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Aujourd’hui — 21 juillet 2019Zero Hedge

Despite Plenty Of Improvements, Trump Hasn't Built A Single Mile Of New Border Fencing

Par Tyler Durden

After more than two years fighting with Democrats over border security, the Trump administration has replaced plenty of dilapidated barriers - yet hasn't built a single mile of border fencing in open, unprotected sections of the southern US border, according to the Washington Examiner's Anna Giaritelli. 

In a statement last week, U.S. Customs and Border Protection, the federal agency overseeing border barrier construction, confirmed that all the fencing completed since Trump took office is "in place of dilapidated designs" because the existing fence was in need of replacement. -Washington Examiner

CBP said that 51 miles of steel bollard fence had been replaced using funds set aside during FY2017 and 2018, however construction of new barriers where there aren't any is 'in the works' according to the report. 

The 50 miles of completed replacement barrier is a 10-mile gain since early April. In Trump’s two and a half years in office, his administration has installed an average 1.7 miles of barrier per month, and none of it in areas that did not previously have some sort of barrier. A total 205 miles of new and replacement barrier has been funded in the two and a half years since Trump took office. -Washington Examiner

Red tape?

One reason given to the Examiner for the lack of fencing in open-border regions is due to a difficult approval process for environmental zoning permits, according to a senior administration official. Another senior official blamed Democrats for blocking wall projects that the administration wants to complete.

"The wall projects are moving along as quickly as practicably possible given the unprecedented obstruction from Democrat lawmakers to protect and prolong open borders," wrote the official, adding "These same obstructionists, including many who once supported border barriers, are the same people who would abolish ICE and DHS, let criminals run free across our borders, and turned a blind eye to the scourge human trafficking and child sex slavery enabled by their policies."

Despite the slow (or no) progress in safeguarding unsecured portions of the border, Trump is applauding his administration for the progress made in reinforcing the current barriers

Trump's 2020 campaign debuted the slogan "Finish the Wall" at his first rally of 2019 in El Paso, Texas. At one point during his speech, the crowd began cheering "build that wall." Trump responded, "Now, you really mean 'finish that wall,' because we've built a lot of it,” though he did not share numbers with the thousands of people in attendance. -Washington Examiner

In 2017, Congress approved $341 million for 40 miles of replacement wall in San Diego, California; Santa Teresa, North Mexico; Calexico, California; and El Paso, Texas. 

"To this date, CBP has completed the construction of approximately 99 percent of the 40 miles funded in fiscal year 2017. Additionally, construction of 35 gates to close gaps in current border infrastructure in the Rio Grande Valley sector continues," according to a DHS statement

Approximately 400 miles is steel fencing comparable to the planned new wall, only shorter. The other 300 miles of barrier is Normandy style, or a handful of steel beams fastened together to prevent vehicular traffic from getting by. However, the four-foot-tall fence does not prevent people from crossing. -Washington Examiner

The Trump administration was sued earlier this year after reallocating $6.6 billion from the Pentagon and elsewhere to fund border wall construction. The move was blocked by the 9th Circuit Court of Appeals - which the Supreme Court is expected to weigh in on over the next few weeks following a request from the Justice Department. 

  • 21 juillet 2019 à 23:55

Why Powell Fears A Gold Standard

Par Tyler Durden

Authored by Mike Gleason via The Mises Institute,

Chairman Powell’s testimony last week was closely scrutinized not just for its economic implications but also for its political overtones. Powell cited “trade tensions” as cause for concern about the strength of the global economy. He clearly seemed to be blaming President Trump’s tariffs.

But if the tariffs are what ultimately move the Fed to cut rates, Trump will have finally gotten what he wants out of Powell. In recent weeks, Trump has stepped up his attacks on the central bank, calling it the biggest problem facing the economy, floating the idea of firing Powell, and suggesting his administration would match China’s and Europe’s "currency manipulation game."

Although many presidents before have pursued currency interventions and quibbled with Fed chairmen over interest rate policy, none have ever done it as openly and directly as the current one. Fed apologists in the media and in Congress view the central bank’s “independence” as being under assault.

The notion that the Fed ever was or could be independent of politics is a fanciful one. When a small group of people — appointed and confirmed by politicians — are empowered to make decisions that can make or break markets, economies, and elections, politics will inevitably intrude.

Fed chairman Jerome Powell may sincerely want to make monetary policy without regard to politics. But when political forces exert themselves on the Fed, he finds himself in an impossible catch-22. If he fails to cut rates, then the central bank risks becoming seen as the enemy of half the country as President Trump makes it his foil at campaign rallies. If Powell does what the President wants, then Democrats will accuse him of succumbing to political pressure from the White House.

Democrats used Powell’s Congressional testimony as an opportunity to get him on record in opposition to agold standard.

Although Trump himself is not calling for a gold-pegged dollar, one of his nominees to the Fed Board of Governors is - or at least has in the past. Potential Fed policymaker Judy Shelton has written and spoken extensively about the gold standard.

Apparently seeking to discredit Shelton’s views, Democrat Jennifer Wexton prodded Fed Chairman Powell into weighing in on the gold standard.

Ms. Wexton: Chairman Powell, do you think that the US should go back to the Gold Standard for our currency?

Chairman Powell: Let me say I wouldn't... This could feasibly be considered commenting on a particular nominee who has recommended that, and of course, I will not do that. I will answer your question, but I want to make sure that this isn't interpreted in that way. So, no, I don't think that would be a good idea. The idea would be... Congress would have to pass a law and that law would say that our job with monetary policy is to manage the level of the dollar, stabilize the dollar price of gold, and we would then not be looking at maximum employment or stable prices. There have been plenty of times in the fairly recent history where the price of gold has sent signals that would be quite negative for either of those goals.

Ms. Wexton: Much better mission for the Fed is what you're doing right now.

Chairman Powell: Well, this is why every country in the world abandoned the Gold Standard some decades ago.

Ms. Wexton: Okay. Well, that reluctance or that desire not to go back to the Gold Standard is something that you have in common with the CEO's of seven of the world's globally systemic important banks.

It’s no surprise that “too big to fail” bankers who depend on special privileges from the Fed and other central banks don’t like gold. It’s hard to orchestrate multi-trillion dollar bailouts of the financial system when the currency supply is limited by gold .

Some see that as a disadvantage. Others see it as a distinct advantage because it discourages banks from getting too big to fail to begin with.

Chairman Powell claims that gold-backed money would prevent the Fed from pursuing full employment - as if all workers have monetary planners to thank for their jobs - and stable prices. Of course, by “stable prices” he means prices that rise at his target rate of two-percent inflation. He means a dollar that steadily loses purchasing power.

Sound money, on the other hand, is market-based money and can be based on gold, silver, or anything else the market values. If the dollar were defined simply in terms of grains of silver, for example, then monetary policy and the politics surrounding it would recede into the background. No longer would markets swing wildly based on the particular phraseology contained in Fed policy statements.

No longer would every incumbent administration push for easy money policies. Instead of counting on the Fed to devalue existing debt and pave the way to pile on more of it, hard choices would have to be made by members of Congress about paying down debt and embarking on a fiscally sustainable path.

The fact that politicians, central bankers, and “too big to fail” bankers all oppose a gold standard is a tacit admission that hard money would serve as an effective constraint on their activities.

  • 21 juillet 2019 à 23:30

Mexico City "Extensively Under-Reported" Crime", New Government Alleges

Par Tyler Durden

Mexico City's government is under attack by critics since a left-leaning administration took over in 2018, with critics claiming that violence has "spun out of control." In response, the city now claims that the previous administration "extensively under-reported crime" and, as a result, the crime rate appears to have shot up in 2019, but it has really fallen. 

Tens of thousands of criminal files from 2018 were reviewed and show that the city's homicides have not risen by a third this year, as previously reported. Instead the number is only up about 12%, according to Ernestina Godoy, Mexico City’s chief prosecutor. In addition, violent crimes as a whole have dropped by 8% this year, she said.

The new figures are slated to be released as part of Federal data on and will certainly raise questions about the trustworthiness of crime statistics in Mexico. President Andres Manuel Lopez Obrador won his election on promises of curbing crime, corruption and violence. Mexico City's mayor, Claudia Sheinbaum, is a close ally of his. 

Godoy said: “The registry was distorted. In cases of rape they were classified as sexual harassment or abuse, or just injuries.”

More than 24,000 of 214,000 reviewed files on criminal cases were said to be doctored. Rapes in the prior year were actually double the number reported by former mayor Miguel Angel Mancera's administration. Mancera had no comment. 

Data shows that murders in Mexico's capital city were up 36% from January to May versus the year prior. Godoy says homicides will formally now show a rise of about 12%. 

Godoy concluded: "That’s still far too many. This is not being done to justify our government. We won’t deny the situation we are in."

  • 21 juillet 2019 à 23:05

China Expands Military Reach With 'Secret' Deal For Cambodia Base

Par Tyler Durden

China and Cambodia reached a (no longer) secret agreement last spring which allows Beijing to make use of a Cambodian navy base near the coastal city of Sihanoukville, according to the Wall Street Journal, citing US and allied officials familiar with the matter. 

The deal gives China exclusive rights to a portion of Ream naval base in the Gulf of Thailand, close to an airport being constructed by a Chinese firm. According to an early draft of the deal seen by US officials, China will be allowed to use the base for 30 years, with automatic renewals once per decade after that. Beijing will be able to use the base to post military personnel, dock warships and store weapons. 

According to the early draft of the base accord, China would build two new piers—one for Chinese use, one for Cambodian, U.S. officials said. U.S. officials said further dredging would likely be needed for the base to host larger Chinese navy ships. 

The draft also allows China’s personnel to carry weapons and Cambodian passports, and requires Cambodians to get Chinese permission to enter the 62-acre Chinese section of Ream, U.S. officials said. -Wall Street Journal

As the Journal notes, "Military operations from the naval base, airport, or both, would sharply increase Beijing’s capacity to enforce territorial claims and economic interests in the South China Sea, to threaten American allies in Southeast Asia and to extend its influence over the strategically important Malacca Strait."

China is re-asserting their historic imperial hegegnony over the Asia-Pacific region while making deep strategic inroads across Africa, South America, and Europe

If you can’t see it yet, wait til 2049

— Jack Posobiec 🇺🇸 (@JackPosobiec) July 21, 2019

While Chinese and Cambodian officials deny plans for a Chinese military base in the country ("Nothing is happening like that," according to Cambodian government spokesman, Phay Siphan, who called it "fake news."), concerns have been raised over construction in a China-backed investment zone that encompasses 20% of Cambodia's coastline, according to Bloomberg

A model of the Dara Sakor project shows hotels, luxury housing and at least one container port, as well as the airport. (via WSJ)
A construction site at the Dara Sakor Seashore Resort.
Photographer: Brent Lewin/Bloomberg

Dara Sakor, a $3.8 billion China-backed investment zone encompassing 20% of Cambodia’s coastline, is unlike any other in the developing Southeast Asian nation. Controlled by a Chinese company with a 99-year lease, it features phased plans for an international airport, a deep-water seaport and industrial park along with a luxury resort complete with power stations, water treatment plants and medical facilities. -Bloomberg

According to the Journal, US officials have been lobbying Cambodia not to allow China's military to make use of the Dara Sakor construction, which has made significant progress according to satellite photographs. "The site now features a two-mile-long runway—big enough for Boeing 747s and Airbus A380s, and for China’s long-range bombers and military transports," per the report. 

Dara Sakor international airport is located in a national park in sparsely populated Koh Kong province and will be Cambodia’s largest.

Recent satellite images shows that an area inside the Ream base has recently been cleared in apparent preparation for construction work. A bridge at the entrance is also being repaired.

Meanwhile, a state-run Chinese construction company is working on Dara Sakor airport, which is due to open next year and will be Cambodia’s largest despite being in a province with a population of 200,000 people. -all Street Journal

According to an Australian intelligence official, the Cambodian runway "seems far longer than needed for any normal commercial purpose or aircraft, and certainly longer than necessary for any tourist development envisaged there." 

While China's deal for Ream base doesn't constitute a 'full-scale Chinese base,' per WSJ, it "would give Beijing its first dedicated naval staging facility in Southeast Asia and a second outpost in what the Pentagon sees as a Chinese quest for a global network of military and dual-use sites," setting off alarm bells in DC. 

Washington is “concerned that any steps by the Cambodian government to invite a foreign military presence in Cambodia” would disturb regional peace and stability, said Emily Zeeberg, a spokesperson for the U.S. Embassy in Phnom Penh.

Surrounded by dense jungle and mangroves, and overlooked by a Buddhist temple, the naval installation in question, at Ream, covers about 190 acres and includes two facilities built with U.S. funding and used by the Cambodian navy, and a single pier where a dozen patrol craft dock. -Wall Street Journal

According to the report, US officials are debating whether Phenom Penh can be convinced to reverse course on the Chinese presence at Ream. One senior Pentagon official indicated that the United States wanted Cambodia to be a "preferred security partner," however other officials fear the country has instead chosen team-red.

  • 21 juillet 2019 à 22:39

Morgan Stanley: "A 25bps Cut Won't Be Seen As Aggressive, And Will Disappoint The Market"

Par Tyler Durden

Authored by Matthew Hornbach, head of interest rate strategy at Morgan Stanley

The Fed won’t be enjoying a lazy summer this year. Chair Powell has teed up monetary policy easing at the conclusion of the FOMC meeting on July 31. The consensus expectation among economists calls for a 25bp cut in the target interest rate, while we expect the Fed to deliver 50bp. The market is pricing an outcome somewhere in between, with fed funds futures implying around 30bp.

The debate over the size/cost of an insurance cut remains active, thanks to a spate of strong data (nonfarm payrolls, inflation, retail sales) that have been perceived, at least at the margin, as increasing the risk that the Fed under-delivers at its July meeting relative to our expectation. For those FOMC participants who are less inclined to act aggressively against downside risks, these data points could also argue against delivering more than 25bp.

The minutes from the June FOMC meeting revealed that 14 of the 17 participants saw downside risks to the growth and inflation outlooks. What's more, in their assessment of downside risks to the economic outlook, participants noted factors including “recent weak indicators for business confidence, business spending and manufacturing activity; trade developments; and signs of slowing global economic growth”. Thus, the case for concern does not hinge on the labor market or the consumer, but more on external conditions, trade policy, and manufacturing.

Chair Powell also underscored this point in his most recent remarks in Paris on Tuesday, expressing concern about "trade developments and global growth". It's important to note that our US public policy strategists, led by Mike Zezas, have characterized the post-G20 environment for trade escalation as an 'uncertain pause', while our global economists, led by Chetan Ahya, see global growth slowing through 4Q19 with risks to the downside.

In June, FOMC participants were also increasingly concerned about the inflation outlook, based on recent low inflation readings, downside growth risks, and lower inflation expectations. The June CPI print then surprised to the upside, with positive implications for core PCE (where we expect an increase in the year-over-year reading to 1.66% from 1.60%). So inflation has moved higher, but does the June data point alter the fact that inflation has fallen short of the Fed's 2%Y goal for two decades, let alone put a measurable dent in that shortfall – or even the decline over the past four months? Recall that the Fed's goal is to create enough inflationary pressure that inflation stays above its 2%Y goal for a sustained period. That means running the economy hot.

While these factors easily support a rate cut at the July meeting, they don't necessarily justify the magnitude we expect. We'd point out that in June seven FOMC participants suggested the need for 50bp of accommodation this year, even before the FOMC judged that global uncertainty had persisted beyond the G20 meeting. Based on recent comments from policy-makers, we believe this number has grown. As such, we think the FOMC will be debating when to deliver 50bp of accommodation, as opposed to whether circumstances call for only 25bp.

Will the Committee cut by 50bp all at once, or in a gradual fashion reminiscent of the recent tightening cycle? In this regard, we note a deeply held view among monetary policy-makers that near the zero lower bound the Fed must act aggressively when low inflation or a downturn threatens. The message to policy-makers today? Don't keep your powder dry. In addition, our own simulations have shown that, in terms of a positive impact on the economy, 25bp in cuts is a rounding error, while 50bp might be enough to mitigate the downside risks we face today.

Putting to one side their desire for aggressive action, current market pricing indicates that market participants won't see a 25bp cut as aggressive. And that could result in tighter financial conditions than those in place today. To date, such conditions have helped to "sustain the economic expansion, with a strong job market and stable prices, for the benefit of the American people". The recent labor market and inflation reports and retail sales data confirm this. Would policy-makers want to put those accommodative financial conditions at risk by delivering the 50bp they deem appropriate gradually? We doubt it.

  • 21 juillet 2019 à 22:21

Why Are Billionaires Like Bezos So Obsessed With Space?

Par Tyler Durden

Authored by Marshall Auerback via TruthDig.com,

The 50th anniversary of the Apollo 11 lunar landing is this year, and it’s worth recalling the memo that then-Vice President Lyndon Johnson wrote to President John F. Kennedy:

“If we do not make the strong effort now, the time will soon be reached when the margin of control over space and over men’s minds through space accomplishments will have swung so far on the Russian side that we will not be able to catch up, let alone assume leadership.”

That sense of urgency has shifted over the decades from government to the private sector, where billionaires like Elon Musk, Richard Branson and Jeff Bezos, among others, are displaying profound enthusiasm in regard to the notion of exploiting space. Their interest appears to go well beyond space tourism for the thrill-seeking one-percenters, even though that’s what gets most of the media attention. As Cathal O’Connell reports for Cosmos Magazine, “Already companies are sending up 3D printers to produce replacement tools in space. Next we could see orbiting factories making products for sale on Earth or automated robots constructing satellites the size of a football field.”

If this all seems as exotic as those old 1930s “Flash Gordon” films did to the audiences of the day, recall that the experience of the Apollo 11 moon landing showed that reality has a way of catching up quickly to Hollywood fantasy (it also shows that when sufficient government resources are harnessed to a higher common purpose, good results can happen surprisingly quickly and efficiently). Once the likes of Bezos, Branson, Musk, and others find a way to economically hoist heavy machinery into space (and it is becoming more economic), permanent “off-Earth” manufacturing could become a reality.

But this raises an interesting issue: who chooses the technological alternatives that set out our future? Should this decision solely be left in the domain of the private sector? Should space be privatized in this matter? What about NASA? Consider the future: Forget about the threat of moving a Midwestern plant from, say, Ohio, to Mexico or China. Next time, it could be a robot-filled factory in space that takes your job.

To be clear, nobody is suggesting a return to medieval-style craft guilds. At the same time, it is worth noting certain salient aspects about technology: rather than acting in the service of mankind, technology has often been used in a way that creates a momentum of its own that establishes limits or controls what becomes socially possible. It is wrapped in an aura of linear progress and scientific inevitability, conveniently ignoring that its benefits are often skewed most heavily to the power brokers who initiate and champion its use. This is a principle danger of subcontracting space to billionaire plutocrats, whose ambitions and interests might be inconsistent with society’s broader public purpose. This is to say nothing of the increasing de-skilling of labor that could follow, if they are not integrated into this process somehow.

As the Wall Street Journal’s Greg Ip notes, the government-sponsored race to the moon spurred considerable “advances in computers, miniaturization and software, and found its way into scratch-resistant lenses, heat-reflective emergency blankets and cordless appliances,” all of which had tremendous benefits for society as a whole. But today, the government has largely lost its “moonshot mindset” and space, in turn, has increasingly become the focus of the oligarch class, seeking to enhance profit opportunities as well as exploiting the increasing trend of displacing human labor with machines. This is despite the fact that Professor Seymour Melman’s own research illustrated that if you give workers decision-making power on the shop floor, productivity tends to increase substantially.

Without a doubt, there are many benefits to be derived from the work being done in the cosmos. For example, the microgravity conditions pertaining in space are considered ideal for developing materials, such as protein and virus crystals, observes Sarah Lewin, in a piece discussing the incipient development of “off-Earth manufacturing.” The insights developed by these crystals could enhance drug research and provide useful new therapies and medical treatments for infections and diseases (such as heart disease and organ transplants). Space also enhances the scope for producing high-tech materials, whose production is otherwise adversely affected by the Earth’s gravity, one example being a “fiber-optic cable called ZBLAN, … [which, w]hen manufactured in microgravity… is less likely to develop tiny crystals that increase signal loss. When built without those flaws, the cable can be orders of magnitude better at transmitting light over long distances, such as for telecommunications, lasers and high-speed internet,” according to Lewin.

We shouldn’t be oblivious to the considerable human costs associated with work in the government’s space program - “Microgravity sets our fluids wandering and weakens muscles, radiation tears through DNA and the harsh vacuum outside is an ever-present threat” (to quote Lewin), to say nothing of the risk of death itself—which are mitigated considerably when you can do things with machines alone. At the same time, left unchallenged or unmonitored, these billionaires could use space to quietly initiate further radical changes to our social structures.

It starts with ownership models. There’s an interesting paradox of futuristic 24th-century economic visions in space being built on the 12-to-13th–century ownership models that make up Silicon Valley. Wealth sharing ownership models should be conceived as part of the futuristic vision if we don’t want to be saddled with human wealth disparities reaching factors of 12 or 15 zeros. Ideally, NASA (or some other space agency) should take a leading national developmental role in the production of goods in space, and then subcontract to manufacturers to do the actual production processes, rather than the other way around.

Of course, if the government does ultimately decide that space privatization is not a great thing, no doubt Silicon Valley and its market fundamentalist champions will trot out the line about the inefficient government fighting “technological inevitability” - a typical playbook from the Silicon Valley oligarchs (i.e., you can’t fight technological progress, so let’s just set up something like a Universal Basic Income - UBI - that acts like a painkiller, but masks the symptoms of economic injustice and fails to address the underlying causes of exploitation and inequality). That’s one major risk of “off-Earth” production when it becomes a plaything of the rich alone. That’s to say nothing of the fact that the billionaire class is already benefiting from a long series of government-funded innovations undertaken in the past, as Professor Marianna Mazzucato has illustrated in her work, “The Entrepreneurial State.”

One of which was the government-led (and funded) space program: at its funding peak, the lunar space program employed over 400,000 Americans. The management, national commitment and personal motivation of the participants were just as important as the technology itself in terms of ensuring the program’s success. It’s hard to see that sort of coalescing of interests in the absence of an overriding government stake when it comes to the production of manufactured goods in an environment outside a planetary atmosphere.

There is another unhealthy aspect to uncritically acceding to a paradigm in which supposedly superhuman entrepreneurs are selflessly taking up the baton from a tapped-out public sector. It becomes self-serving for the billionaires, and implicitly justifies and entrenches the economic status quo. As journalist Amanda Schaffer has argued:

“If tech leaders are seen primarily as singular, lone achievers, it is easier for them to extract disproportionate wealth. It is also harder to get their companies to accept that they should return some of their profits to agencies like NASA and the National Science Foundation through higher taxes or simply less tax dodging.”

That self-entitlement also manifests itself in other ways. Just look at the way that Elon Musk treats his own employees to get a better sense of this. Or Jeff Bezos’s labor practices at Amazon.com.

It’s undoubted that orbital manufacturing will yield innovations in technology, medicine and material science in the next few decades. But we should recall that technology doesn’t simply have an autonomous momentum and direction that inexorably leads to social progress. Likewise, it bears recalling (as Professor Seymour Melman once observed) that technology “is applied in accordance with specific social criteria wielded by those with economic decision power in the society.” Melman’s implicit argument is that technology can be used to enhance worker control or to create more yet alienation. The government, therefore, shouldn’t be reduced to the role of passive minority shareholder collecting dividends or royalties from a privately run space enterprise.

That’s the old market fundamentalist model that has failed pretty badly on this planet, let alone replicating it in space. So before we get too wrapped up in all of the exciting new goodies that Jeff Bezos and his fellow space enthusiasts can create for us, let’s also ensure that this move to “the final frontier” doesn’t simply become a new form of technological control and enslavement, in which the benefits continue to be distributed in a profoundly illiberal direction as they are here on planet Earth.

  • 21 juillet 2019 à 21:50

Iran Urges UK To Rein In 'Deep State'; Germany Warns Of "Uncontrollable" Escalation

Par Tyler Durden

Iran’s ambassador in London warned on Sunday that the UK government must get its "domestic political forces" pushing for regime change under control or else the two countries will face dangerous escalation. The public statement came two days after the British-flagged Stena Impero was boarded and captured by IRGC commandos, and over two weeks after the tanker Grace 1 was seized by UK Royal Marines off Gibraltar.

Iranian Ambassador Hamid Baeidinejad urged via his personal Twitter account that continued pressure on Iran would be "unwise" given that Tehran stands “firm and ready for different scenarios”.

The ambassador said the UK government must “contain those domestic political forces who want to escalate existing tension between Iran and the UK well beyond the issue of ships” — in what appears a reference to the UK defense establishment and its allies at think tanks like the neoconservative the Henry Jackson Society and others, and powerful oil and weapons gulf allies like Saudi Arabia. 

Iranian Ambassador to the UK Hamid Baeidinejad, via Iran News Daily

His statement implied that British 'deep state' elements were using the tit-for-tat tanker seizures as a convenient raison d'etre for pushing conflict with Iran. 

On Friday Britain had issued its own warnings, with Foreign Minister Jeremy Hunt telling the Iranians they face "robust" and “serious consequences,” but he stopped short of discussing military options, instead his statements emphasized diplomacy. The UK has condemned it as "a hostile act" - and German Foreign Minister Heiko Maas has indicated European leaders are desperately trying to prevent "uncontrollable military escalation."

Meanwhile, more details of Iran's seizure of the still detained Stena Impero tanker have emerged.  IRGC spokesman Brig. Gen. Ramezan Sharif was cited by Iran's Fars News Agency over the weekend as claiming a Royal Navy warship had attempted to put up “resistance and interference” to prevent Iran's navy from detaining the vessel. 

State media released new footage showing the tanker impounded with Iran's flag raised above.

State media of #Iran's Islamic Regime just released exclusive video of the seized #UK's Oil Tanker, Stena Impero anchored in #BandarAbbas port. They brought down the #UK's flag and raised the Islamic Regime's flag in instead. pic.twitter.com/qWWFGtrff6

— Babak Taghvaee (@BabakTaghvaee) July 21, 2019

According to Sharif, Iran's military had warned the tanker several times to change course before intervening. This followed Iranian state media claiming the Stena Impero was making unsafe and dangerous maneuvers which led it to collide with an Iranian fishing boat; however, neither the UK nor any independent source has backed this interpretation. 

The IRGC spokesman further alleged that UK Royal Navy helicopters tried to stop Iran's naval commandos from boarding the ship. Iran previously released dramatic video showing special forces operatives fast-roping to the tanker's deck, but there was no evidence of UK aircraft overhead. 

  • 21 juillet 2019 à 21:25

It's Mueller Time, Again: Here Are The Top 10 Questions Ahead Of Wednesday's Testimony

Par Tyler Durden

With Special Counsel Robert Mueller slated to testify before the House Judiciary and Intelligence committees on Wednesday, lawmakers on both sides of the aisle will have an opportunity to question him about his two-year probe into Russian interference in the 2016 US election - as well as his decision not to render an opinion on whether Trump obstructed the investigation. 

Mueller has made clear that he won't say anything beyond what's in his 448-page report, and that he won't answer hypotheticals. 

While Democrats will likely focus on questions that might provide fodder for Trump's long-promised impeachment, Republicans will likely highlight that the 22-month probe failed to find a conspiracy between the Trump campaign and the Kremlin to interfere with the election. The GOP is also likely to probe Mueller for answers regarding allegations of FBI misconduct - which House Judiciary Chairman Jerrold Nadler (D-NY) says would be a waste of time. 

"Very clear the Trump investigation was not predicated on the so-called dossier, there was nothing wrong with the FISA application, all the things that they’re talking about have been gone through," Nadler told Fox News Sunday. "If they want to debate or discuss this irrelevancy, let them waste their time. What’s before the American people is the conduct of this president." 

Meanwhile, The Hill has 10 questions they'd like to see Mueller answer

***

Would you have charged Trump if it weren’t for the OLC opinion? 

Democrats want to know if Mueller would have charged Trump with obstruction of justice in the absence of an Office of Legal Counsel (OLC) opinion from the Justice Department that says a sitting president can’t be indicted.

Judiciary Committee aides said Thursday that Democrats would respect Mueller’s desire to stay within the confines of his report. But members are still likely to ask this question, which can be phrased a number of ways.

Mueller is unlikely to answer the question, given his insistence in May that he would not comment on “hypotheticals about the president.” 

In his May 29 remarks, Mueller said charging Trump “was not an option we could consider” because of the Justice Department policy. Mueller didn’t say that he would have charged Trump if it weren’t for the policy, but he also declined to clear the president of allegations of wrongdoing.

“If we had had confidence that the president clearly did not commit a crime, we would have said so,” Mueller said. 

Attorney General William Barr and then-Deputy Attorney General Rod Rosenstein reviewed the evidence laid out in Mueller’s report and found it to be insufficient to accuse Trump of a crime.

Why did your office write a letter to Barr objecting to his March 24 memo? 

Mueller wrote to Barr on May 27 objecting to the attorney general’s four-page memo from a few days earlier outlining the Russia report’s principal conclusions, a revelation that sparked a firestorm in Washington on the eve of Barr’s public testimony before the Senate.

Mueller is likely to be asked about the letter — why his office wrote it, who authored it, how it was leaked — and whether he was satisfied with Barr’s decision not to ultimately release summaries from the report despite the special counsel’s overtures.

Did you blame the media on your call with Barr? 

Lawmakers are sure to inquire about Mueller’s interactions with Barr following the March 27 letter, when he asserted that the attorney general’s March 24 memo “did not fully capture the context, nature, and substance” of his work and conclusions.

Barr told Congress in April that, during a later phone call, Mueller told him he was upset by the media coverage of the memo and that he did not take issue with the accuracy of the memo.

“My understanding was his concern was not the accuracy of the statement of the findings in my letter but that he wanted more out there to provide additional context to explain his reasoning and why he didn’t reach a decision on obstruction,” Barr told the Senate Judiciary Committee.

Did any Trump campaign contacts with Russia put national security at risk? 

House Intelligence Committee Democrats are particularly interested in the counterintelligence implications of Mueller’s report and whether any contacts between the Trump campaign and Moscow posed national security risks, even if they didn’t amount to criminal conduct.

Mueller’s report briefly notes that the investigation generated “foreign intelligence and counterintelligence information” that was sent to the FBI but acknowledged that not all of it was included in the final report.

Intelligence Committee Chairman Adam Schiff (D-Calif.) and other Democrats on the panel have said they want to focus on the dozens of contacts between Trump campaign associates and Kremlin-linked figures.

Did your investigation exonerate Trump of ‘collusion’ and obstruction allegations?

Trump has cheered the Mueller report as vindicating him of allegations of “collusion” and obstruction of justice. 

But Democrats and other critics of the president note that Mueller’s report explicitly states that there was no evaluation of alleged “collusion” — a term often used by the press, Trump administration officials and lawmakers to describe accusations of coordination or conspiracy between the Trump campaign and the Kremlin. 

Instead, Mueller investigated whether the Trump campaign conspired with Russia to interfere in the election, finding insufficient evidence to charge anyone associated with the campaign with criminal conspiracy. 

Mueller also did not reach a judgment on obstruction of justice. Barr said that left it up to him to make the call.

Should Congress initiate an impeachment inquiry? 

Some Democrats took Mueller’s statement on May 29 as a green light to start impeachment proceedings against Trump.

In his terse nine-minute remarks, Mueller did not mention impeachment but said the Constitution “requires a process other than the criminal justice system to formally accuse a sitting president of wrongdoing” while explaining his decision not to reach a judgment on obstruction. He’s likely to be asked what he meant by that.

More than half of the Democrats on the House Judiciary Committee publicly back an impeachment inquiry, and the topic is sure to hang over Mueller’s testimony.

Still, Speaker Nancy Pelosi (D-Calif.) is opposed to impeachment at this time, saying House Democrats are doing plenty to investigate and hold accountable both Trump and his administration.

At what point did you know the investigation was not going to establish conspiracy between the campaign and Russia? 

Rep. Jim Jordan (R-Ohio), a Trump ally and Judiciary Committee member, previewed this question in an appearance on Fox News.

“I think the one question all Americans have is, when did you first learn there was no collusion, no coordination, no conspiracy? And if you learned that early, why didn’t you tell us that?” Jordan said on Fox.

Many Republicans are skeptical of Mueller and his team and are likely to use the hearing to question the former special counsel’s credibility, his team and his decisions.

What role did the Steele dossier play in the investigation? 

Republicans have focused on the early stages of the Russia investigation before Mueller took it over in May 2017. Of particular interest to them is the FBI’s use of information from the controversial Steele dossier in an application to surveil onetime Trump campaign adviser Carter Page.

The dossier is fleetingly referenced in Mueller’s report in the context of Trump’s reactions to media reports about its allegations and his interactions with then-FBI Director James Comey.

The dossier is described as a collection of “unverified allegations” compiled by ex-British intelligence agent Christopher Steele, a former FBI source who was terminated by the bureau in fall 2016.

Republicans have long scrutinized the dossier following revelations it was paid for by Democrats.

Congressional Republicans opened their own investigations into the origins of the Russia probe when they were in control of the House. Barr has since opened an inquiry into whether intelligence collection targeting the Trump campaign was adequately predicated, and the of Justice inspector general is said to have nearly completed his own review of the FBI’s actions in applying for the Page warrant.

Why did you select people for your team who mostly donated to Democrats? 

Another point of contention for GOP lawmakers has been the makeup of Mueller’s team of prosecutors, many of whom are registered Democrats.

Republicans have also seized on anti-Trump text messages exchanged by FBI officials working on the Russia probe before Election Day 2016 as evidence the investigation was initiated by agents biased against Trump. One of the agents, Peter Strzok, was removed from the investigation after the messages became known.

Mueller is a registered Republican, and he was appointed special counsel by Rod Rosenstein, Trump’s hand-picked deputy attorney general.

Why didn’t you compel Trump to be interviewed? 

Some legal experts have criticized Mueller’s decision not to issue a subpoena to compel Trump to testify under oath — a move that undoubtedly would have provoked a prolonged court fight.

While Trump submitted written answers to Mueller on the topic of Russian interference, he declined to sit for a voluntary interview with the special counsel’s team or answer questions related to obstruction.

Mueller wrote in his report that he decided not to issue a subpoena because of the “substantial delay” it would have caused, though his team believed they had the “authority and legal justification” to do so. The report also states that Mueller told the president’s legal team that an interview with Trump was “vital” to the investigation.

  • 21 juillet 2019 à 21:00

Watch: Tesla-Hater Harasses "Tesla Fag" Driving A Model 3

Par Tyler Durden

A pickup truck driver has been charged for harassing a Tesla owner thanks to the Model 3's eight cameras that provide 360 degrees of video coverage around the vehicle, reported Electrek.

Youtuber Arti999, recently published the video titled Truck driver gets charges after harrasing Tesla Model 3 onto YouTube showing the incident.

He said, "The gentleman in this white truck decided to tailgate, pull into the shoulder to intimidate, give me the finger, call me a "Tesla fag," and run a red without stopping."

Arti999 said that he submitted the video to the Royal Canadian Mounted Police (RCMP), which according to him, RCMP charged the truck driver late last week for "tailgating, crossing a solid line and running a red. $800 lesson for this gem of a driver."

Electrek said there have been other reports of pickup truck drivers lashing out towards Tesla owners, usually resulting in some form of road-rage.

Last year, a bunch of hillbillies in Hickory, North Carolina, staged a protest with their lifted-trucks blocking a Supercharger station.

Tesla owner and Reddit user Leicina captured the incident and said:

"I've never had a supercharging experience like this one. These trucks blocked all the chargers, chanted "F" Tesla, and were kicked out by a Sheetz employee."

Electrek reported last month that truck drivers who modify their exhaust have been "rolling coal" on Teslas across the US, which basically means black sooty exhaust fumes pour out of the truck's modified exhaust system onto the electric car.

The EV transportation magazine said people who target electric cars with their diesel exhaust are "reaching a whole new level of redneck douchebaggery."

Leilani Münter, a race car driver and Tesla owner, tweeted last December about how she periodically gets targeted by truck drivers trying to roll coal on her Tesla.

This is scary. I’ve been coal-rolled in my Tesla by several trucks in NC, the drivers were hostile. If you don’t know what it is google “Stephen Colbert Coal Rolling.” One day these conflicts will end very badly. @Tesla @hickorypd @StephenAtHome @cleanairNC @cleanenergyorg @CMPD https://t.co/Gd6S6SOhNB

— Leilani Münter (@LeilaniMunter) December 23, 2018

Truck drivers rolling coal on electric or hybrid cars started back in the early 2000s with the Toyota Prius.

It seems that diehard diesel truck drivers have lots of hatred towards electric vehicles. Thanks to Tesla's eight cameras - more of these incidents will be caught on camera and uploaded onto YouTube.

  • 21 juillet 2019 à 20:35

Hedge Fund CIO: "Everyone Plans To Sell To Someone Else Before This Market Rolls Over"

Par Tyler Durden

Submitted by Eric Peters, CIO of One River Asset Management

Capitulation Collage

"“Based on my many conversations, if I were to create a composite of the emerging consensus amongst traders today, it would be this,” I said, answering the investor’s question.

“The trade war and America’s domestic political drama has sparked an economic soft patch. The Fed has panicked. It’ll cut rates even though it doesn’t need to. Every other country is stimulating too. And just as the stimulus kicks in, we’ll have a trade war truce which will reignite animal spirits in corporate board rooms everywhere, lifting capital investment."

"But that’s not the end of the story,” I said, describing the emerging consensus.

"The starting point in terms of positioning is a massive investor underweight in risk assets. Despite the S&P being at all time highs, there have been investor outflows. Active managers are all underperforming and are scrambling to chase performance. Corporate buybacks continue at a $1trln/year pace. There is $13trln in negatively yielding debt globally. And now that we’re in an earnings recession, people say things are probably going to get better anyway."
 
"The continued shift toward passive investing is pushing more cash into the market,” I continued.

Pensions are taking more risk in order to hit their magic +7.5% return targets. The capitulation to this collective view has grown over the past month. Before that there were plenty of bears. And now everyone agrees this will be the last leg of history’s longest bull market."

"Guys managing other people’s money seem more bullish than those who trade their own capital. Naturally, everyone plans to sell to someone else before this market rolls over."

  • 21 juillet 2019 à 20:10

Swedish PM Pushes Back Against Trump, Says A$AP Rocky "Won't Get Any Special Treatment"

Par Tyler Durden

In a statement published on Sunday, the Prime Minister of Sweden Stefan Lofven said that he had told President Trump in a phone call that A$AP Rocky, an American rapper who is being detained in a Swedish jail on assault charges and has been denied bail because he's a "flight risk," would not be allowed any special treatment.

Citing Sweden's official statement, the New York Times reports that the phone call lasted about 20 minutes, and that the Swedish characterized it as "friendly and respectful."

The prime minister "underlined that in Sweden everyone is equal before the law and that the government cannot and will not attempt to influence the legal proceedings," the statement said.

The PM's statement appears to undercut President Trump's account of the call. The president said the PM had assured him that Rocky would be "treated fairly," though Trump said he had personally offered to guarantee Rocky's bail, and that the two leaders had agreed to speak about the issue again on Monday.

Rocky

Prime Minister Stefan Lofven

The Swedish government, according to NYT, has faced accusations of human rights abuses and racism as rumors about the rapper's treatment spread. Some said he was sleeping on a yoga mat spread over a concrete floor, and that he was eating one apple a day.

Whether those rumors are exaggerated or accurate, a groundswell of celebrity support for Rocky has brought the issue to the White House's attention. First, senior aide and Trump son-in-law Jared Kushner tried to intercede on Rocky's behalf (he reportedly helped secure better accommodations for Rocky), then, after conversations with Kim Kardashian and Kanye West, Trump tweeted that he would call the Swedish PM.

On Saturday morning, Trump said the Swedish PM had assured him that Rocky would be treated fairly, and that Trump had offered to personally guarantee Rocky's bail. Trump said the two had planned to discuss the issue again on Monday.

Video footage of the incident appears to show Rocky acting in self-defense:

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

A post shared by PRETTY FLACKO (@asaprocky) on

 

  • 21 juillet 2019 à 19:47

"Astonishing Scenes" In Hong Kong Where Triad Members Attack Pro-Democracy Protesters As Violent Clashes Return

Par Tyler Durden

Well over a month after the latest bout of Hong Kong street protests erupted, the situation remains tense as ever when more than seven hours after the start of a major march against Hong Kong's now-suspended extradition bill, riot police in Hong Kong fired rounds of tear gas on protesters along Connaught Road Central, following skirmishes and a tense stand-off.

In an unexpected twist, the SCMP reports that in a darker turn of events on Sunday, a group of men in white suspected to be triad members attacked passengers at Yuen Long MTR station, particularly those wearing black, the color of protesters.

Things turning ugly in Yuen Long - Thugs broke through the MTR gate and attacked people gathering in yuen long mtr station #antiELAB @SCMPNews pic.twitter.com/UQc81Qgv4n

— Jeffie Lam (@jeffielam) July 21, 2019

Confirming that China appears to be getting rather jittery, but instead of sending in the army is deploying it less "reputable" elements, a reported noted "absolutely astonishing scenes in Yuen Long, where Triad members clad in white are attacking anyone suspected of being a pro-democracy demonstrator (people wearing black are a target as that’s been the dress code for some marches, hence why triads are all in white)."

Meanwhile, absolutely astonishing scenes in Yuen Long, where Triad members clad in white are attacking anyone suspected of being a pro-democracy demonstrator (people wearing black are a target as that’s been the dress code for some marches, hence why triads are all in white). pic.twitter.com/lo13nRGp0L

— Jack Hazlewood (@JackHHazlewood) July 21, 2019

And yes, there will be blood.

The blood stains left behind in yoho mall after the thugs stormed the mtr station and hit people pic.twitter.com/J99BLae7dJ

— Jeffie Lam (@jeffielam) July 21, 2019

The Civil Human Rights Front, the organiser of the march earlier in the day, said 430,000 people attended while police put the figure at 138,000 at its peak.

Crowds then advanced beyond the original police-mandated end point at Wan Chai to Queensway and Central, where they began occupying main thoroughfares of Connaught Road Central and Connaught Road West, blocking vehicles from getting through and putting up wooden barricades. Another group of protesters advanced towards the liaison office.

Demonstrators also gathered outside the Court of Final Appeal, the initial finishing point of the march organizers had pushed for but police disallowed. By 7pm, crowds reached Beijing's liaison office in Sai Ying Pun. No police were seen guarding the building but a number of security guards were inside.

Meanwhile, back on Hong Kong Island, protesters have mostly left Sheung Wan, where police earlier fired several volleys of tear gas. A protester was using a loudspeaker to warn people against going back to Yuen Long, saying: “They'll hit you even if you change your clothes.”

Police at the scene look more relaxed, some sitting down on the road behind shields. At last check the situation appeared to be back under control, with occasional bouts of violence breaking out.

For now China has refused to intervene in Hong Kong's scuffles, although on Sunday, Sunday Times' notorious Editor in Chief, Hu Xijin, who has taken to trolling Trump in recent weeks, tweeted that "protesters on Sunday besieged building of the Liaison Office of the Central People's Government in Hong Kong and defaced national emblem of China. This is crime."

Protesters on Sunday besieged building of the Liaison Office of the Central People's Government in Hong Kong and defaced national emblem of China. This is crime. Hong Kong is quickly slipping from the Pearl of the Orient to a lawless place. pic.twitter.com/EU1AtyEBjp

— Hu Xijin 胡锡进 (@HuXijin_GT) July 21, 2019

His conclusion: "Hong Kong is quickly slipping from the Pearl of the Orient to a lawless place" should probably come as a warning to HK natives: we won't intervene directly, but we will make sure HK's star is promptly extinguished.

  • 21 juillet 2019 à 19:20

"I've Had Many Strange Experiences In My Life" - Inside Epstein's 'Honey Trap' On E 71st Street

Par Tyler Durden

Authored by Eric Margolis via EricMargolis.com

I’ve had many strange experiences in my decades of covering intelligence affairs. These run from being invited to KGB HQ in Moscow, Chinese intelligence in Beijing, US intelligence in Virginia, Libyan intelligence in Tripoli, South African intelligence, and even Albanian intelligence in Tirana.

But none was odder than the day I was invited to lunch in New York City with the by now notorious figure Jeffrey Epstein. The golden boy of Manhattan and Palm Beach society now sits in a grim jail cell accused of having sex with underage girls. He’s been doing this in plain view since the early 1990’s but, until recently, he seemed bullet-proof.

Soon after I walked into the entrance of Epstein’s mansion on E 71st Street, said to be the city’s largest private home, a butler asked me, “would you like an intimate massage, sir, by a pretty young girl?” This offer seemed so out of place and weird to me that I swiftly declined.

Image source: Getty

More important than indelicacy, as an old observer of intelligence affairs, to me this offer reeked of ye old honey trap, a tactic to ensnare and blackmail people that was old when Babylon was young. A discreet room with massage table, lubricants and, no doubt, cameras stood ready off the main lobby.

I had arrived with Canada’s leading lady journalist who was then close to Epstein’s sometime girlfriend, Ghislaine Maxwell and, it was said, procuress – something Maxwell denies. Bizarrely, Maxwell believed that I could get KGB Moscow Center to release satellite photos that showed the murder on his yacht of her father, the press baron Robert Maxwell, who was a well-known double agent for Israel and KGB, and a major criminal.

Also present was the self-promoting lawyer, Alan Dershowitz, who had saved the accused murderer Claus von Bulow, as well as a titan of the New York real estate industry (not Trump) and assorted bigwigs of the city’s elite Jewish society. All sang the praises of Israel.

Epstein reportedly had ties to Donald Trump, Bill Clinton, Britain’s Prince Andrew and repeatedly flew them about in his private jet, aka “the Lolita Express.” All guests deny any sexual activity. I turned down dinner with Prince Andrew.

Epstein’s residence in Manhattan and Palm Beach, both of which I visited, were stocked with young female “masseuses.” All were working class girls making big money in their spare time. I did not see any interactions between these girls and the guests.

Epstein and Maxwell became too big for their britches. They flaunted their sexual adventures and laughed at New York society. Everyone wondered about the source of Epstein’s lavish income but no one knew its origins. He claimed to be an exclusive money manager for a group of secretive millionaires. But the only one identified was billionaire Leslie Wexner, the owner of L Brands and Victoria’s Secret. Wexner denied any knowledge of Epstein’s alleged crimes.

Besides sexual frolics, Epstein and Maxwell were up to many odd things. The FBI found diamonds, cash and a fake passport when raiding his mansion and documents showing his net worth at $559,120,954.00. The IRS tax people will be eager to review the sources of this income.

It seems likely that political influence was brought to bear on then US attorney Alexander Acosta (he just resigned under fire last week) to make a sweetheart deal with Epstein, who had been charged by Florida with child molestation. Epstein got off with a token, 13-month jail sentence that allowed him to work from his office much of the day.

Were Trump or Clinton involved? How much did they “party” with Epstein and revel in his fleshmart? There was talk of some sort of “intelligence” angle to the affaire Epstein that spared him a harsh sentence.

A respected former CIA official, Phil Giraldi has come right out and accused Epstein of being an Israeli agent of influence. Epstein was let off with a slap on the wrist on his first child abuse charge, says Giraldi, because of his powerful Israel connections.

To Giraldi and this writer, the Epstein “massage” operation was a classic intelligence operation designed to blackmail men of influence into doing Israel’s bidding. Clinton had reportedly already fallen into this trap years earlier while still president.

Now watch this stinking pile of corruption be hurriedly covered up. Talk about draining the swamp.

  • 21 juillet 2019 à 19:05

Smollett 2.0? Dem Congresswoman Backtracks On Racist "Go Back" Insult Claims

Par Tyler Durden

Lies, Dem'd Lies, and Sadistics...

Who could have seen this coming?

After a whirlwind of press furore - extending the drive against President Trump's recent remarks aimed at the 'squad' - following Georgia Rep. Erica Thomas' claims she was a victim of a racist attack when a man confronted her in a grocery line telling her to "go back to her own country," it appears she is rapidly backtracking on her original story.

The story began Saturday when the black representative, who is 9 months pregnant, shared a tearful video saying what she said happened.

“This white man comes up to me and says, ‘You lazy son of [expletive]. You need to go back where you came from,'” she said.

We have a serious problem in this Country when @itsericathomas is subjected to racism in a Cobb County @Publix in front of her daughter. #gapol. #IStandwithErica thank you @RenittaShannon for alerting me and the @NAACPGA. #NoPlaceforHate. pic.twitter.com/hN5HDS4aG9

— Gerald A. Griggs (@AttorneyGriggs) July 20, 2019

“I’m at the grocery and I’m in… the aisle that says ’10 Items or Less.’ Yes, I have 15 items, but I’m nine months pregnant and I can’t stand up for long,” Rep. Erica Thomas said.

“This white man comes up and says, ‘You lazy son of a b***h.’ He says, ‘You lazy son of a b***h, you need to go back where you came from,’” she said.

It hurt me so bad — I’m sorry y’all — because everything in me just wanted to tell him who I am… but I couldn’t, I couldn’t get anything out,” she said. “I couldn’t even explain to her why he has so much hate in his heart.”

Of course, these claims were immediately met by a torrent of virtue signaling from various leftists...

These are the consequences of a president who foments hate every day—and sees our diversity not as a strength but as a weakness. Erica, thank you for serving your state and thanks to your husband for serving our country. We are better than this, and together, we will prove it. https://t.co/eCrdZFgAPl

— Beto O'Rourke (@BetoORourke) July 20, 2019

Let’s be clear: this is on @realDonaldTrump and every single person who refuses to condemn his vile racism. #IStandWithErica https://t.co/Asx5kZaqbs

— Bill de Blasio (@BilldeBlasio) July 20, 2019

But... 24 hours later, the story is starting to change. The 'white man' she is accusing of a racist attack is a died-in-the-wool squad-defending Democrat...

Georgia Democrat Erica Thomas claims a "white man" told her to "go back to where I came from"

The guy is a Cuban Democrat and he says that he didn't say that and that she is doing this for political gain

He defended "the squad" this week on Facebook against Trump's attacks pic.twitter.com/ldWvrYGyqJ

— Ryan Saavedra (@RealSaavedra) July 20, 2019

... and confronted her as she stood in front of media making her claims...

Media machine has been blowing up story of @itsericathomas, who claims a racist white man told her to “go back where you came from.” Well, he returns during her presser to deny allegation. He says he’s a Democrat & she’s embellishing story for attention. pic.twitter.com/wh4uds2IKC

— Andy Ngo (@MrAndyNgo) July 21, 2019

Eric Sparkes absolutely denies claim that he told politician @itsericathomas to “go back where you came from.” He says the argument started over her using the express lane while having too many items. pic.twitter.com/ZikyJc81vf

— Andy Ngo (@MrAndyNgo) July 21, 2019

“I called you a lazy (expletive),” he said to the representative and he said she berated him. “That’s the worst thing I said.”

“This woman is playing the victim for political purposes because she is a state legislator,” he said to the reporter.

“I’m a Democrat and will vote Democrat for the rest of my life, so call me whatever you want to believe. For her political purposes, make it black, white, brown, whatever. It is untrue,” he said.

And then the Congresswoman seemed to back away from her vehement claims...

“I don’t want to say he said, ‘Go back to your country,’ or ‘Go back to where you came from,'” Rep. Thomas said.

“But he was making those types of references is what I remember,” which is not what she said in her video when she was certain of what he said.

Now Erica Thomas is changing her story after it trended all day and resulted in extensive news coverage
pic.twitter.com/Esho3Dtzpv

— Ryan Saavedra (@RealSaavedra) July 21, 2019

And while we are on the topic of lies, The Federalist Papers reports that a gay Democrat former candidate for the Florida House of Representatives admitted that she lied about saving victims of the Pulse Nightclub shooting.

She made the claims that she had tended to those who were shot at two events organized by Democrats in her state:

“It’s probably one of the hardest things of my career to work through,” she said. “I personally removed 77 bullets from 32 victims … It was like an assembly line.”

Turns out she made the whole thing up!

“I lied,” she said in the affidavit to DoH Medical Quality Assurance Investigator Rafael B. Aponte “It is a false statement. I just made it up.”

I wanted to be somebody in the community, and I’m sorry. I’m sorry that I gave any impersonation. I knew it was wrong and I should have stopped — by no means did I ever mean to put anybody in jeopardy,” she said.

Still, when the head of the California Democratic Party slams "rural white Americans," it's clear the left has some rather odd ideas about 'inclusion' and 'honesty'...

“You know who is not grateful enough? Rural white Americans,” he said. “They are heavily subsidized, drowning in federal largesse, blessed with political affirmative action & overrepresentation, have all their bills paid by cities and blue states, but they whine and yell constantly.”

Don’t get me wrong: I’m all about reaching out & showing rural white America that it’s the plutocrats that are hurting them, not people of color. Rural white Americareally is hurting.

But I’ll be damned if the bigoted entitled stupidity doesn’t constantly try one’s patience,” he said in his screed.

Deplorable!

  • 21 juillet 2019 à 18:40

All The World's Religions In One Map

Par Tyler Durden

Authored by Frank Jacobs via BigThink.com,

  • At a glance, this map shows both the size and distribution of world religions.

  • See how religions mix at both national and regional level.

  • There's one country in the Americas without a Christian majority – which?

China and India are huge religious outliers

A picture says more than a thousand words, and that goes for this world map as well. This map conveys not just the size but also the distribution of world religions, at both a global and national level.

Image: Carrie Osgood

Strictly speaking it's an infographic rather than a map, but you get the idea. The circles represent countries, their varying sizes reflect population sizes, and the slices in each circle indicate religious affiliation.

The result is both panoramic and detailed. In other words, this is the best, simplest map of world religions ever. Some quick takeaways:

  • Christianity (blue) dominates in the Americas, Europe and the southern half of Africa.

  • Islam (green) is the top religion in a string of countries from northern Africa through the Middle East to Indonesia.

  • India stands out as a huge Hindu bloc (dark orange).

  • Buddhism (light orange) is the majority religion in South East Asia and Japan.

  • China is the country with the world's largest 'atheist/agnostic' population (grey) as well as worshippers of 'other' religions (yellow).

The Americas are (mostly) solidly Christian

Which is the least Christian country in the Americas? The answer may surprise you.

Image: Carrie Osgood

But the map – based on figures from the World Religion Database (behind a paywall) – also allows for some more detailed observations.

  • Yes, the United States is majority Christian, but the atheist/agnostic share of its population alone is bigger than the total population of most other countries, in the Americas and elsewhere. Uruguay has the highest share of atheists/agnostics in the Americas. Other countries with a lot of 'grey' in their pies include Canada, Cuba, Argentina and Chile.

  • All belief systems represented on the scale below are present in the US and Canada. Most other countries in the Americas are more mono-religiously Christian, with 'other' (often syncretic folk religions such as Candomblé in Brazil or Santería in Cuba) the only main alternative.

  • Guyana, Suriname and Trinidad & Tobago are the only American nations with significant shares of Hindus, as well as the largest share of Muslim populations – and consequently have the lowest share of Christians in the Americas (just under half in the case of Suriname).

Lots of grey area in Europe

The second-biggest religious affiliation in Europe isn't Islam, but 'none'.

Image: Carrie Osgood

  • Christianity is still the biggest belief system in most European countries, but the atheist/agnostic share is strong in many places, mainly in Western Europe, but especially in the Czech Republic, where it is close to half the total.

  • Islam represents a significant slice (and a large absolute number) in France, Germany and the UK, and is stronger in the Balkans: The majority in Albania, almost half in Bosnia and around a quarter in Serbia (although that probably indicates the de facto independent province of Kosovo).

Islam in the north, Christianity in the south

The map of Africa and is dominated by the world's two largest religions

Image: Carrie Osgood

  • Israel is the world's only majority-Jewish state (75%, with 18% Muslim). The West Bank, shown separate, also has a significant Jewish presence (20%, with 80% Muslim). Counted as one country, the Jewish majority would drop to around 55%.

  • Strictly Islamic Saudi Arabia, but also some of its neighbors in the Gulf, have significant non-Muslim populations – virtually all guest workers and ex-pats.

  • Nigeria, due to its large population and even split between Islam and Christianity, has more Muslims and more Christians than most other African nations.

Different majorities across Asia

Close neighbors India, Bangladesh and Myanmar each have a different majority religion.

Image: Carrie Osgood

  • Because countries are sized for population rather than area, some are much bigger or smaller than you'd expect – with some interesting results: There are more Christians in Muslim-majority Indonesia than there are in mainly Christian Australia, for example.

  • Hindus are a minority everywhere outside India, except in Nepal.

  • North Korea is shown as three-quarters atheist/agnostic, but this is debatable, on two counts. In what is often referred to as the last Stalinist state on Earth, religious adherence is probably underreported. And the state-sponsored ideology of 'Juche', although in essence based on materialism, makes some supernatural claims. For instance: despite having died in 1994, Kim Il-sung was declared 'president for eternity' in 1998.

Of course, clarity comes at the cost of detail. The map bands together various Christian and Islamic schools of thought that don't necessarily accept each other as 'true believers'. It includes Judaism (only 15 million adherents, but the older sibling of the two largest religious groups) yet groups Sikhism (27 million) and various other more numerous faiths in with 'others'. And it doesn't make the distinction between atheism ("There is no god") with agnosticism ("There may or may not be a god, we just don't know").

And then there's the whole minefield of nuance between those who practice a religion (but may do so out of social coercion rather than personally held belief), and those who believe in something (but don't participate in the rituals of any particular faith). To be fair, that requires more nuance than even a great map like this can probably provide.

  • 21 juillet 2019 à 18:15

Twitter Reactivates "Angel Mom" Account After Trump Intervenes

Par Tyler Durden

Twitter briefly suspended the twitter account of "Angel Mom" Mary Ann Mendoza" over a tweet she sent attacking presidential candidate Kamala Harris, then reinstated it after President Trump tweeted that he would "help" with the situation.

On Saturday, Twitter suspended Mendoza's account after she sent the following tweet:

Angel

Two

Three

Illegals

The company said Mendoza had violated its policy on hate speech by using the term "illegal" to describe "undocumented" migrants, and said it wouldn't reinstate Mendoza's account until she agreed to delete several tweets with this hateful language. She refused.

Mendoza's son, 32-year-old police officer Brandon Mendoza, was killed in May 2014 by a drunk illegal immigrant who was driving drunk down the wrong lane on the high way.

Several conservative media outlets reported on the story, though it was largely ignored by the mainstream press, and early on Sunday morning, President Trump tweeted that he would intercede on Mendoza's behalf and insisted that she "should never be silenced."

I will help Angel Mom (and great woman) Mary Ann Mendoza with Twitter. I know Mary Ann from the beginning, and she should never be silenced. She is a winner who has lost so much, her child. Twitter, if you’re watching, please do what you have to do, NOW! @foxandfriends

— Donald J. Trump (@realDonaldTrump) July 21, 2019

Trump first met Mendoza during a campaign stop in Arizona during 2016. She was later invited to the White House.

Trump

Mendoza delivered a lengthy statement to Brietbart News.

"I’m disgusted and disappointed that Twitter is trying to silence me," Mendoza told Breitbart News. "I had my world ripped out from under me the day my son was killed by a repeat illegal alien criminal. I am the ‘other’ side of this crisis and the end result of open borders and the careless release of illegal aliens at our borders because of time restraints."

[...]

"I will not be silenced in my warning calls of what could happen to any American citizen in the blink of an eye as it did to me," Mendoza said. "As an American citizen whose beautiful son was collateral damage to the ineptness if our elected officials, I will continue to bring my words to them in whatever platform I can. They owe it to me and every other Angel Family to have a hearing for our voices. Their fellow American citizens and our loved ones killed by their inactions. My voice is my son’s voice, never to be silenced by anyone."

As of noon ET on Sunday, Mendoza's twitter account was active, but the offending tweets had been deleted.

  • 21 juillet 2019 à 17:50
Hier — 20 juillet 2019Zero Hedge

Banned China-Made Surveillance Tech Still Operational At Sensitive US Bases

Par Tyler Durden

Despite the headlines and scrutiny of US officials focused on Chinese multinational tech giant Huawei, the United States military continues to purchase China-made surveillance cameras, even installing them at sensitive bases like the headquarters of Air Force Space Command and North American Aerospace Defense Command (NORAD), according to bombshell Financial Times report this week. 

US law will ban military and government agencies from purchasing the Chinese manufactured equipment starting in August, but the FT investigation found that hundreds of thousands of dollars worth of the potentially compromising surveillance and monitoring components are still being installed in US bases. As the report points out, "China-made surveillance cameras are still watching over US military bases."

The scene at the NORAD entrance in Cheyenne Mountain, site of NORAD's previous HQ before moving to Peterson Air Force Base. Image source: US Air Force.

FT introduced its report with a deeply alarming example at none other than the ground zero location for the agency responsible for defending American and Canadian airspace:

Cameras made by Hikvision, which is 42 per cent owned by the Chinese government, remain in place at the Peterson Air Force Base in Colorado, the home of North American Aerospace Defense Command (Norad) and the headquarters of Air Force Space Command. The Peterson base spent $112,000 on Hikvision cameras in 2016 and a spokesperson said these were “not associated with base security or classified areas”...

US defense officials at this and other bases justified the procurement by saying the cameras wouldn't be connected to the internet, nor would they be used in classified or sensitive areas. 

Critics worry that the Chinese government could use software in the cameras to spy on America's most secretive military installations, especially following mounting evidence that Chinese intelligence and the People's Liberation Army (PLA) are using Huawei products, specifically its next generation 5G wireless network, as a Trojan horse backdoor to access other nations' secrets. 

Source: South China Morning Post

Other examples of the US military recently using Chinese tech devices "in plain site" at national security related facilities include the following, according to the FT report:

  • A US Navy research base in Orlando, Florida, bought $4,000 of Hikvision cameras even after the passage last year of the National Defense Authorization Act (NDAA)...
  • Police departments in states including Massachusetts, Colorado and Tennessee are also still relying on Hikvision cameras. The Memphis Police Department alone has at least 1,500.
  • The US state department bought more than $20,000-worth of replacement Hytera radio parts for the US embassy in Guatemala, again after the NDAA was passed — as part of its work with the Policía Nacional Civil.
  • In 2017, an army memo said Hytera radios were being used for special forces training since the brand was “extensively used by Islamic State”.
  • The Fort Drum army base, which acquired $30,000-worth of Hikvision cameras in June 2018, declined to comment.
  • Since 2015, the Defense Logistics Agency has spent almost $180,000 on Hikvision cameras, for US forces in Korea and a naval base in Florida.
  • In January 2018, the US army removed Hikvision cameras from Fort Leonard Wood, a base in Missouri, amid cyber security fears, according to the Wall Street Journal newspaper.

Interestingly, in a number of cases the decision to remove China-produced tech items at government facilities was due merely to concern over public perception amid the Huawei scandal.

"We never believed [the cameras] were a security risk. They were always on a closed network," Col. Christopher Beck, at Missouri's Fort Leonard base told the WSJ. He added the base removed the cameras to avoid "any negative perception."

Considering China-made cameras and related surveillance gear make up some one-third of the global market, according to many estimates, might they be impossible for the United States to remove completely? 

  • 20 juillet 2019 à 14:45

The New EU Is Even More Insane Than The Old EU

Par Tyler Durden

Authored by Tom Luongo,

The new leadership team of the EU is insane. They learned nothing from May’s vote which saw the middle ground occupied by Angela Merkel lose ground.

Euroskeptics doubled their representation while nationalist Greens gained ground as well. The European People’s Party lost significant clout and was forced into unprecedented haggling over the leadership bloc.

Merkel, now having no political future to protect, as her last act of betrayal to Germany engineered the ‘election’ of Ursula von der Leyen to replace Jean-Claude “When things get tough you have to lie” Juncker as European Commission President.

Von der Leyen is more of a euro-integrationist than Juncker was. It’s clear they circled the wagons knowing that, as Nigel Farage points out in this clip, the EU will look nothing like it does now in five years when her term is up.

Just like the EU today looks nothing like it did in 2014 when Juncker took over.

So, it’s time to go for broke and push for everything before it all falls apart. But the trends are clear. von der Leyen is the past and Nigel Farage is the future of Europe.

More of everything EU is expected from them and there’s every reason to take them at their word.

The only interesting thing von der Leyen said here was that they would be happy to offer another extension. That’s only interesting because it sets her at odds with French President Emmanuel Macron.

Of course the EU is happy to keep the UK in limbo.

But here’s the rub. The Brexit Party polling just behind Tories, who have rallied behind Boris Johnson to stabilize their poll numbers. Johnson has to keep talking No-Deal Brexit or the knives come out for him.

But the EU, regardless of what happens next week when the votes for Prime Minister are revealed, isn’t done with the UK.

They are still looking to send stern warnings to the rest of Europe.

Case in point is its pointless spat with Switzerland over stock market access, which went into effect on July 1st. The EU, spitefully and with full admission of sending a message to London, refused to extend existing agreements to allow Swiss traders to trade on EU bourses. The Swiss responded in kind.

And despite the worst hand-wringing it seems in these first few weeks of trading, nothing of note has occurred. But Bloomberg (see link above) will never back off on the future doom porn, because you know, reasons.

Swiss stocks have well bid, there are no significant price arbitrages and trading flows are adjusting because that’s what people do.

If the Swiss can stand up to the EU, who are surrounded by them and do much more business with them than the UK as a percentage of domestic trade, then so can London.

This was supposed to scare more City of Londoners into pushing for Merkel and May’s Terrible Treaty.

I think looking at the depths to which the EU will reach to maintain their present course is far scarier.

Mish has a great on the timeline of how to stop Brexit through a no-confidence vote. It’s worth every bit of your time. Basically, the window is closing quickly. And the Remainers, like Dominik Grieve, are running out of time to come up with a plan.

Parliament passed a motion that keeps Johnson from proroguing past the Halloween deadline. But, that’s wasted effort. They have less than a week to call for a vote of no-confidence to organize another election before October 31st.

Which brings us to the votes. Where do things stand?

Regardless of the votes in parliament, the polls are showing Remain will lose that fight. One poll from last weekend have the Tories (25%) and Brexit (21%) running first and second. An aggregate of recent polls yields a parliament could look something like this.

YouGov - 2019-07-17
Con: 25%
Lab: 21%
LDem: 20%
BRX: 19%
Grn: 8%
SNP: 4%
PC: 1%
CHUK: 0%
UKIP: 0%

Flavible Projection
Con: 272 (-46)
Lab: 194 (-68)
LDem: 84 (+72)
SNP: 53 (+18)
BRX: 24 (+24)
PC: 4 (-)
Grn: 1 (-)
Changes w/ 2017https://t.co/ahw8ydC4jv

— Flavible Politics (@flaviblePolitic) July 18, 2019

The time for a general election was back during the height of the Brexit focus and the original March 29th deadline. Labour leader Jeremy Corbyn had his chance before the EU elections, but his silence was deafening.

Because he didn’t have the votes. Now Labour have moved completely to the Remain camp and the polls create a lot of uncertainty. But that is their job, to muddy the waters and move public opinion, not reflect them.

If Corbyn goes for the vote of no-confidence it will be because he has the votes in parliament to force the election. But in doing so he will likely shift public sentiment the 3-5 points needed to create a Tory/Brexit majority that will deliver Brexit.

This is Mish’s point about how the currency markets are trading. With the pound collapsing this is your signal that the markets think Brexit is happening. It’s also helping the euro levitate along with lovey-dovey noises from various FOMC members.

All of this depends on if (and this is a big if) Boris Johnson is actually committed to Brexit and isn’t just another stalking horse for the EU, like Theresa May.

It should be shocking that in all the time May was negotiating with the EU she never once countered with a no-deal scenario. But it really isn’t. May was put in charge, like von der Leyen to keep the European Project on track.

She should be tried for treason, in my opinion.

Farage is forcing this. Brexit is now very likely, because Farage is pushing Johnson on what comes after Brexit. The Brexit Party is running a campaign on how to spend the savings from paying the EU’s blood money.

Check out #InvestInTheRest.

This is powerful stuff that speaks to the voters for the next election. Farage knows that the Brexit Party has to become more than just a single issue, that it has to brand itself as the solution for a post-Brexit UK. It’s the kind of branding that creates social movements and lasting political change, not fads.

The Tories + Brexit hold around 44-46% of the vote. Labour and the LibDems 38-40%. That seems to be the ceiling right now. They would need both the Scottish Nationalists and the Greens to form a government. It would scuttle Brexit and little else. But it couldn’t do it in time regardless.

Flavible’s projections are now a combined 297 seats. I suspect this is a minimum projection for Brexit and the Tories given the methodology and data inputs. But if Johnson delivers Brexit, the death of Labour and the LibDem will be swift heading into 2020.

And don’t think for a second that von der Leyen and the rest of the Eurocrats in Brussels don’t understand this dynamic. They are every day looking more like a gang of Baghdad Bobs rather than world leaders.

Germany’s economy is rotting. The massive safe-haven trade into euro-zone debt on the promise of even more negative interest rates has nearly reached its limit. Christine Lagarde heading the ECB will only ensure the rapid formalization of more consolidated power under it at the expense of national sovereignty.

When the dam breaks on EU monetary policy, a backroom deal between the IMF, ECB and the European Commission will come fast and at the last hour. There will be no votes on this loss of sovereigny for any euro-zone member.

As Germany’s economy rots, as Deutsche Banke falls and the rest of Europe is tied to the boat anchor known as the euro, the case against Remaining strengthens.

For simplicity’s sake, the fragile state of oil prices are your leading indicator on this. J.P. Morgan’s falling Composite Purchasing Manager’s Index is indicating this.

The crisis of confidence in the EU is coming at us full steam. Brexit has revealed not only the depths to which the people of Europe have been betrayed by their leadership but also the people pulling the strings behind the scenes.

Their collective insanity pushing for imperial, unaccountable control over the continent will be the thing that undoes their plans in the end.

*  *  *

Join my Patreon if you think collectivists are insane. Install Brave if you don’t want Google and Facebook to control your access to information.

  • 20 juillet 2019 à 14:10

Italy's Salvini Draws Up Plans To Raid "Illegal Settlements": Deport Roma, Sinti 

Par Tyler Durden

Italy's Interior Minister Matteo Salvini has given the ministry's regional offices two weeks to compile "a report on the presence of Roma, Sinti and Camminanti settlements" in order to begin mass deportations, according to Italian media.

In a Tuesday memo, Salvini laid out his campaign to "verify the presence of illegal camps to draw up an eviction plan," according to DW

According to the Council of Europe, Italy has one of the lowest concentrations of these groups in the EU, with a population of between 120,000 and 180,000, according to the AFP. More than half of these people are Italian citizens who have integrated into mainstream society, AFP claims.

Despite this, hate crimes and prejudice against Roma, Sinti, and Camminanti are rampant, particularly against the less fortunate, some of whom still live in unofficial settlements. -DW

In June of 2018, Salvini ordered a "Special Census" of the Roma community, saying that he planned to boot illegals from the country.

"I've asked the ministry to prepare a dossier on the Roma question in Italy," Salvini told TeleLombardia, adding that the country's large community of Roma, also known as Gypsies, was "chaos" several years after a crackdown.

DW reports that there are some 26,000 members of these groups living in emergency shelters or in vagrant camps across Italy in 2017, according to advocacy group Associazione 21 Luglio. 

  • 20 juillet 2019 à 13:35

Germany: Nest Of Middle-Eastern Spies

Par Tyler Durden

Authored by Soeren Kern via The Gatestone Institute,

  • The report, considered the most important indicator of internal security in Germany, draws a bleak picture and raises questions about the government's apparent passivity in face of mounting threats.... Meanwhile, the Erdoğan-aligned Islamist movement Millî Görüş (Turkish for "National Vision"), which has around 10,000 members in Germany, is the second-largest Islamist group in the country (the Salafist movement is now the largest Islamist grouping in Germany). Millî Görüş is strongly opposed to Muslim integration into European society.

  • "The BfV has found that all Islamist organizations active in Germany harbor anti-Semitic ideas and disseminate them in various ways. These ideas represent a considerable challenge for peaceful and tolerant coexistence in Germany." — Annual report of the Federal Office for the Protection of the Constitution (Bundesamt für Verfassungsschutz, BfV), 2019

  • "The goal of HAMAS is the establishment of an Islamist state in the entire territory of 'Palestine' — also through armed struggle. A strategy paper written in 2017 states: 'Resistance to occupation by all means is a legitimate right guaranteed by divine laws. At the heart of it lies the armed resistance.' By 'Palestine' HAMAS means the area between the Mediterranean Sea and Jordan, which also includes the territory of the State of Israel. Western countries such as Germany are seen by HAMAS as a haven where the organization focuses on collecting donations, recruiting new supporters, and propagating its propaganda." — Annual report of the Federal Office for the Protection of the Constitution (Bundesamt für Verfassungsschutz, BfV), 2019

  • The BfV noted a "high number" of attempts by "covert Pakistani procurement structures" illegally to obtain technology for use in Pakistan's nuclear weapons program. The BfV also observed a "significant increase" in attempts by Iran to obtain technology for its missile program, which was not part of the Iran nuclear deal. The BfV reported that Syrian intermediaries were also continuing efforts to obtain products for weapons of mass destruction, including chemical weapons.

Foreign intelligence services, especially those from Turkey, Syria and Iran, have increased their activities in Germany during the past 12 months, according to Germany's BfV domestic intelligence agency. The foreign intelligence services are not only pursuing dissidents among the large diasporas in Germany, they are also targeting Jewish and Israeli interests in the country.

Pictured: Seehofer (left) and Haldenwang (right) at a press conference on June 18, 2019, with Federal Crime Office head Holger Muench. (Photo by Michele Tantussi/Getty Images)

At the same time, Hezbollah, Hamas and the Muslim Brotherhood appear to be operating with impunity in Germany, while, according to the BfV, the number of Salafists in the country has tripled in recent years and now exceeds 11,000. Overall, the BfV estimates that Germany is home to more than 26,000 Islamists, an unknown number of whom pose an immediate threat of attack.

The new figures are included the latest annual report of the Federal Office for the Protection of the Constitution (Bundesamt für Verfassungsschutz, BfV), and were presented by Interior Minister Horst Seehofer and BfV President Thomas Haldenwang in Berlin on June 27.

The report, considered the most important indicator of internal security in Germany, draws a bleak picture and raises questions about the government's apparent passivity in face of mounting threats.

Iran

Iranian intelligence activities in Germany are carried out by Iran's Ministry of Intelligence and Security (MOIS), as well as the secret service of the Quds Force, a unit of Iran's Islamic Revolutionary Guard Corps (IRGC) responsible for foreign operations. According to the BfV, Iranian intelligence services in Germany are focused primarily on monitoring regime opponents, but also Israeli interests:

"The Iranian intelligence services are a central instrument of the political leadership to secure their claim to power. As a result, the Iranian opposition will continue to be a target of the MOIS....

"General Yahya Rahim Safavi, military adviser to Iranian revolutionary leader Ayatollah Ali Khamenei, said that the Islamic Republic has the authority to destroy any potential aggressors, not only within Iran but also beyond its borders....

"The State of Israel, its representatives and supporters, are among the declared enemies of Iran. This may include leading representatives of Jewish organizations in the Diaspora. The nuclear agreement between Iran and the West has not changed this attitude. Spying activities against Israeli and Jewish targets in Germany therefore continue to be part of the task area of Iranian intelligence services."

The BfV report noted only three successful operations in 2018 against Iranian activities in Germany:

  • In January 2018, German police in seven federal states arrested ten alleged agents of the Quds Force. The agents were accused of spying on Israelis in Germany.

  • In March 2018, a court in Frankfurt sentenced an Iranian national to seven years in prison for purchasing, on behalf of the Quds Force, printing presses that produce counterfeit currency. The man, with German residency, also set up a series of front companies to purchase and ship to Iran specialized paper and ink. During the trial, it emerged that the presses were used to print more than 50 million Yemeni banknotes.

  • On July 1, an Iranian MOIS agent was arrested in Germany on an international warrant for plotting to bomb the annual meeting of the MEK, an Iranian opposition group, near Paris on June 30. The agent was extradited to Belgium in October 2018.

Turkey

The Turkish National Intelligence Organization (MIT), the BfV notes, is controlled by President Recep Tayyip Erdoğan and his Justice and Development Party (AKP) to enforce government policy and ensure internal security.

MIT's activities in Germany are focused on targeting dissidents and opposition groups as well as trying to influence the Turkish diaspora in the country. Targeted dissidents include the Kurdistan Workers' Party (PKK) and the Gülen Movement of the U.S.-based Muslim cleric Fethullah Gülen, a former Erdoğan ally whom Erdoğan accuses of staging a failed coup in July 2016. According to BfV:

"The MIT's activities are flanked by attempts to exert influence on Turkish communities in Germany and the political decision-making process in German society as a whole. Government-related organizations with different structural links to Ankara promote Turkish politics in Germany and other European countries and protect those politics from criticism....

"An essential part of this strategy of influence is to inform the public in an innocuous way on alleged and actual cases of racism, Islamophobia and hostility toward Turkey or other undesirable developments in Germany and Europe, in order to confront criticism of political developments in Turkey."

The two largest Turkish-dominated, state or government-related interest groups in Germany are the "Turkish-Islamic Union for Religious Affairs (DITIB) and the "Union of European-Turkish Democrats" (UETD), which was recently renamed "Union of International Democrats" (UID). According to BfV:

"DITIB and UID are umbrella organizations that include a variety of local and regional (branch) associations with membership status. They emphasize their commitment to the public in a moderate way and endeavor to emphasize the autonomous and independent nature of their organizations and downplay the links and dependencies they have to Turkey."

DITIB and UID are financed by the Turkish government's Directorate for Religious Affairs, known in Turkish as Diyanet, and, according to BfV, both organizations cooperate closely with Turkish intelligence. The Turkish government pays the salaries of nearly 1,000 conservative imams in Germany who are leading more than 900 DITIB-controlled mosques across the country.

Meanwhile, the Erdoğan-aligned Islamist movement Millî Görüş (Turkish for "National Vision"), which has around 10,000 members in Germany, is the second-largest Islamist group in the country (the Salafist movement is now the largest Islamist grouping in Germany). Millî Görüş is strongly opposed to Muslim integration into European society:

"According to Millî Görüş, Western Civilization is presently dominated by a 'vain' order based on violence, injustice and exploitation of the weak. This 'vain' system must be replaced by a 'just order' that is based exclusively on Islamic principles, rather than on man-made and therefore 'arbitrary rules.' All Muslims should participate in the realization of the 'just order.' To do this, they must adopt a certain attitude and gain a certain vision ('Görüş') on earth, namely a national/religious ('Millî) vision, a 'Millî Görüş.'"

Syria

Germany, the report relates, is a priority for Syrian intelligence services as it is the main host country for Syrian refugees in Europe. The main focus of Syrian intelligence in Germany is to monitor opponents of the Syrian regime. According to the BfV, "the Syrian intelligence services appear to have used the influx of Syrian refugees to Germany in 2015 to establish new structures and networks of agents."

Salafists and other Islamists

The BfV estimates that the number of Islamists in Germany increased to at least 26,560 by the end of 2018, up from 25,810 in 2017 and 24,425 in 2016.

The report does not provide estimates for the number of followers of the Islamic State or al-Qaeda living in Germany. As a result, the actual number of Islamists in Germany is undoubtedly higher than 26,560.

According to the report, Salafists comprise the single largest Islamist group in Germany. The number of Salafists in Germany jumped to 11,300 in 2018, up from 10,800 in 2017; 9,700 in 2016; 8,350 in 2015; 7,000 in 2014; 5,500 in 2013; 4,500 in 2012 and 3,800 in 2011.

The BfV report describes Salafism as an Islamist ideology that is at the same time an extremist counterculture:

"Salafism promotes a segregated lifestyle through unique selling points (clothing and language). Salafism wants to create a committed community with an intense sense of togetherness. This particularly attracts people who feel marginalized by the majority society. Unstable persons [ungefestigte Personen] who are looking for a purpose in life, for orientation and security, are especially influenced by the comprehensive Salafist rules, which determine daily life into its minute details. The individual, through Salafist propaganda, becomes part of an elite, the champion of 'true Islam,' distinguished by his moral superiority over a 'world of the corrupt.'

"These subcultural elements are essentially the attractions of the Salafist ideology, which is marked by Wahhabism, the 'state doctrine' of Saudi Arabia, and represents a particularly severe and radical current within Islamism. Salafists see themselves as advocates of an original, unadulterated Islam. They claim to base their religious practice and lifestyle solely on the principles of the Koran, the model of the Prophet Muhammad and the first three Muslim generations, the so-called righteous ancestors (known in Arabic as al-Salaf al-Salih). As a consequence, Salafists are trying to establish a 'theocracy' according to their interpretation of the rules of sharia in which the liberal democratic order would no longer be valid.

"According to Salafism, Islam's universal claim to validity must be accepted, by force if necessary, by all of humanity due to its superiority and Allah's divine plan of salvation. Thus, the basic affirmation of violence is an inherent part of Salafist ideology."

The BfV report also offers demographic data about Salafists in Germany:

"Although Salafist propaganda activities are increasingly aimed at young people, Salafism in Germany is not purely a youth phenomenon. About 27% of followers are 25 years old or younger; 38% are between 26 and 35 years; and 35% are 36 years or older.

"The Salafist scene is clearly male-dominated. Only about 12% of the Salafist supporters known to the BfV are women. Salafism in Germany is dominated by immigrants and their children. About 90% of the followers have a migration background; the rest are converts. New followers find themselves in a scene marked by a 'siege mentality' [Wagenburgmentalität] towards a defamed 'disbelieving' environment that includes not only Christians, Jews and non-believers but also non-Salafist Muslims. Therefore, all outside influences are discouraged. Contacts with non-Salafists are legitimate only if they serve to spread their own ideology."

The report warns that returnees from jihadi warzones in the Middle East will have a radicalizing impact on the German Salafist scene:

"The Salafist scene represents the essential recruitment field for jihad. Almost without exception, all persons with a German connection who have joined the jihad were previously in contact with the Salafist scene....

"In almost all cases, the returnees return to known Salafist circles, into which they are accepted without delay. Since the environment is very often the same as before the departure, it is questionable whether the returnees really have freed themselves from Islamic State ideology. Furthermore, it can be assumed that at least parts of the IS ideology will increasingly find its way into German Salafist circles in the medium to long term as a result of these returnees.... In the medium term, the returnees could take on formal and informal key positions and, as role models, influence others and possibly radicalize them."

The BfV report makes a direct link between the increase in anti-Semitism in Germany and the rise of Islamist movements in the country:

"Anti-Semitism is not only a topic of agitation by right-wing and left-wing extremists, but also constitutes an essential element in the ideology of the entire Islamist spectrum....

"In Islamist propaganda, religious, territorial and/or national-political motives often combine to form an anti-Semitic worldview. The stereotypical image of Judaism as the enemy [Feindbild Judentum] therefore forms a central pillar in the propaganda of all Islamist groups. Stereotypes and prejudices are used which can be associated with the anti-Semitic hate in Europe from the Middle Ages to the National Socialist racial ideology in the 20th century.

"Of particular importance in Islamist anti-Semitism is the 'Jewish world conspiracy.' Similar to right-wing extremism, Jews are seen as the 'masterminds' of a worldwide political conspiracy and collectively held responsible for various national and international evils and grievances.

"The BfV has found that all Islamist organizations active in Germany harbor anti-Semitic ideas and disseminate them in various ways. These ideas represent a considerable challenge for peaceful and tolerant coexistence in Germany. The number of physical attacks against Jewish persons is currently still low. However, even these isolated cases make it clear that the ideological radicalization of people and the incitement to hatred and violence by anti-Semitic ideas can lead to violent anti-Semitic attacks, even if the perpetrators are neither members nor supporters of an Islamist organization. This applies not least to those who have been socialized in the Arab world in social milieus in which anti-Semitic attitudes are widespread. An example of this is a young man from Syria who attacked a kippah-wearing Israeli in Berlin in April 2018 on the street with a belt."

Hezbollah, Muslim Brotherhood and Hamas

In addition to the Salafists and Millî Görüş, BfV estimates that Germany is now home to 1,050 members of Hezbollah, 1,040 members of the Muslim Brotherhood and 320 members of Hamas.

"The Shiite-Islamist 'Hizb Allah' [the party of Allah] denies Israel's right to exist. It is propagating the armed, terrorist-led struggle, referred to as 'legitimate resistance,' against Israel as an 'unlawful occupier' of Palestinian land. It must be expected that the 'Hizb Allah' continues to plan terrorist actions against Israel or Israeli interests outside the Middle East. In Germany, the followers of the 'Hizb Allah' maintain organizational and ideological cohesion in local mosque associations, which are financed primarily through donations....

"The Muslim Brotherhood (MB) is considered the oldest and most influential Sunni Islamist movement. It claims to be represented in more than 70 countries in varying degrees. The aim of the MB, which is still shaped today in essential elements by the ideology of its founder Hasan al-Banna, is the establishment of a political and social system based on the Koran and Sunnah. The credo of the MB is unchanged: 'Allah is our goal. The Prophet is our leader. The Koran is our constitution. Jihad is our way. Death for Allah is our noblest wish.' This ideology, as well as the Islamist form of government aspired to by the MB, are incompatible with basic democratic principles such as the right to free elections, the right to equal treatment, and freedom of expression and religion....

"The goal of HAMAS is the establishment of an Islamist state in the entire territory of 'Palestine' — also through armed struggle. A strategy paper written in 2017 states: 'Resistance to occupation by all means is a legitimate right guaranteed by divine laws. At the heart of it lies the armed resistance.' By 'Palestine' HAMAS means the area between the Mediterranean Sea and Jordan, which also includes the territory of the State of Israel. Western countries such as Germany are seen by HAMAS as a haven where the organization focuses on collecting donations, recruiting new supporters, and propagating its propaganda."

Weapons Proliferation

The BfV noted a "high number" of attempts by "covert Pakistani procurement structures" illegally to obtain technology for use in Pakistan's nuclear weapons program. The BfV also observed a "significant increase" in attempts by Iran to obtain technology for its missile program, which was not part of the Iran nuclear deal. The BfV reported that Syrian intermediaries were also continuing efforts to obtain products for weapons of mass destruction, including chemical weapons.

  • 20 juillet 2019 à 13:00

It's Un-American To Be Anti-Free Speech: Protect The Right To Criticize The Government

Par Tyler Durden

Authored by John Whitehead via The Rutherford Institute,

"Since when have we Americans been expected to bow submissively to authority and speak with awe and reverence to those who represent us? The constitutional theory is that we the people are the sovereigns, the state and federal officials only our agents. We who have the final word can speak softly or angrily. We can seek to challenge and annoy, as we need not stay docile and quiet.” - Justice William O. Douglas

Unjust. Brutal. Criminal. Corrupt. Inept. Greedy. Power-hungry. Racist. Immoral. Murderous. Evil. Dishonest. Crooked. Excessive. Deceitful. Untrustworthy. Unreliable. Tyrannical.

These are all words that have at some time or other been used to describe the U.S. government.

These are all words that I have used at some time or other to describe the U.S. government. That I may feel morally compelled to call out the government for its wrongdoing does not make me any less of an American.

If I didn’t love this country, it would be easy to remain silent. However, it is because I love my country, because I believe fervently that if we lose freedom here, there will be no place to escape to, I will not remain silent.

Nor should you.

Nor should any other man, woman or child—no matter who they are, where they come from, what they look like, or what they believe.

This is the beauty of the dream-made-reality that is America. As Chelsea Manning recognized,We’re citizens, not subjects. We have the right to criticize government without fear.

Indeed, the First Amendment does more than give us a right to criticize our country: it makes it a civic duty. Certainly, if there is one freedom among the many spelled out in the Bill of Rights that is especially patriotic, it is the right to criticize the government.

The right to speak out against government wrongdoing is the quintessential freedom.

Unfortunately, those who run the government don’t take kindly to individuals who speak truth to power. In fact, the government has become increasingly intolerant of speech that challenges its power, reveals its corruption, exposes its lies, and encourages the citizenry to push back against the government’s many injustices.

This is nothing new, nor is it unique to any particular presidential administration.

President Trump, who delights in exercising his right to speak (and tweet) freely about anything and everything that raises his ire, has shown himself to be far less tolerant of those with whom he disagrees, especially when they exercise their right to criticize the government.

In his first few years in office, Trump has declared the media to be “the enemy of the people,” suggested that protesting should be illegal, and that NFL players who kneel in protest during the national anthem "shouldn’t be in the country." More recently, Trump lashed out at four Democratic members of Congress—all women of color— who have been particularly critical of his policies, suggesting that they “go back and help fix the totally broken and crime infested places from which they came.”

Fanning the flames of controversy, White House advisor Kellyanne Conway suggested that anyone who criticizes the country, disrespects the flag, and doesn’t support the Trump Administration’s policies should also leave the country.

The uproar over Trump’s “America—love it or leave it” remarks have largely focused on its racist overtones, but that misses the point: it’s un-American to be anti-free speech.

It’s unfortunate that Trump and his minions are so clueless about the Constitution. Then again, Trump is not alone in his presidential disregard for the rights of the citizenry, especially as it pertains to the right of the people to criticize those in power.

President Obama signed into law anti-protest legislation that makes it easier for the government to criminalize protest activities (10 years in prison for protesting anywhere in the vicinity of a Secret Service agent). The Obama Administration also waged a war on whistleblowers, which The Washington Postdescribed as “the most aggressive I’ve seen since the Nixon administration,” and “spied on reporters by monitoring their phone records.”

Part of the Patriot Act signed into law by President George W. Bush made it a crime for an American citizen to engage in peaceful, lawful activity on behalf of any group designated by the government as a terrorist organization. Under this provision, even filing an amicus brief on behalf of an organization the government has labeled as terrorist would constitute breaking the law.

President Franklin D. Roosevelt authorized the FBI to censor all news and control communications in and out of the country in the wake of the attack on Pearl Harbor. Roosevelt also signed into law the Smith Act, which made it a crime to advocate by way of speech for the overthrow of the U.S. government by force or violence.

President Woodrow Wilson signed into law the Espionage and Sedition Acts, which made it illegal to criticize the government’s war efforts.

President Abraham Lincoln seized telegraph lines, censored mail and newspaper dispatches, and shut down members of the press who criticized his administration.

In 1798, during the presidency of John Adams, Congress passed the Alien and Sedition Acts, which made it a crime to “write, print, utter or publish … any false, scandalous, and malicious” statements against the government, Congress or president of the United States.

Clearly, the government has been undermining our free speech rights for quite a while now, but Trump’s antagonism towards free speech is much more overt.

For example, at a recent White House Social Media Summit, Trump defined free speech as follows: “To me free speech is not when you see something good and then you purposely write bad. To me that’s very dangerous speech, and you become angry at it. But that’s not free speech.”

Except Trump is about as wrong as one can be on this issue.

Good, bad or ugly, it’s all free speech unless as defined by the government it falls into one of the following categories: obscenity, fighting words, defamation (including libel and slander), child pornography, perjury, blackmail, incitement to imminent lawless action, true threats, and solicitations to commit crimes.

This idea of “dangerous” speech, on the other hand, is peculiarly authoritarian in nature. What it amounts to is speech that the government fears could challenge its chokehold on power.

The kinds of speech the government considers dangerous enough to red flag and subject to censorship, surveillance, investigation, prosecution and outright elimination include: hate speech, bullying speech, intolerant speech, conspiratorial speech, treasonous speech, threatening speech, incendiary speech, inflammatory speech, radical speech, anti-government speech, right-wing speech, left-wing speech, extremist speech, politically incorrect speech, etc.

Conduct your own experiment into the government’s tolerance of speech that challenges its authority, and see for yourself.

Stand on a street corner—or in a courtroom, at a city council meeting or on a university campus—and recite some of the rhetoric used by the likes of Thomas Jefferson, Patrick Henry, John Adams and Thomas Paine without referencing them as the authors.

For that matter, just try reciting the Declaration of Independence, which rejects tyranny, establishes Americans as sovereign beings, recognizes God (not the government) as the Supreme power, portrays the government as evil, and provides a detailed laundry list of abuses that are as relevant today as they were 240-plus years ago.

My guess is that you won’t last long before you get thrown out, shut up, threatened with arrest or at the very least accused of being a radical, a troublemaker, a sovereign citizen, a conspiratorialist or an extremist.

Try suggesting, as Thomas Jefferson and Benjamin Franklin did, that Americans should not only take up arms but be prepared to shed blood in order to protect their liberties, and you might find yourself placed on a terrorist watch list and vulnerable to being rounded up by government agents.

“What country can preserve its liberties if their rulers are not warned from time to time that their people preserve the spirit of resistance. Let them take arms,” declared Jefferson. He also concluded that “the tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.” Observed Franklin: “Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!”

Better yet, try suggesting as Thomas Paine, Marquis De Lafayette, John Adams and Patrick Henry did that Americans should, if necessary, defend themselves against the government if it violates their rights, and you will be labeled a domestic extremist.

“It is the duty of the patriot to protect his country from its government,” insisted Paine. “When the government violates the people’s rights,” Lafayette warned, “insurrection is, for the people and for each portion of the people, the most sacred of the rights and the most indispensable of duties.” Adams cautioned, “A settled plan to deprive the people of all the benefits, blessings and ends of the contract, to subvert the fundamentals of the constitution, to deprive them of all share in making and executing laws, will justify a revolution.” And who could forget Patrick Henry with his ultimatum: “Give me liberty or give me death!”

Then again, perhaps you don’t need to test the limits of free speech for yourself.

One such test is playing out before our very eyes on the national stage led by none other than the American Police State’s self-appointed Censor-in-Chief, who seems to believe that only individuals who agree with the government are entitled to the protections of the First Amendment.

To the contrary, James Madison, the father of the Constitution, was very clear about the fact that the First Amendment was established to protect the minority against the majority.

I’ll take that one step further: the First Amendment was intended to protect the citizenry from the government’s tendency to censor, silence and control what people say and think.

Having lost our tolerance for free speech in its most provocative, irritating and offensive forms, the American people have become easy prey for a police state where only government speech is allowed. You see, the powers-that-be understand that if the government can control speech, it controls thought and, in turn, it can control the minds of the citizenry.

This is how freedom rises or falls.

As Hermann Goering, one of Hitler’s top military leaders, remarked during the Nuremberg trials:

It is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is to tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in any country.

It is working the same in this country, as well.

Americans of all stripes would do well to remember that those who question the motives of government provide a necessary counterpoint to those who would blindly follow where politicians choose to lead.

We don’t have to agree with every criticism of the government, but we must defend the rights of allindividuals to speak freely without fear of punishment or threat of banishment.

Never forget: what the architects of the police state want are submissive, compliant, cooperative, obedient, meek citizens who don’t talk back, don’t challenge government authority, don’t speak out against government misconduct, and don’t step out of line.

What the First Amendment protects—and a healthy constitutional republic requires—are citizens who routinely exercise their right to speak truth to power.

As I point out in my book Battlefield America: The War on the American People, tolerance for dissent is vital if we are to survive as a free nation.

While there are all kinds of labels being put on so-called “unacceptable” speech today, the real message being conveyed by those in power is that Americans don’t have a right to express themselves if what they are saying is unpopular, controversial or at odds with what the government determines to be acceptable.

By suppressing free speech, the government is contributing to a growing underclass of Americans who are being told that they can’t take part in American public life unless they “fit in.”

Mind you, it won’t be long before anyone who believes in holding the government accountable to respecting our rights and abiding by the rule of law is labeled an “extremist,” is relegated to an underclass that doesn’t fit in, must be watched all the time, and is rounded up when the government deems it necessary.

It doesn’t matter how much money you make, what politics you subscribe to, or what God you worship: we are all potential suspects, terrorists and lawbreakers in the eyes of the government.

In other words, if and when this nation falls to tyranny, we will all suffer the same fate: we will fall together.

The stamping boot of tyranny is but one crashing foot away.

  • 20 juillet 2019 à 06:00

Cops Bust Fake Ferrari And Lamborghini Factory In Brazil

Par Tyler Durden

O Globo, a Brazilian newspaper based in Rio de Janeiro, Brazil, reported on Tuesday that a small factory in the southern state of Santa Catarina was producing fake Ferraris and Lamborghinis for $45,000 to $60,000, a substantial discount versus the retail price of a genuine supercar.

The investigation behind the counterfeit vehicles started when representatives of Ferrari and Lamborghini began to notice pictures of the fake supercars circulating social media contacted the Civil Police of Santa Catarina. From there, police launched a raid on Monday of the factory where they discovered a father and son team, along with other employees, working on at least eight replicas at the time. The police used flatbed trucks and seized all vehicles inside the facility for evidence.

Police said there were only three models being produced at the time of the raid: Lamborghini Gallardo and Huracan, and a Ferrari 430 lookalike.

Fake parts, with some including fraudulent engravings of the original manufacturer, were also seized in operation.

Police aren't sure how many cars were manufactured at the unauthorized facility, nor do they know if other models were sold. Former employees are expected to testify where more clarity into the size of the operation could be determined.

The raid comes several weeks after Ferrari won a court case against a company offering to build replicas of the 250 GTO, an authentic version of the 1960s supercar has a price tag of $38 million to $48 million.

  • 20 juillet 2019 à 05:40

Escobar: Western Intellectuals Freak Over "Frankenstein" China

Par Tyler Durden

Authored by Pepe Escobar via The Asia Times,

China seen as a rich Communist monster buying support from poor and corrupt states worldwide...

Western economists and intellectuals obsessed with demonization of China are never shy of shortcuts glaringly exposing their ignorance.

The latest outburst posits that “we” – as in Western intellectuals – “are the modern version of Mary Shelley’s Frankenstein,” who electro-shocked a dead body (China) into a resurrected “murderous monster.”

So, welcome to the Sino-Frankenstein school of international relations. What next? A black and white remake with Xi Jinping playing the monster? Anyway, “we” – as in mankind’s best hope – should “avoid carrying on in the role of Frankenstein.”

The author is an economics professor emeritus at Harvard. He cannot even identify who’s to blame for Frankenstein – the West or the Chinese. That says much about Harvard’s academic standards.

Now, compare this with what was being discussed at a trade war symposium at Renmin University in Beijing this past Saturday.

Chinese intellectuals were trying to frame the current geopolitical dislocation provoked by the Trump administration’s trade war – without naming it for what it is: a Frankenstein gambit.

Li Xiangyang, director of the National Institute of International Strategy, a think tank linked to the Chinese Academy of Social Sciences, stressed that an “economic decoupling” of the US from China is “completely possible,” considering that “the ultimate [US] target is to contain China’s rise... This is a life-or-death game” for the United States.

Decoupling

Assuming the decoupling would take place, that could be easily perceived as “strategic blackmail” imposed by the Trump administration. Yet what the Trump administration wants is not exactly what the US establishment wants – as shown by an open letter to Trump signed by scores of academics, foreign policy experts and business leaders who are worried that “decoupling” China from the global economy – as if Washington could actually pull off such an impossibility – would generate massive blowback.

What may actually happen in terms of a US-China “decoupling” is what Beijing is already, actively working on: extending trade partnerships with the EU and across the Global South.

And that will lead, according to Li, to the Chinese leadership offering deeper and wider market access to its partners. This will soon be the case with the EU, as discussed in Brussels in the spring.

Sun Jie, a researcher at the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, said that deepening partnerships with the Association of Southeast Asian Nations (Asean) will be essential in case a decoupling is in the cards.

For his part Liu Qing, an economics professor at Renmin University, stressed the need for top international relations management, dealing with everyone from Europe to the Global South, to prevent their companies from replacing Chinese companies in selected global supply chains.

And Wang Xiaosong, an economics professor at Renmin University, emphasized that a concerted Chinese strategic approach in dealing with Washington is absolutely paramount.

All about Belt and Road

A few optimists among Western intellectuals would rather characterize what is going on as a vibrant debate between proponents of “restraint” and “offshore balancing” and proponents of “liberal hegemony”. In fact, it’s actually a firefight.

Among the Western intellectuals singled out by the puzzled Frankenstein guy, it is virtually impossible to find another voice of reason to match Martin Jacques, now a senior fellow at Cambridge University. When China Rules the World, his hefty tome published 10 years ago, still leaps out of an editorial wasteland of almost uniformly dull publications by so-called Western “experts” on China.

Jacques has understood that now it’s all about the New Silk Roads, or Belt and Road Initiative:

“BRI has the potential to offer another kind of world, another set of values, another set of imperatives, another way of organizing, another set of institutions, another set of relationships.”

Belt and Road, adds Jacques, “offers an alternative to the existing international order. The present international order was designed by and still essentially privileges the rich world, which represents only 15% of the world’s population. BRI, on the other hand, is addressing at least two-thirds of the world’s population. This is extraordinarily important for this moment in history.”

In fact, we are already entering a Belt and Road 2.0 scenario – defined by Minister of Foreign Affairs Wang Yi as a “high-quality” shift from “big freehand” to “fine brushwork.”

At the Belt and Road Forum this past spring in Beijing, 131 nations were represented, engaged in linked projects. Belt and Road is partnering with 29 international organizations from the World Bank to APEC, the Asia Pacific Economic Cooperation.

Apart from the fact that Belt and Road is now configured as a vast, unique, Eurasia-wide infrastructure and trade development project extending all the way to Africa and Latin America, Beijing is now emphasizing that it’s also a portmanteau brand encompassing bilateral trade relations, South-South cooperation and UN-endorsed sustainable development goals.

China’s trade with Belt and Road-linked nations reached $617.5 billion in the first half of 2019 – up 9.7% year-on-year and outpacing the growth rate of China’s total trade.

Chinese scholar Wang Jisi was right from the start when he singled out Belt and Road as a “strategic necessity” to counter Barack Obama’s now-defunct “pivot to Asia”.

So now it’s time for Western intellectuals to engage in a freak-out: as it stands, Belt and Road is the new Frankenstein.

  • 20 juillet 2019 à 05:20

These Two Charts Reveal The Extraordinary Collapse In Australian Homeownership 

Par Tyler Durden

A housing affordability crisis has been gaining momentum in Australia over the last several decades as the number of people outright owning a home has collapsed by a third as home prices soared 400%.

The Age, a daily newspaper in Melbourne and Victoria, Australia, reports that in the mid-1990s, nearly 44% of people living in New South Wales (NWS), a southeastern Australian state, outright owned their home, but according to new data published by the Australian Bureau of Statistics, this rate has now plummeted to just 29.7%.

So what happened over the last twenty years? Why have Australians resorted to hefty mortgages instead of buying homes in cash?

Well, the swing from outright ownership to financing has primarily been due to a 460% jump in the median house price in Sydney, approaching levels that are considered out of reach for many.

The Age reveals a similar crisis in Victoria, wherein the mid-1990s, more than 45% outright owned a home, but now that number has declined to just 31%.

Over the same period, the median house price in Melbourne has skyrocketed from $126,131 to $806,000, forcing homebuyers in the last decade to resort to mortgages more than ever.

The Northern Territory has the smallest population of people who own their home mortgage-free, at just 17%. Among the states, just 27% of residents in Queensland and Western Australia live without a mortgage or rental payments.

Despite a housing bubble that has shown cracks, the median outstanding mortgage in Western Australia is $315,000. The median mortgage in Victoria is $260,000 while it is $265,000 in NSW.

The single largest age group of new mortgages were those aged between 55 and 64, suggesting as the housing market falters - older adults will experience the most financial pain.

"There are more and more people who are getting into retirement with a mortgage over their heads," said National Seniors chief advocate Ian Henschke.

"The number of people on Newstart aged between 55 and 64 is increasing sharply. These are people having to access their super to try and get on top of their mortgage because they don't want to retire with such large debts."

The affordability crisis has crushed low-income households. In the mid-1990s, the poorest of NSW resident spent 21% of their weekly income on housing; now they spend more than a third.

The low-income segment in Victoria is paying 25% of their income on rents or mortgages.

NAB senior economist Kieran Davies, in a recent note, warned that the newly created mortgage debt over the last several decades is mostly carried by older people.

"Gearing has increased sharply among older Australians, broadly reflecting the changing pattern of homeownership," he said.

Earlier this week, the Reserve Bank of Australia said interest rate cuts were going to have little effect in boosting house prices.

"A decline in interest rates was unlikely to encourage an unwelcome material pick-up in borrowing by households that would add to medium-term risks in the economy," it said.

With Australians saddled up with the most debt ever - many are soon going to discover that an era of cheap money will be the financial death of them as the housing market implodes.

  • 20 juillet 2019 à 05:00

Move Over, Millennials: GEN X Is The Generation In The Most Financial Trouble

Par Tyler Durden

Authored by Daisy Luther via The Organic Prepper blog,

Everyone picks on Millennials these days but a new study by Lending Tree shows that out of all the generations, Gen X is the one dealing with the deepest financial problems.

First, some definitions.

  • Gen Z or Centennials: Born 1996 – current day

  • Millennials: Born 1977 – 1995.

  • Gen X: Born 1965 – 1976.

  • Baby Boomers: Born 1946 – 1964.

  • The Silent Generation: Born 1945 or before

We all know that two major financial mistakes are getting into debt and failing to have an emergency fund. A recent study looked into the debt levels of each generation.

The study

Lending Tree, an online lending marketplace, did a study on the 3-year changes in each generation’s debt.

As each generation moves into different stages of their personal and economic lives, the amounts and types of debt they carry shifts, too. We compared the debts of members of the four adult generations — millennials, Gen Xers, baby boomers and silents — between March 2016 and March 2019 to see what’s changed.

Specifically, we calculated the changes in the average balance of each major debt category — personal loans, credit cards, auto loans, student loans and mortgages — and the change in the percentage of each generation that carries each type of debt. (source)

Here were the key findings:

  • Millennials saw the greatest spike in overall debt. Their total balances rose by an average of $16,714 — almost 29% — between 2016 and 2019.

  • Gen Xers now have the highest average debt burden of any generation. They increased their average debt burdens by about 10%, or $11,898, between 2016 and 2019, thanks to steady dollar increases across all debt categories.

  • Older generations — boomers and silents — are winding down their debt, thanks to decreases in average mortgage balances. However, they’ve increased their average debt across all other categories.

  • Boomers decreased their debt burdens by 7%, or $10,424. Members of the silent generation dropped their overall debt by $9,486, or 8%. (source)

But what about Gen X? Why are they in so much trouble?

Gen X has financial problems in many ways.

Marketwatch did an analysis on that the ways that Gen X is financially wrecked and it’s not pretty. This is my generation so I was especially interested in their analysis.

They’ve got the most credit card debt of anyone - yet still spend more than anyone on non-essentials...

Despite their sky high credit card debt, Gen X spends big on non-essentials, according to data released in 2018 from finance site Bankrate.com. Indeed, “Gen Xers (ages 38-53) spend $3,473 annually on restaurant food, prepared beverages and lottery tickets, the most of any generation,” the report reveals.

They’re woefully under-saved for retirement... Median retirement savings for Gen X is only $35,000, the same median amount as millennials, despite Gen Xers being much closer to retirement,” according to a study of 3,000 Americans by Allianz Life. Having just $35,000 in retirement savings — especially when you’re a Gen Xer ages 37- 51 — is not even close to enough. Fidelity recommends that by age 40 you have three times your salary saved for retirement. Gen Xers may be so under-saved thanks to the competing financial demands of children… and caring for aging parents.

Their average debt now tops $150,000. Not only is their credit card debt high, the total amount of debt they have is. Those in the 35-44 age group have “the highest debt levels of any age bracket,” SmartAsset notes, citing Federal Reserve data. 

They’re more likely than other generations to say they can’t meet their financial goals. All of this debt and the lack of savings may explain why fewer than 1 in 3 members of Gen X says they think they can reach their long-term financial goals, according to a survey released in 2017 by FICO.  (source)

That’s not a pretty picture for people between the ages of 37 and 51.

Some of the reasons for this financial mess

Reading over the data, the thing that jumps out at me is that people of my generation are at the point where they’re taking care of everyone. Some still have kids at home, while others have adult kids who have returned home.  We are often lending a helping hand to our adult children who are in college or trying to get their feet on the ground. Some of this generation are taking care of aging parents.

It’s pretty tough to save for retirement when you have all these people depending on you.

Regarding the credit card debt, that one is kind of a mystery to me. While I have used credit cards to fund medical care I couldn’t fully pay for with my emergency fund, I rarely use them otherwise. It seems to me that it is essential to get this high-interest debt under control immediately. (If this is a problem for you, check out this article about paying down debt fast.

Spending on non-essentials seems to be a problem too. A lot of folks think that being on a budget means you can never have any fun, you can’t travel, you can’t go out to eat. So instead of creating a budget, they throw caution to the wind, spend while they have money, and complain when they don’t. I’d never say that you cannot travel, dine out, or do fun things. I do all of these and on a fairly tight budget. But I work it into my budget, I fund it with cash, and this comes after savings and all my other bills.

The biggest concern I see is that the money we Gen X-ers are paying into social security right now is going to fund the retirements of the Baby Boomers. The social security system is at a near-breaking point right now and most folks believe it may not even be there by the time we get to retirement age, much less for millennials. All that money that has been taking from our paychecks our entire working life…and none left when we need it. And if you think times are tight now, just wait until you’re too old to work and there’s no social security.

  • 20 juillet 2019 à 04:40

China's Top Carmaker Guides For First Annual Sales Drop In 14 Years

Par Tyler Durden

SAIC Motor – China’s top carmaker and General Motors' biggest Chinese partner - expects sales to fall annually for the first time in at least 14 years, according to Bloomberg.

The company is based in Shanghai and projects that for 2019, sales will be down about 7%. The company's new target of 6.54 million sales is about 8% below the company's public forecast for a slight increase in sales and would be the company's first full year drop on record.

SAIC also has a venture with VW, where sales are expected to fall by about 3% to 2 million units. Deliveries at SAIC General Motors are projected to fall by about 8% to 1.2 million vehicles. These numbers would be the first full year drop for the VW venture and the second straight decline for the GM partnership.

A representative for SAIC said that the company plans to "sustain its marketshare", even if the overall market slides this year.



SAIC reported a 17% drop in first half sales and said it saw declines across its various ventures. The company has offered buyers incentives of as much is 50% over the past few months to help clear out inventory. We reported on this fire sale earlier this month. 

We noted that passenger car vehicles in China finally showed their first tepid signs of recovery after a historic and record-breaking plunge in the country over the last two years, according to data from the China Passenger Car Association. 

China was able to - at least temporarily – shake itself from its rut as a result of offering significant discounts to clear inventory before new emissions rules took place on July 1.



Retail sales of passenger vehicles were up 4.9% to 1.8 million units in June from the year prior. This is the first increase since May 2018 for China, according to the CPCA data.

  • 20 juillet 2019 à 04:20
À partir d’avant-hierZero Hedge

Facebook's Fake 'Crypto' Is "A Fiat-Money Clone"

Par Tyler Durden

Authored by Thorsten Polleit via The Mises Institute,

Starting in 2020, Facebook wants to offer its customers a global high-tech currency and infrastructure. The US IT giant says that this will provide many people around the world with easy and cost-effective access to the monetary and financial system. The new blockchain-based money is called "Libra." Technically, it is something akin to a crypto-money-banknote covered by a basket of official fiat currencies (such as US dollars, euros, and the like). The heart of the Libra project is the "Libra Association" (LA). The non-governmental association, based in Geneva, Switzerland, is supported by founding members such as eBay, Facebook, Mastercard, PayPal, Spotify, Uber, Visa, as well as other renowned firms, and will be responsible for the operation and further development of Libra.

Libra will be created by participants depositing fiat currencies such as US dollars or euros with the LA, and the LA will then grant the depositors a corresponding Libra amount in a digital wallet, which can be used for payments via the Internet, smartphone, credit card or WhatsApp and messengers, i.e., Facebook’s chat services. The chances of success seem to be pretty good for the Libra: Electronic payment is a world-wide mega-trend. People seem to have become increasingly open to new technological ways of making payments. And if money can be sent to and fro via social media, many potential customers will presumably like it very much.

Traditional banks have good reasons to worry. The Libra is about to siphon transactions out of bank accounts and put them into the LA’s hands. Not banks, but the LA will collect the fees and will receive precious data on who pays what, when, and where. The banks will be left even more in the cold should customers begin to use the Libra for savings purposes as well. Because then they would also lose the time and savings deposits with which they refinance their balance sheets at low costs. Or think of the credit business: The LA may at some point also provide its customers with short-term consumer loans.

In any case, from a customers’ perspective it is a good thing if and when the competitive pressure in the banking business gains momentum; as is well known, competition stimulates the search for better products and lower prices, which benefits the customers. The now heightened competition from the fin-tech industry is undoubtedly quite a challenge for many banks. Not least because for decades state regulation has kept unwelcome outside competition from their backs, thereby, however, weakening their innovative strength. But our sympathies have to be first and foremost with the people demanding banking and financial services, not with the banks delivering them.

The critical question, however, is this: Is the Libra really good — or sound — money? Unfortunately, this question cannot be answered in the affirmative. The reason is this: The quality of the Libra depends on the quality of the underlying fiat currencies — and fiat currencies do not make for good money, as should be well known by now. Fiat currencies are inflationary; they enrich some at the expense of many others. The issuance of fiat currencies causes distortions in the credit markets, which provokes speculative bubbles and triggers booms and busts, and last but not least, fiat currencies lead the economies into over-indebtedness.

Against this backdrop, it becomes evident that the Libra will suffer from all the economic and ethical deficiencies that come with its underlying fiat currencies. For instance, the Libra will be inflationary money to the extent that the US dollar, the euro, and all the other underlying fiat currencies are subject to inflationary measures by central banks, resulting in the Libra losing its purchasing power in step with the fiat currencies. In extreme cases, if the official currencies were to go under, the Libra would follow suit. The Libra is, therefore, not a real alternative to official fiat currencies, but rather a more straightforward and more cost-efficient way to use them.

The LA is supposed to keep the fiat monies paid-in by customers as a "reserve." This should make sure that the Libra can, at any given point in time, be exchanged back into national fiat currencies at its equivalent value. To this end, the LA wants to hold the reserve in fiat currencies-denominated bank deposits as well as in high-quality interest-bearing securities. To the extent that the LA decides to keep debt securities, the result would be a kind of "fractional reserve." In this case the Libra would even carry a payment default risk — which would strike if and when the LA could not, due to market stress, for example, exchange its bond holdings into fiat currencies at face value.

With the investment of the reserve, the LA hopes to earn interest income. But this is likely to be difficult. After all, central banks have slashed interest rates to extremely low levels, and there is no sign of a move away from this kind of monetary policy. Should monetary authorities impose negative interest rates on bank deposits, this would affect Libra holders directly: Because if the LA is forced to pay for its bank deposits, the owners of the Libra will have to pay the bill. So anyone who thinks that the Libra might offer an escape from the bad fiat currencies is mistaken. The Libra is a fiat money clone; just like fiat currencies the Libra is fake money.

Unfortunately, the Libra project does not appear to be driven by the desire to provide the people in this world with better money. The fact that the Libra will be run on a private ("permissioned") blockchain does not change anything. The Libra is just the upshot of an entrepreneurial attempt to profit from the global market for payment services (and later perhaps also from the credit markets), and, of course, to collect as much precious transaction data as possible. If Facebook and the others wanted to offer the world a better, actual good money, the choice is obvious: It would be a 100 percent gold-backed Libra. But who knows: Maybe this will be the next step, initiated by Facebook, Amazon, or any other company because there sure is a vast market for sound money out there.

  • 19 juillet 2019 à 18:45

Iran Releases "Video Proof" Contradicting Trump Claim US Shot Down Drone

Par Tyler Durden

Earlier in the day top Iranian officials claimed the US Navy may have shot down its own US drone "by mistake" - contradicting the White House account that it had been "immediately destroyed" when it came within 1,000 yards of the ship according to President Trump during Thursday's press briefing announcing the Iranian drone downing. Iran's military says all of its drones are accounted for and that it had successfully tracked and monitored the USS Boxer via its overhead unmanned aerial system (UAS) without incident.

Hours following the bizarre contradiction over basic facts, Iran aired video "proof" that its version of events are correct on state TV. Iran's Press TV published the following video:

🔴 DO NOT MISS 🔴#IRGC releases video showing its #drone -the #US alleges to have downed-safely returning to its base after monitoring #USSBoxer before and after the vessel sailed through the Strait of #Hormuz.

PARTS 1-2-3#Iran #IranianDrone #StraitOfHormuz #PerisanGulf pic.twitter.com/5by5nqoK3g

— Press TV (@PressTV) July 19, 2019

Islamic Revolutionary Guard Corps (IRGC) issued a statement calling Trump's account of an Iranian drone downing "sheer lies" and says the newly released drone footage proves the US version of events can't possibly be true. 

An Iranian military spokesman said its reconnaissance drone "returned to base safely after mission" and the drone observation video of the USS Boxer proves this. 

🔴 DO NOT MISS 🔴#IRGC releases video showing its #drone -the #US alleges to have downed-safely returning to its base after monitoring #USSBoxer before and after the vessel sailed through the Strait of #Hormuz.

PART 3#Iran #IranianDrone #StraitOfHormuz #PerisanGulf pic.twitter.com/FBJlhHTsQC

— Press TV (@PressTV) July 19, 2019

US military officials who previously spoke to CNN said the Iranian drone had been brought down through electronic jamming measures. If true there's a strong likelihood the drone may have been recovered by US forces, which can be presented as verifying the White House account. 

The video was released after Iran's Deputy Foreign Minister Abbas Araghchi said on Twitter early Friday:

"We have not lost any drone in the Strait of Hormuz nor anywhere else. I am worried that USS Boxer has shot down their own UAS (Unmanned Aerial System) by mistake!" 

Iran's drone footage was aired with the time stamp and date evident, and state media released the following English language statement:

Iran’s Islamic Revolutionary Guards Corps (IRGC) has released footage captured by an Iranian drone flying over the Strait of Hormuz and monitoring a United States Navy vessel, belying a claim by Washington that the unmanned aircraft was shot down by the American forces.

The Iranians are claiming that the time stamp reveals the drone was still in flight after the time President Trump says it was downed by the USS Boxer.

Iran’s Press TV airs surveillance video it says is from the IRGC drone that Trump claimed U.S. shot down. Press TV says the drone captured footage of the USS Boxer and timecode shows drone was still operating and surveilling the vessel after the time Trump says it was shot down pic.twitter.com/AWmChJq54J

— Golnar Motevalli (@golnarM) July 19, 2019

developing...

  • 19 juillet 2019 à 18:27

CEO Of World's Largest Asset Manager: "The ECB Will Buy Stocks"

Par Tyler Durden

Three weeks ago, when previewing the restart of the ECB's monetary easing in the form of even more negative rates and further QE - which just like the Fed's rate cut and subsequent ZIRP, NIRP and QE is now inevitable - Goldman laid out three potential "bundles" which Mario Draghi could unveil as one of his last pre-retirement acts, depending on just how severe the ECB perceives Europe's economic slowdown. There were as follows:

  • First, a “small” program which includes a 10bp deposit rate cut and corporate purchases (scaled to EUR 5bn per month for six months).
  • Second, Goldman constructs a “medium” package which includes a 20bp rate cut with tiering, somewhat stronger forward guidance, corporate purchases (EUR 5bn per month for nine months) and limited sovereign purchases (EUR 25bn per month for nine months).
  • Third, the bank considers a “large” package that contains more aggressive sovereign purchases (scaled to EUR 75bn per month for twelve months) via an increase in the issuer limit, in addition to the other elements in the medium package.

In retrospect, it appears at least one major asset class was missing.

Stocks.

To be sure, it's hardly a novel idea: back in 2016, Reuters first floated an ECB trial balloon that the central bank "may soon be forced to follow the Bank of Japan’s example and buy equities as part of any expanded stimulus programme," even as it faces significant hurdles in helping all 19 euro zone members equally without distorting a key market for investors.

Citing analysts, Reuters noted that Draghi, and soon Lagarde, will have to pursue alternative options to loosen policy further to lift growth and inflation across the bloc: "Analysts say these could include large-scale share buying, a policy that the BOJ has already adopted after it started purchasing equity exchange traded funds (ETFs) for its own quantitative easing scheme six years ago."

Now, none other than the head of the world's largest asset manager, BlackRock CEO Larry Fink, has chimed in on this, and in his view the Japanification of Europe is almost complete, and that the ECB - as so many have speculated - will have no choice but to buy stocks to stimulate Europe's slowing economy.

Fink, who back in April correctly predicted a broad market "melt up" - which was driven entirely by the Fed's pathetic capitulation to Trump and its suggestion that it would cut several times in the coming year - appeared on CNBC this morning to make the case that the next European QE would also include stocks.

"55% of all European debt has a negative yield. I'm going to stick my foot out again: if the ECB is really going to try to restimulate the economy in Europe, they're going to have to buy equities just like the Bank of Japan has done", Fink told CNBC.

At least Fink whose business is all about higher stock prices, admits - unlike Dragh, - that this would be game over for capital markets: "Most monetarists would say that's terrible." And they woudl be right. However, at this point it is too late to change the outcome: "I believe that negative returns harm the economy" Fink concluded, and every European bank agrees with him.

The ECB will need to buy stocks in order to stimulate Europe's economy, says $BLK CEO Larry Fink pic.twitter.com/uB2DUhUEbS

— Squawk Box (@SquawkCNBC) July 19, 2019

Which begs the question - when will there finally be a rebellion to the catastrophic, destructive and idiotic policies of central bankers that we have been raging against for the past decade?

The answer - never, because what is coming next is MMT, and wholesale money printing for the entire world, as the status quo makes a last ditch attempt to hyper-reflate and extend and pretend for at least a few more years before the entire financial system, and western way of life, comes crashing down.

  • 19 juillet 2019 à 18:09

The "Scared & Desperate" Fed Is Playing The Most Dangerous Game

Par Tyler Durden

Authored by Sven Henrich via NorthmanTrader.com,

How can I not talk about the Fed? How can I not talk about the daily jawboning? It is all around us. Every. Single. Day.

And it keeps working.

I feel like I’m being reduced to a loon conspiracy theorist documenting the very reality of it.  But I’m not. From my perch I’m doing a public service doing it, because the background motivation for why it is being done reveals a deeper and disturbing truth: They are scared, they are worried and they are desperate to keep the balls in the air.

In my view it’s disingenuous to not acknowledge the real impact central banks have on markets and assess the risk implications.

Yesterday the Fed went full circus. It was stunning to watch and I suspect they made a couple of mistakes by revealing things they shouldn’t have.

Not a surprise Bullard wants to see cuts, but it was Clarida and Williams who dropped the bombs. Wait for bad data? Nah, just cut preemptively. A full abandonment of the ‘data dependency’ charade. To ‘influence markets’. Stated straight up for all to see. They are no longer even pretending.

And a stunning admission from Williams: “When you only have so much stimulus at your disposal, it pays to act quickly to lower rates at the first sign of economic distress.”

It pays to act when you have limited ammunition. A clear acknowledgement of what I’ve been outlining: The Fed, by not being being able to normalize in this cycle, is scrapping at the bottom.

So they want to intervene before things turn bad and hope this will prevent a recession. How? By blowing the asset bubble even higher.

And it worked again yesterday. Stocks flew higher, especially in after hours.

But then the New York Fed came and sheepishly claimed Williams didn’t really mean it, he was just speaking theoretically wink, wink, don’t you know.

Oh please. Nobody believes you. While futures dipped momentarily on the clarification the monkeys came back and bid stocks back up in classic magic risk free Friday fashion.

My take here for what it’s worth? This week economic data actually showed strength in the economy which is paradoxically what the Fed didn’t want to see as it weakened the argument for rate cuts in July. Stocks took the cue and sold off and the 3,000 level was gone, wedge patterns were breaking and we were at the cusp of a failed breakout after tagging the major trend lines.

So if the data kills your rate cut argument what do you do? You declare the data irrelevant and ramp up expectations for a rate cut anyways and jam stocks higher again and save pattern breaks.

Yes it is this banal, but this is precisely what happened and we can see it in the charts.

And there it is:

On Wednesday odds for a 50bp rate cut had dropped to 34%, by the time Clarida, Bullard, and Williams were done these odds had skyrocketed to 71%.

Come on. None of this is an accident.

JP Morgan now expects 12 central banks to cut rates in the next 2 months. The global easing cycle has begun. With negative rates still in place.

What’s all this really tell us? A recession is coming, they know it and they are desperate to prevent it. It also says zero rates are coming back and I suspect, in due time, negative rates. Which means markets will eventually drop despite the current efforts to jam things higher.

But a Fed desperate to jawbone markets higher, to “influence markets” is playing the most dangerous game.

A Fed admitting they have limited ammunition and are openly abandoning their data dependency mantra to stop the business cycle is an open admission of weakness. And a weak Fed may commit the worst sin a Fed can commit: Lose confidence of the market. And once that happens all things are possible:

A chart that complements perhaps the most obvious reality not readily acknowledged:

#WAG:
Without the Fed flip flop in 2019 we'd be at least 15% lower
Without buybacks we'd be at least another 5% lower
Without both sentiment would be on the floor & we'd be in a recession already.
Cumulative effect: $SPX 2,000-2,200.

— Sven Henrich (@NorthmanTrader) July 18, 2019

The Fed has now further raised expectations. Again. Only a 50b rate cut will do, or they risk disappointing markets. They know this hence the New York Fed intervened on its own communication last night claiming Williams only spoke theoretically and academically, hence Bullard came out this morning and mentioned he’s only advocating a 25bp rate cut. Not only jawboning every day, but now re-gaming their own communications daily as well. Where does this farce end?

Who, but dilettantes, put themselves in this policy position? This lot does.

Like it or not markets have turned into a circus and by participating in these markets you have a front row seat.

The Fed has already made itself the daily punching ball of the President and have signaled themselves to be beholden to markets with no backbone.

Make no mistake, we’re watching history unfold:

Folks, we're witnessing the final grand collapse of whatever credibility the Fed had left.
It's truly pathetic.

— Sven Henrich (@NorthmanTrader) July 18, 2019

The Fed, so far continues to succeed to interfere at the sight of any dip and markets react to every single dovish communication. Over and over. But by feeling the need to communicate daily and incessantly and now forced to game their own communications the Fed is playing the most dangerous game: Risking losing the confidence of markets. And once it’s lost it may not be easily regained.

To quote Yogi Berra: If you come to a fork in the road, take it. Investors have a choice to make.

*  *  *

For the latest public analysis please visit NorthmanTrader. To subscribe to our market products please visit Services.

  • 19 juillet 2019 à 17:49

US May Have Shot Down Its Own Drone, Iran Claims

Par Tyler Durden

Iran has issued a surprising contradiction to the official US account of Thursday's drone downing. President Trump had announced that the amphibious assault ship, the USS Boxer, shot down an Iranian drone in the Strait of Hormuz in a defensive action. The president said in a press briefing it was "immediately destroyed," when it came within 1,000 yards of the ship according to the president, "threatening the safety of the ship and the ship's crew." 

But Iran denied losing any of its drones following the perplexing statement from Iranian Foreign Minister Javad Zarif yesterday evening saying he was not be aware of any drone downing following Trump's announcement, according to Reuters.We have no information about losing a drone today,” Zarif had told reporters at the United Nations. Instead, Iranian officals are now suggesting the US Navy actually shot down its own drone by mistake. Iran's Deputy Foreign Minister Abbas Araghchi said on Twitter early Friday:

"We have not lost any drone in the Strait of Hormuz nor anywhere else. I am worried that USS Boxer has shot down their own UAS (Unmanned Aerial System) by mistake!" 

And Iran military spokesman, Gen. Abolfazl Shekari, was also quoted by the semi-official Tasnim news agency as saying that "all Iranian drones that are in the Persian Gulf and the Strait of Hormuz, including the one which the U.S. president mentioned, after carrying out scheduled identification and control missions, have returned to their bases."

We have not lost any drone in the Strait of Hormuz nor anywhere else. I am worried that USS Boxer has shot down their own UAS by mistake!

— Seyed Abbas Araghchi (@araghchi) July 19, 2019

According to President Trump's account of the incident, the Iranian operators of the drone refused calls to stand down, after which it was "immediately destroyed," when it came within 1,000 yards of the ship, "threatening the safety of the ship and the ship's crew." 

Trump has called on "other nations to protect their ships as they go through the Strait," also as a State Department official told Bloomberg that the elite Islamic Revolutionary Guard Corps which patrols the area has kept up “continued harassment” of vessels in and around the strait.

I want to apprise everyone of an incident in the Strait of Hormuz today, involving #USSBoxer, a U.S. Navy amphibious assault ship. The BOXER took defensive action against an Iranian drone.... pic.twitter.com/Zql6nAUGxF

— Donald J. Trump (@realDonaldTrump) July 18, 2019

Concerning the now deeply conflicting narratives over the downed drone — which Tehran is now saying was actually American, but which Washington says was clearly Iranian— the evidence is out there somewhere in the Persian Gulf, and assuming it's recovered and presented to the world, could prove hugely embarrassing to one side or the other, most especially the White House if its claims are wrong.

  • 19 juillet 2019 à 17:30

"Where There's Smoke, There's Fire" - Trader Blasts NYFed Williams' "Miscommunication" Miasma

Par Tyler Durden

NY Fed President John Williams screwed up... or did he? Since he "academically" strawman'd a 50bps rate cut - which the market instantly soaked up, priced-in, and looked for moar - a Fed spokesman (and The Fed's Jim Bullard) have since desperately walked-back the comments back towards a preference for a 25bps cut.

This has erased the spike in 50bps rate-cut odds (from 35% to 71% and back down to 35%) and retraced the dollar dump that Williams created...

However, as former fund manager and FX trader Richard Breslow, there are important rules governing any sort of effective communication strategy, made all the more important when financial markets are on tenterhooks. One of them is that it’s the responsibility of the speaker to make sure their message was successfully delivered. It’s not on the listener to figure out what, in hindsight, they were meant to hear. Forget that and you are asking for trouble.

Via Bloomberg,

This was one of the first lessons drilled into the heads of people new to a trading floor. And for good reason. Because when it wasn’t observed, things inevitably didn’t end well. And make no mistake, Thursday’s “miscommunication” was perfectly analogous. This wasn’t a case of algorithms gone wild. A lot of very smart people know what they heard. Despite the walk-back, I suspect there remains a number of people who will cling to the notion that where there is smoke, there is fire. Now it remains to be seen what the price tag will be.

It isn’t insignificant that trading volumes were quite high in the Asia session. A lot of interest-rate products changed hands. The early hours of the session saw Treasury volumes running three times normal. It wasn’t just U.S. securities trying to price and reprice themselves. Euribor futures traded at the same time at five times average volumes.

Heading into the weekly close, it’s worth taking a look at various assets to see if there is any lasting technical damage. Although, trading may be sloppy Friday, so I wouldn’t sharpen any pencils too finely. What may complicate matters further is that traders will need to decide whether to reestablish positions that were stopped out. And whether to stick with or head for the hills on new ones. It may not end up being as quiet a day as one would normally expect.

Foreign exchange should have the least difficulty righting itself. The Dollar Index held where it had to. And the euro has so far failed miserably in attempting a topside run. After all, the ECB is unlikely to let the possibility of a more dovish than expected FOMC go to waste. DXY will look very different outside of a 96.80 to 97.15 range. Both doable, and it probably won’t require giving it more room than that to get the lay of the land.

Equities have proven once again the perils of investors trying to stay short. But nothing has really changed for them. S&P 500 would need to get back above this week’s highs or back below Wednesday’s low to really change anyone’s opinion. Although that is probably giving it too much room. At least on the downside.

Emerging-market currencies are more straightforward. And relevant because Thursday’s action put them back into vogue. The MSCI Emerging Market Index has so far topped out almost exactly where it did four times earlier this year. That’s the level to watch. Back below the week’s lows and they too will look different. But, in truth, they don’t look as interesting as they sound.

Ten-year Treasuries have stayed safely within no-man’s land. And none of the very widely agreed upon levels have been tested. The two-year pivot at 1.80% isn’t too far away.

Twos are messy and require a fundamental view to go along with any trades

With gold, traders keep giving up location and paying the price for it. There are lots of bids below and plenty of supply above. Fading extremes is the only way to give yourself a chance of sticking with a position.

As far as Fed funds futures are concerned, I’m not ready to touch them with a 10-foot pole.

  • 19 juillet 2019 à 17:10

Guy Behind 'Storm Area 51' Page Worried About Visit From FBI

Par Tyler Durden

A plan to 'Storm Area 51' in search of aliens on September 20th started out on Facebook as "kind of a joke" which spiraled out of control, according to the guy who created the event.

"I posted it on like June 27th and it was kind of a joke," Matty Roberts told Nevada's KLAS-TV. "And then it waited for like three days and like 40 people, and then it just completely took off, out of nowhere. It’s pretty wild."

Now, over 1.7 million people have signed up for the Facebook event, with another 1.3 million people having expressed interest in the event.

Roberts, who had initially communicated with NPR anonymously via Facebook messenger, says he was worried that the FBI would show up at his house.

Roberts says he came up with the idea after Joe Rogan interviewed Area 51 whistleblower Bob Lazar and filmmaker Jeremy Corbell. During the interview, Lazar claims to have been involved in all types of alien matters while working at a branch of Area 51 known as "S4," where he was tasked with reverse-engineering the propulsion system on one of nine flying saucers kept on the base.

Lazar said this of the inside of a UFO: "It’s a very ominous feeling because everything is one color. It’s like a dark pewter color. There are no right angles anywhere. It’s as if somebody took a model and fashioned it out of wax and then heated it just for a short time so everything melted. Everything looks like it’s fused together. Everything has a radius, a curvature where two items meet. It’s a really weird looking thing. There was almost nothing, other than a small foldable hatchway, that looked recognizable. Everything was really unworldly."

Needless to say, the "Storm Area 51" event has attracted a ton of attention.

The event — a tongue-in-cheek attempt to find aliens hidden by the government — has taken on a life of its own in the internet zeitgeist, receiving nods from celebrities and brands while also turning into its own meme on the short-form video app TikTok.

Celebrity chef Guy Fieri jokingly offered to cater the event with radioactive ribs. Bud Light created an Area 51-themed beer can. And MoonPie naturally got in on the fun. -NBC News

Rapper Lil Nas X even came out with a special alien-themed video for his hit, "Old Town Road."

Roberts says that while he doubts the group will form an actual army to make a run at Area 51 this September, he's met "some pretty great people" along the way who are planning a safer event, per CNN.

The Air Force, meanwhile, has issued a warning that is not a joke - warning that "any attempt to illegally access the area is highly discouraged."

  • 19 juillet 2019 à 16:50

US Regulator Investigating "Shady Rekting Racket" BitMEX Crypto Exchange

Par Tyler Durden

Authored by William Suberg via CoinTelegraph.com,

United States regulator the Commodity Futures Trading Commission (CFTC) is reportedly investigating derivatives giant BitMEX.

image courtesy of CoinTelegraph

CFTC wants to know if Americans using BitMEX

According to sources citing people familiar with the matter speaking to Bloomberg on July 19, the CFTC suspects that BitMEX, which is registered in the Seychelles, allowed U.S. residents to use its platform to trade.

Under current law, the U.S. is one of the countries excluded from using BitMEX and similar crypto-based financial services, but users may have sought to circumvent the geoblock using services such as VPNs.

The investigation, details of which have not yet been confirmed by either BitMEX or the CFTC, came to light on social media via Bloomberg journalist Tim Culpan. 

Bitcoin was under heavy pressure as the news broke Friday, dropping around $500 in minutes to target $10,000.

Roubini calls BitMEX a money laundering ‘rekting racket’ 

BitMEX remains in the spotlight this week after a showdown between CEO Arthur Hayes and serial Bitcoin naysayer Nouriel Roubini earlier in July.

Following the heated debate, Roubini hit out at Hayes for delaying the release of a video recorded for the occasion. 

On Wednesday, meanwhile, Roubini heightened the stakes, publishing what he said was incriminating evidence of malpractice at BitMEX while openly insulting both Hayes and his platform.

Roubini described his report as “my new column where I expose the shady rekting racket that is (BitMEX) run by the thug (Hayes): evasion of AML/KYC, front-running, insider trading, massive scale money laundering, gouging of clients, etc.

"It is high time that US and other law-enforcement agencies stepped in. So far, regulators have been asleep at the wheel as the crypto cancer has metastasized. According to one study, 80% of “initial coin offerings” in 2017 were scams. At a minimum, Hayes and all the others overseeing similar rackets from offshore safe havens should be investigated, before millions more retail investors get scammed into financial ruin.

Even US Secretary of the Treasury Steven Mnuchin – no fan of financial regulation – agrees that cryptocurrencies must not be allowed to “become the equivalent of secret numbered accounts,” which have long been the preserve of terrorists, gangsters, and other criminals."

  • 19 juillet 2019 à 16:36

Senate Bill Would 'Properly Identify' Antifa As 'Domestic Terrorist Organization' 

Par Tyler Durden

A new resolution introduced by Senators Ted Cruz (R-TX) and Bill Cassidy (R-LA) would "properly identify" Antifa as "Domestic Terrorists."

Introduced Thursday, the resolution defines Antifa as "a movement that intentionally combines violence with the group's alt-left positions," and "represents opposition to the democratic ideals of peaceful assembly and free speech for all." 

The measure then lists several examples of Antifa behavior, including: 

  • Assaulting conservative journalist Andy Ngo in February and June of 2019, putting him in the hospital. 
  • Doxxing ICE employees.
  • Confronting an ICE officer when he went to pick up his daughter from summer camp, as well as plastering "his name and photo" on flyers outside his home labeling him as part of the "Gestapo."
  • Explicitly rejecting the authority of law enforcement to
  • "protect free speech and stop acts of violence."

⚠️🚨READ: 🇺🇸Senate Resolution proposal presented to designate ANTIFA as a domestic terrorist group. https://t.co/Wr68qPMIBd pic.twitter.com/Em9uOg5HeG

— NewsChute (@NewsChute) July 19, 2019

After Ngo was beaten and robbed by members of Portland's Antifa cell, a GoFundMe established for the journalist raised $195,680 out of its original $50,000 goal after an outpouring of support. 

First skirmish I’ve seen. Didn’t see how this started, but @MrAndyNgo got roughed up. pic.twitter.com/hDkfQchRhG

— Jim Ryan (@Jimryan015) June 29, 2019

As noted by The Blaze, however, labeling Antifa as "Domestic Terrorists" may also require an entirely new law. 

federal law does not have the same clear-cut designation for domestic terrorism organizations that it does for foreign terror organizations (FTOs), explained Andy McCarthy in a 2017 column at National Review. 

"There are federal-law processes for designating foreign and international terrorism because defending against foreign threats to national security is primarily a federal responsibility," McCarthy explained, because foreign operatives have fewer civil rights protections than American citizens and that the best weapon against domestic terror is local law enforcement, not federal. -The Blaze

Portland, meanwhile, is mulling a ban on wearing masks at protests in an effort to crack down on Antifa violence.

  • 19 juillet 2019 à 16:16

UMich Inflation Expectations Spike To 3-Year Highs

Par Tyler Durden

Following June's dip in 'hope', UMich Sentiment was expected to improve in preliminary July data but it disappointed in most aspects.

  • Headline Sentiment rose from 98.2 to 98.4 (but missed 98.8 exp)

  • Current Conditions dipped from 111.9 to 111.1 (missing 112.8 exp)

  • Expectations inched higher from 89.3 to 90.1

Still close to the best level in more than a decade

“ Favorable trends in personal finances remained widespread,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement.

“These favorable financial expectations were supported by gains in household incomes and wealth.”

June's surge in buying conditions dipped in preliminary July data...

However, perhaps most notable - given The Fed's focus - longer-term inflation expectations spiked from 2.3% to 2.6%...

The Consumer Expectations Index falls as inflation expectations rise, signifying that consumers view higher inflation as a threat to economic growth.

"Consumers’ views appear to be more consistent with the stagflation thesis, which holds that inflation and unemployment move in the same direction. This thesis is more consistent with how consumers process and organize diverse bits of news about the economy."

Additionally, the reading of expectations for personal finances rose to 136, matching the highest level since 2004.

The share of households that expected interest rate increases fell to 44%, the lowest since May 2013, while 19% expected rates to fall, the most in 10 years.

  • 19 juillet 2019 à 16:11

Libra Will Upset World Economy If It Isn't Regulated Tightly, G7 Warns

Par Tyler Durden

Authored by Thomas Simms via CoinTelegraph.com,

Cryptocurrencies such as Libra risk upsetting the world’s financial system if they are not regulated tightly, G7 finance ministers have warned.

image courtesy of CoinTelegraph

According to Reuters, French finance minister Bruno Le Maire told a news conference on July 18 that the G7 “cannot accept private companies issuing their own currencies without democratic control.”

His remarks followed informal talks in Paris, where the Group of Seven expressed vehement opposition to the prospect of firms having as much power as countries in creating means of payment.

The ministers and central bank governors also warned:

“Stablecoins and other various new products currently being developed, including projects with global and potentially systemic footprint such as Libra, raise serious regulatory and systemic concerns.”

Benoit Coeure, a European Central Bank board member, had told the meeting that global stablecoins could boost competition in the payments sector, reduce fees for consumers and support greater financial inclusion. However, he warned that they could undermine efforts to clamp down on money laundering, terrorism financing and tax compliance.

The draft document from the G7, seen by The FT, stated that “significant work” is required from developers of stablecoins like Libra before regulatory approval is likely to be granted. The FT cites the document as saying:

“As large technology or financial firms could leverage vast existing customer bases to rapidly achieve a global footprint, it is imperative that authorities be vigilant in assessing risks and implications for the global financial system.”

Global pushback

The warnings come after Facebook faced tough questions about Libra at hearings in Congress on Tuesday and Wednesday of this week. David Marcus, the CEO of the tech giant’s Calibra crypto wallet, stressed that the project would not launch until all regulatory concerns had been addressed.

This didn’t stop politicians at the hearing from criticizing Facebook for its past failings in protecting user data, and questioning why the company thought it was fit to launch a stablecoin on such a global scale.

Other lawmakers expressed concerns that Facebook could undermine the U.S. dollar and the American economy by basing Libra in Switzerland.

  • 19 juillet 2019 à 11:00

Russia Offers Turkey Advanced Su-35 Jets Day After US F-35 Program Expulsion

Par Tyler Durden

Could NATO show Turkey the door in the near future? Things could easily reach this point considering the alliance's most easterly member is fast amassing significant Russian defense hardware. With reception of Russian S-400 anti-air components, and now blocked from the F-35 joint strike fighter program per Wednesday's White House announcement, President Recep Tayyip Erdogan is said to be mulling a new Russian offer.

"Russia is ready to sell its super-maneuverable Sukhoi Su-35 fighter jets to Turkey, the head of the Russian state conglomerate Rostec said Thursday," according to Turkey's English language Daily Sabah.

"If our Turkish colleagues express a desire, we are ready to work out the deliveries of the Su-35," Rostec CEO Sergei Chemezov said.

Russia's Sukhoi Su-35 fighter, via Russia Insider/Asia Times

Russia's TASS news agency also confirmed the offer, which a Turkish military source said was "premature" but noted that Erdogan will assess the proposal. Turkish Foreign Minister Mevlut Cavusoglu had stated previously that Ankara stood ready to sign a contract for jet fighters with other countries should the US block transfers of the F-35.

After the White House statement confirming Turkey was booted from the program, Turkey urged the US to rectify its "mistake" while also calling it "unfair". 

The Su-35S is Russia's latest advanced fighter, a derivative of the Su-27 plane, having been in service with the army since 2015, as TASS describes further of its specs:

The Su-35S generation 4++ supersonic fighter jet performed its debut flight on February 19, 2008. The fighter jet is a derivative of the Su-27 plane. The Su-35S weighs 19 tonnes, has a service ceiling of 20,000 meters, can develop a maximum speed of 2,500 km/h and has a crew of one pilot. The fighter jet’s armament includes a 30mm aircraft gun, up to 8 tonnes of the weapon payload (missiles and bombs of various types) on 12 underwing hardpoints.

The first foreign purchasers of the Su-35 were China and Indonesia. Russia completed delivery of two dozen of the supersonic jets to China in November 2018 as part of a deal said to be worth about $2.5 billion.

Indonesia reportedly is awaiting delivery its own order of 11 Su-35s, expected by the end of 2019. 

Should at some future point Turkey actually possesses advanced Russian fighters in the air, with Russian air defenses on the ground, the mainstay of NATO leadership would certainly find it hard to stomach Ankara's continued membership in the alliance.  

  • 19 juillet 2019 à 10:15

On The Brink Of World War 3: Here Are 5 Major Developments Within The Last 48 Hours...

Par Tyler Durden

Authored by Michael Snyder via The End of The American Dream blog,

Has a war between the United States and Iran become inevitable?  That is what some in the mainstream media seem to be claiming, but let us hope that is not true, because such a war would mean immense death and destruction.  If the Iranian regime felt that their survival was at stake, they would throw everything in their entire arsenal at the United States and Israel, and they would unleash Hezbollah to commit horrific acts of terror all over the globe.  That would include acts of terror inside the United States, and most Americans have absolutely no idea how nightmarish it would be to have Hezbollah terrorists striking soft targets all across the country.  And in order to quickly win a war against Iran, the U.S. would probably have to use nuclear weapons, and that is a line that we do not want to cross.  This wouldn’t be anything like our wars in Afghanistan and Iraq, but very few people seem to understand this.

And within the last 48 hours, such a conflict has gotten much, much closer.  Here are 5 of the most important developments…

#1 According to President Trump, the U.S. Navy shot down an Iranian drone over the Strait of Hormuz.  The following comes from NBC News

President Donald Trump on Thursday said that a U.S. Navy ship “destroyed” an Iranian drone over the Strait of Hormuz — the latest in a series of tense incidents between Washington and Tehran.

Trump told reporters at the White House on Thursday that the USS Boxer — a U.S. Navy amphibious assault ship — “took defensive action” against the Iranian drone that had “closed into a very, very near distance, approximately 1,000 yards.”

The drone was “threatening safety of the ship and the ship’s crew” and “was immediately destroyed,” he said.

#2 The Iranians denied that it was their drone.  So either the Iranians are lying (which is a very real possibility), or someone else may be trying to start a war between our two nations.  When asked about the drone, Iranian Foreign Minister Mohammad Javad Zarif seemed to indicate that the drone which was shot down did not belong to them

“We have no information about losing a drone today,” Zarif told reporters at the United Nations before a meeting with Secretary-General Antonio Guterres.

#3 But the Iranians have admitted that they have seized a Panamanian-flagged, UAE-based oil tanker.  According to Iran, the tanker was seized because it was illegally smuggling Iranian oil “to foreign customers”

The tanker was seized by Revolutionary Guard forces on July 14 after getting intercepted south of Iran’s Larak Island in the strategic Strait of Hormuz amid allegations that the tanker was smuggling fuel from Iranian smugglers to foreign customers.

It remains unclear to which country or company the tanker belongs but a tanker based in the United Arab Emirates disappeared earlier this week.

#4 The U.S. State Department has condemned Iran for seizing the tanker, and U.S. officials are demanding that they immediately release it

In a statement, a State Department spokesperson said the U.S. “strongly condemns the Islamic Revolutionary Guard Corps Navy’s continued harassment of vessels and interference with safe passage in and around the Strait of Hormuz.”

“Iran must cease this illicit activity and release the reportedly seized crew and vessel immediately. We will continue to work closely with our allies and partners to ensure the Iranian regime’s extortion tactics and malign activities do not further disrupt maritime security and global commerce,” the spokesperson said.

#5 It has been announced that the U.S. is deploying 500 troops to Prince Sultan Air Base in Saudi Arabia.  As tensions with Iran continue to rise, the number of troops being staged at this base is likely to increase dramatically.  The following comes from CNN

Five-hundred troops are expected to go to the Prince Sultan Air Base, located in a desert area east of the Saudi capital of Riyadh, according to US two defense officials. A small number of troops and support personnel are already on site with initial preparations being made for a Patriot missile defense battery as well as runway and airfield improvements, the officials said.

The US has wanted to base troops there for some time because security assessments have shown Iranian missiles would have a difficult time targeting the remote area.

I don’t know who is doing those “security assessments”, because the truth is that Iranian missiles can easily reach that base.

For a while there it seemed like things had cooled off a bit in the Middle East, and many were hoping that the threat of an imminent conflict had been averted.

Unfortunately, things are now more tense than ever, and a single mistake could set off a chain of events that nobody is going to be able to stop.

On Thursday, Iran’s foreign minister made the following very ominous statement

“We live in a very dangerous environment,” the Iranian foreign minister, Javad Zarif, said Thursday at the United Nations before news of the drone was made public.

“The United States has pushed itself and the rest of the world into probably the brink of an abyss.”

And once we plunge into that abyss, there is no turning back.

Of course most ordinary Americans aren’t really thinking about Iran at all.  They are just busy working hard, raising their kids and trying to build their lives.  Perhaps they have heard a little bit about tensions with Iran on the news, but most of them have absolutely no idea that we could literally be on the verge of an apocalyptic war in the Middle East.

If a full-blow war with Iran erupts, events are going to start escalating very rapidly and it will set the stage for many of the nightmare scenarios that I have been relentlessly warning about.

A lot of the talking heads on television seem to think that “the worst case scenario” would be having the U.S. dragged into another endless “quagmire” like we witnessed in Afghanistan and Iraq.

No, that is definitely not the worst case scenario.

The Iranians have been preparing for this conflict for decades, and they would hit us with everything that they have got.

In order to defeat them quickly, we would have to go beyond just using conventional weapons, and that is somewhere that we do not want to go.

  • 19 juillet 2019 à 09:30

Russian Nuclear Reactors Taken Offline In 2nd Serious Incident In Under A Week

Par Tyler Durden

In a deeply worrisome development related to Russia's network of ten nuclear power plants nationwide, two of them suffered significant operating incidents in under only one week, causing multiple reactors to be take offline. 

Russia's TASS reported that a "transformer short circuit" at the Kalinin nuclear power plant (NPP) resulted in "a complete shutdown of two and a partial shutdown of another power unit in the Tver region" early on Thursday. In total 3 out of the 4 nuclear plant's reactors had to be unplugged

Cooling towers at the Kalinin nuclear power plant, via Russia Now/The Telegraph

Hours later, as evening fell, Reuters reported one or more of the units suffering shutdown were back online. Russia is well-known as among the world's largest producers of nuclear energy.

The Kalinin plant is north-west of Moscow in central Russia and has been operational since the mid-1980's, with the last major known accident in 2016, in which two workers were injured when a power unit short circuited. Its newest reactor, No. 4, went operational in 2011. 

Rosenergoatom, a subsidiary of state nuclear corporation Rosatom, issued a statement stressing there was no need for panic or alarm.

"The radiation level at the station and surrounding territory remains without change and is in line with normal background levels," the company said.

This latest incident follows a similar one which state media reported last Friday involving a a nuclear plant in the central Russian city of Beloyarsk.

A reactor there had to be disconnected when an automatic safety mechanism was triggered; however, it came back online Tuesday after an inspection found no issues. 

  • 19 juillet 2019 à 08:45

England: Knife Crime Hits New Record High

Par Tyler Durden

Authored by Paul Joseph Watson via Summit.news,

Knife crime has hit a new record high in England and Wales, rising 8% on the previous year new figures show.

“The figures for police-recorded crime revealed there were 43,516 police-recorded offences involving a knife or sharp instrument, which is the highest since comparable records began in 2011,” reports Sky News.

As I have relentlessly argued, the causes of this epidemic are easily identifiable.

– The scaling back of “stop and search” because it’s “racist”.

– The ongoing emasculation of UK police forces who are being trained that mean words and ‘hate crime’ is more important than people dying.

– Fatherless black homes.

– UK street gangs becoming more violent to compete with immigrants from countries like Congo and Somalia.

– The ongoing mass importation of people from violent countries in general.

– Drill rap music that encourages young people to commit murder.

– Political leaders like Sadiq Khan refusing to even admit there’s a problem to protect their own pathetic legacies.

But instead of addressing any of these issues, the political establishment meekly argues that the lack of “youth clubs” for young people and racist police officers are the source of the problem.

Until that politically correct myopia ends, the carnage will continue.

*  *  *

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  • 19 juillet 2019 à 08:00

Australia Conducts It's "Largest Amphibious Assult Since WWII"

Par Tyler Durden

A joint Australian-U.S. military exercise, called Talisman Sabre 2019, will continue through early August following this week's Australian-led amphibious landing at Langham Beach, Queensland, Australia, reported Naval Today.

Forces from around the world (the U.S., New Zealand, United Kingdom, and Japan) practiced one of the most massive beach assault since World War II off the eastern coast of Queensland. 

Maj. Gen. Roger Noble, deputy chief of joint operations for the Australian Defence Force, noted the beach assault was the critical portion of the monthlong exercise.

"The relationship between the Australian and the United States is the cornerstone of our regional stability. Practicing [working together] builds our flexibility to achieve our shared aims," he said.

"A credible amphibious capability significantly broadens the options for Australia and the United States to fulfill these requirements," Noble said in a statement Wednesday.

Stripes said the Australian military lacks a dedicated amphibious force. Rather, the Australian army rotates soldiers through land and sea postings, and the Australian navy is in command of sailing them close to the beach for attacks.

"This is completely foreign to almost all of us," said Capt. Matthew Stevens of the Royal Australian Army's 7th Infantry Regiment, who led the group of soldiers on the amphibious landing craft earlier this week.

The amphibious assault included more than 34,000 personnel, 30 ships, and 200 aircraft, the Australian Broadcasting Corporation reported Thursday.

Marines started aboard the USS Wasp, USS Green Bay, Royal Australian Navy ships, and Japan Maritime Self-Defense Force vessels. The marines then used landing craft air cushion, amphibious assault vehicles, and combat rubber raiding crafts for the beach assault.

As the first wave of Americans and Japanese landed on the beach, a smokescreen was deployed to disorient the imagined enemy. 

WATCH || Our amphibious landing was significant because it was done with partner nations. This amazing feat demonstrates our preparedness for future amphibious assaults.

👉 Read more at https://t.co/buOY3OZDkD#TalismanSabre #TS19 pic.twitter.com/UPq2J864XH

— TalismanSabre (@TalismanSabre) July 18, 2019

While on land, Australian soldiers observed as two Japanese air-cushioned landing craft drove ashore.

The exercise came after U.S. Chief of Naval Operations Admiral John Richardson last month encouraged Australian counterparts to become more active in countering China's military expansion in the South China Sea.

Tensions flared up earlier this week when the Royal Malaysian Navy conducted anti-ship missile war drills in the South China Sea.

There's also been worsening relations between China and Vietnam, who are currently in a South China Sea stand-off. The latest dispute began two weeks ago when a Chinese geological survey ship started conducting a seismic survey near the Vietnamese-controlled – and China-claimed – Vanguard Reef, and has resulted in coastguard vessels from the two countries patrolling the area.

The South China Sea has overlapping claims, Brunei, the People's Republic of China, Republic of China (ROC/Taiwan), Malaysia, Indonesia, the Philippines, and Vietnam; all believe they have equal rights to the highly disputed body of water.

And to make matters worse, the Pentagon told Congress it expects to solidify a $2.2 billion arms sale with Taiwan, further irritating China who warns it will sanction U.S. defense firms connected to Taiwan arms deal.

As tensions boil in the South China Sea, it becomes evident why Australia and the U.S. conducted one of the most significant amphibious assaults in more than seven decades: the world is preparing for war with the rising power, China.

  • 19 juillet 2019 à 07:00

Bowling Alone: How Washington Has Helped Destroy American Civil Society And Family Life

Par Tyler Durden

Via Ammo.com,

Church attendance in the United States is at an all-time low, according to a Gallup poll released in April 2019. This decline has not been a steady one. Indeed, over the last 20 years, church attendance has fallen by 20 percent. This might not sound like cause for concern off the bat. And if you’re not a person of faith, you might rightly wonder why you would care about such a thing.

Church attendance is simply a measure of something deeper: social cohesion. It’s worth noting that the religions with the highest rate of attendance according to Pew Forum have almost notoriously high levels of social cohesion: Latter-Day Saints, Jehovah’s Witnesses, Evangelical Protestants, Mormons and historically black churches top the list.

There’s also the question of religious donations. Religious giving has declined by 50 percent since 1990, according to a 2016 article in the New York Times. This means people who previously used religious services to make ends meet now either have to go without or receive funding from the government. This, in turn, strengthens the central power of the state.

It is our position that civil society – those elements of society which exist independently of big government and big business – are essential to a functioning and free society. What’s more, these institutions are in rapid decline in the United States, and have been for over 50 years.

Such a breakdown is a prelude to tyranny, and has been facilitated in part (either wittingly or unwittingly) by government policies favoring deindustrialization, financialization and centralization of the economy as well as the welfare state. The historical roots of this breakdown are explored below, along with what concerned citizens can do to mitigate its impact on their loved ones.

What Is Bowling Alone?

The urtext of this topic is Bowling Alone: The Collapse and Revival of American Community by political scientist Robert D. Putnam. He uses the decline in league bowling as a sort of shorthand for the overall decline in American participation in social life.

The local bowling alley was known as the blue-collar country club, and it was the invention of the automatic pinsetter that changed the game, making it faster and more accessible. The first million-dollar endorsement sports deal was Don Carter receiving a million dollars to bowl with an Ebonite signature ball designed for him in 1964.

Business was driven by league play. People would sign up to join a league, which had them in for 30 weeks of once-weekly play. In the course of doing this, they would rub elbows with teammates, opponents and whoever happened to be hanging out in the bowling alley at the time. Between 1940 and 1958, the United States Bowling Congress’ membership exploded from 700,000 to 2.3 million. The Women's International Bowling Congress’membership climbed from 82,000 to 866,000, with the American Junior Bowling Congress ballooning from 8,000 to 175,000. In their heyday, bowling leagues brought in a whopping 70 percent of all bowling alley income. Now they bring in a paltry 40 percent.

Again, the point here is not that there is something magical about bowling, which acts as a social glue in the United States. Rather, it is that the existence of bowling alleys as a third place in American life was the symptom of a vibrant and healthy civil society, not its cause. People preferred to socialize with others in a place outside of home or work. Putnam is quick to point out that the number of people who bowl in the United States has actually increased since the golden age of bowling – the problem is that they’re all doing it alone.

The decline in bowling league membership parallels the decline of memberships in a number of other civic organizations including the Knights of ColumbusB’Nai Brithlabor unionsthe Boy Scoutsthe Red Crossthe Lionsthe Elksthe Kiwanisthe Freemasonsparent-teacher organizationsthe League of Women Voters and the Junior Chamber of Commerce to name only a few examples other than bowling leagues and churches.

What this means is that there are significantly fewer connections between people and fewer civic-minded discussions going on now than there were in the past. It also means the loss of identity tied to something other than work and consumer goods (see the explosion of adults spending their money on Star Wars or Harry Potter knick-knacks).

Putnam lays the blame at the foot of technology. Television, and to a much greater extent, the Internet, individualized how people spend their spare time. Still, there is a solid case to be made that the decline of civil society and the resulting loss of social capital is not simply the result of new technologies. It is equally the result of government policies which, through design or through negligence, further erode civil society.

The Destruction of the Rust Belt

It is difficult to talk about the decline of civil society and social capital in the United States without looking at the destruction of the Rust Belt. The decline of the population in Rust Belt industrial cities over the last 50 years is worth a cursory glance before delving further into this topic:

  • In 1940, Detroit, Cleveland and Pittsburgh were all among the 10 most populated cities in the United States.

  • By 1980, Cleveland and Pittsburgh had dropped off.

  • While Detroit hung around in the top 10 until the 2010 census, it was also the first city to have its population drop below one million.

Cities outside of the top 10 in 1940 paint an even starker picture:

  • Between 1960 and 2010, Buffalo lost over half of its population, plummeting from 532,000 (20) to 261,000 (71).

  • Cincinnati was hit about this hard during the same time period, with its population dropping from 502,000 (21) to 296,000 (63).

  • Gary, Indiana is perhaps the most extreme case of Rust Belt depopulation. It lost over half its population between 1960 and 2010, going from 178,000 (70) to 80,000 (unranked).

Most of these massive depopulations are tied closely to deindustrialization and the financialization of the economy. While other factors cannot be ignored, such as central air conditioning, which makes living in cities like Phoenix (439,000 in 1960 and the 29th largest city to 1.4 million and the 6th largest by 2010) much more palatable, a conscious set of policies contributed to the destruction of America’s manufacturing base.

If one sees the United States as nothing more than a group of consumers, there’s nothing to fret about here. If, however, one sees the United States as a nation with a value beyond its simple GDP, the replacement of civil society with the marketplace is a disastrous scenario.

The Destruction of Black Business Districts

Another place where this can be seen is the destruction of the black middle class. A frequently untold story of American life is that by the 1950s, the United States actually had a thriving black middle class. Black business ownership peaked during the years between the end of the Second World War and the Great Society. Every city with any significant black population hosted a black business district where a primarily black clientele spent their money within their own community. Black home ownership was likewise high at this point.

This is all very much a thing of the past.

The per capita number of black employers declined by 12 percent between the years 1997 and 2014. An article by Brian S. Feldman in Washington Monthly notes a significant decline in certain sectors of black business ownership as well, namely grocers, insurers and banks. Black-owned insurance agencies declined by 68 percent between 1989 and 1999 in what Black Enterprise magazine called “a bloodbath.”

The article in question lays this at the feet of not specific government policies, but at the doorstep of a more general trend toward market concentration.

It’s worth looking at the question of wealth and market concentration (separate from the question of so-called “wealth inequality”) from a freedom-minded perspective. The massive amounts of government handouts to big business, in the form of both direct subsidies as well as favorable legislation for regulations and taxes alike, creates an environment favoring those most capable of purchasing influence – namely, big business.

This is not the half-baked conspiracy theory of a college Marxist. No less an authority than the Foundation for Economic Education correctly identifies that the wealth concentration that made the destruction of black small business possible is choking the American economy at the expense of Main Street. Likewise, licensing regimes in a number of states choke the pipeline of small business competition by making it more difficult for people to enter fields, from nail tech to brain surgeon. The FEE likewise identifies health insurance requirements and increasingly rising minimum wage laws as government intervention raising the bar to entry into the market and crushing small business.

There is another, highly unlikely and ironic, culprit behind the decimation of black business and the black community – integration.

This is a position championed by Clay Middleton of the South Carolina House of Representatives. Basically, under segregation, black consumers were limited in their choices of business. They could not, in many cases, go to (for example) white hamburger joints. Instead, they had to patronize the equivalent business for black customers. In many cases, these businesses were owned and operated by fellow black Americans. Black hotels are another example of this phenomenon.

The point is not that Southern states should reintroduce segregation to prop up black businesses, but simply to give a broader and more complete picture of how and why black business districts have disappeared. It also offers some insight into the destruction of small business in America in general.

While cheap, imported widgets from Walmart benefit consumers with lower prices, they also create an intangible and difficult-to-quantify social problem. When big business replaces small business, wealth is not only centralized, it is also centralized outside of the communities that it serves.While larger businesses are arguably more “efficient” economically speaking, the loss of small business (most acutely seen in the black community) provides an illustrative example of how lost economic capital and lost social capital are often closely tied. Without black business, there is less of a “black community” than there is a “black marketplace.”

Strictly speaking, small business (black or otherwise) is business, not civil society proper. However, greater economic leverage of big business in the nation means an economically impoverished civil society.

Civil Society, the Welfare State, and Mutual Aid

While direct connections are difficult to establish, it is worth noting that there is a chicken-egg effect of the welfare state, which began during the New Deal, but accelerated under President Lyndon Baines Johnson’s Great Society.

What did people do before the advent of social welfare programs? This is a question that even few libertarians can answer without stammering something about private charity. And indeed, private charity did play a role in meeting social needs for the less fortunate. However, there is a hidden story in how communities met social needs prior to the advent of the welfare state.

Mutual aid in the 21st century is largely a nonprofit form of insurance, particularly life insurance – a sort of analog to the credit union. However, in earlier days they oversaw a number of social welfare programs.

Mutual aid societies, also known as benefit societies (or friendly societies in the United Kingdom and Ireland) date back to the Middle Ages. Medieval guilds were effectively mutual aid societies organized within skilled trades. In the United States, they were popular with black Americans during post-revolutionary times: the Free African Society dates back to 1787.

One of the key differences between mutual aid and benefit societies and the welfare state is the role of civil society and accountability. Mutual aid societies presented a counterweight to both the state and big business. They offered services such as healthcare, unemployment benefits, disability insurance and other services now provided by big business or state and federal governments.

What’s more, the mutual aid societies generally had a set of values tied to their services. Social values were advanced and an ethos of moral character and self-improvement underpinned membership in a mutual aid society. For example, the Ancient Order of United Workmen forbade its members from selling liquor on penalty of forfeiting their death benefit.

Finally, it’s worth noting the primary difference between mutual aid societies and the welfare state. Members who wanted to collect had to look a peer in the eye and request aid. This had a twin psychological effect: First, it diminished spurious claims. Let’s say “Jim” needed some unemployment insurance. His neighbors are also members of his mutual aid society. They know if Jim actually needs help or if he’s just goldbricking. The flipside is that Jim is also receiving aid from his friends and neighbors. This inspires him to look for work so that he can pay everyone back in his own way, in addition to providing a source of social solidarity during his hardest times.

According to A Life of One's Own: Individual Rights and the Welfare State, in the year 1890, 112,000 Americans were living in housing provided by private charitable organizations. Compare this to 73,000 residing in publicly funded almshouses. What’s more, benefit societies were decentralized. The spirit was one of fraternity, not of paternalism. Reciprocity was a driving ethic, which in turn removed the stigma of receiving charity. People were not receiving handouts, they were receiving support from the very same people whom they had supported in the past.

Additionally, belonging to a mutual aid or benefit society was a lot cooler than receiving welfare. They had secret handshakes, among other secret symbols of membership. What’s more, the humble house-call doctor was a feature of mutual aid society membership. Society locals frequently hired a doctor to service a membership area. They have since been regulated to the point where they provide little in the way of services, except for life insurance and annuities, making them effectively non-profit financial organizations.

In addition to accountability, assistance beyond simple financial support and decentralization, private assistance carries other benefits. For example, philanthropic organizations tend to operate leaner and to be more innovative in how they tackle problems. Such organizations tend to tailor their assistance to the individual in need, rather than offering a one-size-fits-all approach. This is true of individuals and communities alike. Finally, philanthropic and mutual aid societies seek to treat the underlying cause, rather than just the symptom of need.

Such organizations are now limited by the federal tax code 501(c)(4), which greatly restricts the activities such organizations are allowed to participate in. Many of them, such as Mutual of Omaha, underwent demutualization and handed out stocks in place of membership. They are now for-profit financial organizations.

A Decline in Family Life

One of the main pillars of civil society is the nuclear family. Any discussion of the decline of civil society in the United States would be incomplete without a discussion of the decline of family life in the United States.

Perhaps the best numbers to look at with regard to the American family are from the 2010 Census. These are, admittedly, a bit old. However, there is no reason to suspect that the trend has reversed itself and that the nuclear family has experienced some kind of resurgence in the years since that census. If anything, the opposite is probably true. So what does the last United States Census say?

  • Non-college graduates are more than twice as likely to be single parents.

  • Affluent families are more common than poor ones.

Pew Research likewise has good data on the state of the American family:

  • Americans who have never been married reached an all-time high in 2012, with 25 percent of all adults over the age of 25 having never been married. In 1960, this figure stood at 9 percent.

  • Men were significantly less likely to have ever been married than women.

  • 24 percent of never-married adults were cohabiting with their partner.

  • For black Americans, the percentage over 25 who had never been married was 36 percent.

  • Pew Research indicates that it expects this trend to continue and that, while people are getting married later in life, it does not expect a significant increase in marriage as the population ages.

  • Financial security was cited as the main hurdle to marriage by one third of all those polled who wanted to get married.

  • 67 percent of Americans under 50 who are married are in their first marriage, compared to 83 percent in 1960.

  • 46 percent of children live with two parents in their first marriage. In 1980, this number was 61 percent. In 1960, it was 73 percent.

The above-cited figures point toward two conclusions: First, the nuclear family is in sharp decline. Second, it is far more common for educated and affluent Americans to form traditional families.

It’s difficult to assign direct blame to any one factor. The centralization of the economy cited above plays a role, as does the financialization and deindustrialization of the economy. In the 1960s, from where our earliest data comes, it was not difficult for a high school graduate or even a high school dropout to earn a living at a stable job that was effectively a career for life. With this job came a defined benefit pension, healthcare, etc. The wages and benefits made having and raising a family easier.

The welfare state is another significant driver of the decline of the nuclear family. Unsurprisingly, the black family is massively impacted. In 1965, 25 percent of all black children were born out of wedlock. In 2016, that rate had increased to 70 percent and even topped 80 percent in certain urban areas. In the 1940s, this number was five percent, which was comparable to that of white children. The Hispanic out-of-wedlock birth rate in 2016 was 52 percent, while for whites it was 30 percent.

The rise in children born out of wedlock cannot be separated from the massive expansion of the welfare state under Johnson’s Great Society. In a report from the Mises Institute, the basic argument is that welfare disincentivizes marriage. In times past, when women had children out of wedlock, it meant an incredibly difficult life balancing whatever work and charity they could get. It also carried a social stigma (from our old friend civil society), which further disincentivized single motherhood.

Today, however, there are a host of social programs specifically for single mothers. A partial list of programs assisting single motherhood includes:

  • Temporary Assistance for Needy Families (TANF) commonly known as “food stamps”

  • Women, Infants and Children Program (WIC), another food assistance program

  • Child Care Assistance Program, Head Start and Early Head Start, all daycare assistance programs

  • Section 8 housing assistance

  • Low Income Home Energy Assistance Program, which helps single mothers pay their utilities

  • Medicaid and Children’s Health Insurance Program (CHIP), health insurance assistance programs

  • Supplemental Security Income, often called “disability,” but accessible to those without bona fide physical disabilities

  • The Emergency Food Assistance Program and the National School Lunch Program, two more food assistance programs

These programs act as a disincentive toward family formation. Benefits are means tested, meaning that if one’s income is low enough, one qualifies. This means that it is advantageous in many cases for couples to remain unmarried so that only one income is counted for the purpose of benefits. Such programs, when coupled with a diminishing stigma against single motherhood, further incentivizes promiscuity and poor mate selection – why not have a child with a man who can’t support it when the welfare state is there to pick up the slack?

The impact of single-parent households is far further reaching than you probably think: In the most extensive study ever done on single parenthood (in permissive, tolerant and liberal Sweden), it was found that children in single-parent households were twice as likely to suffer from psychiatric disorders and addiction. This figure might be conservative, as it only includes hospitalizations. Some other striking statistics about fatherless households include:

  • 63 percent of youth suicides take place in fatherless homes.

  • 90 percent of all homeless youth and runaways are from fatherless homes, which is a whopping 32 times the national average.

  • 85 percent of all children with behavior issues come from fatherless homes, 20 times the national average.

  • 80 percent of rapists with established anger issues come from fatherless homes, 14 times the national average.

  • 71 percent of all high school dropouts come from fatherless homes, nine times the national average.

  • 70 percent of those in state-operated institutions come from fatherless homes, nine times the national average.

  • 85 percent of all juveniles in prison come from single-parent households, 20 times the national average.

  • 90 percent of adolescent repeat arson offenders are from fatherless homes.

  • Fatherless children are nearly twice as likely to be victims of abuse or neglect.

These striking statistics are a serious indictment of the decline of the nuclear family. If, as is common of behaviors, single parenthood is heritable, we have not yet begun to see a crisis.

The End of Civil Society in the United States

The big takeaway is that in the United States, civil society has declined. While the blame cannot entirely be laid at the feet of big government and big business (individual actors are involved), there is strong evidence to suggest that the crisis in American civil society is driven primarily by the welfare state and government policies favoring deindustrialization, financialization and centralization of the economy.

There is a reinforcing quality about the destruction of civil society. As the size of big government and big business increases, they become more capable of taking greater power. Smaller communities become increasingly reliant upon each, making it harder to resist further growth and greater disempowerment. It’s a vicious downward spiral.

So what’s the solution for a concerned individual or family? It’s not political. Instead, the best one can do to counteract these trends are to become as financially independent as possible, make durable local connections in the community, and learn to think critically in order to insulate oneself from the more pernicious effects of social decay and the power of the state.

  • 19 juillet 2019 à 05:45

The Race For The Moon Continues

Par Tyler Durden

On July 21, 1969, astronauts Neil Armstrong and Buzz Aldrin were the first men to set foot on the moon. Ten more Apollo astronauts followed in their footsteps until 1972 but since then, no human has set foot on Earth’s closest companion in space.

Fifty years later, the race for the moon is starting anew with several countries and private companies announcing missions. As Statista's Katharina Buchholz notes, after the successful landings of Chinese probes Chang'e 3 in 2013 and Chang'e 4 in January 2019, who will be the next space agency or company succeeding in landing the next spacecraft or putting the next man (or first woman) on the moon?

Our graphic gives a rundown of the main lunar missions announced to date. Given the remaining uncertainties surrounding some programs, the dates may be subject to change.

Infographic: The Race for the Moon Continues | Statista

You will find more infographics at Statista

After a failed mission by the Israeli private company SpaceIL in April, it is the Indian space agency ISRO that will be up next, with the launch of Chandrayaan-2 moon rover mission currently delayed but to commence in 2019.

Three U.S. companies - Astrobotic, OrbitBeyond and Intuitive Machines – are scheduled to carry out a series of missions in anticipation of astronauts returning to the lunar surface. This is an objective that U.S. President Donald Trump would like to achieve in 2024 and that is supposed to be carried out by NASA in the Artemis 3 and 4 missions.

Another independent private mission, "DearMoon", could see a Japanese billionaire accompanied by six artists making the first touristic flight around the moon in a SpaceX vessel as early as 2023.

Finally, it is interesting to note that the Moon Treaty has still not been ratified by most space-faring nations to date (except for three member countries of the European Space Agency). This treaty, adopted in 1979, stipulates that the moon may only be used for peaceful purposes and that any activity on the moon must comply with international laws.

  • 19 juillet 2019 à 05:25

Demonocracy: The Great Human Scourge!

Par Tyler Durden

Via AntoniusAquinas.com,

Introduction

One cannot speak too highly of Christophe Buffin de Chosal’s The End of Democracy.  In a fast paced, readable, yet scholarly fashion, Professor Buffin de Chosal* demolishes the ideological justification in which modern democracy rests while he describes the disastrous effects that democratic rule has had on Western societies.  He explodes the myth of Democracy as a protector of individual liberty, a prerequisite for economic progress, and a promoter of the higher arts.  Once Democracy is seen in this light, a far more accurate interpretation of modern history can be undertaken.  The book is a very suitable companion to Hans-Hermann Hoppe’s iconoclastic take down of democracy in Democracy: The God That Failed, released at the beginning of this century.  Buffin de Chosal has spoken of a follow up which will be eagerly awaited for.

Democratic Governance

The idea of rule by the people is a scam, one perpetuated by those who, in actuality, are in control of the government.  Through the “democratic process” of voting and elections, a small, determined minority can impose its will despite majority opposition:

We often hear it said that ‘in a democracy, it is the people who rule...’

Rule by the people is a myth which loses all substance once confronted with the real practice in democracy.  [13]

Quoting from a Russian philosopher, Buffin de Chosal continues his criticism:

The best definition [of democracy] was given by the Russian philosopher Vasily Rozanov.  ‘Democracy is the system by which an organized minority governs an unorganized majority.’ 

This ‘unorganized majority’ is the people, aggregated and individualistic, incapable of reaction because disjointed.  [28]

He expands upon Rozanov’s theme:

...[C]ontrary to what [democracy’s] principles proclaim: one can say that the majority almost never wins.  Democracy is not the system of the majority, but that of the most powerful minority, and it has this power not simply due to its numbers, but also and above all due to its organization. [31]

Power does not reside in “the people” and certainly not in the individual.  In democracy, the only way to express one’s preference or protect one’s rights is through the ballot box every so often. “Each voter,” writes Buffin de Chosal, “in a democracy, is the depositary of a tiny particle of sovereignty, in itself unusable. His sole power consists in dropping a ballot into a box, whereby he is immediately dispossessed of his particle of sovereignty at the profit of those who are going to represent him.”  [Ibid.]

Popular democracy has always been condemned and feared by most thinkers since the beginning of human societies.  It was not until intellectuals saw democracy as a way they could attain power that they began to advocate it as a system of social order.  Prior to the democratic age, most of the learned understood that democracy would result in mob rule and the displacement of natural authority with demagogues.  In short, the worst would rise to the top as the author describes the characteristics of a contemporary politician:

The ideal politician, on the other hand, is pliable, convincing, and a liar by instinct.  He is not attached to any platform and has no ideological objective.  The single thing to which he is truly committed is power.  He wants its prestige and advantages, and seeks above all to be personally enriched by it.  Any politician who presents this aspect is recognized as fit for power in a democracy...

It is therefore not surprising that democratically elected assemblies are almost exclusively comprised of these kinds of men and women.  Elected heads of state almost always fit this profile, and international institutions, such as the European Union, consider it the only acceptable profile....  [35]

Democracy and the State

Since the advent of modern democracy, the principle benefactor of its rule has been the State and the politically-connected financial elites who are in actuality the true rulers of societies.  Instead of putting an end to the supposedly despotic rule of the Ancien Régime, which Democracy’s proponents claim to have existed throughout the monarchial and aristocratic age, governance by the people, has instead witnessed an increase in state power and control of individual lives to an unprecedented level in human history. Few, if any, pope, emperor, king, prince, or duke have ever possessed such suzerainty.

In contrast to what has been taught in classrooms, on university campuses, and espoused throughout the media, individual rights and freedoms were far better guarded in the age prior to Democracy’s ascendancy.  Pre-revolutionary Europe had social structures which insulated individuals from State power far more effectively than under modern democracy:

The concept of an organic society was abolished at the time of the French Revolution.  The corps and orders were suppressed, the privileges were abolished, and everything which allowed the people to protect themselves from the power of the state was banished in the name of liberty.  [24]

And in return for giving up the order that protected them from state depredations, the people received “sovereignty:”

They were given the false promise that they would no longer need to defend themselves from the state since they themselves were the state.  But if a people organized into corps and orders are incapable of exercising sovereignty, how much more so a people comprising a formless mass of individuals!  [Ibid.] 

Historically, all of the democratic movements which supposedly stemmed from the people were, in fact, a falsehood, perpetuated largely by revolutionaries who sought to replace the established order with themselves.  While legislatures, congresses, and democratic bodies of all sorts have been interpreted as the fruition of the masses’ desire for representation, the reality was quite different:

Democracy is not, in its origin, a system of the people.  In England with the advent of the parliamentary system just as in France during the Revolution, it was not the people who were seen at work.  Even the Russian Revolution was not a phenomenon of the people.  To regard the people or what the communist elegantly call the ‘masses’ as the agent of change or political upheaval is purely a theoretical view, a historical myth, of which one sees no trace in reality.  The ‘people’ were the pretext, the dupes, and almost always the victims of the revolutions, not the engines.  [13]

Not only was propagation of the myth of popular support for democratic ideals propounded for the survival of the new social order, but putting these tenets into practice was accomplished, in large part, by the role of the “intellectual” an often neglected feature of standard historical analysis and the reason behind much social transformation:  

The ‘nation’ met the desires of the philosophers who wanted to transfer power from the monarch to an enlightened, philosophical, and philanthropic class who, moreover, ought to be financially comfortable.  The educated bourgeoisie of the time were the protagonists of this idea, and a portion of the nobility formed their audience.  [13-14]

The intellectuals promoted Democracy because it would open up for them considerable opportunities for position and income in the nation state.  It must be remembered that it was the intellectuals who justified the idea of Absolutism.  Later, the intellectuals turned on the monarchies and sided with the emerging republican classes rightly believing that democratic governance would give them greater opportunities for power in the emerging nation states.

Democracy and Modern History

While most historians see the advancement of democracy and the development of legislative bodies over the course of the last centuries as an advancement in the human condition and one that has emanated from the people’s desire for greater political representation, Buffin de Chosal presents a far different and more accurate interpretation.  “Democracy,” he asserts, “is not, in its origin a system of the people.” [13] All of the social movements which eventually led to the destruction of Christendom did not come from the people seeking a greater “voice” in their governance.

“The ‘people,’” he argues, “were the pretext, the dupes, and almost always the victims of the revolutions, not the engines.” [Ibid.]  Liberty, Equality and Fraternity was not a popular cry, but one coined and used by the “enlightened” classes to mobilize and justify their overthrow of the French monarchy and with it the destruction of the Church. 

The French Revolution was built on the idea of the ‘nation,’ which claimed to bring together the intellectual, social, and financial elite of the country.  It was on this foundation that democracy was established and that it functioned during almost all of the nineteenth century.  [Ibid.]

A similar historical narrative can be seen in England.

The rise and eventual triumph of representative democracy in England was not one that percolated from the masses itching for more freedom.  “The appearance of the parliamentary system in England,” Buffin de Chosal contends, “was tied to the great movement of Church property confiscation begun under Henry VIII and continuing until the coming of the Stuarts.” [14] 

After Henry gorged himself on the Church’s wealth, he sought to bribe as much of the nobility as possible with his ill-gotten gains to insure his power.  An envious Parliament, however, wanted its cut of the loot which led to the great internecine struggle between Crown and Parliament which eventually ended in the suzerainty of the latter with the Glorious Revolution of 1688.  The real power from then on rested with an oligarchical legislative branch:

The families who had thus helped themselves to the Church’s goods, morally justified by Protestant ethics, formed the gentry, the class of landowners who sat in Parliament.  Parliament was not then, as one might believe today, an organ of poplar representation.  It was an instrument in the hands of the gentry to defend its own class interests. [16-17]

That Parliament and the monarchy would become the two dominant ruling structures was the result of the breakdown of the feudal structure which was taking place not only in England, but across Europe.  European monarchs continued to gain more and more power at the expense of the feudal landed elite.  The gentry’s power and wealth was also on the wane with the rise of commercial centers which most of the time aligned themselves first with the kings and then later with Parliament.  The eventual triumph of Parliament, however, did not mean greater democracy for the people:

The financial incentives for England’s adoption of the Protestant Reformation are therefore intimately connected with the bolstering of Parliamentary power. The Parliament in England was used to put the monarchy in check and to replace it with an oligarchic class of wealthy Protestants to whom the kings were required to submit.  This is why the overthrow of James II in 1688 was a true revolution.  It was not a popular revolution or the overthrowing of a tyranny, but it was the rebellion of a class implementing the transfer of sovereign power for its own profit. [17]

The Market Economy

The author takes a refreshing look at the market economy that sets straight the inaccurate and often times hostile analysis of it that frequently comes from conservative circles.  He distinguishes and rightly points out that “pure capitalism” or the “unhampered market” is an “excellent thing” [123].  The free market is intimately tied with private property which is a prerequisite for a just society:

[Capitalism] proceeds from respect for private property. As capitalism is the reinvestment or saved money for the purpose of making new profits, it presupposes respect for property rights and free enterprise.   It has existed in Europe since the Middle Ages and has contributed significantly to the development of Western society.  [Ibid.]

He insightfully notes that “bad capitalism” often gets lumped in with its “good form” while the latter gets the blame for the baneful excesses of the former.  “Monopoly capitalism,” “corporatism,” “the mixed economy,” and “crony capitalism” are not the result of the market process, but stem from “intervention” brought about by the State in favor of its business favorites through participatory democracy.  In a truly free market, entrenched wealth is rarely maintained but is constantly subjected to challenges by competitors:

But what one ought to designate as bad capitalism is the concentration of wealth and power this wealth procures.  This danger does not stem from capitalism itself but rather from parliamentary democracy, for it is democracy that enables money powers to dominate the political realm.  [Ibid.]

The “monied interest” did not exist under “traditional monarchy,” but was a product of Democracy and the protection and extension of the “bad capitalistic” paradigm that came into being and was expanded by the rise of popular representative bodies.  Assemblies, legislatures, and congresses, which emerged, became aligned with the banking and financial interests to bring about the downfall of the monarchies. 

The concentration of political power could only be attained after the control of money and credit were centralized in the form of central banking and the gold standard was eliminated.  Central banks have been an instrumental part of the democratic age, funding the nation state’s initiatives and enriching the politically- tied financial elites at the expense of everyone else.   

Wealth concentration is not a by-product of the free market.  Rarely are firms able to maintain their dominance for long periods of time.  Many turn to the State to get protection and monopoly grants to ensure their position in the economy:

. . . capitalism only becomes harmful when it grants political power to the money powers. This was only made possible thanks to the advent of parliamentary democracy, which was an invention of liberalism.  It is therefore the foundational principles of political liberalism (equality before the law, suppression of privileges, centralization of political power, censitary suffrage, and the accountability of ministers to the legislative houses) which have enabled the rise of a wealthy class and its power over society.  [124]

Such sound economic analysis abounds throughout his tome.

Future Prospects

The author rightly sees that because of its nature and the type of personalities that it attracts, modern democracy cannot reform itself, but will eventually collapse from financial stress, war, and/or civil strife:

Parliamentary democracy rarely produces true statesmen, as its party system more often promotes ambitious and self-interested persons, demagogues, and even communication experts.  These are generally superficial and egocentric individuals with a very limited understanding of society and man.  These politicians do not have the makings of statesmen.  They are adventurers who use the state to satiate their hunger for power and money or to benefit their party.  [147]

Efforts to reform it, however, should not be totally dismissed since they could lead to more fundamental change and ultimately the creation of a new political paradigm for Western governance.  Populism and the various movements around the globe which fall into that category should be encouraged.  Populism, because of is lack of definite ideological underpinnings, has meant different things at different times to different people.  Most populists, however, do not want to get rid of democratic forms of government, but want the system to be more “responsive” of its constituents instead of favoring entrenched political elites.  Populism is a symptom of the growing failure of modern democracy’s inability to “deliver the goods” that it promises to a now growing dependency class. 

As a means of getting rid of totalitarian democracy, populist movements and themes should always be encouraged:

In Europe, the only political forces today which could, in the more extreme of circumstances assume this rescue role are found on the side of populism.  Conservative in its values, sometimes classically liberal when it is a matter of opposing the stifling interventionism of the state, and yet ready to defend social gains . . .  populism is the only political current which comes to the defense of those interests of the population denied or ignored by the parties in power. [148]

He adds:

Populist parties, from the simple fact that they can bring together voters from both the left and the right, have a chance of coming to power in the near enough future.  The deterioration of security conditions in Europe due to mass immigration plays in their favor.  [148-49]    

While he does not explicitly discuss it, a more concrete and ideological coherent idea and one of historical precedent, is that of secession.  For all those who oppose the democratic order, secession is the most justifiable, logical, and practical strategy for the dissolution of the nation state.  Secession movements, therefore, whether they do not outwardly condemn parliamentary democracy and only seek to establish a “better run” system, should always be supported. 

Conclusion

The most likely scenario if there is to be a change in Western democratic life will be from a world-wide economic crisis and collapse of the financial system which will render the nation states unable to meet their financial obligations to their citizens.  All economies are hopelessly indebted from their welfare state excesses and can never hope to meet their promises which now runs in the trillions.  What will emerge in the aftermath of a collapse is hard to predict, but some form of authoritarianism is likely which will be centered on a one-world state with a single, irredeemable currency.

While the financial demise of Western-styled democracy will be evident for all to see, its ideological underpinnings which have justified its existence needs to be extirpated.  Any hope of it being reconstituted to better serve “the people” needs to be shot down.  There is no better place to start the de-mystification of Democracy than with Christophe Buffin de Chosal’s magnificent, The End of Democracy.  

*  *  *

Christophe Buffin de Chosal, The End of Democracy, Translated by Ryan P. Plummer.  Printed in the U.S.A.: Tumblar House, 2017.

  • 19 juillet 2019 à 05:05

Black Homeownership Plunges To All-Time-Low Despite Record-Low Unemployment

Par Tyler Durden

One of President Trump's favorite talking points is promoting how his economic policies have lifted all Americans. He routinely cites the record low rate of black unemployment and how the economy is the "greatest ever."

— President Trump tweeted Jan. 2018

"African American unemployment has reached its lowest rate ever recorded — ever! Ever! Remember 'What do you have to lose?' What do you have to lose, right? 'What do you have to lose?' I said."

Trump wishes Jay-Z were a little more grateful for the low black unemployment rate. https://t.co/PeY2ZxCusO pic.twitter.com/SLJqER2XWs

— The Daily Show (@TheDailyShow) January 30, 2018

— Trump, at a campaign rally in Southaven, Miss., Oct. 2018

"You look at our economy. You look at jobs. You look at African American — the lowest in the history of our country, unemployment numbers — the best numbers they've ever had."

— Trump tweeted July 2019

"The best economy in our lifetime!" @IngrahamAngle

— Trump tweeted July 2019

"Lots of great things to tell you about, including the fact that our economy is the best it has ever been. Best Employment & Stock Market Numbers EVER. I'll talk also about people who love, and hate, our Country (mostly love)!" 

New census data, reported via The Wall Street Journal, tells an entirely different story in the African-American communities across the country, one where the black homeownership rate has plunged to the lowest on record.

The black homeownership rate increased for three decades and reached nearly 50% in 2004, but all those gains were wiped out in the last decade, hitting a new record low in 1Q19.

The rate stabilized from 1Q16 through 3Q18, has since dove under the 2.5-year range to 41.1%. The rate plunged 1.8% from 3Q18 to 1Q19, which was a period in the economy where the most recent industrial slowdown started.

1Q19 was the first time in 20 years that Hispanics and blacks, the two most significant ethnic minorities in the U.S., have seen a divergence in the path towards the American dream: homeownership.

Policy analyst told The Journal that black communities have developed an indisputable wealth gap that has kept homeownership out of reach. 

"We can see that discrimination is still there, although it has changed its form," said Michela Zonta, a senior policy analyst at the Center for American Progress.

The black unemployment rate being at ultra-low levels hasn't translated into a stronger middle class in inner cities, thus the increase in home buying. 

This could mean one of two things: either the jobs being provided are low skill and low wage, or the birth/death adjustment in the black unemployment rate highly overstated the number of employed so that the Trump administration can create enough propaganda in black communities that by the time 2020 comes around, inner cities would ditch Democrats for Republicans.

  • 19 juillet 2019 à 04:45

Iran Releases Dramatic Footage Showing IRGC Seizing Foreign Oil Tanker

Par Tyler Durden

On a day that's witnessed serious escalation amid already soaring tensions in the Persian Gulf, Iran has confirmed the vessel it earlier said its IRGC forces seized for "smuggling" oil is in fact Panamanian-flagged oil tanker MT Riah which had disappeared near Iranian waters starting last weekend. State TV aired dramatic footage showing multiple IRGC fast-boats swarming the clearly marked vessel in the Strait of Hormuz. 

First video of ‘a foreign fuel-smuggling tanker’ seized by #Iran’s Islamic Revolution Guards Corps in the Iranian waters in the Persian Gulf. #StraitOfHormuz #PersianGulf #tanker #IRGC pic.twitter.com/mgYEnYKFxv

— Press TV (@PressTV) July 18, 2019

#IRGC releases footage showing seizure of ship smuggling fuel in Persian gulf#StraitOfHormuz #PersianGulf #tanker pic.twitter.com/v3RO4SBuGw

— Press TV (@PressTV) July 18, 2019

On Tuesday international reports described the Riah as a tanker based in the United Arab Emirates and cited US intelligence officials to say Iran's navy had forced the vessel into waters near Iran's coast starting late Saturday night. Iran had initially denied the accusations that it had detained the vessel. 

But now Foreign Minister Mohammad Javad Zarif has acknowledged the vessel is now being detained by Iran for "smuggling":

“We do this (inspecting ships) every day. These are people who smuggle our oil,” Iran's Press TV quoted Iranian Foreign Minister Mohammad Javad Zarif as saying, adding: “It was a small ship used to smuggle 1 million litres - not 1 million barrels - of crude oil.”

It's clear that Tehran is attempting to ramp up the pressure on Washington and drive up global oil prices, while also potentially in the beginning phase of making good on its long time threat to cut off global shipping through the vital oil passageway

State run ISNA had earlier in the day described, "A foreign vessel smuggling one million liters of fuel in the Lark Island of the Persian Gulf has been seized," and said its navy detained it starting Sunday. 

Video released by #IRGC shows the foreign fuel tanker's main deck #StraitOfHormuz #PersianGulf #tanker #Iran pic.twitter.com/V8wuBhkCGF

— Press TV (@PressTV) July 18, 2019

Iran's Press TV had previously issued the following details

The incident took place to the south of the Iranian Lark Island on Sunday.

IRGC naval forces, which were patrolling the waters on an anti-smuggling mission, acted against the vessel in a “surprise” operation upon ascertaining the nature of its cargo and securing the required legal approval from Iranian authorities.

The ship had loaded the fuel from Iranian dhows and was about to hand it over to other foreign vessels in farther waters. The vessel, which had 12 foreign crewmembers aboard at the time of the mission, is capable of carrying two million liters of fuel.

The statement hailed the naval forces’ “perceptiveness” in frustrating the smuggling effort. It added that the crime had invoked due legal proceedings.

Days ago Iran vowed to "answer" the UK's seizure and detention of the 'Grace 1' which had been transporting 2 million barrels of Iranian oil to Syria. The Royal Marines had boarded it in the Strait of Gibraltar and arrested its crew. 

Tehran condemned it as an act of "piracy" and warned the UK it would respond in kind. Thursday's so far mysterious vessel seizure announced by the IRGC could be the start of the promised coming retribution. 

Meanwhile, late in the day Thursday President Trump announced that the amphibious assault ship, the USS Boxer, shot down an Iranian drone in the Strait of Hormuz in a defensive action.

But strangely, Iran's FM Zarif claimed not be aware of any drone downing following Trump's announcement, according to Reuters. “We have no information about losing a drone today,” Zarif told reporters at the United Nations.

  • 18 juillet 2019 à 23:53

"Liquidating Before Your Eyes" - PG&E's Clock Is Ticking

Par Tyler Durden

Grant's Almost Daily, submitted by Grant's Interest Rate Observer

On Tuesday, California governor Gavin Newsom signed Assembly Bill 1054, establishing a $21.5 billion wildfire relief fund and setting a June 30, 2020 deadline for fallen utility PG&E Corp. (PCG on the NYSE) to emerge from bankruptcy in order to participate. PG&E, which was found liable for a series of 2017 and 2018 blazes including the Camp Fire (which killed 85 people and destroyed the town of Paradise), entered Chapter 11 on Jan. 29. Investors have kept their hopes up for a swift return to business as usual, as the company still commands a $9.8 billion market cap.

There is reason for that optimism. The new legislation will allow utilities to choose between accessing designated liquidity and insurance funds which allow for fire cost coverage. While PG&E cannot participate in the scheme until it emerges from bankruptcy, analysts at Bloomberg Intelligence note today that PG&E shareholders “would face significantly less downside” if the company can achieve various safety certifications and make the necessary payments to buy in to the insurance fund post-bankruptcy.

As noted by The Mercury News yesterday, “as much as some legislators may have wanted to roundly punish bad actors among California’s electricity providers, they were mindful that even a slap on the wrist to utilities could have the unintended impact of a punch in the nose to consumers.”

But will PG&E investors avoid the proverbial knuckle sandwich? In its most recent 10-Q filing on March 31, the company disclosed $14.2 billion in existing wildfire-related liabilities. In testimony concurrent with the filing, CFO Jason Wells estimated that figure could end up topping $30 billion.

The clock is ticking for future liabilities, as claims from any new wildfire damages would take precedence over existing liabilities.  A study released Sunday by the journal Earth’s Future finds that: “During 1972–2018, California experienced a five-fold increase in annual burned area, mainly due to more than an eight-fold increase in summer forest-fire extent.”

Media scrutiny continues apace. Last Wednesday, The Wall Street Journal reported that company executives were aware of problems with transmission lines that were eventually responsible for the Camp Fire, yet “repeatedly failed to perform the necessary upgrades.”  In addition, PCG estimated in 2017 that its transmission towers were 68 years old on average (already above the mean life expectancy of 65 years), with some as old as 108.

The company is no stranger to bad press surrounding environmental disaster and big payouts. In 1996, PG&E was forced to pay $333 million to settle claims it dumped more than 350 gallons of chemically-poisoned water into ponds near Hinkley, Calif., an episode memorialized in the 2000 film Erin Brockovich.

It might be harder to shake the wildfire legacy costs than the bulls reckon. In a bearish analysis of PG&E in the Feb. 22 edition of Grant’s, Angelo Thalassinos, the deputy managing editor at Reorg Research, Inc., noted that the Camp Fire may act as a millstone around PCG for years to come.

The thing that jumps out at me, and the distinction here from other mega cases, is the damages and liabilities from the wildfires. It most harkens back to old Chapter 11 cases that had asbestos liabilities. . . . There is potential for continuing damages from that respect throughout the bankruptcy case and even post-emergence.

In the five months since our report, PCG shares have treaded water, lagging the 8.3% total return from the S&P 500 Utilities Index over that period.  But the company’s debt has fared well, with the senior unsecured 6.05% notes of 2034 rallying to 111 cents on the dollar (from 93 in February), for a 283 basis point pickup over Treasurys.

That performance disparity seemingly reflects the unfolding political situation. On Friday, The Journal reported that creditors led by Elliott Management Corp. petitioned California lawmakers for bondholder-friendly tweaks to the bill, including allowing PG&E to issue debt to pay future wildfire claims but not existing liabilities, such as from the Camp Fire. As noted by the WSJ: “Legislators ultimately sided with bondholders on the issue.”

Victory in court for that Elliott-led bondholder group would likewise spell trouble for shareholders. Creditors have proposed injecting up to $18 billion into PCG, in return for control of the company.  A court hearing at which Elliott et al. will present their arguments is scheduled for July 23.

With PCG continuing to sport a substantial market cap, investors may be underestimating the risks. That Feb. 22 Grant’s analysis broke down the pertinent numbers, concluding:

To the equity holders, it’s a daunting figure. Wildfire claims of just $10 billion (around a third of the CFO’s estimate) would impair the equity— assuming that PG&E’s asset base is not overstated through overly long depreciation schedules.

Even prior to the recent disaster, PCG’s shareholder economics looked less than compelling. From 2013 to 2018, the company generated $25.5 billion in operating cash flow, well shy of the $31.9 billion in capital expenditures over that period. In his Jan. 31 affidavit, CFO Wells forecast that cash from operations will lag capex by an additional $1.6 billion per year in 2019 and 2020. Even after suspending its dividend in December 2017, post-2013 disbursements to shareholders foot to $4.4 billion, a sum which PCG borrowed to pay.

The utility increased operating earnings to $3 billion in 2017 from $2.3 billion in 2008, while capital employed jumped to $62 billion in 2018 from $30 billion in 2008. James S. Chanos, founder and managing partner of Kynikos Associates L.P. and a PG&E bear, noted to Grant’s in February:

It’s a 2% return on incremental capital. That is below their cost of capital. They are liquidating. The utility is in effect liquidating before your eyes before any wildfire liability.

  • 18 juillet 2019 à 23:45

Boeing Takes $4.9 Billion Charge As 737 Max Fiasco Drags On, Stock Jumps

Par Tyler Durden

In a long-overdue step that suggests Boeing is eager to put the 737 MAX debacle behind it, the Seattle airplane company announced it would take a $4.9 billion charge in Q2 related to the grounding of the 737 Max aircraft, which represents that troubled aircraft maker’s first estimate of the cost of compensating airlines for schedule disruptions and delays in aircraft deliveries. The charge will result in a $5.6 billion hit to pre-tax earnings when the company reports earnings on July 24, the company said in a statement issued on Thursday.

There is just one problem: there is no assurance Boeing's 737 MAX woes will end in Q2, with media reports suggesting the grounding of the jet may last into 2020. That scenario is not being contemplated by the world’s largest commercial aircraft manufacturer, which said it assumes regulatory approval will be granted for the Max to return to global skies in the fourth quarter of this year.

"This assumption reflects the company’s best estimate at this time, but actual timing of return to service could differ from this estimate," the company said.

To address the possibility of an extended grounding, Boeing said that although the charge equal to $8.74 per share, would be taken in the second quarter, the company said it expects “potential concessions or other considerations” would come “over a number of years”. As the FT notes, "concessions in such circumstances often take the form of price cuts on aircraft orders rather than cash payments."

More importantly, and the reason why the company finds itself in this spot, Boeing said it is raising its estimated costs to produce the aircraft by $1.7bn in the second quarter, primarily due to higher costs associated with a reduced production rate (and hopefully with safety equipment that is sold as standard instead of options). While Boeing cut production to 42 per month in April from 52 per month, and is parking the grounded plane in car-lots...

... Boeing said it expects to ramp up to 57 a month in 2020.

Addressing Boeing's shareholders, CEO Dennis Muilenburg said that “we remain focused on safely returning the 737 Max to service. This is a defining moment for Boeing."

Boeing chief financial officer Greg Smith added: “We are taking appropriate steps to manage our liquidity and increase our balance sheet flexibility the best way possible as we are working through these challenges. Our multiyear efforts on disciplined cash management and maintaining a strong balance sheet, in addition to our strong and broad portfolio offerings, are helping us navigate the current environment.”

Boeing suspended financial guidance after the grounding and said it will issue new guidance in future, but for now investors liked the fact that over half a billion dollars would be paid out, sending Boeing stock higher after hours.

  • 18 juillet 2019 à 23:41

'Gendered' Terms Like "Manhole", "Policemen", & "Chairmen" To Be Banned In Berkeley, CA

Par Tyler Durden

Today in "the entire world is steadily losing its mind" news, there will no longer be terms like "manhole", "policeman" or "chairman" in Berkeley, California city codes, according to CNN.

Words that "imply a gender preference" will soon be removed from the city's codes and replaced with gender-neutral terms, according to recently adopted ordinances. Berkeley voted on Tuesday to replace "gendered" terms in its municipal codes. 

Words like "manhole" will be replaced with words like "maintenance hole".

"Manpower" will be replaced with "human effort". 

The item passed without comment or discussion and wasn't controversial, according to Berkeley City Council member Rigel Robinson, the bill's primary author.

Robinson said:

"There's power in language. This is a small move, but it matters". 

Gendered pronouns like "he" and "she" will also be replaced with words like "they". The office of the city manager said that the city's municipal codes currently "contain mostly masculine pronouns". 

Robinson concluded: 

"Having a male-centric municipal code is inaccurate and not reflective of our reality. Women and non-binary individuals are just as entitled to accurate representation. Our laws are for everyone, and our municipal code should reflect that."

When will this idiocy end?

  • 18 juillet 2019 à 23:25
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