanced Research and Development (known as Barda), is developing medical countermeasures to counter the opioid crisis. In September, it signed a $4.6 million contract with Opiant Pharmaceuticals Inc. to produce a reliable single-dose fentanyl antidote.

“Fentanyl-based drugs have been used in conflicts in other countries, so we know it’s possible, and we need to be ready to save lives and protect Americans from potential health security threats,” said Barda Director Rick Bright. He said repeat doses of Narcan, could be challenging to administer in a terror attack.

Because the US is already in a fentanyl crisis, likened to a silent weapon of mass that has decimated communities across the country, US officials are now concerned that the drug could be used in upcoming terror attacks.

Published:12/13/2018 9:27:48 AM
[Media] It is SO on! Sharyl Attkisson’s announcement should scare the ever-living CRAP out of the Obama administration

Sounds like Sharyl Attkisson may get her day in court after all. *NEW* Date set: Oral arguments Attkisson v DOJ for govt computer intrusions 1/29/19 9:30a Tx all supporters #pressfreedom #constitution RT if u don’t want @TheJusticeDept spending tax $ defending the intruders. @realDonaldTrump https://t.co/0Rj1Xs1rhj — Sharyl Attkisson?????? (@SharylAttkisson) December 12, 2018 A refresher from […]

The post It is SO on! Sharyl Attkisson’s announcement should scare the ever-living CRAP out of the Obama administration appeared first on twitchy.com.

Published:12/13/2018 8:59:27 AM
[Markets] Trump Warned Not To Interfere With Prosecution Of Huawei CFO

President Trump angered senior officials in his Justice Department and Democratic lawmakers this week when he told Reuters reporters that he wouldn't hesitate to intervene in the prosecution of Huawei CFO Meng Wanzhou - who is at the beginning of what's expected to be a lengthy extradition process - if it would improve the president's chances of striking a trade deal with China. His comments elicited indignant replies about Trump turning what should be a purely criminal proceeding into a political bargaining chip.

Trump

And in a sign of just how badly Trump upset the federal law enforcement community with his comments, members of the "deep state" community of federal intelligence and law enforcement agents and president Trump's advisors are engaging in the time-tested practice of trying to walk back controversial comments made by the president by leaking a story to WSJ claiming that the president has been warned that any intervention in the Huawei case would "break with longstanding tradition" and that Meng's arrest was "out of his hands."

Despite President Trump’s statement that he might intervene in a criminal case against the chief financial officer of Huawei Technologies Co., such a move would break from longstanding tradition and advisers have warned him that his options are limited, according to people familiar with the matter.

When news broke last week of the arrest of Meng Wanzhou, threatening the president’s trade talks with China, he asked for options, according to one person, and advisers told him the arrest and potential prosecution of Ms. Meng was essentially out of his hands.

The arrest was a Justice Department matter, they said, and the White House should stay out of it for now, this person said. There are no immediate plans to intervene in the matter, officials added.

The timing of this leak is incredibly inconvenient (it follows two possible trade-war victories: China restarting purchases of US soybeans and considering the scrapping of its "Made in China" 2025 plan"). Furthermore, it risks harming the fragile market rally as WSJ's sources insinuated that Trump's comment about intervening in May's detention was purely intended to prop up stocks.

The matter arose when Mr. Trump returned to Washington last week optimistic that his trade talks with Chinese President Xi Jinping had made headway. But stocks didn’t respond as well as he had expected, and on Tuesday Mr. Trump told Reuters he would be willing to intervene in the case against Ms. Meng if it meant securing a strong agreement.

"If I think it’s good for the country, if I think it’s good for what will be certainly the largest trade deal ever made, which is a very important thing - what’s good for national security - I would certainly intervene if I thought it was necessary," Mr. Trump said.

"It’s also possible it will be a part of the negotiations," he added.

And while the story goes on to quote several experts who seemed to suggest that Trump wouldn't dare interfere with the DOJ (because his administration has always shown such unshakable respect for precedent), it also points out that - constitutionally speaking - there's nothing stopping Trump from absolving Meng.

Former Justice Department officials said that while Mr. Trump’s intervention in the Meng case would be a departure from the norms against White House involvement in criminal cases, there is nothing in the Constitution that bars it. Such actions are more common - though still unusual - if the action is framed as a national-security matter.

While the circumstances were different, President Obama pushed the Justice Department to drop cases against several alleged Iran-sanctions violators while negotiating a plan for that country to curb its nuclear program.

"In this trade negotiation, the economic and national-security concerns are increasingly indistinguishable, as is the case with so much of what the U.S. and China are in conflict over at the moment," said Robert D. Williams, executive director of the Paul Tsai China Center at Yale Law School.

It's hardly surprising that "deep state" figures would try to undermine Trump's trade talks. But, for now, all they can do is orchestrate damaging leaks. They don't have the authority to stop Trump from using Meng as a bargaining chip - if that's what the president believes is in the best interest of the nation.

Published:12/13/2018 8:59:27 AM
[Constitution] 9th Circuit: Judges, or Robed Activists? (John Hinderaker) Mark Pulliam notes that the famously left-wing 9th Circuit Court of Appeals is sponsoring a “Mid-Winter Workshop.” Mark comments: Chief Justice Roberts recently chastised President Trump for criticizing federal judges as partisan. Roberts insisted that “We do not have Obama judges or Trump judges, Bush judges or Clinton judges. What we have is an extraordinary group of dedicated judges doing their level best….” The Ninth Circuit makes that Pollyannish assessment Published:12/12/2018 10:54:45 PM
[Markets] "We're Approaching A Critical Mass..." - Know Your Rights Or You Will Lose Them

Authored by John Whitehead via The Rutherford Institute,

"If a nation expects to be ignorant and free in a state of civilization, it expects what never was and never will be." - Thomas Jefferson

We are approaching critical mass, the point at which all hell breaks loose.

The government is pushing us ever closer to a constitutional crisis.

What makes the outlook so much bleaker is the utter ignorance of the American people - and those who represent them - about their freedoms, history, and how the government is supposed to operate.

As Morris Berman points out in his book Dark Ages America, “70 percent of American adults cannot name their senators or congressmen; more than half don't know the actual number of senators, and nearly a quarter cannot name a single right guaranteed by the First Amendment. Sixty-three percent cannot name the three branches of government. Other studies reveal that uninformed or undecided voters often vote for the candidate whose name and packaging (e.g., logo) are the most powerful; color is apparently a major factor in their decision.”

More than government corruption and ineptitude, police brutality, terrorism, gun violence, drugs, illegal immigration or any other so-called “danger” that threatens our nation, civic illiteracy may be what finally pushes us over the edge.

As Thomas Jefferson warned, no nation can be both ignorant and free.

Unfortunately, the American people have existed in a technology-laden, entertainment-fueled, perpetual state of cluelessness for so long that civic illiteracy has become the new normal for the citizenry.

It’s telling that Americans were more able to identify Michael Jackson as the composer of a number of songs than to know that the Bill of Rights was the first 10 amendments to the U.S. Constitution.

In fact, most immigrants who aspire to become citizens know more about national civics than native-born Americans. Surveys indicate that half of native-born Americans couldn’t correctly answer 70% of the civics questions on the U.S. Citizenship test.

Not even the government bureaucrats who are supposed to represent us know much about civics, American history and geography, or the Constitution although they take an oath to uphold, support and defend the Constitution against “enemies foreign and domestic.”

For instance, a couple attempting to get a marriage license was recently forced to prove to a government official that New Mexico is, in fact, one of the 50 states and not a foreign country.

You can’t make this stuff up.

Here’s a classic example of how surreal the landscape has become.

Just in time for Bill of Rights Day on December 15, President Trump issued a proclamation affirming the importance of the Bill of Rights in guarding against government abuses of power.

“The Founding Fathers understood the real threat government can pose to the rights of the people… That is why those first 10 Amendments to the Constitution, among others, protected the right to speak freely, the right to freely worship, the right to keep and bear arms, the right to be free from unreasonable searches and seizures, and the right to due process of law. As a part of the Constitution, the supreme law of the land, the Bill of Rights has protected our rights effectively against the abuse of government power for 227 years… Since there will always be a temptation for government to abuse its power, we reaffirm our commitment to defend the Bill of Rights and uphold the Constitution.”

Don’t believe it for a second.

The government doesn’t want its abuses checked and it certainly doesn’t want its powers restricted.

For that matter, this is not a president who holds the Constitution in high esteem.

After all, Trump routinely rails against the rights enshrined in the first ten amendments to the Constitutiondecrying the free speech rights of protesters, denouncing the media (which enjoys freedom of the press) as the enemy of the people, supporting government efforts to seize private property through asset forfeiture and eminent domain, refusing to denounce the use of internment camps to detain American citizens, sneering at due process, and encouraging police officers to use excessive force against suspects.

As law professor Garrett Epps notes:

Donald Trump ran on a platform of relentless, thoroughgoing rejection of the Constitution itself, and its underlying principle of democratic self-government and individual rights. True, he never endorsed quartering of troops in private homes in time of peace, but aside from that there is hardly a provision of the Bill of Rights or later amendments he did not explicitly promise to override, from First Amendment freedom of the press and of religion to Fourth Amendment freedom from ‘unreasonable searches and seizures’ to Sixth Amendment right to counsel to Fourteenth Amendment birthright citizenship and Equal Protection and Fifteenth Amendment voting rights.”

To be fair, it’s not all Trump’s fault.

Indeed, we wouldn’t be in this sorry state if it weren’t for Presidents Barack Obama and George W. Bush and the damage their administrations inflicted on the freedoms enshrined in the Bill of Rights, which historically served as the bulwark from government abuse.

In the so-called named of national security, since 9/11, the Constitution has been steadily chipped away at, undermined, eroded, whittled down, and generally discarded to such an extent that what we are left with is but a shadow of the robust document adopted more than two centuries ago.

The Bill of Rights—462 words that represent the most potent and powerful rights ever guaranteed to a group of people officially—became part of the U.S. Constitution on December 15, 1791, because early Americans such as James Madison and Thomas Jefferson understood the need to guard against the government’s inclination to abuse its power.

Yet the reality we must come to terms with is that in the America we live in today, the government does whatever it wants.

Make no mistake: if our individual freedoms have been restricted, it is only so that the government’s powers could be expanded at our expense.

The USA Patriot Act, passed in the wake of the 9/11 attacks, drove a stake through the heart of the Bill of Rights, violating at least six of the ten original amendments—the First, Fourth, Fifth, Sixth, Seventh and Eighth Amendments—and possibly the Thirteenth and Fourteenth Amendments, as well. The Patriot Act also redefined terrorism so broadly that many non-terrorist political activities such as protest marches, demonstrations and civil disobedience were considered potential terrorist acts, thereby rendering anyone desiring to engage in protected First Amendment expressive activities as suspects of the surveillance state.

Since 9/11, we’ve been spied on by surveillance cameras, eavesdropped on by government agents, had our belongings searched, our phones tapped, our mail opened, our email monitored, our opinions questioned, our purchases scrutinized (under the USA Patriot Act, banks are required to analyze your transactions for any patterns that raise suspicion and to see if you are connected to any objectionable people), and our activities watched.

We’ve also been subjected to invasive patdowns and whole-body scans of our persons and seizures of our electronic devices in the nation’s airports and at border crossings. We can’t even purchase certain cold medicine at the pharmacy anymore without it being reported to the government and our names being placed on a watch list.

Government surveillance, militarized police, SWAT team raids, asset forfeiture, eminent domain, overcriminalization, armed surveillance drones, whole body scanners, stop and frisk searches (all sanctioned by Congress, the White House, the courts and the like), etc.: these are merely the weapons of the police state.

The power of the police state is dependent on a populace that meekly obeys without question.

Remember: when it comes to the staggering loss of civil liberties, the Constitution hasn’t changed. Rather, it is the American people who have changed.

Those who gave us the Constitution and the Bill of Rights believed that the government exists at the behest of its citizens. The government’s purpose is to protect, defend and even enhance our freedoms, not violate them.

It was no idle happenstance that the Constitution opens with these three powerful words: “We the people.” Those who founded this country knew quite well that every citizen must remain vigilant or freedom would be lost. As Thomas Paine recognized, “It is the responsibility of the patriot to protect his country from its government.”

You have no rights unless you exercise them.

Still, you can’t exercise your rights unless you know what those rights are.

“If Americans do not understand the Constitution and the institutions and processes through which we are governed, we cannot rationally evaluate important legislation and the efforts of our elected officials, nor can we preserve the national unity necessary to meaningfully confront the multiple problems we face today,” warns the Brennan Center in its Civic Literacy Report Card. “Rather, every act of government will be measured only by its individual value or cost, without concern for its larger impact. More and more we will ‘want what we want, and [will be] convinced that the system that is stopping us is wrong, flawed, broken or outmoded.’”

Education precedes action.

As the Brennan Center concludes “America, unlike most of the world’s nations, is not a country defined by blood or belief. America is an idea, or a set of ideas, about freedom and opportunity. It is these ideas that bind us together as Americans and have kept us free, strong, and prosperous. But these ideas do not perpetuate themselves. They must be taught and learned anew with each generation.”

There is a movement underway to require that all public-school students pass the civics portion of the U.S. naturalization test100 basic facts about U.S. history and civics—before receiving their high-school diploma, and that’s a start.

Mind you, it’s only the first of many steps.

If there is to be any hope for restoring our freedoms and reclaiming our runaway government, we will have to start by breathing life into those three powerful words that set the tone for everything that follows in the Constitution: “we the people.”

People get the government they deserve.

As David Fouse writes for National Review, A government by the people, for the people, and of the people is only as wise, as just, and as free as the people themselves.

It’s up to us.

We have the power to make and break the government.

We the American people—the citizenry—are the arbiters and ultimate guardians of America’s welfare, defense, liberty, laws and prosperity.

It’s time to stop waiting patiently for change to happen. Do more than grouse and complain.

We must act—and act responsibly.

Get outraged, get off your duff and get out of your house, get in the streets, get in people’s faces, get down to your local city council, get over to your local school board, get your thoughts down on paper, get your objections plastered on protest signs, get your neighbors, friends and family to join their voices to yours, get your representatives to pay attention to your grievances, get your kids to know their rights, get your local police to march in lockstep with the Constitution, get your media to act as watchdogs for the people and not lapdogs for the corporate state, get your act together, and get your house in order.

In other words, get moving. 

A healthy, representative government is hard work. It takes a citizenry that is informed about the issues, educated about how the government operates, and willing to make the sacrifices necessary to stay involved, whether that means forgoing Monday night football in order to attend a city council meeting or risking arrest by picketing in front of a politician’s office.

Don’t wait for things to get as bad as they are in France, where civil unrest over a government  proposal to raise taxes on gas has turned into violent clashes between protesters and the police.

Whatever you do, please don’t hinge your freedoms on politics.

No election will ever truly alleviate the suffering of the American people.

No matter which party controls Congress or the White House, the government as we have come to know it—corrupt, bloated and controlled by big-money corporations, lobbyists and special interest groups—remains largely unchanged. And “we the people”—overtaxed, overpoliced, overburdened by big government, underrepresented by those who should speak for us and blissfully ignorant of the prison walls closing in on us—continue to trudge along a path of misery.

Remember what Noam Chomsky had to say about politics? “It is important to bear in mind that political campaigns are designed by the same people who sell toothpaste and cars.

In other words, as I make clear in my book Battlefield America: The War on the American People, we’re being sold a carefully crafted product by a monied elite who are masters in the art of making the public believe that they need exactly what is being sold to them, whether it’s the latest high-tech gadget, the hottest toy, or the most charismatic politician.

It’s just another Blue Pill, a manufactured reality conjured up by the matrix in order to keep the populace compliant and convinced that their vote counts and that they still have some influence over the political process.

Don’t buy any of it.

The Constitution is neutral when it comes to politics. What the Constitution is not neutral about, however, is the government’s duty to safeguard the rights of the citizenry.

“We the people” also have a duty that goes far beyond the act of voting: it’s our job to keep freedom alive using every nonviolent means available to us.

As Martin Luther King Jr. recognized in a speech delivered on December 5, 1955, just four days after Rosa Parks was arrested for refusing to relinquish her seat on a Montgomery city bus: “Democracy transformed from thin paper to thick action is the greatest form of government on earth.”

Know your rights. Exercise your rights. Defend your rights. If not, you will lose them.

Published:12/12/2018 10:54:45 PM
[Markets] Paul Craig Roberts: Truth & Free Speech Are Being Taken Away From Us

Authored by Paul Craig Roberts,

Free speech and the ability to speak truth are being shut down. It is happening with the complicity of the print and TV media, the liberal/progressive/left, the US Department of Justice (sic), the law schools and bar associations, Congress, and the federal judiciary.

The attack on Julian Assange is the arrow aimed at the heart of the ability to publish the truth. If a journalist can be indicted for espionage for publishing leaked documents that a corrupt government has classified in order to conceal its crimes, the First Amendment is dead.

Moreover, as the claim is that government was harmed by Wikileaks publishing the truth, Assange’s secret indictment sets the precedent that truth is harmful to government. This precedent will be extended to include the publication of any information or opinion, classified or not, that the government regards as harmful. The media then officially becomes what it mainly already is in effect—a Ministry of Propaganda for the government and those who control it.

As a person who has held high security clearances, I can say with confidence that no more than one percent of classified information falls in the realm of national security. Most classification is simply to prevent the people and Congress from knowing what is going on. Classification allows the various components of government to put the spin where they want it. “National security” has always been an excuse accepted by patriots for the government to conceal its wrong doings and hidden agendas.

Give thought to the alleged harm done by Wikileaks publishing the information leaked by Bradley Manning and the Clinton emails that were downloaded onto a thumb drive and not hacked as security experts have proved. Give thought to the documents proving the warrantless and thereby illegal spying by the NSA that Edward Snowden revealed. How was government hurt by the information? Government should have been hurt, but it was not. The presstitutes did not take up the issue. No one in government was punished for the war crimes, lies, and illegal and unconstitutional acts that the publication of the leaked documents revealed. None of Washington’s vassal governments renounced its vassalage on the basis of the information that revealed they were spied on and deceived. Washington’s vassal governments already knew that Washington lies and deceives them. The Chancellor of Germany simply accepted that Washington listens to her private telephone calls. Vassals simply accept indignities as a consequence of their vassalage. The only people punished were those who revealed the truth—Manning, Snowden, and Assange.

Washington imprisoned Manning and seeks to imprison Assange for damage that Washington did not suffer.

As a country loses its liberty, legal scholars who formerly would have protected liberty turn against it in order to curry favor with power. Recently, I read a specious legal argument that the First Amendment did not really protect Ellsberg and the New York Times when the Pentagon Papers were published, but that no president wanted to be the first one to break the tradition of extending such protection. The author claims that Assange is not protected by the First Amendment even though he is a journalist. The author of the article did not realize that his argument means that journalists have squatters’ rights in First Amendment protection. For the Justice Department to bring a case against Assange means overturning a right that is ensconced in common law as well as in the Constitution.

Washington has shown that it is not interested in any rights but its own to do what it wants. The George W. Bush regime overturned the Constitutional protection of habeas corpus when the regime declared that it could detain citizens indefinitely in prison without presentation of evidence to a court. The Obama regime destroyed due process and the Constitutional right to life when the regime declared that it could assassinate citizens on suspicion alone. Both regimes ignored statutory and Constitutional prohibitions on torture and only punished those who revealed the torture. If Bush and Obama had the right to torture, what was the point of prosecuting those who revealed that torture happened?

As the truth revealed by Wikileaks has had no adverse consequence for Washington, what is the point of Washington’s assault on Assange? In part it is revenge on an individual brazen enough to stand up to Washington, and in part it is to criminalize the telling of truth that is critical of the government.

Once there was a time when the media would have been up in arms in defense of Assange and press freedom. That was before the media was illegally concentrated in a few hands by the Clinton regime and before the media became concentrated ideologically. The media hates Donald Trump and thereby hates Assange for publishing the Hillary emails that the media believes cost Hillary the election. The media is much more intent on helping the Deep State deep-six Assange than the media is in defending its First Amendment protections.

The liberal/progressive/left sees it the same way. The politics of the liberal/progressive/left is Identity Politics, and Identity Politics hates white fly-over America that elected Trump. This is why the media and the liberal/progressive/left are helping the military/security complex tie Assange to Trump, Putin, and “Russiagate.” The Guardian newspaper has destroyed what little credibility it still had by publishing obviously false information concocted to connect Assange to “Russiagate.”

The military/security complex planted on its media assets the fiction that Assange fled to the Ecuadorian Embassy to escape prosecution for rape. The presstitutes consistently repeat the lie, as Harriet Alexander in the UK Telegraph does, that “Mr Assange fled to the embassy to avoid charges of rape, sexual molestation and coercion. All charges were dropped by May 2017”

There were never any such charges filed against Assange. Assange took asylum in the embassy, because it was clear that he was going to be extradited to Washington where he would get a show trial as a spy. It is not possible that Harriet Alexander and the editors at the Telegraph do not know this. Nevertheless, they repeat the lie, the purpose of which is to put Assange in a bad light that will aid his conviction on false charges.

Washington knew that it could tell this lie about Assange raping women because Washington knew that #MeToo and other radical feminists believe that that is what men do, and that #MeToo would be delighted to have yet another celebrity provided for their denunciation.

Washington also knew that its media whores hated Assange for having the integrity and courage that they do not have and that they would willingly stomp him to death with their hobnailed boots.

The US Justice (sic) Department knows it has concocted a false case and intentionally kept it secret, but has no worry because insouciant Americans will believe its indictment regardless.

The judiciary will permit the false case to be tried in a federal court because every judge wants to be elevated rather than criticized and even framed, and the jury will be too afraid to go against Assange’s public conviction in the media to find him innocent.

The jury’s guilty verdict will murder the First Amendment, but the jury will be able to go home to their neighborhoods without being ostracized.

It is not only the government that is attacking free speech. Free speech is under full scale attack by everyone who claims to be “offended,” by the invention of “hate speech” to control what can be said about “victim groups,” by the Israel Lobby that is having laws passed that prohibit the boycotting of Israel for its mistreatment of Palestinians and by equating criticism of the Israeli government with anti-semitism. Twitter, Facebook, and Google are all active in deciding what can and cannot be said. Public forums are denied to people who are disapproved of by other people.

A population that does not respect and defend free speech, debate, and truth will not long have the liberty that results from free speech, debate, and truth. This website respects truth, and it requires your support.

Published:12/12/2018 8:55:06 PM
[Opinion] President Trump Treats Foreign Governments Like Obama Used To Treat US Citizens

By Dave King -

In the bad-ole-days of the Obama administration American citizens were treated like dirt. Citizens were told that they would have to put up with a “Fundamental Transformation” of their great nation: they we forced to accept government-issued healthcare; their taxes were raised; executive orders were issued on all sorts of ...

President Trump Treats Foreign Governments Like Obama Used To Treat US Citizens is original content from Conservative Daily News - Where Americans go for news, current events and commentary they can trust.

Published:12/12/2018 2:21:35 PM
[The Blog] Kennedy: Yeah, we’re gonna have a shutdown

Trump: Obama gave $150B to Iran but I can't have $5 for a wall?

The post Kennedy: Yeah, we’re gonna have a shutdown appeared first on Hot Air.

Published:12/12/2018 11:21:12 AM
[Markets] The China Agenda Behind Trump Leaving the INF Treaty

Authored by Richard Bitzinger via The Asia Times,

A recent decision by the Trump administration could have major implications for defense and security in Asia, although you could be forgiven for missing it, what with the Democratic landslide in the midterm elections and the Mueller investigation causing near-daily meltdowns by America’s commander-in-chief.

The decision the Trump administration announced was that the US will withdraw from the 1987 Intermediate Nuclear Forces (INF) Treaty in 60 days, unless Russia stops testing weapons that Washington says are in violation of the agreement.

The INF Treaty was the capstone of arms control efforts undertaken during the late 1980s, a deal signed by President Ronald Reagan and Soviet leader Mikhail Gorbachev to ban the development, production and deployment of nuclear-tipped ballistic and ground-launched cruise missiles with a range greater than 500 kilometers and less than 5,500 kilometers.

The agreement came about after the Soviets started deploying intermediate-range missiles such as the SS-20 in Eastern Europe in the late 1970s. Given its mobility, load and accuracy, the SS-20 was regarded as a highly effective offensive nuclear weapon that threatened all of NATO Europe. After considerable and often acrimonious debate, NATO responded by emplacing its own INF in Western Europe, mainly the Pershing II ballistic missile and the Ground-Launched Cruise Missile (GLCM).

It was a move that caused considerable protest in Western Europe, with anti-nuclear marches, demonstrations and sit-ins at US bases across Europe. But the NATO INF deployments had their political effect in bringing the Gorbachev regime to the negotiating table, and the INF Treaty was the first agreement to effectively ban a whole class of nuclear forces, at least by the US and Russia. Within three years of its coming into force, nearly 2,700 missiles were withdrawn and destroyed.

Why Trump wants to leave the treaty

Flash forward to 2018. Trump’s foreign policy coterie, led by Secretary of State Michael Pompeo and National Security Advisor John Bolton – a man who was never a fan of arms control agreements – has accused Russia of violating the INF Treaty by continuing to test two types of missiles.

The first is the SSC-8 cruise missile, reportedly a ground-launched version of the ship- and submarine-based Kalibr missile system. The INF Treaty does not apply to sea-based or air-launched intermediate-range delivery vehicles.

Russia has been testing the SSC-8 for the past decade and it supposedly has a range of 2,500 kilometers, placing it clearly within the banned zone.

Second, Moscow is also working on a ballistic missile designated the RS-26. Although technically an intercontinental ballistic missile (ICBM), that is, with a range greater than 5,500 kilometers, the RS-26 has been test-fired at distances of about 2,000 kilometers, potentially making it an INF weapon in disguise.

Cutting off its nose to spite its face

Washington’s threat to leave the agreement has supporters outside the administration. The alleged non-compliance was first noted by the Obama administration and a number of Trump critics, including lapsed neoconservative Max Boot, have voiced their support for pulling out of the INF Treaty.

Still, it is a dangerous bluff. If Washington finds itself dissatisfied with Moscow’s responses and withdraws from the agreement, it simply leaves the field clear for Russia to quickly saturate its European territory with already available INF systems.

In the meantime, the US has no plans or programs even under consideration for reintroducing such forces to NATO Europe. At the same time, it is highly unlikely Western Europe would ever readily agree to reintroducing such weapons on their territories, especially given the current chill in transatlantic relations – which are mostly of Trump’s own making.

The US would be cutting off its nose to spite its face.

Just about China?

More to the point, it is likely that the Trump administration is concerned more about the build-up of Chinese nuclear forces than it is about Russia. The INF Treaty applies only to the US and Russia, and China has been steadily expanding its stable of medium- and intermediate-range nuclear forces for decades.

More importantly, it has significantly built up its strategic nuclear forces, which now stands at about 50-60 ICBMs, particularly road-mobile, solid-fueled rockets.

The US argument inferred here is that Washington lacks the capacity to deploy countering nuclear forces closer to China and that it therefore needs ground-based INF in Asia.

There are two things wrong with this line of reasoning.

In the first place, the US already has considerable numbers of INF systems dedicated to Asia. These include the sea-based Tomahawk Land-Attack Missile (TLAM), which can be launched from both surface ships and submarines, and the AGM-86 Air-Launched Cruise Missile (ALCM), which will soon be replaced by new Long Range Stand Off (LRSO) Weapon.

A few more land-based GLCMs are not going to make that much of a difference.

Second, like Western Europe, it is hard to see any Asian ally or partner agreeing to permit the deployment of INF on their territories. Certainly not Japan, with its decades-old, baked-in anti-nuclearism. And certainly not South Korea, which experienced major convulsions just trying to deploy what basically is a defensive weapon, the Terminal High Altitude Area Defense (THAAD) system.

And certainly not Australia, the Philippines or Singapore – the potential political consequences of angering China are just too great, compared with any potential strategic gain.

In short, any kind of INF in Asia is a non-starter. The US does not need INF to counter China or Russia, it has no place to put them in Asia, and it would force Washington to waste money on yet another misguided military program it can ill-afford.

Published:12/11/2018 11:20:29 PM
[Markets] Hack Of 500 Million Marriott Guests Traced To Chinese Intelligence Services

First it was the North Korean hackers that were accused of somehow hacking into Sony's unbreakable firewall. Then, for a period of almost three years, not a single computer, voting booth, or nuclear power plant appeared to be safe from the Russian hacking scourge, which according to much of the US press, singlehandedly won the election for Trump.

Well, step aside Russians and make room for the Chinese hacker army, because according to the NYT citing two sources, the recent cyberattack on the Marriott hotel chain that collected passport information or other personal details of roughly 500 million guests was part of a Chinese intelligence-gathering effort that hacked health insurers, other hotels and the security clearance files of millions more Americans.

And just like in the Russian narrative, these were no ordinary hackers, but the kind that worked on behalf of the Ministry of State Security.

The latest discovery comes at a very opportunistic time: just as the Trump administration plans a series of actions targeting China’s trade, cyber and economic policies. As reported earlier, even as the trade war between the US and China is supposedly in a tenuous ceasefire, the DOJ is preparing to announce new indictments against Chinese hackers working for the intelligence and military services. The Trump administration also plans to declassify intelligence to reveal concerted efforts by Chinese agents, dating to 2014 or earlier, to build a database containing names of executives and American government officials with security clearances.

Finally, as we discussed yesterday when we commented that the real reason for the US-China trade war is the US desire to halt or at least delay China from manufacturing its own high-tech semiconductors, the NYT also adds that the Trump administration is considering an executive order intended to make it harder for Chinese companies to obtain critical telecommunications equipment.

The coordinated moves against Chinese hackers are expected to be announced within days, and stem from the growing concern within the administration that "the 90-day trade truce negotiated between President Trump and President Xi Jinping in Buenos Aires two weeks ago may do little to change China’s behavior — including coercing American companies to hand over valuable technology if they seek to enter the Chinese market, as well as the theft of industrial secrets on behalf of state-owned companies."

Meanwhile, the actual hack of Marriott’s Starwood chain, which was only revealed late last month after being discovered in September, is not expected to be part of the coming indictments.

But two of the government officials said it has added urgency to the administration’s crackdown, given that Marriott is the top hotel provider for United States government and military personnel.

The crackdown is in response to what has vexed the Trump administration as Russia China appears to have reverted over the past 18 months to the kind of cyber intrusions into American companies and government agencies that former President Barack Obama thought he had ended with a 2015 agreement with Mr. Xi.

And just like Russia, China has denied any knowledge.

Geng Shuang, a spokesman for the Chinese Ministry of Foreign Affairs, denied any knowledge of the Marriott hack. “China firmly opposes all forms of cyberattack and cracks down on it in accordance with the law,” he said. “If offered evidence, the relevant Chinese departments will carry out investigations according to the law.”

“China is one of the major victims of threats to cyber security including cyberhacking,” he said.

Logically, the risk with the coming sweeping accusations, is that while top administration officials insist that the trade talks are proceeding on a separate track, the broader crackdown on China could undermine Trump’s ability to reach an agreement with Xi as American charges against senior members of China’s intelligence services — in tandem with the targeting of high-profile technology executives, like Meng Wanzhou, the chief financial officer of the communications giant Huawei and daughter of its founder — risk hardening opposition in Beijing to negotiating with Mr. Trump.

Over the weekend, China was infuriated by the arrest of Meng, who was detained in Canada on suspicion of fraud involving violations of United States sanctions in Iran. She was granted bail of 10 million Canadian dollars, or $7.5 million, while awaiting extradition to the United States, a Canadian judge ruled on Tuesday.

In response, American business leaders have been bracing for retaliation from China, which has demanded the immediate release of Meng and accused both the United States and Canada of violating her human rights. On Tuesday, the International Crisis Group said that one of its employees, a former Canadian diplomat, had been detained in China. The disappearance of the former diplomat, Michael Kovrig, could further inflame tensions between China and Canada. “We are doing everything possible to secure additional information on Michael’s whereabouts as well as his prompt and safe release,” the group said in a statement on its website.

Late on Tuesday, in an interview with Reuters, Trump said that he would consider intervening in the Huawei case if it would help serve national security and help get a trade deal done with China. Such a move would essentially pit Trump against his own Justice Department, which coordinated with Canada to arrest Meng as she changed planes in Vancouver.

“If I think it’s good for what will be certainly the largest trade deal ever made — which is a very important thing — what’s good for national security — I would certainly intervene if I thought it was necessary,” Mr. Trump said.

Of course, now that cyberwarfare is the strawman to escalate any diplomatic feud, from the first revelation that the Marriott chain’s computer systems had been breached, there was widespread suspicion in both Washington and among cybersecurity firms that the hack was not a matter of commercial espionage, but part of a much broader spy campaign to amass Americans’ personal data; one in which Chinese crack hacker inexplicably left "fingerprints" confirming they were behind the attack.

Meanwhile, since the Marriott database contained not only credit card information but passport data, that particular intrusion would allegedly have given China access to confidential data belonging to hundreds of millions of Americans.  Specifically, according to the NYT, Chinese spies stole passport numbers for up to 327 million people — many of whom stayed at Sheraton Hotels, Westin and W Hotels and other Starwood brands. But Marriott has not said if it would pay to replace those passports, an undertaking that would cost tens of billions of dollars.

Lisa Monaco, the former White House homeland security adviser, noted at a conference last week that passport information would be particularly valuable in tracking who is crossing borders, what they look like, and other key data.

Why would China need this data?

James Lewis, a cybersecurity expert at the Center for Strategic Studies in Washington, said the Chinese have collected “huge pots of data” to feed a Ministry of State Security database seeking to identify American spies — and the Chinese people talking to them. “Big data is the new wave for counterintelligence,” Mr. Lewis said.

“It’s Big Data hoovering,” said Dmitri Alperovitch, the chief technology officer at CrowdStrike, who first highlighted Chinese hacking as a threat researcher in 2011 and who was also instrumental in launching the witch hunt targeting Russians in the summer of 2016, accusing them of hacking the DNC server which has yet to be investigated by the FBI. “This data is all going back to a data lake that can be used for counterintelligence, recruiting new assets, anti-corruption campaigns or future targeting of individuals or organizations.”

The effort to amass Americans’ personal information so alarmed government officials that in 2016 the Obama administration threatened to block a $14 billion bid by China’s Anbang Insurance Group to acquire Starwood Hotel & Resorts Worldwide, according to one former official familiar with the work of the Committee on Foreign Investments in the United States, a secretive government body that reviews foreign acquisitions. Eventually, the failed bid cleared the way for Marriott Hotels to acquire Starwood for $13.6 billion later that year, becoming the world’s largest hotel chain.

As it turned out, it was too late: Starwood’s data had already been stolen by Chinese state hackers, though the breach was not discovered until this past summer, and disclosed by Marriott on Nov. 30.

Ironically, while it is unclear that any kind of trade agreement reached with China by the Trump administration can address this kind of theft, the Chinese regard intrusions into hotel chain databases as a standard kind of espionage. So does the United States, which has often seized guest data from foreign hotels.

Separately, since 2012, analysts at the National Security Agency and its British counterpart, the G.C.H.Q., have watched with growing alarm as sophisticated Chinese hackers, based in the Chinese city of Tianjin, began switching targets from companies and government agencies in the defense, energy and aerospace sectors, to organizations that housed troves of Americans’ personal information.

At the time, one classified National Security Agency report noted that the hackers’ “exact affiliation with Chinese government entities is not known, but their activities indicate a probable intelligence requirement feed” from China’s Ministry of State Security, the country’s Communist-controlled civilian spy agency.

Of course, this is the same NSA which as Edward Snowden revealed several years ago, was just as busy spying on foreign targets as it was on America's own citizens.

Published:12/11/2018 10:17:49 PM
[Markets] Three Clinton Foundation Whistleblowers To Testify About Tax Fraud, Pay-For-Play

Following allegations of sloppy accounting, potential tax fraud and pay-to-play, the Clinton Foundation will be under a Congressional microscope this week after three whistleblowers have come forward and agreed to testify - one of whom secretly submitted 6,000 pages of documents to the IRS and FBI in August of 2017, and all three of whom have submitted various documents to Congressional investigators. 

Rep. Mark Meadows (R-NC), Chairman of the House Freedom Caucus, told Fox News's Martha MacCallum on Monday night that there are three whistleblowers who have spent the past two years investigating the Clinton Foundation, and have "explosive" allegations which they will share during Thursday testimony on Capitol Hill. 

MACCALLUM: OK. With regard to the investigation, which doesn’t get a lot of attention, into the Clinton foundation, the DOJ designated John Huber to look into this. They have 6,000 pages of evidence that they’ve gone through. The foundation raised $2.5 billion, and they’re looking into potential improprieties.

What’s next on this investigation?

MEADOWS: Well, I think for the American people, they want to bring some closure, not just a few sound bites, here or there, so we’re going to be having a hearing this week, not only covering over some of those 6,000 pages that you’re talking about, but hearing directly from three whistleblowers that have actually spent the majority of the last two years investigating this.

Some of the allegations they make are quite explosive, Martha. And as – we just look at the contributions. Now everybody’s focused on the contributions for the Clinton Foundation and what has happened just in the last year. But if you look at it, it had a very strong rise, the minute she was selected as secretary of state. It dipped down when she was no longer there.

And then rose again, when she decided to run for president. So there’s all kinds of allegations of pay-to-play and that kind of thing.

As we noted in late November, the Clinton Foundation has seen donations plummet approximately 90% over a three-year period between 2014 and 2017

While Hillary Clinton was Obama's Secretary of State, however, the State Department authorized $151 billion in Pentagon-brokered deals to 16 countries that donated to the Clinton Foundation - a 145% increase in completed sales to those nations over the same time frame during the Bush administration, according to IBTimes

Meanwhile, John Solomon of The Hill reported on Tuesday that one whistleblower who submitted 6,000 pages of evidence through a firm composed of former federal law enforcement investigators, MDA Analytics LLC., has provided evidence of potential tax crimes as well as a "culture of noncompliance."  

That submission made with the IRS, and eventually provided to the Justice Department in Washington and to the FBI in Little Rock, Arkansas, alleges there is "probable cause" to believe the Clinton Foundation broke federal tax law and possibly owes millions of dollars in tax penalties. That submission and its supporting evidence will be one focus of a GOP-led congressional hearing Thursday in the House.

The foundation strongly denies any wrongdoing. But it acknowledges its own internal legal reviews in 2008 and 2011 cited employee concerns ranging from quid pro quo promises to donors, to improper commingling of personal and charity business. -The Hill

In some instances the Clinton Foundation appears to have misled the IRS, or lied when filling out forms. For example, the Foundation retracted a bid to conduct fundraising in Utah after they refused to correct a filing error which state officials would not allow. 

When contacted for comments, the Clinton Foundation admitted their errors, but told Solomon they were akin to "minor traffic violations." 

Published:12/11/2018 9:17:48 PM
[Campaign finance regulation] Let’s Prosecute Google For Illegal Campaign Contributions (John Hinderaker) If we are going to start prosecuting illegal campaign contributions–sadly, too late to go after Barack Obama’s two scofflaw campaigns–maybe we should begin by charging Google and its executives with federal crimes. Earlier today, Google’s CEO, Sundar Pichai, testified before the House Judiciary Committee on, among other things, Google’s apparent attempt to help Hillary Clinton win the 2016 presidential election. Tyler O’Neil at PJ Media reports: On Tuesday, Google CEO Published:12/11/2018 8:17:58 PM
[Entertainment] Michelle Obama Writes an Emotional Letter to Her Younger Self ESC: Michelle ObamaMichelle Obama has written a letter to her younger self, giving advice to the young woman heading off to college at Princeton. As a part of CBS News' Note to Self series, the former...
Published:12/11/2018 2:45:27 PM
[Politics] Trump Administration Proposes Major Rollback of Water Rules The Trump administration proposed withdrawing federal protections for countless waterways and wetlands across the country Tuesday, making good on President Donald Trump's campaign pledge to weaken landmark Obama-era water rules long opposed by some developers, farmers and... Published:12/11/2018 1:45:09 PM
[Entertainment] 10 books we loved reading in 2018: Michelle Obama, David Sedaris, Tayari Jones and more USA TODAY's reviewers pick the 10 books they most loved reading in 2018, including 'Becoming' by Michelle Obama and 'Clock Dance' by Anne Tyler.
     
 
 
Published:12/11/2018 6:13:04 AM
[Markets] Despite Massive Opposition, The U.N. Presents Migration Global Compact As Milestone For Europe

Authored by Jon Hall via Free Market Shooter blog,

After a petition against the United Nations Global Compact for Migrationreached the threshold of 100,000 signatures last week, members of the British Parliament issued a response to the petition.

The United Nations Global Compact for Migration is a comprehensive, inter-governmental negotiated agreement prepared by the U.N. to cover all the dimensions of international migration.

Under the compact, migration would be made a universal human right and even expand the definition of hate speech to include criticism of mass migration.

President Trump has decreed the compact “simply not compatible with… sovereignty”.

Along with the United States, several other countries have rejected the compact:

  • Hungary

  • Austria

  • Poland

  • Czech Republic

  • Croatia

  • Bulgaria

  • Slovenia

  • Slovakia

  • Australia

As Breitbart points out, the compact has barely registered as a blip in Britain’smainstream media – but in recent weeks, Brexit has dominated the news cycle which may be due in part as to why.

However, after a petition against the compact reached 100,000 signatures, Parliament did respond to the outpouring of opposition in a released statement:

The Global Compact for Migration will support global co-operation on migration without affecting the sovereignty of all countries to control their own borders…

Despite the fact that mass migration has already proven itself to greatly impact the sovereignty of many European nations, the U.N. has instead decided to lie and ignore reality…

They continue:

Too many people, including vulnerable women and girls, are taking risky journeys to migrate through dangerous channels. The Compact will help us take important steps to keep migrants around the world safer and to protect the most vulnerable, by supporting international cooperation on the protection of migrants, in line with our obligations under international law. It outlines ways of preventing exploitation, and of combating the heinous crime of modern slavery…

Again, the U.N. ignores the true reality of mass migration – putting young girls and women at risk in the hands of refugees not compatible with free and Western societies.

The statement concludes:

The Compact is the result of months of intergovernmental negotiations. Though it is legally non-binding and no country can be compelled to conform with its provisions,we are aware that a small number of countries have chosen not to endorse it. We respect this choice and note that countries will be able to endorse the Compact, or cooperate with other states on delivering its objectives, at any point in the future.

In short, this “compact” isn’t a legally-binding agreement – and although they want to act like it’s progress, it’s more of the same – ignoring the truth behind the situation and allowing dangerous circumstances to befall ordinary citizens all across Europe.

The U.N. and British Parliament still bury their heads in the sand regarding the dangers of unfettered migration, even after public opinion shows them the clear message of average citizens yearning for their countries to be secure and safe again.

It will be only up to the citizens of their respective countries to protect themselves and their land as more and more problems and issues arise from refugees and migrants infiltrating and desecrating their culture – real authority figures in Europe have proven beyond a shadow of a doubt that they do not bear the best interests of their own people in mind.

Published:12/11/2018 2:43:36 AM
[Markets] How Government Bureaucrats & The NYTimes Are Misleading The Public About Climate Change

Authored by Robert Murphy via The Institute for Energy Research,

The Executive Branch’s recently released Volume II of the National Climate Assessment (NCA) is a massive document that is being cited as yet further evidence that the U.S. government should act quickly and boldly in the fight against climate change. The coverage in the New York Times was typical:

“All told, the report says, climate change could slash up to a tenth of gross domestic product by 2100, more than double the losses of the Great Recession a decade ago.”

Yet this claim is extremely misleading, as I’ll demonstrate in this post. The projection of a 10-percent hit to GDP is an extremely unlikely (less than a 5-percent chance) event even if we assume we are in the most pessimistic of emission scenarios, while the scenario itself rests upon an assumption that progress on renewables and other technologies occurs much more slowly over the next century than it has already occurred historically. This means that anybody citing the NCA projections isn’t allowed to also tout imminent breakthroughs in wind and solar, because such optimism renders the NCA projections invalid.

Even more astonishing, the NCA gives projections of the “cost of inaction” on climate change, but does not give any estimate of the costs of action on climate change. (It’s a bit like a mechanic warning that you need a new part to avoid engine failure down the road, but refusing to tell you how much the part will cost.) Yet if we follow the citations to other work (such as from the United Nations) that the NCA cites, we see that even using the NCA’s own diagram, it is not clear that aggressive steps to fight climate change would be worth the cost.

The NCA Warns of a Potential 10-Percent Hit to U.S. GDP

The NCA is massive. In the interest of giving the reader a digestible chunk of analysis, in this post I am restricting myself to the material in Chapter 29, which covers the topic of “mitigation” and considers the economic impacts of climate change on the U.S. This chapter contains the chart that led New York Times reporters to write, “climate change could slash up to a tenth of gross domestic product by 2100.”

Here’s the chart in question, taken from Figure 29.3 of the Assessment:

Figure 1. Emissions and Damage Estimates from NCA Study

Source: National Climate Assessment 2018, Vol. II, Figure 29.3

On the right panel of our Figure 1, we see where the NYT writers got their statistic. The far right bar shows that the midpoint of the gray “uncertainty range” is above a 10-percent level of damage to the U.S. economy.

However, how likely is this outcome? As the NCA chart itself shows, this enormous damage estimate is an outlier. In particular it is colored red, which the legend in the top left of the diagram shows is an “RCP8.5” scenario. The other RCP scenarios (blue and green bars) are nowhere near this level of warming or damage. Furthermore, notice that all of the other red bars indicate much smaller temperature increases, and hence damage.

The Unlikely RCP8.5 Scenario

As we’ve seen, the NCA can only generate the alarming outcome under the so-called RCP8.5 scenario. This refers to Representative Concentration Pathway, which is a series of benchmark scenarios used in climate science to have consistent assumptions in order to compare the results of different models. The number 8.5 refers to the amount of “radiative forcing” in effect in the year 2100, namely 8.5 watts per square meter. (The other scenarios, such as RPC4.5, of course have a similar meaning.)

The RCP8.5 scenario is the most pessimistic in the literature. It assumes rapid population growth coupled with a lack of progress in developing alternative technologies. As a scholarly article on the scenario explains:

Another important characteristic of the RCP8.5 scenario is its relatively slow improvement in primary energy intensity of 0.5% per year over the course of the century. This trend reflects the storyline assumption of slow technological change. Energy intensity improvement rates are thus well below historical average (about 1% per year between 1940 and 2000). [Bold added.]

Although the RCP8.5 could be classified as “business-as-usual” because it assumes no government policies to mitigate emissions, it nonetheless involves more emissions than most “business-as-usual” scenarios in the literature. In other words, it is a relatively pessimistic scenario to adopt, even if we assume no major government action.

And so we see that in order to focus attention on the RCP8.5 scenario, we are already building in pessimism, above and beyond the “governments do nothing” assumption. Furthermore, if writers at the NYT and elsewhere want to use the NCA’s worst-case projections as motivation for climate change, then they can’t also tout the continuing progress in “clean energy”—because the RCP8.5 scenario assumes a sudden stall in the historical progress on lowering emissions per unit of economic output.

10-Percent Damage Unlikely Even in the RCP8.5 Scenario

But wait, it gets worse. Even though we’ve seen how dubious the RCP8.5 scenario is, let’s stipulate for the sake of argument that we’ll be in it through the year 2100. Still, how likely is the extreme warming that the NCA report says could cause a 10-percent hit to the U.S. economy?

For that, we need to follow the citations. The chart in Figure 1 above ultimately comes from a 2017 Science article by Hsiang et al. In the Science version, the temperatures are expressed in Celsius, but otherwise it is clearly the same material.

Although the article doesn’t (as far as I can tell) give a specific number for the probability of various outcomes, it does show us this graph, indicating the “probability density function” of varying degrees of warming:

Figure 2. “Probability density” of various level of warming, according to NCA source

SOURCE: Hsiang et al. 2017, Figure 1.

In order to get to the particular simulation involving a 10-percent hit to GDP, the Hsiang et al. study needs more than 7 degrees Celsius of warming. Yet as Figure 2 above shows—all assuming RCP8.5—that only happens on the far right-hand tail of the probability distribution. The overwhelming bulk of the area under the curve is well to the left of that much warming.

If this were a standard statistical test, we could safely “reject” the hypothesis of warming in the range necessary to generate the extreme damage projections.

NCA Ignores Cost of Climate Mitigation Policies

Although Chapter 29 presents estimates of the damage from climate change, when it comes to the possible economic damage from policies to fight it, the report is remarkably agnostic. Indeed it says in the second sentence:

This chapter does not evaluate technology options, costs, or the adequacy of existing or planned mitigation efforts relative to meeting specific policy targets, as those topics have been the subject of domestic (e.g., Executive Office of the President 2016, CCSP 2007, DeAngelo et al. 2017, NRC 20157 ,8 ,9 ,10 ) and international analyses (e.g., Fawcett et al. 2015, Clarke et al. 201411 ,12 ). [Bold added.]

Fortunately here at IER I have already explored the cost estimates in the Clarke et al. 2014 references, which are to the previous UN IPCC Fifth Assessment Report (AR5).

For a full recounting of my analysis, here is my post. For our purposes, the most important takeaway is this: According to the very literature that the NCA refers us to, the cost of limiting warming to 2 degrees Celsius by the year 2100 could be anywhere from 2.9 to 11.4 percent of consumption, with a best-guess of 4.8 percent.

Go look again at Figure 1 above, taken from the NCA report. Most of the projected outcomes involve less than 4.8 percent damage to the U.S. economy! Furthermore, the tradeoff is even worse than you might initially think. For even if we limited warming to two degrees Celsius (and incurred 4.8 percent damage to U.S. consumption), there would still be climate change damage, according to the official models—that’s why the UN recently urged an even lower target of 1.5 degrees.

This is why the most recent UN report, as well as the new NCA, refrain from engaging in a cost/benefit analysis altogether. If they did explicitly compare the costs of mitigation policies to the estimated economic impacts of climate change, then it wouldn’t even be close. To be sure, advocates of extreme intervention can point to unlikely but catastrophic scenarios, and/or they can say the models leave out important things, but it would be more difficult to then claim the mantle of “scientific consensus” when they are ignoring the Obama Administration’s own “social cost of carbon” estimates.

Conclusion

The recent NCA misleads the public, and the media should do a better job digging into the assumptions underlying its pronouncements. In particular, the alarming projections of economic damage rely on the RCP8.5 scenario, which is very pessimistic and in any event rules out the innovations in solar and wind that advocates assure us are just around the corner. Furthermore, even within the RCP8.5 scenario, it is unlikely that the U.S. will suffer extreme damage. The NCA itself doesn’t discuss the cost of mitigation policies, but the previous UN IPCC report did. Looking at the NCA’s own numbers, it’s not at all clear that pursuing aggressive government action to mitigate climate change would produce benefits in excess of costs.

Published:12/10/2018 7:10:46 PM
[Markets] Too Much Partisanship In Washington? No, Ron Paul Says, Too Much Bipartisanship!

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

Washington is once again gripped by the specter of a government shutdown, as Congress and President Trump negotiate an end-of-year spending deal. A main issue of contention is funding for President Trump’s border wall. Sadly, but not surprisingly, neither Congress nor the administration is fighting to cut, or at least not increase, spending.

Federal spending has increased from 3.6 trillion dollars to 4.4 trillion dollars since Republicans gained control over both chambers of Congress in 2014. Some may try to defend congressional Republicans by pointing out that for two years the Republican Congress had to negotiate spending deals with President Obama. But federal spending has increased by 7.5 percent, or over 300 billion dollars, since Donald Trump become President.

A big beneficiary of the Republican spending spree is the military-industrial complex. Republicans have increased the “defense” budget by eight percent in the past two years. President Trump and congressional Republicans claim the increases are necessary because sequestration “decimated” the military. But Congress, with the Obama administration’s full cooperation and support, suspended sequestration every year but one, so the planned cuts never went into full effect. Congress and Obama also “supplemented” the official military budget with generous appropriations for the Pentagon’s off-budget Overseas Contingency Operations fund. Spending on militarism increased by as much as 600 billion dollars over the amounts allowed for under sequestration.

President Trump has proposed reducing the projected military budget for fiscal year 2020 to 700 billion dollars. This would be a mere two percent cut, yet the usual voices are already crying that this tiny reduction would endanger our security. If history is any guide, the military-industrial complex’s congressional allies and high-priced lobbyists will be able to defeat the president’s proposed reductions and convince President Trump to further increase the military budget.

This huge military budget has little or nothing to do with America’s legitimate security needs. In fact, as candidate Trump recognized, America’s military interventions in the Middle East have endangered our security by empowering terrorist groups like ISIS and al-Qaeda.

While the warfare state has been a big beneficiary of the Republican spending spree, the GOP has hardly neglected the welfare state. Domestic spending has increased seven percent since 2016. Except for a half-hearted attempt to repeal Obamacare and some food stamp reforms that were included in and then dropped from this year’s farm bill, Republicans have not made any effort to roll back or even reform the welfare state.

The farm bill, which Congress is expected to pass this week, will spend as much as 900 billion dollars over the next ten years. Much of that spending will be on taxpayer subsidies for wealthy farmers and even “farmers in name only.”

Trump’s budget deals have been supported by the majority of Democrats. Even those who have called for the president’s impeachment are more than happy to vote with him when it comes to increasing spending and debt. These Democrats are the mirror image of 1990s Republicans who made a big spending deal with President Clinton while simultaneously trying to impeach him.

We suffer from too much bipartisanship when it comes to the welfare-warfare state. This bipartisanship has resulted in a national debt that is rapidly approaching 30 trillion dollars. This will inevitably lead to a major economic crisis. The way to avoid this crisis is to replace the bipartisan welfare-warfare consensus with a new consensus in favor of limited government, peace, free markets in all areas including currency, and auditing then ending the Fed.

Published:12/10/2018 4:41:39 PM
[Immigration] Obama Admin. Illegally OK’d $310 Million In Free Legal Advice To Illegal Aliens

Former President Barack Obama's administration paid over $310 million to illegally provide free legal advice to young illegal aliens.

The post Obama Admin. Illegally OK’d $310 Million In Free Legal Advice To Illegal Aliens appeared first on Godfather Politics.

Published:12/10/2018 4:10:02 PM
[Immigration] Obama Admin. Illegally OK’d $310 Million In Free Legal Advice To Illegal Aliens

Former President Barack Obama's administration paid over $310 million to illegally provide free legal advice to young illegal aliens.

The post Obama Admin. Illegally OK’d $310 Million In Free Legal Advice To Illegal Aliens appeared first on Godfather Politics.

Published:12/10/2018 4:10:02 PM
[] Families of Hostages Held by Iran: "We Will Remain Quiet No Longer" Weird, I keep hearing about this Jamal Kashoggi fellow but I never heard much about the Americans still held hostage by Iran when Obama was delivering them $150 billion. I'm sure there are reasons for that. Families of hostages held... Published:12/10/2018 2:09:17 PM
[Politics] 43% Say U.S. Heading in Right Direction

Forty-three percent (43%) of Likely U.S. Voters think the country is heading in the right direction, according to a new Rasmussen Reports national telephone and online survey for the week ending December 6.

This week’s finding is up three points from last week. This finding has been running in the 40s for most weeks this year after being in the mid- to upper 20s for much of 2016, President Obama's last full year in office.

(Want a free daily e-mail update? If it's in the news, it's in our polls). Rasmussen Reports updates are also available on Twitter or Facebook.

The national telephone survey of 2,500 Likely Voters was conducted by Rasmussen Reports from December 2-6, 2018. The margin of sampling error for the survey is +/- 2 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research, LLC. See methodology.

Published:12/10/2018 12:09:35 PM
[Trending Commentary] Independent Women’s Forum Celebrates Reversal Of Michelle Obama’s School Lunch Rules

By Nick Givas -

Kids throw Obama school lunch program food in trash

Julie Gunlock of The Independent Women’s Forum celebrated the reversal of former first lady Michelle Obama’s school lunch rules on “Fox & Friends” Monday, saying children will get more nourishment from the new menus. “These reforms that went through in 2010 pushed by Michelle Obama, were well-intentioned, but in reality, ...

Independent Women’s Forum Celebrates Reversal Of Michelle Obama’s School Lunch Rules is original content from Conservative Daily News - Where Americans go for news, current events and commentary they can trust.

Published:12/10/2018 8:37:52 AM
[Media] INFURIATING! Sharyl Attkisson breaks down Comey’s testimony making Obama admin, Hillary, and Mueller look even WORSE

Sharyl Attkisson was good enough to go through Comey’s testimony and break it down into easy-to-understand blips and tweets (she also wrote an entire article on it if you’re interested) and thank goodness she did because at this point all of this is starting to read like stereo instructions written backward in Japanese. I did […]

The post INFURIATING! Sharyl Attkisson breaks down Comey’s testimony making Obama admin, Hillary, and Mueller look even WORSE appeared first on twitchy.com.

Published:12/10/2018 8:08:27 AM
[Markets] How Big Brother Grips Americans' Minds To Support Invasions

Authored by Eric Zuesse via The Strategic Culture Foundation,

On November 29th, Gallup headlined “Democrats Lead Surge in Belief U.S. Should Be World Leader” and reported that “Three-fourths (75%) of Americans today think the United States has ‘a special responsibility to be the leading nation in world affairs,’ up from 66% in 2010. The surge is driven by Democrats, whose belief in this idea has increased from 61% eight years ago to 81% now.

This finding comes even after the lie-based and catastrophic U.S. invasions of Iraq in 2003, and of Libya in 2011 (and of so many others, such as Afghanistan, where the U.S. and Sauds created the Taliban in 1979). Americans — now even increasingly — want ‘their’ (which is actually America's billionaires’) Government to be virtually the world’s government, policing the world. They want this nation’s Government to be determining what international laws will be enforced around the world, and to be enforcing them. Most Americans don’t want the United Nations to have power over the U.S. (its billionaires’) Government, but instead want the U.S. Government (its billionaires) to have power over the United Nations (which didn’t authorize any of those evil, lie-based, U.S. invasions). 

Not only would doing this bankrupt all constructive domestic functions (health, education, infrastructure, etc.) of the U.S. federal Government, but it would also increase the global carnage, as if the U.S. Government hasn’t already been doing enough of that, for decades now.

The leadership for this supremacist craving comes straight from America’s top, not from the masses that are being sampled by the Gallup organization, who only reflect it — they are duped by their leaders. Here is how U.S. President Barack Obama (a Nobel Peace Prize winner in 2009, for nothing at all but his ‘kindly’ but insincere verbiage when he had been a candidate) stated this widespread delusional American belief in American global moral supremacy, when addressing the graduating class at West Point Military Academy, on 28 May 2014: 

The United States is and remains the one indispensable nation. [Every other nation is therefore ‘dispensable’; we therefore now have “Amerika, Amerika über alles, über alles in der Welt”.] That has been true for the century passed and it will be true for the century to come. … America must always lead on the world stage.

This had certainly not been the objective of U.S. President Franklin Delano Roosevelt when he set up the U.N. just before his death in 1945; he instead wanted the U.N. to evolve into a democratic government of the world, with elected representatives of each and every one of the world’s governments — to evolve into becoming the global international republic — regardless of whether or not the U.S. Government approves or disapproves of another nation’s government. The idea on which the U.N. was founded was not to involve the U.S. Government in the internal affairs of other nations, not to be the judge jury and executioner of other governments that it doesn’t like, nor to dictate what other nations should or should not do within the given nation’s boundaries. FDR intended that there instead be democratically represented, at the U.N., each and every nation, and each and every people within that global government, where each of these national governments is (hopefully but not necessarily) a democracy. FDR was just as opposed to dictatorship internationally, as he was opposed to dictatorship nationally, and he recognized that inevitably some governments will disapprove of other governments, but he was deeply committed to the view that a need exists for laws and law-enforcementbetween nations, on an international level, and not only within the individual nations, and that each nation is sacrosanct on its own internal laws. He respected national sovereignty, and opposed international empire. (This was his basic disagreement with Winston Churchill, then, and with American leaders such as Obama and Trump now.) Unlike President Obama (and evidently unlike the vast majority of today’s Americans) FDR didn’t want this international government to be an American function, but instead an entirely separate international governmental function, in which there is no international dictatorship whatsoever — not American, and not by any other country. He knew that this is the only stable basis for international peace, and for avoiding a world-annihilating World War III

Barack Obama rejected FDR’s vision, and advocated for the United States as being (and even as if it already had been for a century) virtually the government over the entire world, which “must always lead on the world stage.” Adolf Hitler had had that very same international vision for his own country, Germany, “the Thousand-Year Reich,” but he lost World War II; and, then, when FDR died, Hitler’s vision increasingly took over in America, so that ideologically, FDR actually lost WW II, when Harry S. Truman took over the White House and increasingly thereafter, until today, when the U.S. commits more invasions of foreign countries than do all other nations in the world combined. Americans (apparently, as shown in this and other polls) like this, and want more of it.Nobody else does. For example, nobody (except the U.S. and Saudi and Israeli aristocracies and their supporters worldwide, which are very few people) supports the U.S. regime’s reinstitution of sanctions against Iran, which the U.S. regime is imposing as the global dictator. America’s economic sanctions are like spitting into the face of FDR, who had opposed such imperialistic fascism in the more overtly military form when Hitler’s regime was imposing it. It’s also spitting at the U.N.

This latest Gallup finding displays an increase, but nothing that’s at all anomalous as compared to the decades-long reality of imperialistic U.S. culture. For decades now, Gallup’s polling has shown that the most respected of all institutions by the American people is the nation’s military — more than the church, more than the Presidency, more than the U.S. Supreme Court, more than the press, more than the schools, more than anything. America is invasion-nation. This is true even after the 2003 invasion of Iraq on the basis of blatant lies, which destroyed Iraq — a nation that had never invaded nor even threatened to invade the United States. The American people are, resolutely, bloodthirsty for conquest, even after having been fooled into that evil invasion, and subsequent decades-long military occupation in Iraq, and after subsequent conquests or attempted conquests, in Libya, Syria, Yemen, and elsewhere — all destroying nations that had never invaded nor even threatened America. Why? How did this mass-insanity, of evil, come to be?

How is this aggressive nationalism even possible, in America’s ‘democracy’? It’s actually no democracy at all, and the public are being constantly fooled to think that it is a democracy, and this deception is essential in order for the public to tolerate this Government, and to tolerate the media that lie for it. This widespread deceit requires constant cooperation of the ‘news’-media — and these are the same ‘news’-media that hid from the public, in 2002, that the U.S. Government was outright lying about “WMD in Iraq.”

The public simply do not learn. That’s a tragic fact. Largely, this fact results from reality being hidden by the ‘news’-media; but, even now, long after the fake ‘news’ in 2002, about the U.S. regime’s having possessed secret and conclusive evidence of “Saddam’s WMD,” the published ‘history’ about that invasion still does not acknowledge the public’s having been lied-to at that time, by its Government, and by the ‘news’-media. So, the public live, and culturally swim, in an ongoing river of lies, both as its being ‘news’, and subsequently as its having been ‘history’. This is why the public do not learn: they are being constantly deceived. And they (as Gallup’s polls prove) tolerate being constantly deceived. The public do not rebel against it. They don’t reject either the politicians, or the ‘news’-media. They don’t demand that the American public control the American Government and that America’s billionaires lose that control — especially over the ‘news’-media.

Honesty is no longer an operative American value, if it ever was. That’s how, and why, Big Brother (the operation by the international-corporate billionaires) grips Americans’ minds to support foreign Invasions. Americans support liars, and it all comes from the top; it’s directed from the top. It is bipartisan, from both Democratic Party billionaires and Republican Party billionaires. National politicians will lose their seats if they disobey.

A good example, of this Big-Brother operation, is America’s Politifact, the online site which is at America’s crossover where ‘news’ and ‘history’ meet one-another. It’s controlled by billionaires such as the one who founded Craigslist. Millions of Americans go to Politifact in order to determine what is true and what is false that is being widely published about current events. The present writer sometimes links to their articles, where I have independently verified that there are no misrepresentations in an article. But, like the ‘news’-media that it judges, Politifact is also a propaganda-agency for the (U.S.-Saud-Israeli) Deep State, and so it deceives on the most critically important international matters. An example of this occurred right after the U.S. regime had overthrown in February 2014 in a bloody coup the democratically elected Government of Ukraine, and replaced it by a rabidly anti-Russian racist fascist or nazi Government on Russia’s doorstep, a regime that was selected by the rabidly anti-Russian (but lying that it wasn’t) Obama regime. This Politifact article was dated 31 March 2014, right after over 90% of Crimeans had just voted in a referendum, to rejoin Russia, and to depart from Ukraine, which the Soviet dictator had transferred them to, separating them from Russia, in 1954. (None of that history of the matter was even mentioned by Politifact.) The Politifact article was titled “Viral meme says United States has 'invaded' 22 countries in the past 20 years”, and it was designed to deceive readers into believing that “Russia’s recent annexation of Crimea” reflected the real instance of “invasion” that Americans should be outraged against — to deflect away from America’s recent history as being the world’s actual invasion-nation. This propaganda-article said nothing at all about either Crimea or Ukraine except in its opening line: “A Facebook meme argues that Americans are pretty two-faced when it comes to Russia’s recent annexation of Crimea.” It then proceeded to document that the exact number of American invasions during the prior 20 years wasn’t 22, and so Politifact declared the allegation “false” (as if the exact number were really the entire issue or even the main one, and as if America’s scandalous recent history of invasions were not).

So, it’s on account of such drowning-in-propaganda, that the U.S. public not only respect what U.S. President Dwight Eisenhower derogatorily called the “military-industrial complex,” but respect it above even the U.S. Presidency itself, and above all other U.S. institutions (as Gallup’s constant polling demonstrates to be the case).

Here’s the reality: The same group of no more than a thousand super-wealthy Americans control both the United States Government and the weapons-manufacturing firms (such as Lockheed Martin), which are the only corporations whose only customers are the U.S. Government and its chosen allied governments. So, these few people actually control the U.S. Government’s foreign relations, and foreign policies. They create and control their own markets. This is the most politically active group of America’s super-rich, because they own America’s international corporations and because their business as owners of the military ones is military policy and also diplomatic policy, including the conjoining of both of those at the CIA and NSA, including the many coups that they (via their Government) engineer. They also control all of the nation’s major news-media, which report international affairs in such a manner as to determine which foreign governments will be perceived by the mass of Americans to constitute the nation’s ‘enemies’ and therefore to be suitable targets for the U.S. military and CIA to invade and conquer or otherwise “regime-change” — such as have been the lands of North Vietnam, Afghanistan, Iraq, Libya, Syria, Iran, North Korea, Yemen, Venezuela, etc., at various times. The weapons-manufacturers won’t have any markets, at all, if there are no ‘enemy’ nations that are deemed by the public to be suitable targets for their weapons. ‘Enemy' nations, and not only ‘allies’ (or ‘allied’ nations), are necessary, in order for the military business to produce the most profits. Overwhelmingly, if not totally, the chosen ‘enemies’ are nations that have never invaded nor even threatened to invade the United States; and, so, in order to keep this Government-funded business (the war-profiteering and associated international natural-resources extractions businesses) growing and thriving, what’s essential is continuing control over the nation’s ‘news’-media. As Walter Lippmann wrote in 1921, “the manufacture of consent” is an essential part of this entire operation. It happens via the media. Even Germany’s Nazis needed to do that. Any modern capitalist dictatorship (otherwise called “fascism”) does. The U.S. regime, being a capitalist dictatorship, certainly does. Physically, Hitler lost, but his ideology won, he won even as nazism (racist fascism) instead of merely as fascism, and this racism is shown because the U.S. regime is rabidly racist anti-Russian (not merely anti-communist), and has been so for at least a century. (Maybe it’s what Obama actually had secretly in mind when he said “That has been true for the century passed and it will be true for the century to come.” And Trump is no less a liar than Obama, and he continues this aim of ultimately conquering Russia.) They say they’re only against Russia’s leader Vladimir Putin, but Putin shows in all polls of Russians, even in non-Russian polls, to be far more favorably viewed by Russians than either Barack Obama or Donald Trump are viewed by Americans. This is why regime-change-in-Russia is increasingly becoming dominated by U.S. economic sanctions and military, and less dominated by CIA and other coup-organizers. The actual dictatorship is in America, and it requires participation by its ‘news’-media. Demonizing ‘the enemy’ is therefore crucial. It is crucial preparation for any invasion.

The United States Government spends at least as much money on its military as do all of the other governments in the world combined. Its ‘news’-media (that is to say, the media that are owned by, and that are advertised in by, the corporations that are controlled by, the same small group of billionaires — America’s billionaires — who fund the political campaigns of both the Democratic Party’s and the Republican Party’s nominees for the U.S. Congress and the Presidency) may be partisan for one or the other of the nation’s two political Parties, but they all are unitedly partisan for the international corporations, such as Lockheed Martin, that America’s billionaires control, and that sell only to the U.S. Government and to the foreign governments that are allied with the U.S. Government. They also are partisan for the U.S.-based oil and gas and mining international corporations, which need to extract at the lowest costs possible, no matter how much the given extractee-nation’s public might suffer from the deal. “Three-fourths (75%) of Americans today think the United States has ‘a special responsibility to be the leading nation in world affairs,’” and the actual beneficiaries of this mass-insanity are the owners of those U.S.-based international corporations, the military and extraction giants.

Anthony Cordesman, at the Center for Strategic and International Studies, headlined on 15 August 2016, “U.S. Wars in Iraq, Syria, Libya and Yemen: What Are The Endstates?” and he said, “Once again, the United States does not seem to be learning from its past. The real test of victory is never tactical success or even ending a war on favorable military terms, it is what comes next.” But he ignored the main reason why these invasions had occurred. America’s weapons-manufacturers won’t have any markets, at all, if there are no ‘enemy’ nations that are deemed by the American public to be suitable targets for their weapons. Cordesman is there calculating success and failure on the basis of the myths (such as that the U.S. Government cares about those “Endstates”), not of the realities (that it craves targets). The realities focus upon the desires of the owners and executives of the weapons-manufacturers and the extraction-firms, for ongoing and increased profits and executive bonuses, and not on the needs of America’s soldiers nor on the national security of the American people. Least of all, do they focus upon the needs — such as the welfare, freedom, or democracy — of the Iraqi people, or of the Syrian people, or of the Libyan people, or of the Yemenite people. It’s all just lies, PR. Those invasions served their actual main functions when they were occurring. “The Endstates” there are almost irrelevant to those real purposes, the purposes for which the invasions were, and are, actually being done.

Here’s an ideal example of this mass mind-control: On 19 November 2017, Josh Rogin at the Washington Post headlined “The U.S. must prepare for Iran’s next move in Syria” and reported that:

A task force of senior former U.S. diplomatic and military officials has come up with suggestions for how Trump could prevent Iran from taking over what’s left of liberated Syria and fulfill his own promise to contain Iranian influence in the region.

“Most urgently... the United States must impose real obstacles to Tehran’s pursuit of total victory by the Assad regime in Syria,” the report by the Jewish Institute for National Security of America states. “Time is of the essence.”

The underlying presumption there was that the U.S. regime has legitimate authorization to be occupying the parts of Syria it has invaded and now occupies, and that Iran does not. But the reality is that the U.S. regime is occupying Syria instead of assisting Syria’s Government to defeat the U.S.-Saud-Israeli invasion to overthrow and replace Syria’s Government, by stooges who will be selected by the Saud family who own Saudi Arabia, and the reality is that Iran’s forces there are invitees who are instead assisting Syria’s Government against the Saudi-Israeli-American invasion. In other words: this WP article is basically all lies. Furthermore, the Jewish Institute for National Security of America is a front-organization for the fascist regime that rules Israel, and the WP hid that fact, too, so its cited ‘expert’ was a mere PR agency for Israel’s aristocracy. So, this is Deep-State propaganda, parading as ‘news’. 

Americans actually pay their private good money to subscribe to (subsidize) such bad public ‘news’papers as that. The billionaire who happens to own that particular ‘news’paper (the WP), Jeff Bezos, had founded and leads Amazon, which receives almost all of its profits from Amazon Web Services (AWS), the cloud-computing division, which supplies the U.S. ‘Defense’ Department, CIA, and NSA. For example, “without AWS and Prime, Amazon lost $2 billion in the 1st quarter of FY18. … These losses come from Amazon’s retail business. About 60% of Amazon’s revenue comes from retail and that’s where Amazon is losing money.” Amazon is profitable because of what it sells mainly to the Government, but also to other large U.S. international corporations, and they all want to conquer Syria. None opposes that evil goal. Although Bezos doesn’t like the Sauds, he has actually been (at least until the Khashoggi matter) one of their main U.S. media champions for the Sauds to take over Syria. It’s all just a fool-the-public game. It works, it succeeds, and that’s what Gallup’s polls are demonstrating. The public never learns. It’s a fact, which has been proven in many different ways.

This reality extends also to other nations, allies of the U.S. aristocracy, and not only to the U.S. regime itself. For example, on 27 November 2018, a whistleblowing former UK Ambassador, Craig Murray, who is a personal friend of Julian Assange, headlined“Assange Never Met Manafort. Luke Harding and the Guardian Publish Still More Blatant MI6 Lies”, and he proved that Britain’s Guardian had lied with total, and totally undocumented (and probably even totally non-credible), fabrications, alleging that Julian Assange of WikiLeaks had secretly met (in 2013, 2015, and 2016) with Paul Manafort of the Trump campaign. The UK, of course, is a vassal-nation of the U.S. aristocracy, and the Guardian is run by Democratic Party propagandists (paid indirectly by Democratic Party and conservative Tony-Blair-wing Labour Party billionaires) and therefore fabricates in order to assist those Parties’ efforts to impeach Trump and to dislodge Jeremy Corbyn from the Labour Party’s leadership. However, each of America’s two political parties (like the UK’s aristocracy itself) represents America’s aristocracy, which, like Britain’s aristocracy, is united in its determination to eliminate Assange — they are as determined to do that to him, just as Saudi Crown Prince Mohammed bin Salman al-Saud was determined to eliminate Jamal Khashoggi. ‘Democracy’? This? It is Big Brother.

Only if the population boycott lying individuals and organizations, is democracy even possible to exist in a nation. Democracy can’t possibly exist more than truth does. In political matters, deceit is always treachery; and its practitioners, whenever the evidence for it is overwhelming and irrefutable, should experience whatever the standard penalty is for treachery. Only in a land such as that, can democracy possibly exist. Elsewhere, it simply can’t. The only basis for democracy, is truth. Deceit is for dictators, not for democrats. And deceit reigns, in the U.S. and in its allied countries. Is this really tolerable? Americans, at least, tolerate it.

When Obama was awarded the Nobel Peace Prize, the far-right Rupert Murdoch’s Wall Street Journal editorialized against Obama on 10 October 2009, by saying that “What this suggests to us — and to the Norwegians — is the end of what has been called ‘American exceptionalism’.” Little did anyone then know that after winning re-election upon the basis of such war-mongering lies from Obama, as that “America remains the one indispensable nation”, Obama in February 2014 would go so far as to perpetrate a bloody coup overthrowing the democratically elected Government of one “dispensable” nation, Ukraine; and, then, on 28 May of 2014, Obama would be telling America’s future generals, that “The United States is and remains the one indispensable nation” and that Obama would, in that speech, explicitly malign Ukraine’s neighbor Russia. He did it, in this speech, which implicitly called all nations except the U.S. “dispensable.” He had carefully planned and orchestrated Americans’ hostility toward Russia. His successor, Trump, lied saying that he wanted to reverse Obama’s policies on this, and Trump promptly, once becoming elected, increased and expanded those policies. Whatever a deceitfully war-mongering country like this might be, it’s certainly no democracy. Because democracy cannot be built upon a ceaseless string of lies.

Published:12/9/2018 11:08:43 PM
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