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À partir d’avant-hierZero Hedge

The Fed's "Irrational Exuberant" Bull Market

Par Tyler Durden
The Fed's "Irrational Exuberant" Bull Market

Submitted by Joseph Carson, Former Director of Global Economic Research, Alliance Bernstein

Stock market booms are often based on a “good” story or a narrative of better things to come. Excess liquidity usually provides the fuel for bull market runs, as fundamentals of growth and profits usually don’t play a major role, at least not initially.

In the past 5 years, the S&P 500 stock index has risen over 50% and during that period operating profits for non-financial companies have declined over 15%, a drop that has always been associated with economic recessions.

Source: Bloomberg

The big test for policymakers is how to assess when “irrational exuberance” over easy money has gone too far, creating a vision of little risks and a persistent bull market in stocks that unduly separates finance from the economy increasing the risk of a bad outcome?

The Great Divergence

The Bureau of Economic Analysis reported that Q3 operating profits for all US companies, large and small, public and private, totaled $2.087 trillion, off 0.8% from year ago levels. The decline in profits in the past year continues a long stretch of weak corporate earnings. In fact, operating profits peaked in Q3 2014 and over the past 5 years are off nearly 5%.

The weakness in operating profits is centered in non-financial companies—with the biggest declines in the manufacturing sector. In the past year, profits for non-financial corporate businesses declined nearly 5%, bringing the cumulative 5-year fall to 15.5%--three times larger than the decline for all companies.

Profit declines of this scale, and even less, have always been associated with an economic recession. In fact, since 1975, there have been 6 recessions and of those only two--- the bust and the Great Financial Recession - recorded larger declines in operating profits than the current slump.

Yet, despite the decline in operating profits the broad equity markets has posted very strong gains, with the S&P 500 index up over 50% in the past 5 years, and the NASDAQ up over 80% - with both indexes posting gains of 25% to 30% in 2019 alone.

Divergence between profits and equity markets are not uncommon, but the scale and length of the current divergence is.
The primary fuel for the stock market run has been easy money and the promise of more easy money. Even though the economy’s performance in 2019 in terms of growth, jobless rate and core inflation was fairly close to the Fed’s forecast policymakers voted to reduce official rates three times instead of the initial plan to raise rates twice. That’s the equivalent of 125 basis points of an easier money stance relative what the financial markets had been expecting. Policymakers have also made a promise not to raise official rates until reported inflation is well above its preferred rate of 2%. 

In 1996, Federal Reserve Chairman Alan Greenspan raised the question “how do we know when irrational exuberance has unduly escalated asset values? Nowadays a similar question can be directed to the Fed - "How do we know when irrational exuberance over the Fed’s policy of easy money has unduly escalated asset values?"

History clearly shows excess liquidity fuels bull markets, but money has to at some point work its way into the real economy, lifting growth and profits. Bubbles form when excess liquidity remains bottled in one segment of finance or single sector of the economy - like during the and housing bubbles.

Monetary policy can create liquidity, but it can’t direct its flow - and the current flow remains unbalanced between finance and the real economy.

Tyler Durden Tue, 12/03/2019 - 09:15
  • 3 décembre 2019 à 15:15

Iranian State TV Acknowledges Killings Of "Rioters" During Gas Price-Hike Protests

Par Tyler Durden
Iranian State TV Acknowledges Killings Of "Rioters" During Gas Price-Hike Protests

In a rare moment of transparency for Iran's state-run media, a domestic television station reported that Iranian security forces shot and killed protesters - whom they described as dangerous "rioters" conspiring to undermine national stability - in several Iranian cities during a wave of unrest sparked by a massive hike in gasoline prices.

The report is the first time the Iranian government has even acknowledged the killings, which were largely carried out by state security forces.

As Bloomberg explains, Iranians have come to regard cheap gasoline as a birthright, since low gas prices are one of the few sops that the government can throw the impoverished Iranian people. Many underemployed Iranians work as cab drivers, an easy, low-cost gig that can quickly line the pockets of any impoverished Iranians.

At least 208 people were killed during the protests, according to Amnesty International, though Iran's UN delegation insisted this claim was inaccurate.

Iran infamously blocked access to the Internet during the unrest that gripped the country, cutting off the flow of information from non-official sources.

According to the state TV report, many of those killed during the unrest were "rioters who have attacked sensitive or military centers with firearms or knives, or have taken hostages in some areas." Others killed were described as passers-by, security forces and peaceful protesters, though the report didn't attempt to assign blame for their deaths.

In one case, the report said security forces confronted a separatist group in the city of Mahshahr armed with "semi-heavy weapons."

"For hours, armed rioters had waged an armed struggle," the report alleged. "In such circumstances, security forces took action to save the lives of Mahshahr’s people."

Separately, state TV acknowledged confronting "rioters" in Tehran, as well as in the cities of Shiraz, Sirjan and Shahriar, a suburb of Tehran, where Amnesty said there had been "dozens of deaths." The suburb was one of the areas that saw one of the highest death tolls during the protests.

Amnesty didn't offer much of a breakdown of deaths across the country, saying only that "the real figure is likely to be higher" than what it reported.

However, the report did note that there is a "general element of fear" inside Iran.

"The authorities have been threatening families, some have been forced to sign undertakings that they won’t speak to the media," she said. "Families have been forced to bury their loved ones at night under heavy security presence."

Thanks to President Trump's sanctions, Iran's economy has taken a nosedive. Recently, the World Bank estimated Iranian GDP at $6,000 per person, compared with more than $62,000 in the US.

Prior to this latest report, Iranian leaders denounced the protests as a "conspiracy", and also announced that more than 700 banks were torched.

Tyler Durden Tue, 12/03/2019 - 09:35
  • 3 décembre 2019 à 15:35

Dow Plunges To 1-Month Lows As Trade-Deal Odds Plummet

Par Tyler Durden
Dow Plunges To 1-Month Lows As Trade-Deal Odds Plummet

Dow futures are now down almost 800 points from post-China-PMI highs, plunging this morning after President Trump's comments on a delayed trade deal...

And the market is now discounting less of a chance of a trade deal...

Source: Bloomberg

Once again it seems like bonds were on to something all along...

Source: Bloomberg

Cue - Kudlow to save the world with a "deal is close" headline.


Tyler Durden Tue, 12/03/2019 - 09:37
  • 3 décembre 2019 à 15:37

Pondering Yesterday's Gigantic Miss On Construction Spending

Par Tyler Durden
Pondering Yesterday's Gigantic Miss On Construction Spending

Authored by Mike Shedlock via MishTalk,

Yesterday's Oct construction spending report was much weaker than expected. That's on top of huge negative revisions for Sept.

Gigantic Miss

Economists at Econoday expected construction spending to rise 0.4% in October. Instead, spending fell 0.8%.

Worse yet, the Census Department revised september spending from 0.5% to -0.3%.

All told that is a gigantic economic estimate miss of a full 2.0 percentage points.

Residential Construction

Despite glowing new home sales reports, residential construction spending peaked in February of 2018.

Government spending has kept total construction spending flat.

If this was a single report, I would suspect an outlier. But the key chart lines point to early 2018.

New Home Sales Highest in 12 Years

Six days ago I reported New Home Sales Highest in 12 Years.

Q: Does today's report make sense?

A: Actually, it does.

Median Sales Price of Houses Sold for the United States

The median home sales price peaked in the fourth quarter of 2017.

Builders are building cheaper homes because no one can afford anything else.

Tyler Durden Tue, 12/03/2019 - 09:55
  • 3 décembre 2019 à 15:55

Stocks, Yuan, Bond Yields Crash On Reports Dec 15th Tariffs "Going Forward"

Par Tyler Durden
Stocks, Yuan, Bond Yields Crash On Reports Dec 15th Tariffs "Going Forward"

Well that escalated quickly...

Stocks are accelerating their losses after reports from Fox News that the December 15th tariffs are still going forward...

Trade Sources tell me the Dec 15th tariffs on basically the rest of what China imports into the US are still going forward as of today. I was told the caveat is if Phase One trade deal gets on paper or something else positive happens President could choose not to impose tariffs

— Edward Lawrence (@NewsEdward) December 3, 2019

Dow futs are down 900 points from Sunday night highs...

Yuan is collapsing...

Source: Bloomberg

And Treasury yields are plunging...

Source: Bloomberg

Tyler Durden Tue, 12/03/2019 - 09:57
  • 3 décembre 2019 à 15:57

Barr Disputes Major Horowitz Finding Based On Durham, CIA Evidence

Par Tyler Durden
Barr Disputes Major Horowitz Finding Based On Durham, CIA Evidence

Attorney General William Barr will dispute a fundamental finding in the upcoming Inspector General report - namely that the FBI was justified in launching an operation Crossfire Hurricane, the agency's official covert counterintelligence investigation into links between the Trump campaign and Russian officials, according to the Washington Post.

While IG Michael Horowitz is said to have concluded that the agency had enough information to launch the probe on July 31, 2016 after Trump campaign aide George Papadopoulos repeated a rumor that Russia had dirt on Hillary Clinton, Barr has reportedly told associates that Horowitz does not know about - or did not include - potentially exculpatory evidence held by other US agencies such as the CIA, which could alter his report's conclusion.

In July, Fox News reported that exculpatory evidence existed which the FBI failed to include in surveillance warrant applications in which Papadopoulos denies having any contact with the Russians, when he was in fact told about the 'Clinton dirt' byJoseph Mifsud, a mysterious Maltese professor (and self-professed member of the Clinton foundation) who has ties to George Soros' Open Society Foundation.

Many believe Papadopoulos was the victim of an entrapment scheme, by which Mifsud would seed him with information that Australian diplomat would later extract from him in a London bar, which made its way to the FBI - officially leading to the launch of Operation Crossfire Hurricane.

And the exculpatory evidence? Downer - a Clinton ally - likely recorded Papadopoulos saying he had no Russian contacts.

Have been contacted by about a dozen Australian journalists for comment on Clinton errand boy, Alexander Downer, and him being idiotic enough to spy on me with his phone. The transcript of my meeting with him will show Australia was willfully trying to sabotage Donald Trump.

— George Papadopoulos (@GeorgePapa19) June 15, 2019

Barr's information also comes from a concurrent, ongoing investigation into the Obama DOJ conducted by Connecticut US Attorney John Durham.

Part of Barr’s reluctance to accept that finding is related to another investigation, one being conducted by Connecticut U.S. Attorney John Durham, into how intelligence agencies pursued allegations of Russian election tampering in 2016. Barr has traveled abroad to personally ask foreign officials to assist Durham in that work. Even as the inspector general’s review is ending, Durham’s investigation continues. -Washington Post

Barr, through Durham, has been investigating Mifsud - who told Italian media "I never got any money from the Russians: my conscience is clear," adding "I am not a secret agent." The Maltese professor is currently MIA.

As the Post's Devlin Barrett (who spoke with former FBI lawyer Lisa Page) notes, Barr's disagreement with Horowitz not only sets the stage for a showdown within the DOJ, it will spark partisan outrage among Democrats who have already accused the AG of being Trump's personal lawyer.

House Speaker Nancy Pelosi (D-Calif.) charged in September that Barr had “gone rogue.”

In recent weeks, Democrats have charged that Barr’s Justice Department was too quick to decide not to investigate Trump over his efforts to convince Ukraine’s president, Volodymyr Zelensky, to announce an investigation of Democratic presidential candidate Joe Biden. The Ukraine controversy has led to an impeachment inquiry. -Washington Post

Barr, meanwhile, has slammed Democrats for abusing legal procedures and Congressional standards in their pursuit of Donald Trump, saying earlier this month "In waging a scorched-earth, no-holds-barred war against this administration, it is the left that is engaged in shredding norms and undermining the rule of law."

In April, Barr used the term "spying" to describe what the Obama DOJ did to the Trump campaign.

"I think spying on a political campaign is a big deal," he told lawmakers. "I think spying did occur, but the question is whether it was adequately predicated and I’m not suggesting it wasn’t adequately predicated, but I need to explore that."

PapaD is the key

— Jack Posobiec 🇺🇸 (@JackPosobiec) December 3, 2019
Tyler Durden Tue, 12/03/2019 - 10:02
  • 3 décembre 2019 à 16:02

Nomura Warns Of Imminent "Gamma-Flip" Risk In Stocks

Par Tyler Durden
Nomura Warns Of Imminent "Gamma-Flip" Risk In Stocks

While the last few weeks have seen endless headlines that "a trade deal is close" which, thanks to headline-scanning algos has ignited an endless short-squeeze to lift stocks to record highs, the last two days have seen a very sudden and very dramatic plunge in stocks on the heels of some less-than-positive trade-deal comments.

This has plunged the market's odds of a deal notably...

Source: Bloomberg

But, the velocity of the collapse in stocks has many wondering what else is going on. The answer, as Nomura's Charlie McElligott explains below is simple - what forced self-reinforcing buying pressure on the way up is about to feed a vicious cycle of selling on the way down as stocks face an imminent "gamma flip."

As we warned earlier today:

3100 is critical: this is the massive gamma wall. All downhill from there

— zerohedge (@zerohedge) December 3, 2019

And McEligott explains:

The interpretation of Trump’s “better to wait until after the election” for a China trade deal comments is that the Hong Kong human rights bill sponsorship by POTUS has clearly caused agitated the Chinese side (plus this morning’s Reuters report stating that the White House is considering kicking Huawei out of the US banking system), and in conjunction with the narrowing window to act on the Dec 15th tariff “fill or kill,” is likely incentivizing monetization of of the +9% gain made in S&P since early October via profit-taking in recently Options- ($Delta still 94th %ile since 2013 even after yday’s selloff) and Futures- (Asset Manager S&P Futures $notional position currently 99.6th %Ile since 2006 at $141.7B) positioning “extremes.”

This “extreme positioning” into a dynamic where traders are incentivized to monetize into year-end—especially ahead of the Dec 15th “tariff risk”—has been at the core of my view over the past few weeks that there was a local / tactical “window for a pullback” into late November (start Dec ain’t bad though).

As such, this risk-off dynamic is driving the bid in Rates / USTs (Reds and Greens +6 to +8 ticks, while we’ve seen Real Money and Central Bank buying flows in the front-end—thus the “bull steepening”), which too then will almost certainly result in a reversal later today of the US Equities factor dynamic experienced on Monday (Momentum down, Value up); instead, today’s UST rally will then dictate a resumption of the “Momentum” bounce-back experienced over the past 3 weeks, as longs in “Duration” Equities (“Min Vol” Defensives and “Secular Growth”) are set to rally, with “Cyclicals” are likely to again fall.

Touching on my constant refrain over the past two years—that being where a “macro shock” then acts as catalyst for Dealer Gamma “flip” and / or in conjunction with a Systematic Trend deleveraging impulse—we see a mixed-bag, as our Nomura QIS CTA model shows the majority of Equities futures positions remain “in trend” and ABOVE estimated deleveraging / “sell” levels.

HOWEVER looking at SPX options, we see the Dealer $Gamma position nearing the potential “flip” level to “SHORT GAMMA” ~ 3073 (spot 3083 last), which would of course beget more selling the hedge the lower futures travel and further incentivize that massive Asset Manager futures “length” to monetize profits on the multi-month rally:

  • Both the Equities and Global DM Bond / Rates positions for CTA’s remain firmly in “no man’s land” relative to any sort of “deleveraging triggers"

  • Today’s estimates for the S&P futures position for CTAs show no reduction of the current “+100%” signal until all the way under 2916 (which would see the signal drop to just “+25%”)

  • In TY (current signal at “+75%” Long), we would not see any selling / deleveraging until all the way down at 121.41 as the DEEPLY “in the money / in trend” 1Y window (“Long”) would “flip” and turn the signal entirely “-100%” Short—and that’s not gonna happen, LOL

Back to Equities however, the larger risk today for a “sloppy” move lower in US Stocks would be via Dealer “Greek” exposures via Options positioning, as our analysis of the Dealer Gamma position across consolidated SPX / SPY options is just ~12 handles ABOVE a potential “flip SHORT” level ~3073—but in true “negative convexity” / “short Gamma” fashion, we are accelerating as we turn lower.

And sure enough, S&P Futs plunged through that critical level...

We are going to need a serious walk-back of Trump's comments to rescue this one... where's Kudlow!?

Tyler Durden Tue, 12/03/2019 - 10:12
  • 3 décembre 2019 à 16:12

Saxo Bank Unveils Its "Outrageous Predictions" For 2020

Par Tyler Durden
Saxo Bank Unveils Its "Outrageous Predictions" For 2020

Via Saxo Bank,

Continuing almost two decades of tradition, our experts have made 10 Outrageous Predictions for the year ahead. Their consensus-smashing forecasts would send shockwaves through the markets, if they come to pass. So will they prove pure fantasy or visions of reality?

Engines of Disruption

click image for large legible version

1. Chips go cold in AI winter

Diminishing returns on chip applications sees the SOX Index of semiconductor stocks collapse 50%.

click image for large legible version

2. Stagflation rewards value over growth

The iShares MSCCI World Value Factor ETF outperforms the FANGs by 25%.

click image for large legible version

3. ECB folds and hikes rates

European banks make a comeback as the EuroStoxx bank index rises 30%.

click image for large legible version

4. In energy, green is not the new black

The green revolution gets a reality-check as dirty energy starts to pay once again.

click image for large legible version

5. South Africa gets electrocuted by ESKOM debt

USDZAR rises from 15 to 20 as world cuts credit lines to the rainbow nation.

click image for large legible version

6. Trump announces America First Tax

A 25% tax on all foreign-derived revenue scrambles supply lines and pushes inflation higher.

click image for large legible version

7. Sweden breaks bad

Sweden’s pragmatic attitude shift leads to a massive increase in fiscal spending that drives up the SEK.

click image for large legible version

8. Dems win clean sweep in 2020 election

Democrats take control of the presidency and both houses of congress. Big healthcare and pharma stocks collapse 50%.

click image for large legible version

9. Hungary leaves the EU

HUF collapses to EURHUF 375 as Hungary’s leadership and the EU fight over the country’s place in the Union.

click image for large legible version

10. Asia launches digital reserve currency

An Asian, AIIB-backed, digital reserve currency tanks the US dollar by 30% versus gold.

click image for large legible version

Saxo's "outrageous predictions" can be downloaded here.

Tyler Durden Tue, 12/03/2019 - 10:30
  • 3 décembre 2019 à 16:30

Tech War: Trump Admin Considered Nuclear Option In Banning Huawei From US Banking System

Par Tyler Durden
Tech War: Trump Admin Considered Nuclear Option In Banning Huawei From US Banking System

A trade deal between the U.S. and China becomes less likely by the day... A decoupling of the world's largest economies is underway.

Sources told Reuters that the Trump administration considered banning Huawei from using the U.S. financial system as a nuclear option to crush the company.

The strategy by the White House National Security Council was to place China's Huawei Technologies Co Ltd. on the Treasury Department's Specially Designated Nationals (SDN) list. This would've meant Huawei would've been barred from the U.S. financial system and banned from using U.S. dollars in transactions, along with prohibiting it from transacting with any U.S. entities or persons.

One source, who supports the move, said Huawei could be placed on the SDN list in the coming months, depending on trade war developments. 

Considering President Trump's statements on Tuesday morning of how a trade deal might be delayed until after the 2020 election, it seems that Huawei could be imminently placed on the list.

Another source said White House officials drafted a memo and held several meetings on the issue, which shows the extent the Trump administration is willing to damage China's economy in the trade war.

Instead of the nuclear option, President Trump opted to blacklist Huawei on trade over the summer, which forces U.S. suppliers to obtain individual licenses to do business with the Chinese company. But this leaves the door open for Trump to use the nuclear option to pressure China into signing a deal.

Annie Fixler, a cyber expert at the Foundation for Defense of Democracies think tank, told Reuters that placing Huawei on the SDN list "would have broad, widespread implications for Huawei across the globe."

Fixler noted that banning the company from using dollars in the global financial system would be devastating for the company. It would also open the doors for Beijing to unleash countermeasures on U.S. firms, like Apple, etc...

Huawei understands that more sanctions are coming, and the trade war could quickly deepen in 2020. To avoid having their assets frozen in the U.S., the company has announced that it will shift a U.S. research center to Canada.

"The research and development center will move from the United States, and Canada will be the center," Huawei's CEO Ren Zhengfei told Toronto's Global and Mail newspaper.

Judging by the headlines on Tuesday from the Trump administration, the likelihood of a trade deal between the U.S. and China before the 2020 election is slim. This means that an escalation in the trade war could be seen as soon as Dec. 15.

Tyler Durden Tue, 12/03/2019 - 10:50
  • 3 décembre 2019 à 16:50

In Hong Kong, It's US Versus China Now

Par Tyler Durden
In Hong Kong, It's US Versus China Now

Authored by Patrick Buchanan via,

At first glance, it would appear that five months of pro-democracy protests in Hong Kong had produced a stunning triumph.

By September, the proposal of city leader Carrie Lam that ignited the protests — to allow criminal suspects to be extradited to China for trial — had been withdrawn.

And though the protesters’ demands escalated along with their tactics, from marches to mass civil disobedience, Molotov cocktails, riots and attacks on police, Chinese troops remained confined to their barracks.

Beijing wanted no reenactment of Tiananmen Square, the midnight massacre in the heart of Beijing that drowned in blood the 1989 uprising for democratic rights.

In Hong Kong, the police have not used lethal force. In five months of clashes, only a few have perished. And when elections came last month, Beijing was stunned by the landslide victory of the protesters.

Finally, last month, Congress passed by huge margins in both houses a Hong Kong Human Rights and Democracy Act that threatens sanctions on Hong Kong authorities should they crush the rebels.

When President Donald Trump signed the bills, the protesters now had the U.S. as an ally, and the Chinese reacted viscerally.

An enraged Foreign Ministry declared:

“The US … openly backed violent criminals who rampantly smashed facilities, set fire, assaulted innocent civilians, trampled on the rule of law and jeopardized social order.

“This so-called bill will only make the Chinese people … further understand the sinister intentions and hegemonic nature of the United States. It will only make the Chinese people more united and make the American plot more doomed to failure.”

Thus do the Hong Kong protesters appear victorious, for now.

Sunday, black-clad masked protesters were back in the streets, waving American flags, erecting barricades, issuing new demands — for greater autonomy for Hong Kong, the release of jailed protesters and the punishment of police who used excessive force.

This confrontation is far from over.

Instead, it has escalated, and the U.S. government, having given up its posture of benevolent neutrality in favor of peaceful demonstrators for democracy, has become an open ally of often-violent people who are battling Chinese police inside a Chinese city.

On Monday, China retaliated, suspending visits to Hong Kong by U.S. military planes and Navy ships and declaring sanctions on the National Endowment for Democracy, Freedom House and half a dozen other U.S. agencies that promote democracy for interfering in the internal affairs of China.

And there is another issue here — the matter of face.

China has just celebrated the 70th anniversary of the Revolution where Mao proclaimed, “China has stood up!” after a century of foreign humiliations and occupations.

Can Xi Jinping, already the object of a Maoist cult of personality, accept U.S. intervention in the internal affairs of his country or a city that belongs to China? Not likely. Nor is China likely to accede to demands for greater sovereignty, self-determination or independence for Hong Kong.

This would only raise hopes of the city’s eventual escape from its ordained destiny: direct rule by Beijing when the 50-year China-U.K. treaty regarding the transfer of Hong Kong expires in 2047.

For Xi to capitulate to the demands of Hong Kong’s demonstrators could cause an outbreak of protests in other Chinese cities and bring on a crisis of the regime.

Xi Jinping is no Mikhail Gorbachev. He is not going to let his people go. He is not going to risk a revolution to overturn the Maoist Revolution he has served his entire life.

A ruler committing the atrocities Xi is committing today in the concentration camps in the Uighur regions of China is staying his hand in Hong Kong only so the world and the West cannot see the true face of the ideology in which this true believer believes.

In providing moral support for protesters in Hong Kong who desire the freedoms we enjoy, America is on the right side. But to align the U.S. with the protesters’ cause, and threaten sanctions if their demands are not met, is to lead these demonstrators to make demands that Hong Kong’s rulers cannot meet and China will not allow.

We should ask ourselves some questions before we declare our solidarity with the protesters engaging the Hong Kong police.

If the police crush them, or if China’s army moves in and crushes the demonstrators whose hopes were raised by America’s declared solidarity, then what are we prepared to do to save them and their cause?

Are we willing to impose sanctions on Beijing, such as we have on Venezuela, Iran and Vladimir Putin’s Russia?

Some of us yet recall how the Voice of America broadcast to the Hungarian rebels of 1956 that if they rose up and threw the Russians out, we would be at their side. The Hungarians rose up. We did nothing. And one of the great bloodbaths of the Cold War ensued.

Are we telling the protesters of Hong Kong, “We’ve got your back!” when we really don’t?

Tyler Durden Tue, 12/03/2019 - 11:10
  • 3 décembre 2019 à 17:10

Trump Unveils Next G-7 Meeting Will Be Held At Camp David

Par Tyler Durden
Trump Unveils Next G-7 Meeting Will Be Held At Camp David

One month after Trump unleashed the latest round of outrage after he said next year's G-7 summit would take place at his Doral golf resort in Florida, sparking angry accusations that this was just another (potentially impeachable) example of self-dealing, and forcing Trump to promptly drop this plan, moments ago the president unveiled the G-7 meeting would instead take place at the historic Camp David secluded traditional presidential retreat in Maryland, which had originally been speculated to be the G7 venue all along.

“It’s nearby. It’s close. it will be at Camp David, which is a place that people like,” he said in response to a reporter’s question at the NATO summit in London.

The summit is scheduled to take place from June 10 to June 12 next year.

It's no secret that Trump has traditionally not been a big fan of the woodsy charms of Camp David, the secluded traditional presidential retreat in Maryland. Before winning the presidential election, he told a reporter:

Camp David is very rustic, it’s nice, you’d like it. You know how long you’d like it? For about 30 minutes


Tyler Durden Tue, 12/03/2019 - 11:24
  • 3 décembre 2019 à 17:24

Appeals Court Hands Trump Loss, Rules Banks Must Turn Over Financial Records To House Democrats

Par Tyler Durden
Appeals Court Hands Trump Loss, Rules Banks Must Turn Over Financial Records To House Democrats

The Second Circuit Court of Appeals on Tuesday said that Deutsche Bank and Capital One must comply with a subpoena from the Democrat-controlled US House of Representatives demanding the financial records of President Trump and his children.

"The Committees' interests in pursuing their constitutional legislative function is a far more significant public interest than whatever public interest inheres in avoiding the risk of a Chief Executive's distraction arising from disclosure of documents reflecting his private financial transactions," the three-judge panel ruled in a 2-1 split decision.

In August, Trump filed an appeal to block Deutsche Bank and Capital One from providing the records, after a New York district judge declined to block the subpoenas issued by the House Intelligence and Financial Service committees in April amid their investigations into foreign influence.

In October, Deutsche Bank said in a letter that while it has some of the records the House seeks, they don't have Trump's tax returns.

We imagine Trump will appeal to the Supreme Court next.

Via Axios:

The big picture: Trump is currently engaged in court battles with both House Democrats and the Manhattan district attorney over subpoenas ordering his longtime account firm Mazars USA to turn over his tax returns. He has appealed both cases to the Supreme Court, where the Deutsche Bank and Capital One case is likely to end up as well.

  • Trump's arguments that he is protected from criminal prosecution while president and that the House's investigations into his financial dealings "serve no legitimate legislative purpose" have both been struck down by judges and appeals courts.
  • The overarching theme from the judges who have presided over these cases is that Trump's tax returns are a matter of "public interest."

Read the ruling here.

Tyler Durden Tue, 12/03/2019 - 11:35
  • 3 décembre 2019 à 17:35

Meet The Biggest Losers Of The US Shale Bust

Par Tyler Durden
Meet The Biggest Losers Of The US Shale Bust

Authored by Anes Alic via,

After a decade of unprecedented growth and seemingly endless investments, the writing is now on the wall: the Great American Shale Boom is slowing down and this could have some grave consequences both the industry and the financial markets. 

A total of 32 oil and gas drillers have filed for bankruptcy through the third quarter, with the total number of bankruptcy filings since 2015 now clocking in at more than 200.

Unlike Phase 1 of the oil bust that featured shale production declining due to an epic global price collapse, the current slowdown is being driven partly by industry-wide core operational issues, including declining production due to wells being drilled too close to one another as well as production sweet spots running out too soon. 

Yet, the most important underlying theme precipitating the collapse is a growing financial squeeze as banks and investors pull in the reins and demand that shale drillers prioritize profitability over production growth.

The shale industry has been built on mountains of debt and the day of reckoning is finally here. 

As many company executives who hoped to drill their way out of debt are belatedly discovering, trying to squeeze a profit from shale-fracking operations is akin to trying to draw blood from stone with the industry having racked up cumulative losses estimated at more than a quarter of a trillion dollars.

From the Permian of the Southwest to the Eagle Ford in Texas and the Bakken of central North America, the future is looking decidedly bleak for shale companies that racked up the most debt and expanded too aggressively.

Bingeing on debt

Chesapeake Energy Corp. (NYSE:CHK) is widely considered the posterchild of debt-fueled shale investments gone woefully wrong. A decade ago, the company’s deceased CEO, Aubrey McClendon (aka the Shale King), was the highest paid Fortune 500 CEO. McClendon had a rather unusual modus operandi: instead of trying to sell oil and gas, he was essentially flipping real estate using borrowed money to acquire leases to drill on land, then reselling them for 5x- 10x more.

He was unapologetic about it, too, claiming it was far more profitable than the drilling business.

McClendon’s aggressive leasing tactics finally landed him in trouble with the Oklahoma authorities before he was killed in a car crash shortly after being indicted. 

He left the company that he founded in a serious liquidity crunch and corporate governance issues from which Chesapeake has never fully recovered--CHK stock has crashed from an all-time high of $64 a share under McClendon in 2008 to $0.60 currently. 

The shares plunged 30% in early November after management fired a warning that the company was at risk of defaulting on an important leverage covenant, something that would trigger the entire balance immediately coming due:

‘‘If continued depressed prices persist, combined with the scheduled reductions in the leverage ratio covenant, our ability to comply with the leverage ratio covenant during the next 12 months will be adversely affected, which raises substantial doubt about our ability to continue as a going concern.’’

Unmitigated disaster for shareholders 

Yet, if shale companies are having it rough, shale investments have been nothing short of disastrous for individual shareholders and investors.

As Steve Schlotterbeck, former CEO of largest natural gas producer EQT, has attested:

“The shale gas revolution has frankly been an unmitigated disaster for any buy-and-hold investor in the shale gas industry with very few limited exceptions. In fact, I'm not aware of another case of a disruptive technological change that has done so much harm to the industry that created the change.”

According to Schlotterbeck, the scale of value destruction has been mind-boggling with the average shale company obliterating 80% of its value (excluding capital) over the past decade.

Chesapeake and the 200+ companies that have gone under should serve as a cautionary tale for an industry that’s big on promises and loves to finance its big ambitions on borrowed dimes with little to show for it in the way of profits. 

Yet, the vicious cycle of high debt, high cash burn and poor returns refuses to go away. Starved for cash, energy companies have devised a new instrument with which to court investors and continue bankrolling their operations: shale bonds. These companies are now floating asset-backed securities wherein producers transfer ownership interests to investors with proceeds from the wells used to pay off the bonds.

A good case in point is Denver-based oil and gas company Raisa Energy LLC, which closed the first shale bond offering in September. Raisa will pay nearly 6% interest on the best quality wells, with higher rates offered on riskier assets. 

After years of low interest rates, fixed-income investors are finding junk bonds increasingly attractive and might find the lure of shale bonds irresistible. But these bonds are a potentially high-risk investment considering that modeling future production remains an inexact science due to the complex geology of shale basins.

Investors will only have companies’ estimates when trying to model potential returns, never mind the fact that there are literally thousands of shale wells that are pumping well below forecasts. 

To get a better grasp of the underlying risks, consider Whiting Petroleum (NYSE: WLL) whose June 2018 unsecured bonds recently traded as low as 57.8 cents on the dollar.

It’s not just retail investors getting torched in this shale snafu. 

Bloomberg has reported that former shale billionaires Farris and Dan Wilks have seen their Permian shale investments decimated in the latest oil bust.

Energy independence

As Schlotterbeck deadpanned: 

“Nearly every American has benefited from shale gas, with one big exception--the shale gas investors.”

No one can deny that the US shale industry has been highly beneficial to the country in a number of ways. For starters, it has helped to lower gas and energy prices for the consumer while freeing the nation from over-dependence on oil imports. Indeed, in November, the US posted its first full month as a net exporter of crude oil in 70 years, with Rystad Energy predicting the country is only months away from achieving total energy independence.

But unless these companies can figure a way to drill profitably and stem the ballooning debts, this is going to continue being a race to the bottom with investors at the bottom of the totem pole paying the highest price.

Tyler Durden Tue, 12/03/2019 - 11:55
  • 3 décembre 2019 à 17:55

Mystery S&P Put Buyer Makes $31 Million Profit In 24 Hours, Covers Half Of Position

Par Tyler Durden
Mystery S&P Put Buyer Makes $31 Million Profit In 24 Hours, Covers Half Of Position

Yesterday we reported that a mystery trader, who was expecting a sharp drop in the market over the next 6 weeks, bought 16,000 January 2,980 S&P puts, spending $32 million to protect against a 4.5% drop in the index at 9:44am on Monday morning, about 15 minutes before the latest dismal Manufacturing ISM sent stocks tumbling.

One day later, that specific put is once again one of the most active ones, and it now appears that the same put buyer is back, only this time he is covering about half of his position, selling 8,221 puts.

Today's trade took place at $37.60, which means yesterday's trader who bought his original batch of 16,000 puts at $19.80, has basically doubled his money...

... and in what is probably a smart move, he has covered half his original position, making a $30.9 million profit on the 8,221 puts sold, as his original $32 million position rose in value to $60.2 million.

It also means that he now has what is effectively a free, costless hedge, protecting him from any major market selloff.

Tyler Durden Tue, 12/03/2019 - 12:11
  • 3 décembre 2019 à 18:11

Hillary Clinton Still Refuses To Rule Out Running For President

Par Tyler Durden
Hillary Clinton Still Refuses To Rule Out Running For President

Authored by Paul Joseph Watson via Summit News,

Hillary Clinton is still refusing to rule out running for president despite already missing the filing deadline for the New Hampshire primary.

During an appearance on Britain’s Graham Norton Show, Clinton was again asked about her presidential aspirations.

Clinton was quizzed as to why she included a story about a U.S. women’s soccer star who retired on the tagline “forget me.”

Hillary said the intention of the words were to “make way for new people” and “get off the stage.”

However, when asked by Norton, “Are you saying ‘Forget me’ now?” – Hillary responded, “Not yet.”

She then said she was aware of the presidential rumor mill and had been “deluged” with questions about running again.

“Right now, I’m not, at all, uh, you know, planning that, I’d have to make up my mind really quickly,” she said, “because it’s moving very fast.”

Back in October, long time Clinton advisor Dick Morris insisted that Hillary will become the Democratic nominee because she believes “she was put on Earth to be President.”

“Make no mistake. She wants it,” said Morris. “She’s planning on it. She’ll do everything she can to achieve it.”

Earlier that month, Clinton teased another presidential run, despite having already failed twice, telling PBS Newshour, “Obviously I can beat him again.”

She also fanned the flames of speculation when she tweeted at Trump, “Don’t tempt me.”

The odds of her getting the nomination are fading however...

Source: Bloomberg

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Tyler Durden Tue, 12/03/2019 - 12:30
  • 3 décembre 2019 à 18:30

"It Would Be A Huge Shock To The Market" - What Happens If The Dec 15 Tariffs Kick In

Par Tyler Durden
"It Would Be A Huge Shock To The Market" - What Happens If The Dec 15 Tariffs Kick In

Now that it appears that the December 15 tariffs are "going forward" despite weeks and weeks of "optimism" that they had been indefinitely postponed, Wall Street is starting to get very unpleasant flashbacks to last December, when the S&P plunged so much, it was the worst December since the Great Depression.

Will Trump risk it all again?

Well, with the S&P starting its descent at 3,150, and with the Fed actively engaged in QE4, he certainly has far more "buffer room" to engage China much more forcefully this time around, and instead of kicking the can again, actually impose the 15% tariffs on $160 billion in Chinese imports on December 15.

And while the US may (or may not) end up victorious in such a showdown, it will give Wall Street strategists - who have all flipped a U-turn and reversed from extremely optimistic to suddenly pessimistic - copious opportunities to impress their clients with superlatives such as this one from Manulife managing director Sue Trinh, who said that "if tariffs scheduled for Dec. 15 are implemented it would be a huge shock to the market consensus," adding that "Trump would be the Grinch that stole Christmas" if the December 15 tariffs go through.

Here are some other impressive, if generally meaningless soundbites, from the same analysts who a week ago were scrambling to describe in the most glowing terms just how wonderful the market's meltup is:

Tongli Han, chief investment officer at Deepblue Global Investment:

  • "What happened recently makes this trade deal more costly for Chinese leaders -- so I’m seeing a gloomy future for the short term, one-to-two months", Han said in an interview with Bloomberg TV.
  • "It will be definitely risk-off across the screen."

 Steve Brice, chief investment strategist at Standard Chartered private bank:

  • "It’s time for investors to take a little bit of risk off the table, said Brice on Bloomberg TV. “It looks like it’s going to be pushed to the beginning of next year at the best case." The message to investors is “maybe trim a little bit of equity exposure, or certainly not chase the market at this stage. But look to do so in the next few weeks if we see a 5-to-7% pullback.”
  • Longer term, Brice remains optimistic “the U.S. and China will still strike a deal of some sort. That will reduce uncertainty and help the global economy do well.”

Kerry Craig, global market strategist at JPMorgan Asset Management

  • "A key concern is markets have already priced in the prospect of a trade deal that has yet to be signed" Craig said on Bloomberg TV.
  • "There had been a lot of optimism built in around a trade deal and it’s still the thing that will weigh on markets over the coming months. In the meantime we need to see more of a pick-up in the global economy to really offset some of those uncertainties."

Eli Lee, head of investment strategy at Bank of Singapore

  • "I’d fade the correction today," Lee told Bloomberg TV. The renewed tariff pressures on South America and Europe are likely an effort to bolster Trump’s “tariff man” image ahead of a trade deal with China.
  • “With the economy in a very delicate situation, if this came on, it would seriously ratchet up the risk of a recession -- and the White House wouldn’t want this situation going into the 2020 presidential election next year,” Lee said.

Chris Weston, head of research at Pepperstone Group

  • "We could face a wild day," Weston said in a note to clients. The S&P 500 is likely to fall about 2%, with currencies including the yuan, Australian dollar and Korean won also likely to move, he said.
  • A relief rally may be in the offing afterward, particularly if there’s agreement to revisit talks in 2020.

Christopher Smart, chief global strategist at Barings Investment Institute

  • “Even if there is a trade deal, it doesn’t solve most of the issues that we still have with China,” which is something that markets are going to have to reflect in time, Smart said on Bloomberg TV. "In fact, it probably makes the relationship more difficult to manage, because we’ve taken tariffs off the table."
  • Smart said “time is running out” to get a deal done this year, given the logistics involved in setting up a presidential meeting. What does offer solace is that global central banks have eased policy and injected liquidity, postponing the recession that investors had been worrying about.

Philip Shaw, chief economist at Investec

  • "We would hope that a bout of common sense breaks out," Shaw told Bloomberg TV. “Don’t forget that this situation is very volatile -- it swings to and fro. We wouldn’t interpret too strongly events of one day."

Source: Bloomberg

Tyler Durden Tue, 12/03/2019 - 12:50
  • 3 décembre 2019 à 18:50

As IG Report Looms, Trump Says Barr Was Misquoted In Conflict With Horowitz

Par Tyler Durden
As IG Report Looms, Trump Says Barr Was Misquoted In Conflict With Horowitz

Authored by Sara Carter via,

President Donald Trump said Tuesday that Justice Department Attorney General William Barr was misquoted in a recent news report, suggesting he was at odds with Inspector General Michael Horowitz’s much anticipated upcoming report on the FBI’s investigation into Russia. It’s one of many stories speculating what the Horowitz investigation will reveal on Dec. 9, and whether or not there was malfeasance on the part of FBI officials charged with investigating Trump’s campaign.

Trump made the statement to reporters at the NATO meeting in London Tuesday. Monday’s story in the Washington Post was at odds with what the President heard and what he has been reading, he said.

The Post reported that Barr conflicted with Horowitz on his finding that the FBI had enough evidence to begin the investigation July 2016, into the Trump campaign.

It is considered a major key finding of the report, according to publication.

However, Barr was not quoted in the story. Instead, the paper relied on associates close to Barr for the information so it is uncertain whether or not the Attorney General does disagree with Horowitz.

Trump said Barr was “quoted incorrectly.”

“I do believe that because I’m hearing the [inspector general’s] report is very powerful,” said Trump.

“But I’m hearing that by reading lots of different things, not from inside information. It’s really from outside information. I think all we have to do is wait.”

Justice Department Issues Statement

Justice Department spokeswoman Kerri Kupec issued a statement Monday night in response to the story, saying on Twitter that the public will soon have the opportunity to read the report.

“The Inspector General’s investigation is a credit to the Department of Justice. His excellent work has uncovered significant information that the American people will soon be able to read for themselves.”

“Rather than speculating, people should read the report for themselves next week, watch the Inspector General’s testimony before the Senate Judiciary Committee, and draw their own conclusions about these important matters,” she added.

DOJ statement on upcoming IG report:

— KerriKupecDOJ (@KerriKupecDOJ) December 3, 2019

Speculation Grows, Stories Leak 

Over the past month, a number of major news outlets, including The Washington Post and the New York Times, have speculated about the upcoming report and have spoken to sources connected to or who have been interviewed by Horowitz.

Those sources have downplayed the IG report, suggesting that Horowitz didn’t find that anti-Trump bias affected the FBI’s handling of the investigation into the Trump campaign or President Trump.

However, a number of sources familiar with the report that have spoken to, suggest that the Horowitz report will be damning of the how agents handling the investigation failed to follow FBI procedures and altered the Foreign Intelligence Surveillance Act warrant to spy on short term campaign volunteer Carter Page.

Further, the report will reveal that the FBI failed to provide the Trump campaign with a full defensive briefing when agents suspected Russia of trying to influence the campaign, according to sources. It will be a significant finding, particularly if then-presidential candidate Hillary Clinton was treated differently.

Graham Cautions On Speculation

Further, Senate Judiciary Chairman Lindsey Graham is warning the public not to be swayed by sources leaking information to the New York Times and Washington Post.

Graham told this reporter Monday night that the New York Times and The Washington Post stories on the Horowitz investigation are attempting to control the narrative. He expects the report to be thorough and reveal the truth about the FBI’s role in the investigation.

“Be wary of the Washington Post and the New York Times reporting on what is coming up with [Inspector General] Horowitz,” Graham tweeted Tuesday. “They have been trying overtime to spin this thing to diminish its effect, to downplay it.”

Be wary of the Washington Post and the New York Times reporting on what is coming up with [Inspector General] Horowitz.

They have been trying overtime to spin this thing to diminish its effect, to downplay it.

— Lindsey Graham (@LindseyGrahamSC) December 3, 2019

The Targets Leak 

A recent report by the New York Times said former FBI lawyer Kevin Clinesmith altered documents associated with the FISA application on Carter Page. The paper described Clinesmith as a low-level lawyer with the bureau and suggested that Horowitz won’t be hard the bureau’s handling of the case.

The description of Clinesmith as a low-level lawyer is also in dispute, as Clinesmith was part of former Special Counsel Robert Muller’s investigation into Trump and he was an attorney with the FBI’s National Security and Cyber Law Branch. He also worked under FBI General Counsel James Baker, who left the FBI and is now under investigation for leaking national security related information. Clinesmith, who sent numerous anti-Trump texts, also worked for Deputy General Counsel Trisha Anderson.

On Sunday, former FBI Lawyer Lisa Page, whose name became national after reports revealed she was having an affair with FBI Special Agent Peter Strzok, spoke to the Daily Beast after years of silence. She said she had to speak out because Trump made her a target of his Tweets and speeches.

The FBI fired Strzok last year and Page has since left the bureau. Strzok and Page sent thousands of text messages to one another during their affair. Many of the text messages discovered by Horowitz and Congress were vehemently anti-Trump.

The discovery of the texts led to their removal from Mueller’s investigation.

Here’s some texts:

“[Trump’s] not ever going to become president, right? Right?!” Page texted Strzok in August 2016, during the investigation into the campaign.

“No. No he won’t. We’ll stop it,” Strzok responded.

In another text message sent in August by Strzok to Page, he “I want to believe the path you threw out in Andy’s [McCabe’s] office—that there’s no way he gets elected—but I’m afraid we can’t take the risk. It’s like an insurance policy in the unlikely event you die before you’re 40.”

Page only told Molly Jong-Fast, also anti-Trump and a columnist from the Daily Beast, that people misunderstood their text messages but she never clarified what she and Strzok actually meant.

Tyler Durden Tue, 12/03/2019 - 13:11
  • 3 décembre 2019 à 19:11

Kamala Harris Suspends Presidential Campaign

Par Tyler Durden
Kamala Harris Suspends Presidential Campaign

Update: Harris has made it official.

In a tweet sent just minutes ago, Harris apologized to her supporters and said it's with "deep regret" but also "deep gratitude" that she would be suspending her campaign.

To my supporters, it is with deep regret—but also with deep gratitude—that I am suspending my campaign today.

But I want to be clear with you: I will keep fighting every day for what this campaign has been about. Justice for the People. All the people.

— Kamala Harris (@KamalaHarris) December 3, 2019

It seems like just yesterday that 'data guru' Nate Silver was declaring Harris the frontrunner, seemingly apropos of nothing.

"She's probably the frontrunner at this point, folks." -- Nate Silver on Kamala Harris, January 29, 2019

— Michael Tracey (@mtracey) September 18, 2019

Did somebody tip off the Babylon Bee? (not that Harris's demise was difficult to foresee).

Anyway, Harris sent the following in an email thanking supporters (according to Axios).

"I’ve taken stock and looked at this from every angle, and over the last few days have come to one of the hardest decisions of my life. My campaign for president simply doesn’t have the financial resources we need to continue. I’m not a billionaire. I can’t fund my own campaign. And as the campaign has gone on, it’s become harder and harder to raise the money we need to compete."

She blamed her decision to drop out on a lack of financial resources.

* * *

Following reports that her campaign had cancelled several fundraisers as the California Senator wrestled with whether to pack it in, a Politico reporter tweeted Tuesday afternoon that Kamala Harris is in the process of informing senior staff that she has decided to end her campaign, and that an official announcement is expected later in the day.

NEWS - Kamala Harris is dropping out of the presidential election today, I'm told reliably. She's informing staff now.

— Edward-Isaac Dovere (@IsaacDovere) December 3, 2019

Harris joins Beto O'Rourke as an establishment favorite who is packing it in early after failing to find traction with voters.

The rumors prompted a flurry of humorous reactions on social media.

Kamala Harris saying goodbye to her campaign and returning to locking teens up like

— Caleb Hull 🎅🏻🎁 (@CalebJHull) December 3, 2019

One reporter noted that, by dropping out, Harris will ensure that the debate stage for the December debate will consist of only white candidates as Corey Booker and Tulsi Gabbard, and Andrew Yang all failed to qualify.

Though she has yet to confirm, members of her staff have already started to tweet about the campaign's demise.

Senator Harris staff is starting to tweet

— Yashar Ali 🐘 (@yashar) December 3, 2019

Notably, Harris's electoral victory odds have plummeted since she clashed with Gabbard during one of the summer debatets.

Now, Harris is just one more establishment favorite that Gabbard has outlasted

*Kamala Harris drops out of presidential race*


— Siraj Hashmi (@SirajAHashmi) December 3, 2019

Clearly unwilling to accept the fact that her background as a prosecutor made her unpalatable to a generation of young Americans suspicious of authority, Harris has recently questioned whether her failure to gain traction was the result of America being unprepared to elect a woman of color.


Tyler Durden Tue, 12/03/2019 - 13:22
  • 3 décembre 2019 à 19:22

Epstein Accuser Hits Out Against Prince Andrew, Dershowitz In Wake Of Potential New Evidence

Par Tyler Durden
Epstein Accuser Hits Out Against Prince Andrew, Dershowitz In Wake Of Potential New Evidence

A woman who claims she was forced to have sex with Jeffrey Epstein and several associates has appealed to Britons for support, after Prince Andrew vehemently denied having inappropriate contact with her.

Virginia Giuffre says Epstein trafficked her to the British prince, bringing her to London in 2001 when she was 17-years-old. In an interview broadcast Monday, she says she was forced to have sex with him three times.

"He knows what happened. I know what happened, and there’s only one of us telling the truth, and I know that’s me," Giuffre told BBC Panorama.

"I implore the citizens in the UK to stand up beside me, to help me fight this fight, to not accept this as being ok. This is not some sordid sex story. This is a story of being trafficked, this is a story of abuse and this is a story of your guys’ royalty."

In her interview, which was recorded before the prince spoke to the BBC, Giuffre said she was taken to the Tramp nightclub in London by Epstein and his former associate Ghislaine Maxwell. Andrew asked her to dance, she said.

He is the most hideous dancer I’ve ever seen in my life. I mean it was horrible and this guy was sweating all over me, like his sweat was like it was raining basically everywhere,” she said.

Andrew, the eighth-in-line to the throne, said he could not have had sex with Giuffre at Maxwell’s home on the night she alleges because he had been to a pizza restaurant in the commuter town of Woking for a children’s party. -Reuters

The 59-year-old Andrew insists he has no recollection of meeting Giuffre.

In response to Giuffre's interview, Buckingham Palace said in a statement: "It is emphatically denied that The Duke of York had any form of sexual contact or relationship with Virginia Roberts. Any claim to the contrary is false and without foundation."

Andrew, meanwhile, was kicked out of Buckingham Palace and had his 60th birthday canceled by the Queen. Seems extreme for a royal they claim is innocent, no?

Andrew, meanwhile, gave a disastrous interview to the BBC last month in which he said he regretted his "ill-judged" relationship with Epstein.


On the other side of the pond, Giuffre may add a sex-abuse claim to a defamation lawsuit against famous Harvard attorney and former Epstein pal Alan Dershowitz, who she says she was forced to have sex with.

Giuffre sued Dershowitz in April after he repeatedly denied her claims and called her a liar, according to Bloomberg. Dershowitz counter-sued for defamation and emotional distress.

Charles Cooper, Giuffre’s lawyer, said in a hearing before U.S. District Judge Loretta Preska that his client may take advantage of New York’s new Child Victims Act, which in August opened a one-year window for people to sue over sex abuse they suffered as children even if the claims would otherwise be too old. New York previously required most childhood sex abuse victims to sue by the time they they turned 23.

Dershowitz’s lawyer, Howard Cooper, said the act would not apply to Giuffre, whose claims date from the early 2000s, because she wasn’t a minor at the time. -Bloomberg

Giuffre's lawyers also brought up a Sunday story in the New York Times regarding a mysterious hacker claiming to have a vast trove of Epstein's covertly recorded video footage and financial records, which he says he has stored on encrypted overseas servers.

The man, who called himself "Patrick Kessler," said he has videos of powerful men in "compromising sexual positions, including rape."


Tyler Durden Tue, 12/03/2019 - 19:58
  • 4 décembre 2019 à 01:58

Have Fannie And Freddie Learned Nothing?

Par Tyler Durden
Have Fannie And Freddie Learned Nothing?

Authored by Andrew Moran via,

Is the housing market about to crash? Some analysts find pockets of weakness in the real estate market as proof that the housing bubble 2.0 is about to pop. One of the biggest markets in the country, Los Angeles, has witnessed a 31% plunge in condominium sales in the third quarter. The sky is not falling because this incident has a reason: Buyers from Beijing accounted for half of condo acquisitions since 2014, and now Chinese cash is drying up. In New York City, a quarter of new luxury apartments are unsold and empty.

Those forecasting a contraction in housing next year may need to wait a little bit longer. New-home construction permits, housing starts, and the average price of single-family homes are all recording growth. When you consider the latest announcement from the federal government and the Federal Reserve artificially lowering interest rates, you can expect continued expansion and higher prices.

That is not to say that you should be worried about a 2007-style crash. For now, the bubble will balloon. When it pops, head for shelter.

Fannie And Freddie Feeling A Loan

The Federal Housing Finance Agency (FHFA) recently announced that it would raise the limit on conforming loans. This means that Fannie Mae and Freddie Mac will allow borrowers nationwide to take out mortgages totaling $510,400; it will top $765,000 in high-cost areas. The loan limits were raised higher in all but 43 counties across the United States.

Conforming loans are mortgages that adhere to the financing limits outlined by the FHFA and meet the underwriting guidelines laid out by Fannie and Freddie. This is the fourth straight year that the conforming loan limit has been raised; it was frozen at $417,000 between 2006 and 2016.

According to federal legislation, conforming loan limits are mandated to be modified to reflect adjustments in housing prices. Since FHFA data suggest home prices have jumped more than 5% in the 12 months to September 2019, the limits were increased by that much.

A White Picket Fence

Many industry experts celebrate the decision because it is expected to spur growth in the number of consumers seeking mortgages. However, before you pop open a bit of the bubbly, practice some caution.

Moving forward, mortgages will be greater, Fannie and Freddie will be scooping up larger loans. In the event of a market downturn or another housing crash, the U.S. government is once again threatening the solvency of the two agencies. Because Fannie and Freddie have returned to their 2006 ways, there is no reason to doubt that they will go belly-up and request a bailout again.

Since 2014, the mortgage agencies have slashed their down payment rates to just 3%. This encouraged the private sector to follow suit as many lenders, such as Wells Fargo and Michigan-based Flagstar Bank, have adopted the same figure. So, if you are taking out a $510,000 mortgage and are only asked to put down 3%, then you have very little skin in the game. At the same time, they account for roughly half of all new mortgages.

Former President Barack Obama compounded the problem as his administration ordered the Federal Housing Administration (FHA) to cut annual mortgage insurance premiums to 0.85%.

In February 2018, the Treasury Department transferred a $5.1 billion bailout to Fannie and Freddie. Because Congress forced these entities to reduce the amount of capital on their balance sheets and allocate a quarter of their reserves to the Treasury, their coffers were relatively empty.

Barrier To Entry

Home price growth has somewhat slowed in recent years, but many markets have still priced would-be homebuyers out of the market. Constant reports show the American dream of homeownership is a distant reality for millennials. Or, if you successfully slipped into the market, then you could be one of the 4.5 million households possessing an underwater mortgage. It might be a bull market, but it is bearish for many other Americans.

The current expectation is that the higher limits will create new demand, even if housing supplies are short in numerous parts of the nation. But if sellers can receive the best dollar for their homes and see bidders can get a $510,000 mortgage, then wouldn’t they lift the starting price? Bidding wars are not as fierce as they once were, but they still account for about 10% of all properties.

Officials might have the right intentions — helping Americans achieve homeownership — but this maneuver has more consequences than you could count on your fingers and toes.

Blowing Bubbles

The federal government has completely distorted the real estate market. A decade after the housing crash, politicians and bureaucrats still have not learned the economic lessons. Presidential candidates are shooting for policies that caused the bubble in the first place, and paper pushers are doubling down on measures that fueled the collapse.

Some correctly point out that the optics of higher loan limits are creating consternation among investors. At the same time, they argue that the government is facilitating the financial system’s origination of jumbo mortgages – a borrower who has good credit but exceeds the conforming limit. You can blame the Federal Reserve for this because its historically low interest rates enable this type of reckless borrowing and lending. Thanks to cheap money and government bailouts of banks and Fannie and Freddie, you would not have interventionist measures that produce such moral hazards.

Tyler Durden Tue, 12/03/2019 - 13:55
  • 3 décembre 2019 à 19:55

House Intel Democrats Releases Trump Impeachment Report

Par Tyler Durden
House Intel Democrats Releases Trump Impeachment Report

After months of public and private testimony, the House Intelligence Committee chaired by Rep. Adam Schiff (D-CA) has released their impeachment report  accusing President Trump of misconduct by withholding military aid to Ukraine unless various demands were met.

Trump is also accused of obstructing the impeachment inquiry by instructing witnesses and agencies to ignore subpoenas for documents and testimony, as well as intimidating and tampering with witnesses.

table of contents

— Jon Ward (@jonward11) December 3, 2019

"No other President has flouted the Constitution and power of Congress to conduct oversight to this extent," reads the report. "If left unanswered, President Trump's ongoing effort to thwart Congress' impeachment power risks doing grave harm to the institution of Congress, the balance of power between our branches of government, and the Constitutional order that the President and every Member of Congress have sworn to protect and defend."

"The decision to move forward with an impeachment inquiry is not one we took lightly.  Under the best of circumstances, impeachment is a wrenching process for the nation.  I resisted calls to undertake an impeachment investigation for many months on that basis, notwithstanding the existence of presidential misconduct that I believed to be deeply unethical and damaging to our democracy.  The alarming events and actions detailed in this report, however, left us with no choice but to proceed."

On Tuesday night, the committee will meet in a 6 p.m. ET closed-door session to formally adopt the report. Members of the committee began reviewing the majority report Monday evening.

The report comes one day after Republicans on the House Intel committee released their own "prebuttal" claiming Trump committed "no quid pro quo, bribery, extortion, or abuse of power. The Democrats' report will be combined with the 'prebuttal' and sent to the House Judiciary Committee, which will draft articles of impeachment following their own inquiry.

Prebuttal bullet points (Via Axios):

  • They claim there is “nothing inherently wrong” with the Trump administration’s actions toward Ukraine and justify each of them in detail, including Rudy Giuliani’s direct involvement in U.S. diplomacy.
  • They say any references to a quid pro quo are conjecture and hearsay — including EU Ambassador and Trump donor Gordon Sondland's testimony.
  • They question the origins of the impeachment inquiry and Democrats' motives, and they allege that Democrats have wanted to undo the 2016 election since Trump won.
  • They mock Democrats for calling the impeachment inquiry a serious process, and they characterize the speedy nature of the inquiry as proof that House Speaker Nancy Pelosi is motivated by politics rather than substance.
  • They use Trump's well-known skepticism about U.S. spending on foreign aid as justification for his hesitation to give money to Ukraine.
  • They say there was "nothing wrong" with asking questions about Hunter Biden’s role on the board of Burisma, a Ukrainian company, or renewing unfounded allegations about who interfered in the 2016 elections.


Tyler Durden Wed, 12/04/2019 - 02:58
  • 4 décembre 2019 à 08:58

Macron Hits Back, Questions Trump: How Can Turkey Buy Russian S-400s & Remain In NATO?

Par Tyler Durden
Macron Hits Back, Questions Trump: How Can Turkey Buy Russian S-400s & Remain In NATO?

Macron hits back after earlier in the day Trump took his NATO "brain death" comments to task saying they were "very nasty" remarks, and the French president also took a swipe at Turkey, saying "technically it is not possible" to purchase the S-400 anti-air defense system from the Russians and be a NATO member

Sitting next to Trump and fielding questions from reporters outlining their respective views of the state of the NATO alliance, it was clear the recent 'bromance' is no longer going strong. 

Trump actually laughed when Macron raised the heart of the Turkey issue, saying Erdogan can’t integrate Russian S-400 defense into NATO systems without deeply compromising the alliance. Macron questioned:

How is it possible to be a member of the alliance - to work with our office, to buy our materials, to be integrated - and to buy the S-400 from Russia? Technically it is not possible...

An incredulous Macron on Turkey: "How is it possible to be a member of the alliance..and to buy the S-400 from the Russians?"

"Technically, it is not possible."

— Evan McMurry (@evanmcmurry) December 3, 2019

The two sparred over the question of what to do with western and European foreign fighters leaving the battlefield in Syria. 

Macron said to Trump, who in the past has claimed 100% defeat of ISIS: "The number one priority, because it's not yet finished, is to get rid of ISIS...It's not yet done. I'm sorry to say that."

Wow. Macron calls for end of ambiguity with #Turkey regarding #ISIS fighters and “some of these groups.”

Macron also questions Trump on how Turkey can buy #Russia S-400 and be in NATO. Trump laughs. Body gestures here tell a lot:

— Joyce Karam (@Joyce_Karam) December 3, 2019

“Would you like some nice ISIS fighters?” Trump asked. “I could give them to you, you could take every one you want.”

“Let’s be serious,” Macron responded.

Macron then took Turkey to task for now being on the wrong side of counterterror efforts in Syria:

“They now are fighting against those who fight with us, who fought with us, shoulder to shoulder, against ISIS,” Macron said of Turkey.

French President Emmanuel Macron says #NATO needs to talk about more than how much its members are paying, specifically Turkey's military incursion in northern Syria. "When I look at Turkey, they are now fighting against those who fought with us against #ISIS."

— i24NEWS English (@i24NEWS_EN) December 3, 2019

As Bloomberg summarized of the testy exchange:

Trump, who effectively green-lit Turkey’s Syria incursion by withdrawing U.S. forces from a region on Turkey’s border, again blamed his predecessor Barack Obama for pushing Erdogan toward Moscow by allegedly refusing to sell Ankara the U.S. Patriot missile system.

* * *


With his allies up in arms over his latest tariff threats directed at France, President Trump landed in London early Tuesday, accompanied by First Lady Melania Trump, for a two-day summit marking the 70th anniversary of the military alliance's birth. Trump is notorious for blaming America's NATO partners for not paying their fair share when it comes to financing the military alliance.

Sitting alongside NATO General Secretary Jens Stoltenberg at Winfield House in London, Trump delivered a rambling address that marked the beginning of the summit, bragging about his progress with China, and claiming that the US is doing 'very well' when it comes to the still-unsigned 'Phase One' trade agreement.

There was talk of arms control progress, with Trump insisting that "Russia wants to do something badly and so do we."

During previous administrations, summits like this one would have been a snoozefest. But President Trump has spiced up several NATO summits by starting drama with one or more of his fellow Nato leaders.

Justin Trudeau and Angela Merkel have been favorite targets of his in the past; but Trump is focusing his ire on French President Emmanuel Macron.

The problem is that Macron apparently told The Economist Magazine that Nato was experiencing "brain death," and warned that members of the alliance could no longer rely on the US.

Unsurprisingly, Trump took umbrage at this, and dedicated a few minutes of his opening press conference to trashing Macron, accusing him of being "very, very nasty" and that it was "very insulting" for the French president to label Nato "brain dead."

Watch a clip of Trump's remarks below:

"I think that's very insulting."

US President Donald Trump condemns French President Emmanuel Macron's "nasty" statement about NATO being "brain dead"

— CNN International (@cnni) December 3, 2019

Trump added that relations between the US and European Nato members were not causing any divide, except with France. He could even envision France 'breaking' away from the military alliance.

"I do see France breaking off. I’m looking at him and I’m saying he [Macron] needs protection more than anybody and I see him breaking off, so I’m a little surprised at that," Trump said.

Returning to the tariffs once more, Trump slammed France for trying to raise money via a "digital tax" levy on US tech giants like Facebook and Google.

"They are starting to tax other people’s products, so we are going to tax them," Trump said

He also took a swipe a France's economy, with its high unemployment rate, claiming that the country was “not doing well economically at all." There's some truth to that: The Q3 unemployment rate climbed o 8.6%.

Of course, some of the most scathing criticism of Nato has come from President Trump, with the president repeatedly declaring the alliance obsolete.

The president also made some comments about the possibility of delaying notifications.

Tyler Durden Tue, 12/03/2019 - 14:15
  • 3 décembre 2019 à 20:15

British Virgin Islands Announce US Dollar-Backed Digital Currency

Par Tyler Durden
British Virgin Islands Announce US Dollar-Backed Digital Currency

Authored by Adrian Zmudzinski via,

Blockchain startup LifeLabs announced that it is developing a digital currency dubbed BVI~LIFE in partnership with the British Virgin Islands (BVI).

image courtesy of CoinTelegraph

According to a press release on Dec. 3, the currency is part of a broader initiative to grow the local fintech sector and will be presented during the BVI Digital Economy symposium. 

The coin will be a stablecoin pegged 1:1 to the U.S. dollar — which the BVI have used since 1959 — and its use is expected to reduce transactional fees, increase transaction speed and be accessible to outsiders such as tourists. 

LifeLabs is also developing Rapid Cash Response, a fund meant to provide aid in case of a national emergency. The local government already announced this initiative in April. BVI Premier Andrew Fahie said:

The importance of blockchain technology and the significant benefits it offers the BVI, are paramount to the Territory. We welcome this innovation with open arms. Our partner, LIFElabs, has demonstrated with their proven track record that their ideology is not just mere words, and we look forward to continuing our partnership with them on the rollout of BVI~LIFE, our digital currency.”

The Life token will serve as gas

LifeLabs community manager Anwar Ali claimed that the transaction fees of the BVI~LIFE stablecoin will be paid in the firm’s Life tokens. According to cryptocurrency data website Coin360, the Life token’s price increased by nearly 31% over the last 24 hours, reaching $0.000083. 

While the BVI may be considering a dollar-pegged stablecoin, the Marshall Islands are developing a token in an effort to move away from the United States’ fiat currency. Earlier this year, officials announced that the Pacific island nation would develop a digital Sovereign that would be easily transmittable over the many islands that make up the country.

Tyler Durden Tue, 12/03/2019 - 14:35
  • 3 décembre 2019 à 20:35

House Democrats Mull Pivot Back To Russiagate To Pad Weak Case For Impeachment

Par Tyler Durden
House Democrats Mull Pivot Back To Russiagate To Pad Weak Case For Impeachment

As House Democrats cobble together a 'less than compelling' case for impeachment based on President Trump's request that Ukraine investigate Joe Biden and his son for Obama-era dealings with the appearance of obvious corruption, some members of the House Judiciary Committee and 'other more liberal-minded lawmakers and congressional aides' are looking back to Russiagate and other accusations for new material to include in articles of impeachment, according to the Washington Post.

Members of the House Judiciary Committee and other more liberal-minded lawmakers and congressional aides have been privately discussing the possibility of drafting articles that include obstruction of justice or other “high crimes” they believe are clearly outlined in special counsel Robert S. Mueller III’s report — or allegations that Trump has used his office to benefit his bottom line. -Washington Post

That said, moderate Democrats wary of impeachment blowback in their GOP-heavy districts have pushed back against the idea, according to the report. In addition, Democratic leaders seeking to keep the impeachment case focused on Ukraine have resisted expanding the case against Trump as well.

The debate is expected to play out in leadership and caucus meetings this week, as the House Intelligence Committee prepares to hand the impeachment inquiry to the House Judiciary Committee. The Intelligence Committee is scheduled to vote Tuesday night on its final report on Ukraine, allowing Judiciary to then work on writing articles of impeachment based on that document.

But the Judiciary Committee also has asked other investigative panels to send any findings of Trump-related misdeeds that they believe are impeachable. And many of the committee members are hoping articles will refer to and cite their own months-long investigation into the Mueller report, which described 10 possible instances of obstruction by the president.

"One crime of these sorts is enough, but when you have a pattern, it is even stronger," said Rep. Pramila Jaypal (D-WA), a member of the House Judiciary Committee and co-chairman of the Congressional Progressive Caucus - who added that there's a strong case for citing the Mueller report in impeachment articles.

"If you show that this is not only real in what’s happening with Ukraine, but it’s the exact same pattern that Mueller documented . . . to me, that just strengthens the case," she insisted.

Trump is accused of holding up nearly $400 million in military aid to Ukraine while simultaneously requesting that newly elected president, Volodomyr Zelensky, investigate the Bidens as well as other matters related to the 2016 US election. Zelensky, who didn't know the aid was paused at the time, has insisted there was no quid pro quo, while several anti-Trump ambassadors who testified in front of Schiff's committee could not establish that the aid hinged on Trump's request. Instead, they assumed it did.

Perhaps this is about more than just having a weak hand on the Ukraine claims. Assuming the House votes to impeach, the GOP-controlled Senate will then hold a trial. If Democrats expand the scope of the impeachment, Senate Republicans would be forced to consider all claims levied at Trump - effectively reducing the spotlight on Ukraine by overwhelming the proceedings.

Whatever the case, even if the Trump-Ukraine claims are forced to share space with Russiagate and emoulments arguments for impeachment, Senate Republicans can still subpoena Joe and Hunter Biden to testify about Burisma, as well as House Intelligence Committee Chair Adam Schiff (D-CA), whose staff communicated with the CIA officer whose whistleblower complaint is at the heart of the impeachment.

Earlier this week, House Republicans issued a "prebuttal" of the upcoming House Intelligence Committee report expected to outline claims that Trump abused his power.

In a 123-page document, GOP investigators assert that Democrats failed to make the case that Trump committed impeachable high crimes and misdemeanors by withholding military aid and a highly sought-after White House meeting to compel Ukraine to launch investigations into his political rivals. Nor, the Republicans say, do Democrats have a basis for impeachment in Trump’s decision to spurn House document requests and witness subpoenas pertaining to Trump’s Ukraine dealings.

Instead, the GOP document contends, the impeachment effort is “an orchestrated campaign to upend our political system” — one “based on the accusations and assumptions of unelected bureaucrats who disagreed with President Trump’s policy initiatives and processes.”

 According to the GOP report, "The evidence presented does not prove any of these Democrat allegations, and none of the Democrats’ witnesses testified to having evidence of bribery, extortion, or any high crime or misdemeanor."

Tyler Durden Tue, 12/03/2019 - 14:50
  • 3 décembre 2019 à 20:50

SocGen Presents "The Most Depressing Chart Ever"

Par Tyler Durden
SocGen Presents "The Most Depressing Chart Ever"

Whereas SocGen's Albert Edwards is mostly concerned with global macro phase transitions, and specifically when the current global economy will transform into a terminal deflationary singularity, one which Edwards calls the "Ice Age", his just as bearish SocGen colleague Andrew Lapthorne has been more preoccupied with the micro in recent years, and this morning the strategist believes he has uncovered the "most depressing chart ever" (especially for active managers).

The chart, shown below, measures how many of the world's 16,000 stocks have beaten the S&P 500 over one and two years. What it finds is that over the last couple of years, nearly 80% of stocks have failed to beat the broader index, making a mockery of the concept of "alpha" creation, and paying someone 2 and 20 to find value beyond the broader market. On the other hand, with activist central banks actively targeting broad market indexes for the past decade, and especially any time there is even a modest swoon, or whenever they fill like boosting investor (and consumer) confidence with a little NOT QE here and not so little NOT QE there, it should not come as a surprise that it is now virtually impossible to outperform the overall market.

Below we present the highlights from Lapthorne's note, which start of by noting that "if the world is heading into a slowdown, global equity markets don’t seem to be that bothered."

MSCI World rose 2.7% in November, which leaves it up 21.7% in 2019. Of course, 2019 performance figures are helped by the starting point, which coincided with the turn of the year and a handbrake turn from the Fed. Picking a less generous starting point, say end-January 2018, and global equities have returned 8.6% versus 10% for 10-year global government bonds. On a total return or a risk-adjusted return basis you were better off owning bonds. Though really, and as ever, the best asset to own was simply the S&P 500.

Lapthorne then reminds us of Warren Buffett's famous recommendation, which urged retail investors to buy the S&P 500, as stockpickers regularly failed to beat it.

"He’s not wrong. The strong performance of the S&P 500 leaves everything in its wake. This is lauded as a success and an abject failure of active fund management. But, the S&P 500 is less a measurement of corporate success and increasingly an ingredient of ever more complex financial products."

Which brings us to the punchline: "Once in a while we create a chart that is truly depressing."

The chart below measures the percentage of global developed and emerging market stocks that have beaten the S&P 500 on a total return USD basis over one and two years. This is a very big universe of 16,000 stocks and over the last couple of years 78% of stocks (so over 12,400 stocks) have failed to beat the S&P 500. Over the last year things have got a little better with only 66% of stocks underperforming. This high-profile index provides such a tough performance benchmark that increasing it convinces investors that just buying the S&P 500 will do.

As the Socgen strategist concludes, "this is a big shame" and explains why:

Not because I want to bang the drum for active management  (admittedly a big part of our client basis), but if the measurement of company success is outperforming the 500 largest-cap US businesses supported by the US Federal Reserve, debt-funded share buybacks, and increasingly sophisticated financial products, then you can understand why less business are going public and private equity is booming. I find this depressing."

So to all those who financial professionals who still foolishly support and cheer for the Fed, even though it is the Fed itself that is making all financial professionals obsolete in a world in which any dumb robot can just buy and hold the S&P for 0 and 0 as opposed to 2 and 20, we wonder just what else you need to see or experience before you too realize that central planning ends in tears for everyone involved. The only question is when.

Tyler Durden Tue, 12/03/2019 - 15:10
  • 3 décembre 2019 à 21:10

Gundlach: Stocks 'Will Get Crushed' In The Next Downturn

Par Tyler Durden
Gundlach: Stocks 'Will Get Crushed' In The Next Downturn

DoubleLine's Jeff Gundlach sat down with Yahoo Finance and discussed how US stocks would get absolutely crushed in the next recession. 

Gundlach said 2019 was the year when investors could pick "just about anything...Just throw a dart, and you're up 15-20%, not just the United States, but global stocks as well." He warns that it could all change in 2020, as a recession is fast approaching.

He shared his "chart of the year," which divides global equities into four regions (the US, Japan, Europe, and Emerging Markets). What it shows is an alarming market top forming in US stocks, similar to what happened with the Nikkei 225 in the early 1990s or the Euro Stoxx 50 Index in the late 1990s or MSCI Emerging Markets in 2007/2008.

"So, where are we today? Today, we have the S&P 500 is killing everybody else over the last ten years, almost 100% outperformance versus most other stock markets," he said.

"My belief is that pattern will repeat itself," said Gundlach, who has spent much of 2019 warning of a downturn ahead of the 2020 elections.

"In other words, when the next recession comes, the United States will get crushed, and it will not make it back to the highs that we've seen, that we're floating around right now, probably for the rest of my career, is what I think is going to happen," he added — suggesting that a recovery won't be seen for years.

Last month, Gundlach warned about the levels of government debt, and the US equity markets are not sustainable. He told investors that they should brace for significant disruptions.

"The corporate bond market in the United States is rated higher than it deserves to be. Kind of like securitized mortgages was rated way too high before the global financial crisis. Corporate credit is the thing that should be watched for big trouble in the next recession."

And maybe a downturn in the economy has already started, considering credit markets usually lead. As shown below, significant cracks in the junk bond space are beginning to appear:

The spreads on CCC US junk bonds have jumped above 1,000bps for the first time in more than three years as a sell-off in energy weighs on the lowest-rated debt.

Blowing the CCC market's risk out to its widest against single-B since April 2016...

Generic CLO BBB tranche is starting to flash very red...

The broader junk bond market posted negative returns last month... as stocks have soared...

Gundlach's Sept. presentation titled "The Greatest Economy Ever!" made it clear that the next big move for the dollar is lower, and warned that when the next recession occurs, the US dollar and stocks will be in trouble, recommending investors to diversify into other currencies and markets.

And since his view on the economy is that it is anything but the "Greatest Ever", pointing out the sharp slump in 2019 global GDP projections...

And as we've said on multiple occasions, the next shoe to drop is likely the consumer. Something that Gundlach is waiting for as well explained in the latest interview with Yahoo. 

Highlight: A recession probability "is around 40% right now," @truthgundlach says. "The ISM looks bad... Consumer sentiment, though, remain at a decent level. What we have to watch for is consumer confidence declining, because that's almost definitional we cause a recession."

— Yahoo Finance (@YahooFinance) December 2, 2019
Tyler Durden Tue, 12/03/2019 - 19:05
  • 4 décembre 2019 à 01:05

China Vows Response After US House Votes To Sanction Chinese Officials Over Uighur Abuse

Par Tyler Durden
China Vows Response After US House Votes To Sanction Chinese Officials Over Uighur Abuse

Update: China wasted no time to issue a harshly worded response to the passage of the Uighur bill, and in a statement published moments ago by the Chinese foreign ministry, said that whereas "the US plan to use the Xinjiang-related issue to sow Chinese ethnic relations, undermine Xinjiang's prosperity and stability, and curb China's development", this is "absolutely impossible" and Beijing urges the US to "immediately correct its mistakes, prevent the aforementioned Xinjiang-related bill from becoming law, and stop using the Xinjiang-related issue to interfere in China's internal affairs."

The statement ends ominously, saying that "China will respond further according to the development of the situation."

In other words, even more words, and no actions, suggesting that at this point, Xi may have capitulated and is scared of actually doing something instead of just speaking.

Full statement below from the foreign ministry:

Foreign Ministry Spokesperson Hua Chunying's Remarks on the U.S. House of Representatives Passing the "Uyghur Human Rights Policy Bill 2019"

The U.S. House of Representatives has just passed the so-called "Uyghur Human Rights Policy Bill 2019." The case deliberately discredited the human rights situation in Xinjiang, arrogantly discredited China's efforts to radicalize and combat terrorism, maliciously attacked the Chinese government's territorial policies, seriously violated international law and basic principles of international relations, and seriously interfered in China's internal affairs. China expresses its strong indignation and resolute opposition.

Xinjiang-related issues are not at all human rights, ethnic, and religious issues, but anti-terrorist and anti-secession issues. Xinjiang has suffered from extremist and violent terrorist activities. Facing the grim situation, the Xinjiang Autonomous Region Government has cracked down on violent terrorist activities in accordance with the law, and at the same time attaches great importance to source governance, including actively promoting depolarization, and continuously promoting economic development, national unity, and social harmony and stability. These measures have ensured that no terrorist attacks have occurred in Xinjiang in the past three years, received universal support from 25 million people of all ethnic groups in Xinjiang, and made positive contributions to the global cause of counter-terrorism.

The international community has generally positively evaluated the Chinese government's policy of governing Xinjiang. Since the end of 2018, more than a thousand people from more than 70 national and regional officials, international organizations, news media, religious groups, experts and scholars have visited Xinjiang, and they have praised Xinjiang's experience in counter-terrorism and depolarization work. In March this year, the Council of Foreign Ministers of the Islamic Cooperation Organization passed a resolution praising China's efforts in caring for the Muslim masses. In July, the permanent representatives of more than 50 countries in Geneva sent a joint letter to the chairman of the United Nations Human Rights Council and the High Commissioner for Human Rights to positively evaluate China's respect and protection of human rights in its counter-terrorism and depolarization efforts. In October, more than 60 countries spoke enthusiastically during the 74th Session of the Third Committee of the General Assembly, praising China's huge human rights progress in Xinjiang. All these strongly prove that the US side's article on Xinjiang-related issues is totally contrary to the facts and completely contrary to the mainstream public opinion in the international community.

We must tell the US side that Xinjiang affairs are purely China's internal affairs and that no foreign interference is allowed. The above-mentioned bill on the US side deliberately smears China's counter-terrorism and de-extremization measures, which will only further expose its double standards on counter-terrorism, and will only let the Chinese people further understand its hypocrisy and sinister intentions.

The Chinese government and people are unwavering in their determination to safeguard national sovereignty, security, and development interests. The US plan to use the Xinjiang-related issue to sow Chinese ethnic relations, undermine Xinjiang's prosperity and stability, and curb China's development is absolutely impossible. We urge the US to immediately correct its mistakes, prevent the aforementioned Xinjiang-related bill from becoming law, and stop using the Xinjiang-related issue to interfere in China's internal affairs. China will respond further according to the development of the situation.

* * *

In the past few days, China's Global Times twitter troll Hu Xijin has been quite vocal not only about China's anger over the recent passage of the pro-HK bill that was signed by Trump last Thursday, but also about China's response to what he said was the imminent passage of a Xinjian-related bill, which would sanction Chinese officials responsible for the repression of over a million Muslim Uighurs in the Xinjiang region.

Overnight, Hu issued his latest not so veiled threat on the matter saying that "since US Congress plans to pass Xinjiang-related bill, China is considering to impose visa restrictions on US officials and lawmakers who've had odious performance on Xinjiang issue;it might also ban all US diplomatic passport holders from entering Xinjiang."

Based on what I know, since US Congress plans to pass Xinjiang-related bill, China is considering to impose visa restrictions on US officials and lawmakers who've had odious performance on Xinjiang issue;it might also ban all US diplomatic passport holders from entering Xinjiang.

— Hu Xijin 胡锡进 (@HuXijin_GT) December 3, 2019

Yesterday, Hu retweeted a post by The Business Source division of the Global Times, which warned that China would release an "unreliable entity list" soon, which includes relevant US entities, in response to the passage of the Xinjiang-related bill "that will harm Chinese firms’ interests, prompting China to speed up the move."

Source told Global Times that China will release an "unreliable entity list" soon, which includes relevant US entities. US House is expected to pass a Xinjiang-related bill that will harm Chinese firms’ interests, prompting China to speed up the move.

— The Business Source (@GlobalTimesBiz) December 2, 2019

His comments came just days after one or more Chinese dissidents leaked the troubling secrets of China's Xinjiang camps to the foreign media, which prompted the following retort from Hu: "China wants real human rights in Xinjiang: people’s rights to have a peaceful life. West’s hypocrisy won’t affect Xinjiang internally, nor will it influence Muslim countries’ attitude. It’s just a few media outlets and politicians pretending to be representing the world.Pathetic."

China wants real human rights in Xinjiang: people’s rights to have a peaceful life. West’s hypocrisy won’t affect Xinjiang internally, nor will it influence Muslim countries’ attitude. It’s just a few media outlets and politicians pretending to be representing the world.Pathetic.

— Hu Xijin 胡锡进 (@HuXijin_GT) November 25, 2019

Well, moments ago the U.S. House of Representatives indeed overwhelmingly approved legislation that would impose sanctions on Chinese officials over human rights abuses against Muslim minorities, provoking Beijing to retaliate just as trade deal negotiations between the two sides appear to be on the verge of collapse.

The bill is an amended version of the Senate’s S. 178 to support the Uighurs, a Muslim ethnic group in western China, and it passed Tuesday, on a vote of 407 to 1. Chinese state media warned before the vote that the government could release a list of “unreliable entities” that could lead to sanctions against U.S. companies. The measure follows legislation supporting Hong Kong protesters signed into law last week by President Donald Trump.

And now, with Xi Jinping having already lost serious credibility after he failed to forcefully respond to Trump's signing of the Hong Kong bill, all eyes will be on China, and whether it will indeed trigger visa restrictions and limit travel for US officials to Xinjiang province (something which will never happen) and, more importantly, if Beijing will finally publish its "unreliable entity", aka black list, which it has been threatening to do since May and which may include such names as Apple and Micron. Well, now that the House has passed the Uighur bill, Beijing may no longer be able to delay, or else it will be seen as a pushover every time a diplomatic - or other - challenge escalates. Needless to say, for a president for life such as Xi Jinping, that is hardly an option, so stay tuned for China's response which may be due any moment.

Tyler Durden Tue, 12/03/2019 - 19:34
  • 4 décembre 2019 à 01:34

Mt. Rainier And The New Madrid Fault Zone Were Both Just Hit By Significant Earthquakes

Par Tyler Durden
Mt. Rainier And The New Madrid Fault Zone Were Both Just Hit By Significant Earthquakes

Authored by Michael Snyder via,

Mt. Rainier and the New Madrid fault zone are both shaking, and a catastrophic seismic event at either location would cause death and destruction on an unimaginable scale.

Mt. Rainier has been called “one of the most dangerous volcanoes in the world”, and scientists tell us that it is just a matter of time before a major eruption occurs. When that day finally arrives, Mt. Rainier has the potential to bury hundreds of square miles with a colossal tsunami of super-heated mud that is literally several hundred feet deep. And since Mt. Rainier is very close to major population centers, we are talking about the potential for the worst disaster that we have seen in modern American history.

But a massive earthquake along the New Madrid fault zone actually has the potential to be far worse. A very deep scar under the ground that was created when North America was originally formed has made that part of the country very mechanically weak, and many experts believe that a big enough earthquake along that fault zone could literally rip the United States in half.

But before we discuss the New Madrid fault zone, let’s talk about what just happened at Mt. Rainier first.

According to the USGS, Mt. Rainier was hit by a magnitude 3.6 earthquake on Sunday afternoon

After a spurt of seismic activity this weekend, Mount Rainier National Park was shaken by a 3.6 magnitude earthquake Sunday afternoon.

The quake hit at 12:31 p.m. and was felt as far as Kent, nearly 80 miles away, the U.S. Geological Survey reported. The relatively shallow quake was centered roughly a mile beneath the earth’s surface.

In addition to that quake, there have been quite a few others in recent days.

In fact, it is being reported that Mt. Rainier has been hit by “more than a dozen” earthquakes since Thanksgiving day.

The Seattle Times is assuring us that this is perfectly normal, but they are also warning their readers that they “should prepare for what might happen in the event of an eruption” just in case...

Regardless, people living near Mount Rainier should prepare for what might happen in the event of an eruption, said Wes Thelen, a research seismologist at the Cascade Volcano Observatory. Specifically, an eruption could cause lahars — large volcanic mudflows — to rip down the side of the mountain.

Many of my readers clearly remember the eruption of Mount St. Helens in 1980, but a catastrophic eruption of Mt. Rainier would be so much worse that the two events would not even be worth comparing. The following comes from Wikipedia

If Mt. Rainier were to erupt as powerfully as Mount St. Helens did in its May 18, 1980 eruption, the effect would be cumulatively greater, because of the far more massive amounts of glacial ice locked on the volcano compared to Mount St. Helens,[40] the vastly more heavily populated areas surrounding Rainier, and the simple fact that Mt Rainier is a much bigger volcano, almost twice the size of St. Helens.[49] Lahars from Rainier pose the most risk to life and property,[50] as many communities lie atop older lahar deposits. According to the United States Geological Survey (USGS), about 150,000 people live on top of old lahar deposits of Rainier.[9] Not only is there much ice atop the volcano, the volcano is also slowly being weakened by hydrothermal activity. According to Geoff Clayton, a geologist with a Washington State Geology firm, RH2 Engineering, a repeat of the 5000-year-old Osceola Mudflow would destroy EnumclawOrtingKentAuburnPuyallupSumner and all of Renton.[39] Such a mudflow might also reach down the Duwamish estuary and destroy parts of downtown Seattle, and cause tsunami in Puget Sound and Lake Washington.[51] Rainier is also capable of producing pyroclastic flows and expelling lava.[51]

A lahar is essentially a giant tsunami of super-heated mud, and they can be hundreds of feet high. If you live in that region, you might be thinking that you will just outrun any lahar that is headed your way, but the truth is that the highways will instantly be jammed once an eruption happens and a lahar can travel at speeds of up to 50 miles per hour. The following is how one author described the danger that those living in the area could potentially be facing…

The numerous towns and cities that occupy the surrounding valley would all be at risk for not only severe destruction, but complete annihilation. Residents of cities like Orting, Sumner, Buckley, and Enumclaw are estimated to have no more than 30 minutes before the lahar, speeding down from the many rivers that flow from Mount Rainier, buries their homes and businesses beneath as much as 30 feet of mud and debris. Even the larger cities like Auburn, Puyallup, and Tacoma itself are not safe. Auburn and Puyallup, with nearly 80,000 residents between them, would be covered in 20 feet of mud in less than an hour, and Tacoma, at almost 200,000, is estimated to be hit with nearly 10 feet from the lahar.

As you can see, the death and destruction would be off the charts, and let us hope that such a disaster does not arrive any time soon.

And as I mentioned earlier, a major earthquake along the New Madrid fault zone has the potential to create even greater death and destruction.

According to scientists, the New Madrid fault zone sits directly above a very deep geological scar that was created when North America was formed. According to Wikipedia, this immense scar makes “the Earth’s crust in the New Madrid area mechanically weaker than much of the rest of North America”.

Today, the New Madrid fault zone is approximately six times bigger than the San Andreas fault zone in California. It covers portions of Illinois, Indiana, Ohio, Missouri, Arkansas, Kentucky, Tennessee and Mississippi, and the largest earthquakes in the lower 48 states have happened in this region.

Scientists assure us that it is just a matter of time before more catastrophic earthquakes hit this fault zone, and that is why what has been happening near the town of Ridgely, Tennessee in recent days is so concerning

A swarm of at least 15 earthquakes reaching up to 2.1 magnitude rattled Ridgely, Tennessee — a small town near the Mississippi River — over a two-day period, the U.S. Geological Survey reports.

The other quakes in the swarm ranged from 1.1 to 1.5 magnitude, according to the USGS.

Most Americans have never heard of Ridgely, and it is definitely a very small town, but what makes this so important is that Ridgely sits directly inside the New Madrid fault zone

Ridgely is home to just 1,657 people, according to the U.S. Census Bureau, and sits less than four miles from the banks of the Mississippi River.

It’s also part of the New Madrid Seismic Zone — which the Missouri Department of Natural Resources refers to as “the most active seismic area in the United States, east of the Rocky Mountains.”

In 1811 and 1812, four absolutely massive earthquakes along the New Madrid fault zone opened up very deep fissures in the ground, they caused the Mississippi River to actually run backwards in certain places, and they were reportedly felt as far away as Washington D.C. and Boston.

Fortunately, very few people populated the region in those days, but if such a quake happened today the death and destruction would be unimaginable. The following description of one of the quakes that happened in 1811 comes from, and for a moment I would like for you to imagine what would happen if such an earthquake happened in our time…

The Midwest was sparsely populated, and deaths were few. But 8-year-old Godfrey Lesieur saw the ground “rolling in waves.” Michael Braunm observed the river suddenly rise up “like a great loaf of bread to the height of many feet.” Sections of riverbed below the Mississippi rose so high that part of the river ran backward. Thousands of fissures ripped open fields, and geysers burst from the earth, spewing sand, water, mud and coal high into the air.

The New Madrid fault zone has altered the course of the Mississippi River before, and someday it will happen again.

We live at a time when our planet appears to be getting increasing unstable. In addition to the other earthquakes that I have already mentioned, Alaska was actually hit by a magnitude 6.0 earthquake on Monday.

Unfortunately, most Americans are not going to start caring about the warning signs until a major disaster has already happened.

Most people will simply not wake up without a major amount of shaking, and let us hope that such a day can be put off for as long as possible.

Tyler Durden Tue, 12/03/2019 - 19:50
  • 4 décembre 2019 à 01:50

World's Biggest Pension Fund Stops Lending Shares To Short-Sellers Amid Threat Of Market Crash

Par Tyler Durden
World's Biggest Pension Fund Stops Lending Shares To Short-Sellers Amid Threat Of Market Crash

Ahead of the next market crash, Japan's public pension fund, one of the largest pension funds in the world, has developed a new market tool where it will no longer allow shares of its $733 billion global equity portfolio to be loaned out for short selling, reported the Financial Times.

The announcement by Government Pension Investment Fund (GPIF), comes at a time when the global economy is quickly decelerating into year-end, could see a significant repricing event where global equities correct into 1H20. 

To get ahead of the downturn, about $370 billion of its $733 billion global equity portfolio will no longer be loaned out. It could be used as a weapon to combat evil short-sellers when the market plunges. If other pension funds follow GPIF's lead, which they likely will, this could be a highly disruptive market tool to stem downside and also create the mother of all short squeezes. 

The reasoning behind GPIF's move to discontinue lending of at least half of its global equity book isn't because it's "concerned that lending stocks out stopped it exercising proper stewardship over the underlying investments. This included a lack of transparency over the final borrower and how it was using GPIF shares," as FT notes, but rather it's an unorthodox market tool that was similarly used by the Chinese government to stem further downside in a 2015 stock market crash.

GPIF will lose nearly $300 million in fees per year from discontinuing its lending of shares from the foreign segment of its portfolio, FT noted. 

Traders in Tokyo told FT that other pension funds will likely follow suit. Though they said, the move to stop lending shares to short-sellers wouldn't have an immediate impact on market fundamentals, though it could prove useful to limit the downside during the next market crash. 

And it already seems like Elon Musk is already a big fan of GPIF's market tool:

Bravo, right thing to do! Short selling should be illegal.

— Elon Musk (@elonmusk) December 3, 2019


Tyler Durden Tue, 12/03/2019 - 20:10
  • 4 décembre 2019 à 02:10

How To Discuss "Climate Change" With A 'Woke' Teenager

Par Tyler Durden
How To Discuss "Climate Change" With A 'Woke' Teenager


After our daughter of fifteen years of age was moved to tears by the speech of Greta Thunberg at the UN the other day, she became angry with our generation “who had been doing nothing for thirty years.”

So, we decided to help her prevent what the girl on TV announced of “massive eradication and the disappearance of entire ecosystems.”

We are now committed to give our daughter a future again, by doing our part to help cool the planet four degrees.

From now on she will go to school on a bicycle, because driving her by car costs fuel, and fuel puts emissions into the atmosphere. Of course it will be winter soon and then she will want to go by bus, but cycling through the freezing builds resilience.

Of course, she is now asking for an electric bicycle, but we have shown her the devastation caused to the areas of the planet as a result of mining for the extraction of Lithium and other minerals used to make batteries for electric bicycles, so she will be pedaling, or walking.

Which will not harm her, or the planet. We used to cycle and walk to school too.

Since the girl on TV demanded “we need to get rid of our dependency on fossil fuels” and our daughter agreed with her, we have disconnected the heat vent in her room. The temperature is now dropping to twelve degrees in the evening, and will drop below freezing in the winter, we have promised to buy her an extra sweater, hat, tights, gloves and a blanket.

For the same reason we have decided that from now on she only takes a cold shower. She will wash her clothes by hand, with a wooden washboard, because the washing machine is simply a power consumer and since the dryer uses natural gas, she will hang her clothes on the clothes line to dry, just like my parents and grandparents used to do.

Speaking of clothes, the ones that she currently has are all synthetic, so made from petroleum. Therefore on Monday, we will bring all her designer clothing to the secondhand shop.

We have found an eco store where the only clothing they sell is made from undyed and unbleached linen and jute. Also can’t have clothes made on wool, because the emissions from farting sheep are supposedly causing bad weather.

It shouldn’t matter that it looks good on her, or that she is going to be laughed at, dressing in colorless, bland clothes and without a wireless bra, but that is the price she has to pay for the benefit of The Climate.

Cotton is out of the question, as it comes from distant lands and pesticides are used for it. Very bad for the environment.
We just saw on her Instagram that she’s pretty angry with us. This was not our intention.

From now on, at 7 p.m. we will turn off the WiFi and we will only switch it on again the next day after dinner for two hours. In this way we will save on electricity, so she is not bothered by electro-stress and will be totally isolated from the outside world. This way, she can concentrate solely on her homework. At eleven o’clock in the evening we will pull the breaker to shut the power off to her room, so she knows that dark is really dark. That will save a lot of CO2.

She will no longer be participating in winter sports to ski lodges and resorts, nor will she be going on anymore vacations with us, because our vacation destinations are practically inaccessible by bicycle.

Since our daughter fully agrees with the girl on TV that the CO2 emissions and footprints of her great-grandparents are to blame for ‘killing our planet’, what all this simply means, is that she also has to live like her great-grandparents and they never had a holiday, a car or even a bicycle.

We haven’t talked about the carbon footprint of food yet.

Zero CO2 footprint means no meat, no fish and no poultry, but also no meat substitutes that are based on soy (after all, that grows in farmers fields, that use machinery to harvest the beans, trucks to transport to the processing plants, where more energy is used, then trucked to the packaging/canning plants, and trucked once again to the stores) and also no imported food, because that has a negative ecological effect. And absolutely no chocolate from Africa, no coffee from South America and no tea from Asia.

Only homegrown potatoes, vegetables and fruit that have been grown in local cold soil, because greenhouses run on boilers, piped in CO2 and artificial light. Apparently, these things are also bad for The Climate. We will teach her how to grow her own food.

Bread is still possible, but butter, milk, cheese and yogurt, cottage cheese and cream come from cows and they emit CO2. No more margarine and no oils will be used for the frying pan, because that fat is palm oil from plantations in Borneo where rain forests first grew.

No ice cream in the summer. No soft drinks and no energy drinks, as the bubbles are CO2.

We will also ban all plastic, because it comes from chemical factories. Everything made of steel and aluminum must also be removed. Have you ever seen the amount of energy a blast furnace consumes or an aluminum smelter? All bad for the climate!

We will replace her memory foam pillow top mattress, with a jute bag filled with straw, with a horse hair pillow.

And finally, she will no longer be using makeup, soap, shampoo, cream, lotion, conditioner, toothpaste and medication. Facewashers will all be linen, that she can wash by hand, with her wooden washboard, just like her female ancestors did before climate change made her angry at us for destroying her future.

In this way we will help her to do her part to prevent mass extinction, water levels rising and the disappearance of entire ecosystems.

If she truly believes she wants to walk the talk of the girl on TV, she will gladly accept and happily embrace her new way of life.

Tyler Durden Tue, 12/03/2019 - 20:25
  • 4 décembre 2019 à 02:25

Former Counter-Intel Officer: Durham Needs To Bring Indictments

Par Tyler Durden
Former Counter-Intel Officer: Durham Needs To Bring Indictments

Authored by Chris Farrell via The Gatestone Institute,

There is new evidence that U.S. Attorney John Durham is getting to the root of criminal abuses by senior U.S. law enforcement and intelligence officials in their conspiracy to undermine the Trump campaign, transition and presidency. Mr. Durham's mandate from Attorney General William Barr -- to uncover the seditious plot behind the Trump-Russia hoax, if pursued vigorously, will uncover the single greatest threat to the Constitution since the nation's founding.

Mr. Durham's apparent interest in FBI source Stefan Halper and the contract vehicles available to the Pentagon think tank, the Office of Net Assessments, for whom Halper worked, is an important clue.

Likewise, Mr. Durham's travel to Italy for talks with the Italian government and their intelligence service points to another possible clue concerning the mysterious Maltese academic, Joseph Mifsud.

For the purposes of the manufactured Trump-Russia hoax, one need only remember the associations of Halper with Trump campaign volunteer Carter Page -- and Joseph Mifsud with George Papadopoulos, a foreign policy junior advisor -- to the Trump campaign.

The intelligence agencies of the federal government are prohibited from targeting American organizations in the United States. Executive Order 12333, Section 2.9 states:

Undisclosed Participation in Organizations Within the United States. No one acting on behalf of agencies within the Intelligence Community may join or otherwise participate in any organization in the United States on behalf of any agency within the Intelligence Community without disclosing his intelligence affiliation to appropriate officials of the organization, except in accordance with procedures established by the head of the agency concerned and approved by the Attorney General. Such participation shall be authorized only if it is essential to achieving lawful purposes as determined by the agency head or designee. No such participation may be undertaken for the purpose of influencing the activity of the organization or its members except in cases where:
(a) The participation is undertaken on behalf of the FBI in the course of a lawful investigation; or
(b) The organization concerned is composed primarily of individuals who are not United States persons and is reasonably believed to be acting on behalf of a foreign power.

This prohibition on running penetration operations against domestic political organizations is a legal and political "hangover" from the 1960s civil disturbances that saw (among a host of other covert action programs) US Army Counterintelligence agents working undercover against the militant Leftists organizations such as Students for a Democratic Society. The U.S. Senate Select Committee to Study Governmental Operations with Respect to Intelligence Activities, better known as the "Church Committee," was empaneled in 1975 under the leadership of Sen. Frank Church (D-ID) to review and make recommendations on intelligence operations. The Church Committee was controversial. Critics claimed the committee exposed the "crown jewels" of U.S. intelligence and hobbled our ability to conduct legitimate collection activities. Today's Foreign Intelligence Surveillance Act and Court were inspired by the final reports of the Church Committee.

The seditious coup plotters working against Trump knew the legal prohibitions on what they planned to do. How to target Trump & Co. in a "legal" manner? Was it possible, or more importantly, desirable, to have a legal finding from Attorney General Loretta Lynch justifying their plan to frame-up Trump & Co.? That would authorize their operation -- but would Lynch support it? Could Lynch be counted on? Did they want a piece of paper like that floating around Washington D.C.? No, there had to be a better way to pull off the coup.

The alternative to a purely domestic intelligence operation targeting a major political party's candidate for the presidency (and later, president) was to manufacture a foreign counterintelligence (FCI) "threat" that could then be "imported" back into the United States. Plausible deniability, the Holy Grail of covert activities, was in reach for the plotters if they could develop an FCI operation outside the continental United States (OCONUS) involving FBI confidential human sources (Halper, Mifsud, others?) that would act as "lures" (intelligence jargon associated with double agent operations) to ensnare Trump associates.

We have evidence of these machinations from December 2015 when FBI lawyer Lisa Page texts to her boyfriend, the now infamous FBI Special Agent Peter Strzok, "You get all our oconus lures approved? ;)."

To inoculate themselves from further charges of misconduct and criminality, the FBI's mutually agreed upon lie is that their investigation of Trump/Russia began on July 31, 2016 with the improbable name "Crossfire Hurricane." That coincides nicely with their manufactured FCI "event," allowing the full-bore sabotage of all things and persons "Trump." The coup plotters used a July 2016 event at the University of Cambridge as the opportunity for Carter Page to meet and develop a friendship with Stefan Halper. This is roughly the same time period that Australian diplomat Alexander Downer reported the supposedly drunken ramblings of George Papadopoulos concerning the Russians having Hillary's emails to the FBI. Papadopoulos had already serendipitously met the mysterious Joseph Mifsud in Rome during the second week of March 2016. Learning that Papadopoulos would be joining the Trump campaign, Mifsud let Papadopoulos know that he had many important connections with Russian government officials.

In July 2019, Special Counsel Robert Mueller was questioned closely by Rep. Jim Jordan (R-OH) concerning the persons and sequence of events detailed above.

The summation of Mueller's testimony was, "Well, I can't get into it."

The coup plot failed, but the chief coup conspirators are free, crisscrossing the country on book tours and appearing as paid contributors to CNN and MSNBC. A bright note in the so far grim saga is that one of the collateral casualties has filed a civil lawsuit in the Eastern District of Virginia against Stefan Halper and MSNBC for defamation, conspiracy and tortious interference. It's the closest thing we've seen to justice to date. The complaint makes remarkable and insightful reading.

It is now time for Mr. Durham to "get into it," in a manner Mr. Mueller was either unwilling or unable to do. Time is of the utmost importance. The American public needs to see action. Indictments and trials are the only antidote for the poison of treasonous sedition.

*  *  *

Chris Farrell is a former counterintelligence case officer.

Tyler Durden Tue, 12/03/2019 - 20:30
  • 4 décembre 2019 à 02:30

Asian Economic Avalanche: The Good (China), The Bad (Japan), & The Really Really Ugly (Hong Kong)

Par Tyler Durden
Asian Economic Avalanche: The Good (China), The Bad (Japan), & The Really Really Ugly (Hong Kong)

A smorgasbord of data from AsiaPac tonight poured a big bucket of cold water on the hopes for a trough in global growth.

Japan was first out of the gate with its Services PMI (slightly better than expected) but the Composite PMI remains below 50 (in contraction)

Source: Bloomberg

A typhoon and bad weather in October have also made it hard to discern the economy’s underlying strength. Economists have long forecast a contraction in the last three months of this year as the sales tax increase hits domestic consumption.

Commenting on the latest survey results, Joe Hayes, Economist at IHS Markit, said:

"November data is highly discouraging for the Japanese economy. October was difficult to interpret as a consequence of the consumption tax hike and powerful typhoon. A rebound was to be expected in November, but disappointingly, the strength of the recovery was limited, with activity growing only marginally.

"No notable acceleration in new business growth was also seen, suggesting that underlying demand conditions in Japan's service sector have weakened so far in the fourth quarter.

"Japan's service sector has been robust in 2019 so far, doing a good job at offsetting the strong drag from manufacturing.

However, based on survey data so far in the fourth quarter, a contraction in economic output seems highly plausible as we head into year-end."

Additionally, rubbing salt in the already sore wounds of the Japanese economy, Japanese car sales in South Korea collapsed 56.4% YoY as tensions between the two nations spark backlash.

But, all will be fixed soon as Japan is preparing an economic stimulus package worth 13 trillion yen (S$163 billion) to support fragile economic growth, two government officials with direct knowledge of the matter told Bloomberg yesterday, complicating government efforts to fix public finances.

Next up was Australia, where GDP grew at only 0.4% QoQ, weaker than the expected 0.5% with consumption remaining very weak (+0.1%). As a reminder, Australia has gone 28 years without a (formal) recession.

This follows a drop in Australian services business activity in the middle of the fourth quarter, accompanied by subdued sales growth, which remained constrained by a further fall in export demand. Job creation was marginal.

November data indicated that the decline in business activity occurred amid subdued demand conditions.

Then came the real fun as Hong Kong's Composite PMI crashed to a record low of 38.5 in November, with the sharpest drop in new business since the trough of the crisis in Nov 2008...

The average PMI reading (38.9) for October and November combined indicates the economy is on course for its weakest quarter since the survey's inception over 21 years ago.

Commenting on the latest survey results, Bernard Aw, Principal Economist at IHS Markit, said:

"November PMI data indicated that Hong Kong's private sector suffered its worst downturn since the 2003 SARS crisis, with the latest survey indicators painting a picture of gloom for the Special Administrative Region.

"The survey showed that the escalating political unrest saw business activity shrinking at the steepest rate since the survey started in July 1998. This occurred concurrently with the sharpest decline in new sales since the depths of the global financial crisis.

"The business outlook unsurprisingly remained gloomy, with confidence still stuck among the lowest levels seen in the survey history. In a further sign of pessimism, firms continued to make deep cuts to purchasing activity and inventories, reducing both at a survey record pace."

And finally, Aw notes, "The average PMI reading for October and November combined showed the economy on track to see GDP fall by over 5% in the fourth quarter, unless December brings a dramatic recovery."

And then came the big kahuna - China Services (and Composite) PMI. After China's government-provided PMI surged magnificently out of nowhere (despite a record collapse in industrial profits), all eyes are on the Caixin data tonight, which also surged dramatically from 51.1 to 53.5 (smashing expectations of 51.2)

Source: Bloomberg

But, oddly, employment fell to 51.0 - the weakest since July 2019.

Commenting on the China General Services PMI™ data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said:

“The Caixin China General Services Business Activity Index edged up to 53.5 in November, a marked increase from 51.1 in the previous month, marking the highest growth rate since April this year. The reading indicates a recovery in activity across the services sector.

1) The gauge for new business picked up from a recent low in October with a solid rebound in the measure for new export business, indicating domestic and foreign demand both improved.

2) The measure of outstanding business fell back into contractionary territory after two straight months of expansion, suggesting a strengthening capability on the supply side in the services sector. The employment gauge fell marginally in November from the previous month, which marked the most modest expansion since July.

3) The gauge for prices charged by service providers rose marginally, but the reading for input costs edged down, indicating greater company profitability. In the meantime, the measure for business expectations picked up strongly, but was still lower than the long-term average, reflecting depressed business confidence.

This surprising surge in Services sent the China Composite PMI to its highest since Feb 2018...

Source: Bloomberg

“The Caixin China Composite Output Index rose to 53.2 in November from 52 in the previous month, the highest since February 2018. The employment gauge bounced back into positive territory, reflecting easing pressure on the labor market. The measures for new orders and new export orders remained at relatively high levels, reflecting a continuous improvement in demand. The gauge for input prices edged down, pointing to easing pressure on the costs of companies. But business confidence was still weak, with the measure for future output expectations down from October.

China’s economy continued to recover in November, as domestic and foreign demand both improved. But business confidence remained subdued, reflecting the impact from uncertainties generated by the China-U.S. trade conflicts. That will restrain a recovery in economic growth. The trade dispute is the major reason behind the slowing economic growth this year, and will become a key factor affecting the stabilization and recovery of China’s economy next year.”

PBOC fixed the Yuan notably weaker tonight as the plunge in offshore yuan accelerated after Washington voted on the China Human Rights bill.

Source: Bloomberg

This summed things up rather perfectly...

Their numbers are getting better even during a trade war, a global slowdown, and HK falling into the abyss #ChineseMagic

— Jin SEO (@JTSEO9) December 4, 2019

Do you believe in miracles?

Tyler Durden Tue, 12/03/2019 - 20:56
  • 4 décembre 2019 à 02:56

Why The Future Needs Us Humans

Par Tyler Durden
Why The Future Needs Us Humans

Authored by Daniel Taylor via,

AI tyranny to be “built into the software that runs our society”.

The future needs real humans with a conscience and the ability to question authority.

In 2000, Bill Joy of Sun Microsystems wrote an articled titled Why the Future Doesn’t Need Us that detailed the anti-human worldview of the elite.

If we are to believe Elon Musk, Ray kurzweil and other top Transhumanists, we will need to merge with the machines in order to survive.

In reality the exact opposite is true. Humanity’s survival depends on remaining human and defying the post human agenda.

Two recent stories vividly demonstrate the anti-human future that we all face.

bombshell story from Austin, Texas revealed that the homeless population is being microchipped as a price of entry into shelter.

In the video clip, a homeless man describes the program, saying:

“It’s some kind of chip, I guess. Some kind of device you put on your body and then all you do is scan and then you don’t have to pay for anything anymore, you just scan.”

Another story from China shows the tyranny of social credit scores as a man is held captive and questioned for criticizing police on social media.

China spies on social media conversations. Then they bring dissidents in for a real-life chat. I’d say we’re AT LEAST five years away from that over here, so no worries.

— Ezra Levant 🍁 (@ezralevant) December 1, 2019

The elite are pushing the world into an AI driven nightmare.

Medical decisions, law practices, education, news and entire cities will be driven by artificial intelligence.

We are gradually shifting from constitutional law to algorithm driven tyranny.

Tyranny “built into the software that runs our society”

Computer scientist and pioneer of virtual reality Jaron Lanier, named in Time Magazine’s top 100 most influential people for 2010, says that “Cybernetic totalists” could “…cause suffering for millions of people.” Lanier writes in the year 2000 in his “One Half A Manifesto” that,

“There is a real chance that evolutionary psychology, artificial intelligence, Moore’s Law fetishizing, and the rest of the package, will catch on in a big way, as big as Freud or Marx did in their times. Or bigger, since these ideas might end up essentially built into the software that runs our society and our lives. If that happens, the ideology of cybernetic totalist intellectuals will be amplified from novelty into a force that could cause suffering for millions of people.”

The elite want a final revolution against the human race.

Ultimately, the human capacity to defy authority and exercise God-given conscience is to be snuffed out and rendered ineffective.

It has already begun with big tech censorship (driven by AI) of conservative voices, those who question vaccine safety, and many other prescient issues.

Simultaneously, a cultural purge of Judeo Christian values is taking place. Historically, these basic principles have held western society together in a system of true tolerance, and a regard for natural law for all mankind under God reigned us in when we went astray. The AI final revolution cannot succeed with these values widely held and practiced.

In reality, the future does need us. If we robotically sleepwalk into this post-human future we are finished.

Tyler Durden Tue, 12/03/2019 - 21:10
  • 4 décembre 2019 à 03:10

Clintons Vacationed Extensively At Epstein's New Mexico 'Baby-Making Ranch': Report

Par Tyler Durden
Clintons Vacationed Extensively At Epstein's New Mexico 'Baby-Making Ranch': Report

The Clintons regularly stayed at Jeffrey Epstein's weird New Mexico ranch where the deceased pedophile had grand plans to seed the human race with his DNA, according to his estate manager.

Bill, Hillary and even Chelsea visited the 10,000-acre estate "almost every year after they left the White House," according to the Daily Mail. The former first family didn't stay at the property's main compound, however - they spent their time in a custom cowboy-themed village Epstein built a mile south of his mountaintop villa.

the Clinton family bunked down in a special cowboy-themed village created by Epstein, which is a mile south of his own luxury mountaintop villa. They'd use one of the two guest houses, which look like they're straight out of the 19th century.

Seen in exclusive DailyMailTV images, the guest homes are next to other traditional Wild West-style buildings such as an old schoolhouse and saloon bar. An American flag is raised high above the village, which is next door to Epstein's private airstrip, where he arrived on his private planes, including his infamous 'Lolita Express'.

This is all according to security expert Jared Kellogg, who was brought in by long-standing ranch manager Brice Gordon to improve security and set up a camera system at the main house and 'cowboy village'. -Daily Mail

The Clintons maintain that they had minimal contact with Epstein, despite records proving he flew on the disgraced financier's 'Lolita Express' Boeing 727-200 no fewer than 27 times (which Epstein sold one week before his July arrest on suspicion of sex-trafficking minors).

According to Kellogg, ranch manager Brice Gordon kept bragging about the Clintons staying at the ranch - one of several of Epstein's homes were underage girls were reportedly trafficked from all over the world.

Pictures from inside Epstein's main house in New Mexico show a 'party shower' for up to eight people with four shelves full of toiletries and oils

"My contact was Brice, their main concern was that there was no video surveillance on the property at all. I thought this was a simple request, as they wanted surveillance to protect their investment. It's a huge site," said Kellogg. "But what was weird was that the whole time I was on site, Brice would be bragging about how the Clintons would visit, the whole family. Not just Bill, but Bill, his wife, their kid, and they would stay on the ranch itself. He had built this Western replica village with a saloon, barn houses, old school house and when you're walking through it, it feels like you're walking through the 1800s."

"His biggest concern was monitoring and covering that area, so my main focus was mounting cameras on poles to cover the driveways, walkways, the ins and outs of each house and facilities," the Mail cites Kellogg as adding. "It was like Westworld, it's like they built a functioning movie set, they put a lot of thought and detail into it, the flooring and facilities in there."

'I was saying how cool the replica houses were, they're pretty neat like the 1800s. He said: ''Yeah, they're built for guests, we get a lot of visitors. It's really cool the Clintons come out and hang out [with Epstein].''

'It sounded like a normal summer vacation.' -Jared Kellogg

As the Mail notes, Epstein had a picture of Bill Clinton in a blue dress hanging in his Upper East Side townhouse - a strange parody of former the infamous cum-stained dress Monica Lewinsky wore (and kept), as revealed by the Drudge Report.

Kellogg says he was stopped from going into certain areas of Epstein's New Mexico estate, but briefly explored its underground sections.

In November, a former contractor told the Mail that Epstein had built a secret basement 'strip club.'

"My access was very controlled. During the site walk, it was dictated where I could and couldn't go. There were certain facilities I wasn't allowed to go in, which was odd, as they were boarded up, and they looked like they could have big parties in them, but I didn't think much of it.

The large indoor bathing area has a over-sized pool, hot tub and a framed shower behind it

"They wanted to put very, very limited camera coverage on the main house itself. I was going to put up a couple of cameras on the exterior of the main entrance.

"At the main entrance, there's a downward slope at the back that goes into the basement. I was able to briefly go in. There was a long hallway to a big foyer and there was a door and that was about it. The two guest houses I was not permitted to go into," Kellogg said.

'Due to security reasons, I wasn't permitted to even put a camera location on the drawing that we would then have on our records.

'What is odd is that as a security professional, for me to give the best protection I can give a customer, I need the full layout of the land. I need to see the nooks and crannies, all the blind spots. They were limiting that access.

'The staff only lived in one house, as far as I was aware, which is the the one nearest to the main gate. The saloon bar is in the center [of the village], there's a bar area and looks like where they'd throw parties from my own observations. There's also a barn/hay storage, and they'd put tractors and other vehicles in it.'

Considering Epstein was a multi-millionaire, Kellogg said Gordon wanted to do the security on the cheap. 

Instead of using an expensive, robust camera system, which used underground cables, he wanted a 'point-to-point wireless fluid mesh design', which means cameras are operating via antenna, and is considerably cheaper. -Daily Mail

"What was odd to me was that I wasn't able to interact with Epstein. If it's your house, you have your concerns, the task had been delegated to Brice, he seemed to be in charge of everything."

Maybe it would have been different if Bryce was a 14-year-old girl?

Tyler Durden Tue, 12/03/2019 - 21:30
  • 4 décembre 2019 à 03:30

Will Drones Push The Middle East Past The Point Of No Return?

Par Tyler Durden
Will Drones Push The Middle East Past The Point Of No Return?

Authored by Jonathan Burden via,

Unmanned aerial systems (UASs) or drones, both armed and unarmed, have altered how states and insurgents conduct warfare in the Middle East. The widespread proliferation of these weapons, combined with the range of capabilities they confer and their potential to alter the logic of escalation between states, may cause significant inter-state conflict to occur. 

An increase in proliferation

Since the Cold War, the US has attempted to stop the spread of unmanned systems by pursuing a limited export policy. However, states in the Middle East have responded by either producing their own (Israel, Turkey and Iran) or by importing them (Jordan, Iraq, Saudi Arabia and the UAE). Perhaps the most troubling development is yet to come; in November the US Defense Secretary, Mark Esper warned that China was beginning to export drones with fully autonomous offensive capabilities. Although China’s policy has been described as ‘ask no questions’, it is constrained by its desire to avoid arming non-state actors and therefore legitimising separatist movements. 

Further, declining costs of commercial drones, combined with some DIY ingenuity has meant that groups such as ISIS and the Houthis rebels have been able to field aerial support, a capability that insurgent-type groups have lacked in the past. ISIS allegedly use UASs as light bombers and as reconnaissance aircraft to help coordinate devastating suicide attacks, whilst the Houthis (with Iranian assistance) have used drones as aerial improvised explosive devices (IEDs) for targeted assassination missions.   

Evolving capacity, multiplying impact

One emerging capability of drone operators is ‘swarming’, where multiple systems are used to achieve a shared objective. A crude version of this, in conjunction with cruise missiles, was utilised during the attack on Aramco’s Abqaiq and Khurais oil facilities on September 14 (crude because true swarming requires that the individual systems alter their behaviour based on communication with one another and there is little evidence that this occurred). As a result of the attack, production of 5% of the global oil supply was temporarily halted and, the global price rose by 15%. Although Houthi rebels initially claimed credit, a consensus that Iran was responsible has emerged. The attack was successful, despite the Saudi Aramco sites enjoying protection from the Kingdom’s US ally, in the form of Patriot PAC-2 surface-to-air missile batteries but which proved entirely ineffective.

The Centre for the Study of the Drone recently found that the number of systems and products claiming to protect against UASs had risen from just 10 in 2015 to 235 by 2018. Perhaps not surprisingly, the counter-drone industry (at least in the civilian world) has been described as “peddling snake oil.” Given that very few sites are of such strategic importance in the Middle East (recall the impact on the global oil supply), this swarm technology may prove extremely effective in crippling key national infrastructure and military installations across the region, especially in lieu of a “silver bullet” solution to countering drones. 

Likelihood of conflict escalation 

In the immediate aftermath of the Aramco attack, Jens Stoltenberg, the head of NATO, expressed his deep concern that tensions would increase and accused Iran of “destabilising the whole region.” Nevertheless, the attack, perhaps surprisingly, did not lead to a military response. 

In 2015, a wargame entitled ‘Game of Drones’ held in Washington DC concluded that that the presence of UASs in contested space had the effect of “lowering the threshold for military action in some circumstances because the perceived risk was lower. However, this relies on the belief that your adversary will not treat the engagement of a manned system in the same way they would a drone in the same scenario. Even as advances in surveillance technology means UASs can reveal more of the battlefield, a new “fog of war” is introduced. This ambiguity, reflected in President Trump’s initial decision to launch counter-strikes against an Iranian attack, and then quickly to cancel, could lead to an escalation via two mechanisms. 

First, a state could be baited into engaging a UAS, which is then used as a legitimising pretext to launch further strikes. Indeed, it has been suggested that “baiting” has been a significant facet of the Trump administration’s policy towards Tehran. The second mechanism is via miscalculation. Given the right set of conditions (perhaps a hawkish domestic base), repeated attacks on unmanned systems may compel one side to escalate, despite reluctance on both sides. 

The emergence of autonomous and swarm drone technology across a range of actors, combined with an unclear logic of how targeting unmanned systems affect inter-state relations could, therefore, trigger conflict. The primary risk is that heightened short term tensions over drones lead to a conflict before longer-term issues can be solved. As these systems develop technologically and operationally – the emergence of autonomous systems will complicate the matter – close attention to the mechanisms involved in precipitating conflict in the Middle East must be made. 

Tyler Durden Tue, 12/03/2019 - 21:50
  • 4 décembre 2019 à 03:50

"Chill Out About The Candidates": Obama "Does Not Care" If You Like The Nominee, Just Vote Democrat

Par Tyler Durden
"Chill Out About The Candidates": Obama "Does Not Care" If You Like The Nominee, Just Vote Democrat

When it comes to the 2020 elections, the Democrats' most powerful if ineligible candidate, former president Obama, just can't quite put his finger on who he wants to be the next democratic president. Two weeks ago, Trump's predecessor cautioned 2020 Democratic candidates not to move too far to the left - a clear warning not to vote for Warren or Sanders - as messages of sweeping societal and government transformations risk turning off the party's moderate base, the New York Times reported.

"Even as we push the envelope and we are bold in our vision, we also have to be rooted in reality," said Obama - who told a room of wealthy liberal donors: "Even as we push the envelope and we are bold in our vision we also have to be rooted in reality."

"The average American doesn’t think we have to completely tear down the system and remake it."

Even odder has been Obama's failure of explicitly endorse his own vice president and the on again, off again frontrunner in the democratic primary, Joe Biden.

So as many Democrats look to Obama for inspiration on who to pick amid a field of candidates where nobody sticks out, last week, the former president gave some additional insight into his thought process regarding the coming elections, and last  Thusday Obama simply said that he doesn’t care if his fellow Democrats like the 2020 candidate, he just wants them to pull the lever for whoever wins the nomination.

“Everybody needs to chill out about the candidates, but gin up about the prospect of rallying behind whoever emerges from this process,” Obama told tech leaders during a fundraiser in Silicon Valley last Thursday, the Daily Wire reported.

Barack Obama

And though he stressed that he was calling for unity, Obama reiterated some of his latent criticism.

“When you listen to the average voter — even ones who are stalwart Democrats, are more independent or low-information voters — they don’t feel that things are working well but they’re also nervous about changes that might take away what little they have,” he said. “So there’s always a balance in politics between hope and fear.”

The event — which featured a top-ticket price of $355,000 — was expected to raise over $3 million for the Democratic National Committee. The fundraiser was hosted at the home of Karla Jurvetson, an ascendant Democratic megadonor in Silicon Valley politics. Other key fundraisers for the event included former Twitter executive Katie Jacobs Stanton and former Obama ambassador Denise Bauer.  Stephen Curry, the star point guard of the Golden State Warriors, also attended alongside his wife Ayesha, who spoke at the event.

While there are still 15 candidates running for the Democratic nomination (after the withdrawal of Kamala Harris earlier today), only four are polling in double digits, with most either at 1% or 0%. But Obama said whoever gets the nod should get the vote.

“There will be differences” between the candidates, Obama said, “but I want us to make sure that we keep in mind that, relative to the ultimate goal, which is to defeat a president and a party that has … taken a sharp turn away from a lot of the core traditions and values and institutional commitments that built this country,” those differences are “relatively minor.”

“The field will narrow and there’s going to be one person, and if that is not your perfect candidate and there are certain aspects of what they say that you don’t agree with and you don’t find them completely inspiring the way you’d like, I don’t care,” he said. “Because the choice is so stark and the stakes are so high that you cannot afford to be ambivalent in this race.”


Obama was directly addressing Silicon Valley’s wealthiest Democratic donors, telling them to “chill” in their debate over the party’s candidates, and seeking to ease the tensions among tech billionaires who have broken into separate camps backing Pete Buttigieg, Joe Biden, and — most surprisingly — Elizabeth Warren, according to recode.

Obama may have his job cut out for him: with many Democratic voters confused or merely bored silly by the current roster of candidates, two newcomers, Former Massachusetts Gov. Deval Patrick and former New York City Mayor Michael Bloomberg, entered the race adding further to the confusion. Last month, Massachusetts Sen. Elizabeth Warren, for instance, drew fewer than 100 people to a South Carolina “Environmental Justice” forum. And she’s a frontrunner!

Meanwhile, Gallup released a poll last week that had some troubling news for Democrats, as only 66% of the party faithful said they’re enthusiastic about the upcoming election. And while for Republicans the number is 65%, "this differed from the typical pattern Gallup has seen over the years, whereby those who identify with the political party of the incumbent president have been less enthusiastic about voting than members of the opposing party,” Gallup wrote.

Ironically, Obama isn't alone in saying Democrats need to hold their nose when they vote for the eventual nominee. Joe Biden’s wife, Jill, said in August that her husband might not be the best candidate, but told voters “maybe you have to swallow a little bit” and vote for him anyway.

"Your candidate might be better on, I don’t know, health care, than Joe is,” Jill Biden said on MSNBC, “but you’ve got to look at who’s going to win this election, and maybe you have to swallow a little bit and say, ‘OK, I personally like so-and-so better,’ but your bottom line has to be that we have to beat Trump.”

During a campaign stop in New Hampshire, she repeated the point. “I know that not all of you are committed to my husband, and I respect that. But I want you to think about your candidate, his or her electability, and who’s going to win this race. So I think if your goal — I know my goal — is to beat Donald Trump, we have to have someone who can beat him," she said.

Tyler Durden Tue, 12/03/2019 - 22:10
  • 4 décembre 2019 à 04:10

L.A.'s Head Of Homelessness Resigns After 33% Increase in People Sleeping On Streets

Par Tyler Durden
L.A.'s Head Of Homelessness Resigns After 33% Increase in People Sleeping On Streets

Authored by Paul Joseph Watson via Summit News,

Los Angeles’ head of homelessness is resigning after presiding over a 33% increase in homelessness over the course of just five years.

Peter Lynn, head of the Los Angeles Homeless Service Authority, announced that he would leave at the end of the year, with the LAHSA having splashed out a total of more than $780 million to no avail.

The city’s homeless population jumped a further 12% from 2018 to 2019 but despite Lynn’s total failure, LA Mayor Eric Garcetti claimed he did an excellent job and oversaw “historic action.”

One wonders how badly Lynn would have had to perform for officials to consider his tenure a failure.

Lynn’s $242,000-a-year role appears to have had little success in addressing not just homelessness, but also the directly related problems of leprosy, typhoid fever and even bubonic plague.

Earlier this year, Dr. Drew Pinsky said the public health situation in America’s second largest city was in utter turmoil.

“We have a complete breakdown of the basic needs of civilization in Los Angeles right now,” said Pinsky.

1.5 per cent of rats in L.A. now carry bubonic plague. If that figure hits 2 per cent, the medieval disease will start jumping to humans.

In other words, if LA doesn’t sort out its trash problem and its homeless problem, the return of bubonic plague is virtually guaranteed.

And don’t even get me started on San Francisco.

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Tyler Durden Tue, 12/03/2019 - 22:30
  • 4 décembre 2019 à 04:30

Warren: I'll Be The "Last American President Elected By Electoral College"

Par Tyler Durden
Warren: I'll Be The "Last American President Elected By Electoral College"

Democratic Massachusetts Sen. Elizabeth Warren tweeted a short clip of her speaking at a townhall event over the weekend, indicating that she would eliminate the Electoral College and allow the popular vote to choose the president in 2024, basically implying a massive overhaul of the US Consitution would be coming if she became president, reported The Daily Caller. "My goal is to get elected—but I plan to be the last American president to be elected by the Electoral College. I want my second term to be elected by direct vote," she tweeted.

My goal is to get elected—but I plan to be the last American president to be elected by the Electoral College. I want my second term to be elected by direct vote.

— Elizabeth Warren (@ewarren) December 2, 2019

Warren told dozens of people at an Iowa town hall event that she is ready to "get rid of" the Electoral College and replace it with a popular vote. 

"I just think this is how a democracy should work," she told the townhall. "Call me old-fashioned, but I think the person who gets the most votes should win."

Warren has mentioned before that she would abolish the Electoral College if she became president. There's even a section on her website that says, "Presidential candidates should have to ask every American in every part of the country for their vote. Add your name if you agree: It's time to abolish the Electoral College and to have a national popular vote." 

"Everyone's vote should count equally — in every election — no matter where they live.

But right now, presidential candidates don't even go to places like Mississippi, where I was last night, because it's a deep red state. They also don't go to deep blue states like California or Massachusetts because they're not presidential battlegrounds.

I believe presidential candidates should have to ask every American in every part of the country for their vote, not just a few random states that happen to be close," Warren's website said further. 

Her critics were quick to respond and bashed the unfair election system that has elected Democrats for decades: 

My goal is to get elected and then abolish the unfair corrupt system that elected me.

— Stephen Miller (@redsteeze) December 2, 2019

Making absurd, completely unrealistic promises is rapidly becoming her specialty.

— David French (@DavidAFrench) December 2, 2019

There are two reasons her "plan" is doomed. The first is that she has no chance of getting elected. ...The second would be even harder to overcome. #2020election #ElectoralCollege #ElizabethWarren

— Herman Cain (@THEHermanCain) December 2, 2019
Tyler Durden Tue, 12/03/2019 - 22:50
  • 4 décembre 2019 à 04:50

History Was Supposed To End. What Happened?

Par Tyler Durden
History Was Supposed To End. What Happened?

Authored by Jeffrey Tucker via The American Institute for Economic Research,

Anyone paying close attention at the turn of the 21st century could foresee the impending failure of the social-democratic consensus throughout the developed world. 

The exalted experts who rose to power in the postwar period built gigantic state-based systems of social management and control and took over vast swaths of private society, imposing planning schemes across many sectors of economic life. They imagined themselves to be permanent fixtures of the socio-economic system. After all, this approach won the war (so they said), so why couldn’t it win the peace? 

But there was a problem: over time nothing worked as it was supposed to. There were massive internal contradictions within the model, as Amity Shlaes shows in her new book on the Great Society. The new systems relied on bureaucratic command, not market signals. There was another problem: they were hugely imposing on people’s lives and property, and people don’t like that. Or rather: they will put up with it so long as they perceive that the benefits exceed or at least match the costs. 

Building that apparatus – the efforts really began about a century ago, extended through the New Deal, but became a full model of social control in the postwar period – depended fundamentally on its successful sales pitch: these were programs built by workers for the sake of social justice, for the poor, for the marginalized, against plutocratic elites. 

But as F.A. Hayek had long demonstrated about socialism, the movement was in fact nothing of the sort. It was originated by elites and largely served elites: intellectuals, the people who knew better than the masses, the people in power or wanting power, the winners in the game of political manipulation. 

These systems reached their breaking point by the late 1970s. For the following three decades we observed piecemeal reform efforts such as those that would re-incentivize investment and work, privatize labor relations, control rates of money printing, deregulate, bring back market forces, cut taxes, and re-empower society. 

By the time socialism in China, the Soviet Union, and Eastern Europe were abruptly swept off the map – a devastating blow to the whole model of top-down control – there arose an inconvenient problem. Many institutions constructed in developed capitalist societies were of the same mode: centralized, managed by elites, vastly more expensive than the benefit, ill-managed, and ultimately unworkable.

The dramatic events abroad further humbled the left in the developed world. In the 1990s, the socialist left mostly went into hiding, as even the Democrats in the U.S. and the Labour Party in the U.K. pursued real reforms to welfare systems. It seemed like everyone had made his or her peace with markets and free enterprise as the only system that truly provides the goods. 

As always with politics, the reform efforts were too little too late. Public anger at the status quo built until the end of the century even as private enterprise effectively constructed a completely new system based on information and decentralized control. Ten years later, we had the app economy, the ubiquitous cell phone, and globalized commerce to the point that more than 60% of the GNP of the world was attributable to imports and exports. It seemed like there was no going back. 

Looking at this sweep of events led liberals like me to conclude that history was on the right path. The state was failing in every area and less popular than ever. There were too many anomalies to be sustained. Social consensus was breaking down for a simple reason: the ethos of social democracy presumes that society should operate like a large clan, an impossibility in the context of a modernized globalized economy with mass migration. Politicians came to be loathed alongside the bureaucrats that managed the systems that political forces created. In the course of a half century, public confidence in government had slipped from two-thirds to one-tenth of the public. 

The experts we put in charge of the state apparatus to rule us through compulsion and coercion had proven to be an enormous flop. Their wars on everything from poverty to drugs to illiteracy to terrorism had made each of the targetted areas actually worse, while market forces themselves – mercifully neglected by the state – were creating vast new technologies in the newly dawned digital age and creating glorious new opportunities for everyone. It was markets, not welfare, that lifted billions out of poverty, opened up information economies, created dazzling new modes of communicating and living, and blasted open the possibilities for progress like we’ve never seen in human history. 

But we liberals proved naive in our belief that history would march along a linear path toward the light. We had presumed some or another version of the “end of history” thesis that the next stage of history was moving us toward human liberty and that the state would realize its obsolescence and die a merciful death. 

Looking back, we can see that the very same naive confidence in the capacity of human beings to learn from experience also afflicted the liberals of the late 19th century. Surrounded by the products of liberty, innovations that were dramatically changing the world and leading humanity to a new level of prosperity and peace – flight, internal combustion, the commercialization of steel – they rested on their laurels with a sense that their victory was somehow baked into the narrative story of human evolution. Then came World War I. They had clearly grown overconfident. 

The equivalent happened to us in the last half decade. My own opinions had previously trended in the direction of believing that everyone would see the obvious failures of the state as an institution and thus would the progress toward liberty continue in the right direction. Instead, something remarkable and unexpected happened (though it is all perfectly obvious in retrospect): the reaction to the failure of leftist-style social democracy was not to embrace liberty but rather to rally around the emergence of a new form of authoritarianism that sought to govern with rightist-style rhetoric. 

Which is to say: the state reinvented itself to live another day, forestalling the hoped-for push to emancipate humanity from the constructed oppressions of the last one hundred years. 

The new movements came to power under a global surge of populist agitation. Trump in the US is the most obvious case but a deeper look shows that he was only one player among many in countries all over the world. Rightist movements that were against the old order but for a new form of state-imposed order rose up in Europe, Russia, and Latin America too. 

I’ve called this new form of populism (which is a method of rhetoric and a means of retaining power) “right-wing collectivism.” It feeds off public resentment of the previous type of elite management of the social order. It rejects the universalism (globalism) of the social-democratic way and embraces instead a new form of nationalism that bleeds into every application of reactionary statism: racism, religious bigotry, misogyny, intolerance. It is invariably restrictionist on immigration and protectionist on trade. It celebrates all the things the left puts down such as faith and family but demands that these institutions serve the common national project under a Carlyle-style great leader. It brings back the leadership principle and executive rule. It is as ill-liberal as that which it replaces but not obviously so since this style of governance is more tolerant toward finance capital and nominally capitalistic production, though also celebratory of industrial planning. 

Its champions called the model the “politics of human nature” without noting that there are both lower and higher angels of nature: the rightist brand of collectivism was all about tapping into the lowest instincts. 

The problem was not only the right. What happens on the right somehow always finds its mirror image on the left. The rise of this new form of rightist extremism further fed the resurgence of the same on the left, which similarly tried an experiment with the populist style. Down with the rich. Pillage the millionaires and billionaires. Impose new global plans of economic management. A green new deal. Punitive taxation. The return of socialism itself! 

The whole thing has been incredible to watch, but this is what happens: one form of extremist paradigm shift creates an appetite for another form, which is precisely why several astute observers have noted the strange overlap in the proposed policies of Trump/Warren/Sanders: statism becomes a kind of echo chamber of voices that seeks control by seizing the machinery of power for their own purposes. 

In the end, every form of state planning uses the same methods with the same collectivist goal even if the details change depending on the constituency being served. 

The question that has been on my mind constantly for these last five years has been: when does this all end? At what point does the populist model die the death too?

I must give credit to David Brooks for drawing my attention to a trend this year that I had missed. His column came and went in the flurry of minute-by-minute information flows but, to my mind, this is one of the most important writings I’ve seen on politics in years. His prescience here could define the look of the next half decade. 

Have you noticed that the world is on fire?…

The populist/authoritarian regimes are losing legitimacy. The members of the urban middle class in places like Hong Kong and Indonesia are rising up to protect the political and social freedoms.

These days, it doesn’t take much to set off a giant wave of anger. In Lebanon it was a proposed tax on WhatsApp. In Saudi Arabia the government raised taxes on hookah restaurants. In France, Zimbabwe, Ecuador and Iran it was rising fuel prices. In Chile it was a proposed 4 percent rise in subway fares.

The world is unsteady and ready to blow. The overall message is that the flaws of liberal globalization are real, but the populist alternative is not working.

Bingo! Here’s the problem. The populist must rely on exactly the same means of control as their managerial elite predecessors from the social-democratic project. The state is the state and there is no other kind. Control is control and force is force, and they breed as much popular resentment as the other managerial type from which populism emerged as a reaction. 

State control does not work. It never has. It can’t because, as it turns out, the people who manage state programs are no smarter than the people they manage; in fact, it is worse because the managers lack access to reliable signals of market forces. Also, a revolution on this scale is bigger than another person who purports to lead it. Rise to power in a revolt and prepare to be the next scapegoat. 

That is precisely what is happening right now. The new movements of protest are only nominally about left and right, despite the media attempt to make them fit those categories. As Brooks says, “the protests in all these places are leaderless, so it’s unrealistic to expect them to have policy agendas. But the big question is, what’s next? What comes after the failure of populism?”

He doesn’t dare point to the actual answer because he can’t come around to facing it, because doing so would amount to admitting that a century-long intellectual project is an enormous failure. There is an answer to the question of which paradigm best suits the needs of a modern, progressing, global, diverse world order powered by technological innovation that enshrines human choice as a first principle. The answer is now what it has always been: a free society protected from the wiles of political machines through extreme restraints on the state, any state of any flavor, whether managerial or populist. 

The next paradigm of history – once we stop experimenting with mad ideologies, populist reactions, fake paths to manufactured progress, and top-down means of enforcement – needs to be human liberty itself. 

Tyler Durden Tue, 12/03/2019 - 23:10
  • 4 décembre 2019 à 05:10

Drug Cartels Invade Quiet Mexican Town Packed With Americans

Par Tyler Durden
Drug Cartels Invade Quiet Mexican Town Packed With Americans

The failures of the nationalist Mexican President Andrés Manuel López Obrador (AMLO) are starting to be realized in a huge way.

First, the economy is decelerating, second, murders across the country are hitting record highs, and third, there are small towns filled with Americans that cartels are now invading. 

Mexico's economy entered a recession in 1H19, AMLO promised to "Make Mexico Great Again," though an economic downturn has unfolded and has derailed his beautiful plans of revitalization. 

An imploding economy comes at a time of worsening cartel wars and record homicides, a story we've been documenting for the past five years. So far this year, 28,741 people have been killed as the socio-economic crisis deepens. 

President Trump is ready to designate Mexican drug cartels as terrorist groups, and this will one day allow the US military to fight drug cartels on Mexican soil.

And as Bloomberg reports Tuesday, drug cartels have poured into San Miguel de Allende, a colonial-era city in Mexico's central state, home to 160,000 folks, and approximately 10,000 Americans and Canadians. 

What's currently happening are violent drug gangs are now a demanding property tax on small businesses and have flooded the town with cocaine, resulting in turf wars and a jump in homicides. 

The chaos began several months ago, but before that, the small town was peaceful. Now people are dying in a hail of gunfire every week. 

Cartel members are killing non-compliant business owners who refuse to pay the property tax. 

Manuel, a local restaurant manager, told Bloomberg that this kind of crime was unimaginable over the summer. "It's still hard to believe" that there's so much chaos across the city.

San Miguel has joined the list of popular destinations, such as Cabo San Lucas, Cancun, and Mexico City, where drug wars have erupted over the last several years. 

ALMO's laissez-faire approach in crime-fighting has widely been viewed as a failure. 

"Security is a nation-wide problem now, and unfortunately no one can escape it," said Javier Quiroga, head of the bar and cantina association in Guanajuato, the state where San Miguel is located. "It's getting harder for people to go about their regular activities."

Local reports said cartels had not attacked the resort part of town, popular with tourists and ex-pats. Large multinationals, such as Volkswagen AG and General Motors Co., who have manufacturing facilities in the area, have also reported that cartels aren't disturbing them. 

At the moment, cartels are only targeting small business owners, but that can certainly change. 

The surge in cartel violence has led to hotel occupancy rates declining in August, down 15% over the year, according to government data. 

Some shop keepers have fled the city after failing to pay cartel property taxes. Others have been murdered. 

Cartel members have dropped off sacks of cocaine to shop owners, demanding them pay for the drugs. 

Bloomberg notes that one reason for the surge in violence is due to "the government crackdown on fuel thefts in the region spurred cartels to look for alternative income sources to finance their operations and turf wars." 

Cartels "are looking to make a name for themselves and to get some money quick," said Gladys McCormick, a professor of Mexico-U.S. relations at Syracuse University in New York. "Extortion is the easiest way to do that." 

McCormick said the violence in San Miguel "is a dark cloud on the horizon because it heralds that nowhere is safe anymore. The fact there is such an international presence in San Miguel de Allende guarantees that the fear felt inside the city will echo beyond Mexico."

Tyler Durden Tue, 12/03/2019 - 23:30
  • 4 décembre 2019 à 05:30

Operation Condor 2.0: After Bolivia Coup, Trump Dubs Nicaragua "National Security Threat" And Targets Mexico

Par Tyler Durden
Operation Condor 2.0: After Bolivia Coup, Trump Dubs Nicaragua "National Security Threat" And Targets Mexico

Authored by Ben Norton via,

After presiding over a far-right coup in Bolivia, the US dubbed Nicaragua a “national security threat” and announced new sanctions, while Trump designated drug cartels in Mexico as “terrorists” and refused to rule out military intervention.

One successful coup against a democratically elected socialist president is not enough, it seems.

Immediately after overseeing a far-right military coup in Bolivia on November 10, the Trump administration set its sights once again on Nicaragua, whose democratically elected Sandinista government defeated a violent right-wing coup attempt in 2018.

Washington dubbed Nicaragua a threat to US national security, and announced that it will be expanding its suffocating sanctions on the tiny Central American nation.

Trump is also turning up the heat on Mexico, baselessly linking the country to terrorism and even hinting at potential military intervention. The moves come as the country’s left-leaning President Andrés Manuel López Obrador warns of right-wing attempts at a coup.

As Washington’s rightist allies in Colombia, Brazil, Chile, and Ecuador are desperately beating back massive grassroots uprisings against neoliberal austerity policies and yawning inequality gaps, the United States is ramping up its aggression against the region’s few remaining progressive governments.

These moves have led left-wing forces in Latin America to warn of a 21st-century revival of Operation Condor, the Cold War era campaign of violent subterfuge and US support for right-wing dictatorships across the region.

Trump admin declares Nicaragua a ‘national security threat’

A day after the US-backed far-right coup in Bolivia, the White House released a statement applauding the military putsch and making it clear that two countries were next on Washington’s target list: “These events send a strong signal to the illegitimate regimes in Venezuela and Nicaragua,” Trump declared.

On November 25, the Trump White House then quietly issued a statement characterizing Nicaragua as an “unusual and extraordinary threat to the national security and foreign policy of the United States.”

This prolonged for an additional year an executive order Trump had signed in 2018 declaring a state of “national emergency” on the Central American country.

Trump’s 2018 declaration came after a failed violent right-wing coup attempt in Nicaragua. The US government has funded and supported many of the opposition groups that sought to topple elected Nicaraguan President Daniel Ortega, and cheered them on as they sought to overthrow him.

The 2018 national security threat designation was quickly followed by economic warfare. In December the US Congress approved the NICA Act without any opposition. This legislation gave Trump the authority to impose sanctions on Nicaragua, and prevents international financial institutions from doing business with Managua.

Trump’s new 2019 statement spewed outlandish propaganda against Nicaragua, referring to its democratically elected government — which for decades has been targeted for overthrow by Washington — as a supposedly violent and corrupt “regime.”

This executive order is similar to one made by President Barack Obama in 2015, which designated Venezuela as a threat to US national security.

Both orders were used to justify the unilateral imposition of suffocating economic sanctions. And Trump’s renewal of the order paves the way for an escalated economic attack on Nicaragua.

The extension received negligible coverage in mainstream English-language corporate media, but right-wing Spanish-language outlets in Latin America heavily amplified it.

And opposition activists are gleefully cheering on the intensification of Washington’s hybrid warfare against Managua.

More aggressive US sanctions against Nicaragua

Voice of America (VOA), the US government’s main foreign broadcasting service, noted that the extension of the executive order will be followed with more economic attacks.

Washington’s ambassador to the Organization of American States (OAS), Carlos Trujillo, told VOA, “The pressure against Nicaragua is going to continue.”

The OAS representative added that Trump will be announcing new sanctions against the Nicaraguan government in the coming weeks.

VOA stated clearly that “Nicaragua, along with Cuba and Venezuela, is one of the Latin American countries whose government Trump has made a priority to put diplomatic and economic pressure on to bring about regime change.”

This is not just rhetoric. The US Department of the Treasury updated the Nicaragua-related sanctions section of its website as recently as November 8.

And in September, the Treasury Office of Foreign Assets Control announced a “more comprehensive set of regulations,” strengthening the existing sanctions on Nicaragua.

Voice of America’s report quoted several right-wing Nicaraguans who openly called for more US pressure against their country.

Bianca Jagger, a celebrity opposition activist formerly married to Rolling Stones frontman Mick Jagger, called on the US to impose sanctions on Nicaragua’s military in particular.

“The Nicaraguan military has not been touched because they [US officials] are hoping that the military will like act the military in Bolivia,” Jagger said, referring to the military officials who violently overthrew Bolivia’s democratically elected president.

Many of these military leaders had been trained at the US government’s School of the Americas, a notorious base of subversion dating back to Operation Condor. Latin American media has been filled in recent days with reports that Bolivian soldiers were paid $50,000 and generals were paid up to $1 million to carry out the putsch.

🇳🇮No se ha sancionado el ejército de #Nicaragua "porque tal vez tienen esperanza de que el ejército se va a conducir como el de Bolivia", @BiancaJagger.

— Voz de América (@VOANoticias) November 26, 2019

VOA added that “in the case of the Central American government [of Nicaragua], the effect that sanctions can have can be greater because it is a more economically vulnerable country.”

VOA quoted Roberto Courtney, a prominent exiled right-wing activist and executive director of the opposition group Ethics and Transparency, which monitors elections in Nicaragua and is supported by the US government’s regime-change arm, the National Endowment for Democracy (NED).

Courtney, who claims to be a human rights activist, salivated over the prospects of US economic war on his country, telling VOA, “There is a bit of a difference [between Nicaragua and Bolivia] … the economic vulnerability makes it more likely that the sanctions will have an effect.”

Courtney, who was described by VOA as an “expert on the electoral process,” added, “If there is a stick, there must also be a carrot.” He said the OAS could help apply diplomatic and political pressure against Nicaragua’s government.

These unilateral American sanctions are illegal under international law, and considered an act of war. Iran’s foreign minister, Javad Zarif, has characterized US economic warfare “financial terrorism,” explaining that it disproportionately targets civilians in order to turn them against their government.

Top right-wing Nicaraguan opposition groups applauded Trump for extending the executive order and for pledging new sanctions against their country.

Estados Unidos amplió por un año más la vigencia de la Declaración de Emergencia Nacional con respecto a la Situación en Nicaragua.

— Alianza Cívica Nicaragua (@AlianzaCivicaNi) November 25, 2019

The Nicaraguan Civic Alliance for Justice and Democracy, an opposition front group that brings together numerous opposition groups, several of which are also funded by the US government’s NED, welcomed the order.

Trump dubs drug cartels in Mexico “terrorists,” refuses to rule out drone strikes

While the US targeting of Nicaragua and Venezuela’s governments is nothing new, Donald Trump is setting his sights on a longtime US ally in Mexico.

In 2018, Mexican voters made history when they elected Andrés Manuel López Obrador as president in a landslide. López Obrador, who is often referred to by his initials AMLO, is Mexico’s first left-wing president in more than five decades. He ran on a progressive campaign pledging to boost social spending, cut poverty, combat corruption, and even decriminalize drugs.

AMLO is wildly popular in Mexico. In February, he had a record-breaking 86 percent approval rating. And he has earned this widespread support by pledging to combat neoliberal capitalist orthodoxy.

“The neoliberal economic model has been a disaster, a calamity for the public life of the country,” AMLO has declared. “The child of neoliberalism is corruption.”

When he unveiled his multibillion-dollar National Development Plan, López Obrador announced the end to “the long night of neoliberalism.”

AMLO’s left-wing policies have caused shockwaves in Washington, which has long relied on neoliberal Mexican leaders ensuring a steady cheap exploitable labor base and maintaining a reliable market for US goods and open borders for US capital and corporations.

On November 27 — a day after declaring Nicaragua a “national security threat” — Trump announced that the US government will be designating Mexican drug cartels as “terrorist organizations.”

Such a designation could pave the way for direct US military intervention in Mexico.

Trump revealed this new policy in an interview with right-wing Fox News host Bill O’Reilly. “Are you going to designate those cartels in Mexico as terror groups and start hitting them with drones and things like that?” O’Reilly asked.

The US president refused to rule out drone strikes or other military action against drug cartels in Mexico.

President @realDonaldTrump tells me he is 90 days into the process of designating Mexican drug cartels as Foreign Terrorist Organizations - which would give US forces more leverage in taking them out.

— Bill O'Reilly (@BillOReilly) November 27, 2019

Trump’s announcement seemed to surprise the Mexican government, which immediately called for a meeting with the US State Department.

The designation was particularly ironic considering some top drug cartel leaders in Mexico have long-standing ties to the US government. The leaders of the notoriously brutal cartel the Zetas, for instance, were originally trained in counter-insurgency tactics by the US military.

Throughout the Cold War, the US government armed, trained, and funded right-wing death squads throughout Latin America, many of which were involved in drug trafficking. The CIA also used drug money to fund far-right counter-insurgency paramilitary groups in Central America.

These tactics were also employed in the Middle East and South Asia. The United States armed, trained, and funded far-right Islamist extremists in Afghanistan in the 1980s in order to fight the Soviet Union. These same US-backed Salafi-jihadists then founded al-Qaeda and the Taliban.

This strategy was later repeated in the US wars on Libya and Syria. ISIS commander Omar al-Shishani, to take one example, had been trained by the US military and enjoyed direct support from Washington when he was fighting against Russia.

The Barack Obama administration also oversaw a campaign called Project Gunrunner and Operation Fast and Furious, in which the US government helped send thousands of guns to cartels in Mexico.

Mexican journalist Alina Duarte explained that, with the Trump administration’s designation of cartels as terrorists, “They are creating the idea that Mexico represents a threat to their national security.”

“Should we start talking about the possibility of a coup against Lopez Obrador in Mexico?” Duarte asked.

She noted that the US corporate media has embarked on an increasingly ferocious campaign to demonize AMLO, portraying the democratically elected president as a power-hungry aspiring dictator who is supposedly wrecking Mexico’s economy.

Duarte discussed the issue of US interference in Mexican politics in an interview with The Grayzone’s Max Blumenthal and Ben Norton, on their podcast Moderate Rebels:

Now, a whisper campaign over fears that the right-wing opposition may try to overthrow President Andrés Manuel López Obrador is spreading across Mexico.

AMLO himself has publicly addressed the rumors, making it clear that he will not tolerate any discussion of coups.

“How wrong the conservatives and their hawks are,” López Obrador tweeted on November 2. Referencing the 1913 assassination of progressive President Francisco Madero, who had been a leader of the Mexican Revolution, AMLO wrote, “Now is different.”

“Another coup d’état will now be allowed,” he declared.

Ahora es distinto. Aunque son otras realidades y no debe caerse en la simplicidad de las comparaciones, la transformación que encabezo cuenta con el respaldo de una mayoría libre y consciente, justa y amante de la legalidad y de la paz, que no permitiría otro golpe de Estado.

— Andrés Manuel (@lopezobrador_) November 2, 2019

In recent months, as fears of a coup intensify, López Obrador has swung even further to the left, directly challenging the US government and asserting an independent foreign policy that contrasts starkly to the subservience of his predecessors.

AMLO’s government has rejected US efforts to delegitimize Venezuela’s leftist government, throwing a wrench in Washington’s efforts to impose right-wing activist Juan Guaidó as coup leader.

AMLO has welcomed Ecuador’s ousted socialist leader Rafael Correa and hosted Argentina’s left-leaning Alberto Fernández for his first foreign trip after winning the presidency.

In October, López Obrador even welcomed Cuban President Díaz-Canel to Mexico for a historic visit.

Trump’s Operation Condor 2.0

For Washington, an independent and left-wing Mexico is intolerable.

In a speech for right-wing, MAGA hat-wearing Venezuelans in Miami, Florida in February, Trump ranted against socialism for nearly an hour, threatened the remaining leftist countries in Latin America with regime change.

“The days of socialism and communism are numbered not only in Venezuela, but in Nicaragua and in Cuba as well,” he declared, adding that socialism would never be allowed to take root in heart of capitalism in the United States.

While Trump has claimed he seeks to withdraw from wars in the Middle East (when he is not occupying its oil fields), he has ramped up aggressive US intervention in Latin America.

Though the neoconservative war hawk John Bolton is no longer overseeing US foreign policyElliott Abrams remains firmly embedded in the State Department, dusting off his Iran-Contra playbook to decimate socialism in Latin America all over again.

During the height of the Cold War, Operation Condor thousands of dissidents were murdered, and hundreds of thousands more were disappeared, tortured, or imprisoned with the assistance of the US intelligence apparatus.

Today, as Latin America is increasingly viewed through the lens of a new Cold War, Operation Condor is being reignited with new mechanisms of sabotage and subversion in play. The mayhem has only begun.

Tyler Durden Tue, 12/03/2019 - 23:50
  • 4 décembre 2019 à 05:50

Russian Gas Mega-Pipeline To China Goes Online As Putin & Xi Hail Closer Ties

Par Tyler Durden
Russian Gas Mega-Pipeline To China Goes Online As Putin & Xi Hail Closer Ties

Late Monday Chinese President Xi Jinping and Russia's Vladimir Putin jointly launched the major unprecedented cooperative project that had been years in the making called the 'Power of Siberia' gas pipeline.

The China-Russia east-route pipeline is now providing China with Russian natural gas, which according to Chinese state media is expected to reach 5 billion cubic meters in 2020 and increase to 38 billion cubic meters annually from 2024.

Crucially, S&P Global Platts estimates that total sales through the pipeline is projected to meet nearly 10% of China's entire gas supply by 2022, ensuring vital energy security as Beijing continues to feel the pressure and uncertainty of the trade war with Washington. 

A Chinese section of the China-Russia East Route natural gas pipeline in Heihe, China. Image source: CNN/Getty Images

The ceremony to officially bring the pipeline online was held as a video call between Xi and Putin was underway. Xi told Putin: "The East-route natural gas pipeline is a landmark project of China-Russia energy cooperation and a paradigm of deep convergence of both countries' interests and win-win cooperation."

The deal had been cemented in May 2014 when Russian gas giant Gazprom signed a 30-year contract with China National Petroleum Corp, after which the pipeline agreements were signed with both leaders present in Shanghai in later 2014.

Gazprom CEO Alexei Miller announced to both leaders that the pipeline had been opened via video link. "Gas is flowing to the gas transmission system of the People's Republic of China," he said.

A 30-year deal was signed by Putin and Xi in 2014, and while a final figure has not been announced, it is believed to be worth more than $400 billion. — CNN

Gazprom will oversee operation of the mammoth pipeline which runs more than 8,100 kilometers (5,000 miles) across the two countries.

President #Putin and Chinese President #Xi Jinping launch "Power of Siberia" gas pipeline.
This is a breakthrough in the energy market that will have major geopolitical repercussions.

— Enrico Ivanov (@Russ_Warrior) December 2, 2019

Xi hailed the pipeline's inauguration as signaling a new start in future China-Russian cooperation and partnerships. And as Putin noted in his comments, the pipeline's launch date coincided with the 70th anniversary of Russia-China diplomatic ties.

Putin also projected that 1 trillion cubic meters of natural gas will flow through the pipeline from Russia over the next 30 years. 

The pipeline crosses over to China from Russia's Blagoveshchensk, also site of the first major road bridge between the two.

Via Gazprom

"That step brings the Russian-Chinese strategic partnership in the energy sector to a whole new level," Putin stated to TASS news agency.

In a worrisome sign for Washington as Moscow further cements its energy dominance in the east, the 'Power of Siberia' is but the first of a planned for three total major pipeline projects. It will later be joined by ‘TurkStream’ and ‘Nordstream2’, according to official statements. 

Tyler Durden Wed, 12/04/2019 - 01:00
  • 4 décembre 2019 à 07:00

The UK & The EU Should Prevent Mutual Assured Damage

Par Tyler Durden
The UK & The EU Should Prevent Mutual Assured Damage

Authored by Jean Pisani-Ferry via Project Syndicate,

Nothing can be taken for granted in the United Kingdom these days, but it is now very likely that 2020 will be the year when Brexit finally happens. A majority of UK citizens will probably be relieved to bring this seemingly endless agony to a close, while most European leaders will likely be glad not to have to argue over another postponement. But questions will remain.

To the question of “Who lost Britain?”, the answer must be, first and foremost, Britain itself. Whatever mistakes the European Union’s other 27 members may have made, they cannot be held responsible for the extraordinary behavior of the UK’s three equally amateurish governments of the last five years.

Yet, there are deeper lessons to be drawn from what happened in Britain. The first, as Wolfgang Münchau pointed out in the Financial Times, is that the battle in the UK over EU membership was lost long before it was fought. Since the 1990s, leading pundits and media outlets have routinely portrayed the EU as a stifling bureaucracy obsessed with expanding its own power; few senior politicians have dared to confront such prejudices.

Unfortunately, similar trends are currently visible in other core EU countries. In France, 56% of citizens – as many as in the UK – tend “not to trust” the EU. Working-class voters are especially negative. Confidence in the EU is stronger in Germany, but the European Central Bank’s policies are under attack. For years, horror stories circulated about hidden transfers to the South. Germany’s best-selling tabloid Bild now claims that German savers lost €120 billion ($132 billion) during the tenure of former ECB President Mario Draghi (or “Count Draghila,” as the editors called him). Many politicians, like their British counterparts before them, find it easier to pander to such perceptions than to oppose them. This is paving the way for future backlashes.

At the same time, the EU should not exempt itself from a bit of soul-searching. When the UK’s then-prime minister, David Cameron, sought a temporary limit on immigrants from Central and Eastern Europe, it might have been advisable to work out a solution with him. And after the EU started Brexit negotiations with Cameron’s successor, Theresa May, it might have been wise to respond to her calls for a “bespoke” arrangement for the UK. Since the June 2016 Brexit referendum, the EU27 have been surprisingly united, remarkably consistent, and astoundingly bereft of a strategy. Their stance has been motivated not so much by a desire to limit mutual damage, but rather by the fear that any softening in negotiations with the UK could lead to further fragmentation. Their apparent strength concealed internal weakness.

Bygones are bygones. The EU’s priorities now should be to keep mutually beneficial cooperation alive and to avert the danger of the UK pursuing an aggressive regulatory competition strategy.

Joint defense initiatives involving the UK and continental partners will most likely survive, cooperation within the multilateral system will almost certainly continue, and ad hoc projects will probably flourish. But the big casualty of Brexit risks being economic integration with the European single market.

A screw is a screw, and a bolt is a bolt. But the UK no longer produces screws and bolts. It is a major exporter of banking, insurance, accounting, communication, and professional services, half of which go to the EU. Moreover, most of these services are regulated.

If the Brexiteers’ “take back control” slogan means anything, it implies substituting UK laws for EU legislation. On the day after Brexit, Britain’s regulatory regime will be identical to that of its EU trading partners, because the UK’s 2018 Repeal Bill copy-pasted all EU laws into domestic legislation. But as the UK Parliament gradually amends these laws, and the EU introduces new laws of its own, the two legal systems will start diverging. The question is: how far can they diverge without endangering economic linkages and destroying prosperity?

There are two possibilities.

One is that the UK adopts laws that differ from those in the EU but are based on the same core principles. For example, there can be different ways to guarantee that insurance contracts offer the same degree of consumer protection, or to uphold bioethics standards. In that case, UK national laws would embody different approaches to regulation, and yet create only limited obstacles to trade in services.

The second possibility, however, is that the UK attempts to undercut EU legislation. In this scenario – often dubbed “Singapore-upon-Thames” – Britain would impose less stringent standards for financial stability, be softer on data protection and, or perhaps relax its labor laws, in the hope of attracting more investors and selling cheaper services. Such a move would rightly be regarded as uncooperative by the UK’s European partners, and would result in the EU cutting off market access for British services exporters (most of which currently supply their continental clients directly from their UK base).

Which route will Britain follow?

Ideally, it would agree with the EU on common principles and credibly commit to sticking to them. But because some of the most adamant Brexit supporters openly dream of completing the Thatcher revolution and turning the UK into a low-regulation paradise, the EU is understandably wary. There is a serious risk of a negative spiral of aggressive British deregulation and forceful EU tightening, with damaging consequences for services trade.

The EU should not ask the UK to copy slavishly its legislation. But it should make clear that aggressive regulatory competition is unacceptable and present the UK government with a black-and-white choice: either it agrees to commit to common principles and exercise regulatory self-restraint in order to maintain good access to the European market, or it refuses – and exposes British firms to a severe, across-the-board curb on their ability to export to Europe.

Assuming Brexit happens, future historians will probably remember 2020 as the year when an enfeebled and vulnerable Europe chose to make itself feebler and more vulnerable. The task for its leaders now is to avoid making matters even worse.

Tyler Durden Wed, 12/04/2019 - 02:00
  • 4 décembre 2019 à 08:00

Turkey Declares Ownership On Half Of Eastern Mediterranean Waters

Par Tyler Durden
Turkey Declares Ownership On Half Of Eastern Mediterranean Waters

A Turkish diplomat has revealed a map which delineates waters in the Mediterranean claimed by Turkey, amid an ongoing months-long standoff with Cyprus and Greece over Turkish oil and gas exploration and drilling inside Cyprus' Exclusive Economic Zone (EEZ).

"After signing deals with its own puppet state in occupied northern Cyprus and with the pseudo-government in Libya's Tripoli, Turkey declares that it owns half of the eastern Mediterranean," Aron Lund, an analyst at The Century Foundation, observes of the newly published map.

New map outlining Turkey's claimed continental shelf and the borders of its Exclusive Economic Zone (EEZ), via Hurriyet Daily. Meanwhile the entire eastern side of Cyprus is claimed by the internationally disputed "Turkish Republic of Northern Cyprus."

And Turkey's Hurriyet Daily explains: "With the chart, Çağatay Erciyes showed the outer boundaries of Turkey's continental shelf and EEZ, designated in a 2011 agreement between Turkey and the Turkish Republic of Northern Cyprus (TRNC), the median line between Egypt and Turkey's mainlands and a recent memorandum with Libya."

Over the past year Turkey has sent both oil and gas exploration ships, as well as military transport vessels, into Cypriot waters in the East Mediterranean related to expanded claims based on the Turkish occupation of northern Cyprus (since 1974), earning the condemnation of both Nicosia and top EU officials, who have defended EU-Cyprus' interpretation of the conflict. 

Turkey claims western waters off Cyprus, with the so-called TRNC eastern waters; and now Erdogan is cutting deals with Libya to expand from the southern Mediterranean.

In nearby Libya, as Turkish military advisers continue to play a key role in support of the Tripoli-based Government of National Accord (GNA) against an offensive led by Gen. Khalifa Haftar's Libyan National Army (LNA), Turkey is also busy expanding maritime defensive operations off North Africa.

"On Nov. 27, Turkish President Recep Tayyip Erdoğan held a closed meeting in Istanbul that lasted over two hours with Fayez al-Sarraj, chairman of the Presidential Council of Libya," Hurriyet Daily reports further.

In that meeting the two leaders reportedly struck a deal which is seen as key to expanding Turkey's maritime claims:

Stressing that Turkey has the longest continental coast line in the eastern Mediterranean, [Turkish Foreign Ministry spokesman] Aksoy said: "The islands which lie on the opposite side of the median line between two mainlands cannot create maritime jurisdiction areas beyond their territorial waters and that the length and direction of the coasts should be taken into account in delineating maritime jurisdiction areas."

This follows boiling tensions since the early summer after Turkey laid claim to waters extending a whopping 200 miles from its coast, brazenly asserting ownership over a swathe of the Mediterranean that even cuts into Greece's exclusive economic zone.

After signing deals with its own puppet state in occupied northern Cyprus and with the pseudo-government in Libya's Tripoli, Turkey declares that it owns half of the eastern Mediterranean.

— Aron Lund (@aronlund) December 3, 2019

So far Ankara has responded to threats of EU sanctions by reaffirming its rights to waters of all parts of Cyprus' coast. 

Should the Turkish military attempt to enforce its drilling claims and run up against Cypriot and Greek vessels, it could spark a deadly encounter which would force the EU and reluctant NATO to finally weigh in more forcefully. 

Tyler Durden Wed, 12/04/2019 - 02:45
  • 4 décembre 2019 à 08:45

Germany Is The Rotten Heart Of Europe

Par Tyler Durden
Germany Is The Rotten Heart Of Europe

Authored by Tom Luongo via Gold, Goats, 'n Guns blog,

The crisis in Europe will come from Germany. Germany has entered a period of political crisis that, as yet, has not exploded.

But the pyre is built, the torches lit and all that remains is dragging Chancellor Angela Merkel up and setting the whole thing on fire.

For those that want to understand the fundamental impulses which have led the European Union to where it is today and Germany’s central role one really needs to read Bernard Connolly’s “The Rotten Heart of Europe.”

It’s a book that damns pretty much everyone in their monomaniacal drive for the European Project but, Germany, in particular, to me, comes across the worst.

Because the design of the euro, as a currency, was guided by German industrialists looking for the advantage a single currency would bring them.

This is a point I’ve made many times that the single exchange rate underprices the value of Northern European industrial entities while overpricing Southern Europe’s productive capacity.

Moreover, it raised the effective quality of the debt of those countries far above the market rate. This allowed them to borrow at far lower rates than they would ever have been able to.

This has led to exactly where we are today with massive internal imbalances which have hollowed out these economies, further eroded their productive capacity and competitiveness and left them with a mountain of unpayable debt which is then used as a further means to extract the last of the country’s real wealth when the inevitable crisis hits and the debt has to be restructured.

And to think that this point wasn’t understood by the people who designed the euro is to be terminally naive. This is a point not only made by Connolly but also by Gyorgy Matolcsy, the President of the Hungarian Central Bank.

Thanks to a very generous regular reader I’m reading his book, “The American Empire Vs. the European Dream” right now. And Matolcsy opens the book with a scathing attack on the euro and how it never should have been introduced in the first place.

Because the effects of the single currency have been wholly predictable. But he makes an even larger point than Connolly did in his book. Germany, through wealth extraction and collecting rent thanks to the exchange rate arbitrage.

It may anger my German readers to hear this but, again, if you didn’t think this was the plan by some all along, to colonize countries like Greece that couldn’t be conquered militarily in WWII, then you can’t also see why the rest of Europe is becoming angry.

But Matolcsy goes one step further in his criticism of Germany, saying that if that wealth extraction had been distributed throughout the EU over the twenty-plus years of the euro via investment then things would be far better today.

But Germany never gave up its mercantilist mindset, preferring instead to sell Spanish and Greeks BMWs and Porsches while lending them the money at suppressed interest rates to do so.

And then when the bills come due demand austerity to pay them back and call them deadbeats in the process.

That’s why Germany, today, is the rotten center of a crumbling European would-be empire. And why everyone, including Germans, will now be impoverished as the mountain range of unpayable debt collapses.

Empires always rot from within.

The American empire is facing the exact same problem, but because it is the world’s reserve currency and has the biggest synthetic short against it will simply get hit later.

This is why the Dow Jones Industrials and the S&P500 are trading at all-time highs despite President Trump’s latest trade war salvos at China and the German DAX is struggling to best its 2018 high.

The Dow is sniffing out the differences in the political and economic uncertainties between the U.S. and Germany. Because …

The big news is that Angela Merkel’s coalition partner, the Social Democrats (SPD), just elected new leadership that is hostile to the governing coalition as they blame Merkel for their collapse as a political force nationally. That puts Merkel’s political future in jeopardy or, at a minimum, ensures she has even less control over a mostly gridlocked German government.

For the past couple of months we’ve seen the markets in general breath a sigh of relief after the Fed and ECB stepped in to provide liquidity.  But that doesn’t fix the underlying problems, it only delays them for a few more months by reflating the yield curve, in this case the U.S.’s and Germany’s.

But is the reflation trade the new dominant one or simply a lull between crises, as Jeff Snider at Alhambra Partners suggests?

My guess is the latter as the Fed keeps piling term Repos onto its balance sheet, now more than $207 billion since September, and another 42-day repo operation yesterday that was 2x oversubscribed.

Sure that could be normal quarter-end shenanigans but why? And will we be asking these same questions when these 42-day repos expire in late January?

The bigger questions is what is causing U.S. banks to need so many dollars to keep the money markets liquid? And why is everyone struggling with this dollar shortage?

Because everyone is feeling the same thing, something is going to change in a big way and when it does they want dollars, not euros, pounds, yen or yuan.

The German economy is slowing. It has been for more than a year.

And when the reflation trade is over, markets that haven’t made new highs will be much more vulnerable to collapse. Germany’s multi-generational mercantilist empire has reached its zenith. It can’t push it any further without conceding political ground to the rest of Europe or abandoning the very thing that created the empire in the first place, the euro.

That’s the central problem which sits at the heart of the European Project. And it can’t be papered over much longer.

*  *  *

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Tyler Durden Wed, 12/04/2019 - 03:30
  • 4 décembre 2019 à 09:30

Former Sex Slave Confronts ISIS Rapist On TV After He Was Found Living Free In Germany

Par Tyler Durden
Former Sex Slave Confronts ISIS Rapist On TV After He Was Found Living Free In Germany

In 2018 we detailed the shocking story of an Iraqi Yazidi woman who was kidnapped by ISIS as a teenager in her native Iraq in 2014 and held for three months as a sex slave by the terror group, eventually managing to escape and later resettled as a refugee in Germany after the harrowing ordeal.  But astoundingly, two years after her escape, she unexpectedly encountered her ISIS kidnapper while walking the streets of Stuttgart, Germany. The man she identified as Abu Hamam was living in Germany as a free man, and the police did nothing

"She told police and asylum officials about the encounter and although they identified the man from CCTV they said there was nothing they could do because the man was also registered as a refugee," The Times reported in 2018. But now the Kurdish Yazidi woman Ashraq Haji Hamid (previously identified as Ashwaq Ta'lo) has bravely confronted her prior captor  the very man who bought her and violently raped her “several times a day” — on Iraqi TV in a rare, intense moment.

“Abu Humam, look up. Why did you do this to me? Why? Because I’m Yazidi?” she said to the prisoner now back in Iraqi custody, Abu Hamam. “I was 14 years old when you raped me. Look up. Do you have feelings? Do you have honor?” she asked him. 

“I was 14 years old, as old as your daughter, your son, or your sister,” she continues. “You destroyed my life. You robbed me of all my dreams. I was once held by Isis, by you, but now you will feel the meaning of torment, torture, and loneliness.”

“You’ve destroyed my life. You took everything from me. Everything I dreamed of,” she angrily told her prior ISIS abuser.

Now 20-years old, the young woman actually faints near the end of the intense encounter. The unusual interview recorded by the Iraqi National Intelligence Service and broadcast on Al-Iraqiya news channel in late November.

The idea behind the arrangement was to give a sense of closure to Hamid's ordeal, and for a sense of national acknowledgement and healing in terms of what happened to thousands of Iraqi women after they were kidnapped by the Islamic state.

Former Yazidi Slave Girl Confronts Captured ISIS Terrorist Who Had Held Her Captive, Violently Raped Her When She Was 14: You Destroyed My Life

— MEMRI (@MEMRIReports) December 1, 2019

"Now you will feel the meaning of torment, torture, and loneliness," she tells the Iraqi prisoner while sobbing. He'll likely spend the rest of his life in Iraqi prison following his arrest by Iraqi authorities when he left Germany; or he possibly faces execution like many former Islamic State fighters detained by Iraq.

According to The Independent, after previously accidentally coming face-to-face in Germany with the man who had in Iraq been her ISIS captor, she had fled the country back to her native Iraq, fearing European authorities would do nothing. She feared for her life despite having made it from a war zone to the supposed 'safety' of Europe. 

In 2018 she told the full story of bumping into her ISIS captor of the streets of Stuttgart where he was enjoying life as a free man.

This is Ashwaq, a Yazidi girl who was kidnapped by ISIS in 2014 when the terrorist group attacked Kurdistan-Iraq. After her escape and her migration to Germany, she met the man who had bought her as a slave, walking around freely in Germany. This is unacceptable!

— Polla Garmiany ☀️ (@PollaGarmiany) August 14, 2018

However, Abu Hamam was later "handed over to Iraqi security services when he returned to the country as well." It's unclear precisely how or by what arrangement he had returned to Iraq. 

What's shocking about the case, and what drove outrage when the story first came to light, is that Germany had previously given the ISIS terrorist "refugee" status. And who knows how many other escaped ISIS terrorists are now living freely in Europe under the protection of 'refugee' status? 

Tyler Durden Wed, 12/04/2019 - 04:15
  • 4 décembre 2019 à 10:15

Saxo: 6 Macro Calls For 2020

Par Tyler Durden
Saxo: 6 Macro Calls For 2020

Authored by Christopher Dembik, head of Macro Analysis at Saxo Bank,

Today, we have published our Outrageous Predictions for 2020. The overall theme is: Engines of Disruption. Frankly speaking, I think the ones we have written this year are among the best.

That being said, I am thinking it is certainly the right moment to share with you my macro calls for next year. I haven’t covered everything, but it think the below list is a good sum up of what we should expect in 2020:

The death of free markets

Please, remember QE is not QE. In order to fix the broken monetary transmission mechanism, the Federal Reserve has already injected $324 billion in the repo market. Central banks don’t want you to know it, but this is the death of free markets. In some market segments, central banks are becoming market makers. This is especially the case for the European sovereign bond market. Based on our calculations, central banks own around 80% of German’s debt. Central bank interventions have led to mispricing, misallocation, complacency and muted volatility. This is clearly the case on the forex market, notably the EUR/USD cross. Nothing is able to move the cross and implied volatility is at an historically low point. However, we cannot live without central bank interventions as it would mean higher rates and lower liquidity which would have disastrous economic and financial consequences in a world of high indebtedness.

The Warren trade is trendy

My belief is that no matter what will happen in the coming months, the next US president will be a populist. In this context, one of the most popular trades in 2020 could be a put option on the S&P 500 index for March expiry. It would be the right way to hedge against Warren risk (in case she wins in Iowa, New Hampshire and on Super Tuesday) but also against new US tariffs against China if negotiations derail.

Old monetary policy debates are coming back

The ECB’s strategic review is likely to address the issue of inflation and the way it is calculated. This is a very old debate and there are a lot of conflicting viewpoints on the topic. The ECB, under Draghi’s leadership, seemed in favor of including housing prices in HICP but, in 2018, the EC advised against it due to the lack of timeliness of the new OOH Index (Ower-Occupied Housing Index). More basically, the ECB might need to bring some clarity about what the objective of inflation really means. It could get rid of the “below, but close to” 2% inflation target and it could adopt a more flexible approach, i.e. a range of 1-3% for instance.

And new ones are emerging

Reviewing the framework will be the best opportunity to include climate change. In that sense, Lagarde’s letter to EP was bright clear: “The intended review of the ECB’s monetary policy strategy…will constitute an opportunity to reflect on how to address sustainability considerations within our monetary policy framework”. In the United States, the economist Stephanie Kelton is justifying MMT with climate change. We should get ready to a huge monetary and fiscal climate package but more likely in 2021 than in 2020.

Economists are good to forecast rolling recession

If recession does not happen in 2019, it will happen in 2020…or in 2021. As a matter of fact, it has become more and more complicated to understand how economic cycles work, partially due to the financialization of the economy. However, as long manufacturing weakness contagion to the service sector is limited, our base case scenario is that we are at the start of a mini-cycle recovery, fueled by central banks, in the context of a late-cycle expansion.

The car market is still a disaster, especially in China

In 2018, the car market was hit hard by the expiration of key tax breaks. In 2019, sales were down due to new emissions standards and the withdrawal of consumer subsidies for electric vehicles. In 2020, the car market will remain sluggish as risks on consumption and global trade will stay elevated.

Tyler Durden Wed, 12/04/2019 - 05:00
  • 4 décembre 2019 à 11:00

Futures Surge After Bloomberg Quotes "Unnamed Sources" Saying US, China Closer To Trade Deal 

Par Tyler Durden
Futures Surge After Bloomberg Quotes "Unnamed Sources" Saying US, China Closer To Trade Deal 

We've seen these headlines before...

Equity futures in Europe and the US jump on "trade optimism" headlines around 4 am est. The headlines were published by Bloomberg, citing unnamed sources, who said the US and China are moving closer to the number of tariffs that would be rolled back to complete a phase-one trade deal.

The unnamed sources said President Trump's comments on Tuesday "shouldn't be understood to mean talks were stalling, as he was speaking off the cuff."

Sources added a phase-one deal with China is expected to be completed before the next round of tariffs begins on Dec. 15.

E Mini S&P500 jumps 60bps on unnamed sources saying both sides are closer to a deal. We've heard these headlines before...

Considering unnamed sources and timing of the pump, this was more fake trade news to save equity futures from a further correction.

Protect E Mini S&P500 3100 at all costs, even if that means pumping a "trade optimism" article that had zero substance to it.

On a much larger perspective, the big techincal fight today will be E Mini S&P500 3100 and 20EMA. 

And there it's, Global Times calling out President Trump and Bloomberg for pumping fake trade news... 

I predict there is a high probability that President Trump or a senior US official will openly say in a few hours that China-US trade talks have made a big progress in order to pump up the US stock markets. They've been doing this a lot.😀

— Hu Xijin 胡锡进 (@HuXijin_GT) December 4, 2019

And how did Twitter react to more fake trade news?

Well, some on Fintwit exhibited short fuses and took it out directly on the author of the Bloomberg market-moving article.

It's that fucking whore Jenny Leonard again.

Every single market moving fake news article is written by that slut.

And it's always unnamed sources. Bitch you'll get capped.

— Bovell Global Macro (@Bovell_GM) December 4, 2019

So what? Amount of rollback does Not mean that a deal is any closer. This phase 1 deal was already done in Oct, market already rallied on it Being Done. Fuck me, what a joke.

— onlytrading (@trade4Evr) December 4, 2019

@MikeBloomberg ,@business
the next address for class action lawsuits, fake news, bullshit, manipulation

— Leon (@leon_trader) December 4, 2019

these fake headlines are causing massive disruptions in the bond mkt... not to mention the stock mkt. they are messing with the actual plumbing. when players lose all confidence in the game itself, youre asking for huge problems.

— AGTrader (@ag_trader) December 4, 2019

“It’s coming, it’s coming”

— Daniel Lacalle (@dlacalle_IA) December 4, 2019

We are - truly, sadly - just hamsters on a wheel.

— Invictus (@TBPInvictus) December 4, 2019
Tyler Durden Wed, 12/04/2019 - 05:04
  • 4 décembre 2019 à 11:04

Syria's War-Battered Currency Hits All-Time Low Amid Broader Mideast Banking Crisis

Par Tyler Durden
Syria's War-Battered Currency Hits All-Time Low Amid Broader Mideast Banking Crisis

Via Al-Masdar News,

The Syrian Pound (also lira) has significantly improved over the last 24 hours after reaching an all-time low, Al-Watan newspaper reported on Wednesday morning. Earlier this week it hit an all-time exchange low of 950 SYP for every $1 (in the years leading up to the start of war in 2011, it stood steady at about 50 SYP for $1). 

According to Al-Watan, the Syrian Pound improved by more than 15 percent on Wednesday, reaching 850 SYP for every $1 (USD).

Image via AFP/VOA

Local markets yesterday witnessed a severe recession, so that a large number of economic and commercial activities and shops closed until the direction of the exchange rate was clear.

Panicky Syrians rushed to buy dollars on Monday, causing the Syrian pound’s value to plunge to record lows, two dealers and a banker said.

The pound, worth 47 to the dollar just before Syria’s civil war broke out nearly nine years ago, plunged to 950 pounds to the dollar, weakening it by another 25% in the past few days. It fluctuated around 765 pounds to the dollar last week.

The pound’s fall has accelerated since mid-October, when Lebanon’s economic crisis worsened amid a wave of anti-government protests. — Reuters

The Board of Directors for the Damascus Chamber of Commerce Mohammed Hallak said that the instability of legislation is reflected in the instability of the exchange rate, explaining in a statement to Al-Watan that stability is leading to the survival of the production process as it is, stressing that what is required today is real partnership between business and government in order to raise confidence.

He added: "We have to be objective, any trader or industrial consumer of goods in his home, which confirms that the reflection of the depreciation of the exchange rate is negative by all standards because any industrial or trader has workers and employees to contribute to the productive process."

Earlier this week, the Syrian Pound hit an all-time exchange low when it hit 950 SYP for every $1 (USD).

Tyler Durden Wed, 12/04/2019 - 13:15
  • 4 décembre 2019 à 19:15

Western France Runs Out Of Gas As "Massive Strikes" Set To Paralyze Entire Nation

Par Tyler Durden
Western France Runs Out Of Gas As "Massive Strikes" Set To Paralyze Entire Nation

France is bracing for major transportation disruptions throughout the country starting Thursday, as trade unions launch a strike in response to changes President Emmanuel Macron wants to make to the country’s retirement system, while port blockades have resulted in widespread fuel shortages across the country. Much of the Paris Metro will be shut down, as will many national and international train lines, including certain Eurostar services. Flights will also be canceled, as air traffic controllers say they will join the protests through Saturday.

Hundreds of filling stations around western France have run out of gasoline and diesel as blockades of oil refineries enter their second week according to industry group UFIP. According to The Local, construction workers have been blockading refineries in Brittany since last week and a blockade at La Rochelle has resumed.

French media reported on Tuesday morning that 390 filling stations have no fuel at all, and another 389 have limited supplies. The areas affected include Brittany, the west of France, the south east coast area around Marseille and some parts of eastern France near the Swiss border.

For an interactive map of which filling stations are affected, click here.


Workers are staging blockages at depots in Brest, Lorient, Le Mans and Vern-sur-Seiche. Further south, in the region of La Rochelle, another blockade was cleared at 4.30pm on Friday, but resumed at midnight on Monday. The blockaders belong to the public construction group BTP, Bâtiments et Travaux Publics (“Buildings and Public Construction”). They are protesting a fuel tax hike planned for 2020, which they say will have a negative financial impact on their companies. Until now, the so-called gazole non routier (GNR), used mainly by construction workers and farmers, is subject to a tax benefit that is planned to be phased out in 2020.

According to the workers this will increase their fuel prices by 45%, adding an hourly cost of about €10 for an average mechanical excavator, which they fear will hurt especially the smaller construction businesses.

The government suspended the fuel tax hike last December to appease the "yellow vest" protesters, whose main demands included abolishing the fuel tax.

In a separate dispute about a different type of fuel tax, truck drivers from the group Organisation des Transporteurs Routiers Européens will also be staging protests including rolling road blocks across France from Saturday, December 7th onwards. The French truck drivers are angry about a two cent increase in diesel tax and say their protest will start on Saturday, and could go on for an unspecified number of days.

The group's press release says that: "Tired of not feeling defended and heard, road transport companies will express in the street the legitimate anger of the profession." The protests will be "from December 7th and the following days".

The strike action could also lead to some disruption on the roads as one of the hauliers unions is involved and 'yellow vest' protesters have said they will be staging a day of action. Nothing has been specified yet, but in the past motorway toll booths have been a frequent target for 'yellow vest' demonstrations.

Their protest is not linked to the unlimited strikes that are hitting France from December 5th - those are over plans to reform the pension system - but will coincide with what is expected to be a very difficult weekend for transport as rail employees, Metro drivers, bus drivers, airline ground crew and air traffic controllers all walk out.

The last time the French government seriously tried to overhaul its pension system, in 1995, protests also paralyzed the country for more than three weeks and forced then-President Jacques Chirac to back down and accept a stinging political defeat. And although French transport unions largely steered clear of the yellow vest demonstrations over the past year, they are expressing the same anger that certain segments of the population have been abandoned by their leaders.

Adding to the chaos, yellow vest protesters could join these demonstrations. Teachers unions, postal workers, hospital workers and the police may also support the strikes.

“It’s the coalition of all frustrations, and it demonstrates the isolation of the elite, the isolation of the president, even the personal rejection of Macron,” said Dominique Moïsi, a French political scientist and the author of a recent book on emotions in politics.

“There is a deep sense of injustice right now, that inequalities have exploded, that the state is much less protective than it was of the weak, and much more protective of the strong,” Moïsi said.

France uses forty-two different retirement schemes and under some of those schemes, such as those for train drivers and Paris Metro operators, certain employees can still retire as early as age 50 or 52. Paris Metro drivers are entitled to monthly pensions as high as $4,100, according to a government report in July. Many private-sector employees, by contrast, can retire only at 62, and the average government pension ranges from $1,400 to $1,600 a month. As we showed recently, France is the "winner" among all nations in the expected number of years a worker can expect to live in retirement.

Alas, such a generous arrangement is no longer sustainable, which is why Macron’s idea is to create a universal points-based system that would calculate pensions in the same way for everyone, regardless of their profession.

This has angered the powerful French labor unions, which have called for Thursday’s protest and who insist that Macron’s new calculation would harm lower-income workers and those who have been temporarily employed.

However, the resistance is not just about retirement income.

Laurent Berger, the head of the French Democratic Confederation of Labor, one of the country’s major unions, couched his movement’s actions in general terms in a recent interview with France’s LCI television. “The government is in the process of losing everyone,” he said. “It’s lost everyone."

According to an Ifop poll published Sunday by France’s Journal du Dimanche newspaper, 76 percent of the French are in favor of overhauling the retirement system. But 46 percent of those polled also expressed a positive view of those who plan to demonstrate.

Meanwhile, as the WaPo notes, it remains unclear how long the transport workers strike will last. Eurostar has said that because of expected disruptions, it will run a reduced timetable of its high-speed-train service at least through Dec. 10.

Union organizers have vowed to continue until the government responds sufficiently to their concerns. But the coming Christmas holidays may deflate the crowds they draw.

Some observers have noted that the tense atmosphere in France is the same kind of discontent with democratic systems that is on view across the West, but manifested in a French style. “In Great Britain, when you are dissatisfied, you get a new election, and we are about to see the third one” in four years, Moïsi said. “In France, when you get dissatisfied, you take to the streets. And you have the symbol of the barricade.”

"You don’t use the ballot box but the stone, which you are going to throw at the symbol of authority."

Tyler Durden Wed, 12/04/2019 - 13:30
  • 4 décembre 2019 à 19:30