California's New 'Red Flag' Gun Law So Extreme ACLU Deems "Significant Threat To Civil Liberties"

California adopted 15 firearms-related bills last Friday, including a controversial 'red flag' gun confiscation law which adds co-workers, employers and educators to the list of who can file a gun violence restraining order on those they say are a danger to themselves and others. Currently, only law enforcement and immediate family members can apply

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to temporarily confiscate peoples' firearms. Most of the new laws take effect January 1, according to the LA Times.

Signed by Gov. Gavin Newsom (D) after being vetoed twice by his Democratic predecessor Jerry Brown (who said that educators can work through family members or law enforcement if a restraining order is required), the gun confiscation bill is so broad that the ACLU said it "poses a significant threat to civil libertiessince guns can be seized from owners before they have an opportunity to contest the requests, and those making the requests may "lack the relationship or skills required to make an appropriate assessment," NBC San Diego reports.

All that's needed for a co-worker or educator to file a complaint is to have had "substantial and regular interactions" with gun owners, along with permission from their employers or school administrators. Those seeking the orders will be required to file a sworn statement outlining their concerns. 

The author of the bill, Democratic Assemblyman Phil Ting of San Francisco, said that "With school and workplace shootings on the rise, it's common sense to give the people we see every day the power to intervene and prevent tragedies," citing a recent study which found that 21 mass shootings may have been prevented by a gun restraining order. 

Meanwhile, a companion bill signed by Newsom and written by Democratic Assemblywoman Jacqui Irwin of Thousand Oaks allows gun violence restraining orders to last one and five years, though gun owners would be allowed to petition the state to get their guns back earlier. In another Ting-authored companion bill, gun owners who agree to voluntarily surrender their firearms can notify the court via a form, vs. a hearing which Ting says wastes time and resources. 

The National Rifle Association (NRA)'s Amy Hunter, meanwhile, said of another bill signed on Friday (SB 61) which prohibits Californians from buying more than one semiautomatic rifle per month, and bans the sale of such rifles to those younger than 21: "This bill places burdens on law-abiding residents," adding "It will not make anyone safer.

Republican state legislators criticized the one-gun-a-month bill, as well as the state's failure to remove guns from the thousands of felons and the severely mentally ill as they are already empowered to do so. 

"Instead we continue to do more and more legislation that interferes with the law-abiding citizen’s right to own and possess firearms, which is their constitutional right to do," said Yuba City Republican Assemblyman James Gallagher (LA Times)

According to the Times, other bills signed Friday by Newsom will:

  • Allow those subject to a gun-violence restraining order to submit a form to the court voluntarily relinquishing their firearm rights

  • Require firearm packaging to contain a warning statement on suicide prevention

  • Mandate that county sheriffs who issue licenses for concealed weapons charge a fee covering the cost of vetting the applicant, thus eliminating the current $100 cap on fees

  • Prohibit gun shows at the Del Mar Fairgrounds in San Diego County

  • Require, starting in 2024, that the sale of components used to build a firearm — often used to build untraceable “ghost guns” — be carried out through a licensed vendor.

Tyler Durden

Sun, 10/13/2019 - 23:05



Margolis: More "Stupid Wars" In Syria

Authored by Eric Margolis via LewRockwellc.om,

More war in wretched Syria.  Half the population are now refugees; entire cities lie shattered by bombing; bands of crazed gunmen run rampant; US, French, Israeli and Russian warplanes bomb widely.

Now, adding to the chaos, President Donald Trump has finally given Turkey, NATO’s second military power

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, the green light to invade parts of northeastern Syria after he apparently ordered a token force of US troops there to withdraw.

You will find more infographics at Statista

This, of course, puts the Turks in a growing confrontation with the region’s Kurds, who have occupied large swaths of the area during Syria’s civil war.  The Kurdish militia, known as YPG (confusingly part of the so-called Free Syrian Army), is armed, lavishly financed and directed by the CIA and Pentagon.

Most Kurdish forces are deployed along the line of the former Berlin-Baghdad railway, a major source of warlike tensions before World War I.  Interestingly, Turkey’s president, Recep Tayyip Erdogan, was making a state visit to blood enemy Serbia when the Turkish offensive kicked off.

Turkey calls the Kurdish militias ‘terrorists’ and links them to the original Kurdish resistance movement PKK which is on the US and Turkish black list.  I covered the brutal conflict in eastern Anatolia (southern Turkey) between the Turkish Army and Kurdish militias known as ‘peshmerga.’ If the US can brand Syrian and Iraqi groups ‘terrorists,’ why can’t the Turks do their own terrorist branding? After all, Syria, Lebanon and Iraq are in their backyard.

You will find more infographics at Statista

The US media is fiercely anti-Turkish because Ankara is seen as somewhat pro-Palestinian.  Israel is a bitter foe of Turkey’s Erdogan.  One rarely reads anything positive about Turkey or its leader.  Not very many western readers even know that since the early 1500’s, Syria was part of the Ottoman Empire, the predecessor of modern Turkey.  So were Iraq, Palestine, today’s Israel, Saudi Arabia, and Yemen.

Most important, Iraq’s vast oil fields used to belong to the Ottoman Empire until the British Empire grabbed them at the end of World War I.  France seized Syria and Lebanon. Both former imperial powers are still mucking around today in the region and have the gall to criticize Turkey’s involvement in neighboring Syria.

The United States has zero historic interest in the region. US troops in Syria appear to have come from the US garrison in Iraq, which, as VP Dick Cheney hoped, would become a central US military base for the entire Mideast.  The Washington war party is moaning that Trump has ‘betrayed’ the Kurds.  Their unofficial head, Sen. Lindsey Graham, is demanding more war in Syria – the same warrior senator who dodged the Vietnam War by joining the National Guard as a lawyer.

The Kurds have been used and betrayed since 1918.  They always seem to get the short end of the stick.  The old Kurdish saying, ‘no friends but the mountains,’ is painfully true.  Washington does not want to get involved in a new Kurdish state carved out of Syria or Iraq even though Israel is pushing it hard to further splinter the Mideast.  Iraq’s and Syria’s oil deposits are still a powerful lure for imperial-minded powers.

Trump rightly calls the fracas in Syria ‘a stupid war.’  But many pro-war forces play on this tired, confused president who has gotten himself deep into the Syrian morass, a problem of largely American but also Turkish making.  Ironically, former president Barack Obama foolishly authorized America’s effort to overthrow Syria’s Assad government under the guise of a phony civil war.  This was one of the few Obama policies that Trump chose to follow. The neophyte president was unwilling or unable to prevent the deep state in Washington from encouraging the war.

The region in question is hardly the beating heart of Syria. It looks large on the map but is mostly desert and scrub, dotted by miserable little villages with Arab or Kurdish populations.  Turkey, which has over 2 million Syrian refugees, is eager to begin repatriation of this massive burden created by its policy errors and the western powers.

In the middle is the scattered debris of the short-lived ISIS caliphate.  Russia, which is selling Turkey its very capable S-400 anti-aircraft system, is watching with delight as old allies Turkey and the US split.

Even Trump knows how important Turkey is to the NATO alliance.  A rupture between Washington and Ankara could see the vital US bases at Incirlik and Adana thrown out of Turkey.  That’s why Trump needs to tread carefully.

Tyler Durden

Sun, 10/13/2019 - 23:30


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SunTrust: The One That Got Away With It

Submitted by SB MH Research

The mortgage crash seems like a lifetime ago with house prices and homeowner equity at record highs by a long shot and banks that have paid billions upon billions as restitution, some willingly and deservedly, some not.

Most all the events are well known and documented. But few if any know the sordid story of one of the largest whole loan origination “

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malpractice schemes” to occur in the Housing Bubble era.

The “SunTrust Agency Shortcut” loan program – and what is essentially a “hack” of the Fannie Mae automated underwriting system (AUS) -- was a massive, egregious whole loan origination scheme estimated at over 175k individual transactions nationwide for over $30 BILLION.  In fact, the dollar volume of questionable conforming loans originated by SunTrust Mortgage and sold to Fannie Mae exclusively is larger than SunTrust Bank’s market cap today.

The following is my research, evidence and summary material on the “SunTrust Shortcut” mortgage scheme. The name “Shortcut” speaks volumes by itself. But this scheme was unlike others from Countrywide for example.

I am releasing this information widely for public good and posterity, so this specific negligence is documented in hopes it never happens again.

SunTrust “Agency Shortcut”: Backgrounder

I spent the entirety of the mortgage and housing bubble on the front lines of the mortgage industry. I saw all the excesses, outright fraud and cognitive dissonance first-hand. I knew where all the bodies were buried when it all came apart despite banks, mortgage companies, investors, Wall St banks, David Lereah (blast from the past!) Ace Greenberg and the Fed all day, wall-to-wall in the financial media, telling everybody there is ‘nothing to see here’.

During the crash and recovery period, I operated as a professional financial analyst, researcher and advisor to the financial services and public sectors. From early 2006, when I first became fully convinced that all hell would break loose in mortgage and housing, I made a list of 48 mortgage and related publicly traded names that I thought were the worst or hidden offenders and have the potential to zero-out. I maintain research files on these companies tracking everything they did, would do and their outcomes to this day.

Most of the worst mortgage offenders either failed, were absorbed (willingly or forcibly), or paid heavy penalties to the Obama DOJ, some several times over. Most of the legal matters and settlements were for common, cookie-cutter things like FHA origination/sale fraud, servicing misconduct, foreclosure & mortgage modification dereliction, and securitization fraud.

However, a few companies skated for some reason or another. SunTrust Mortgage, a subsidiary of SunTrust Bank at the time, is one. Its residential mortgage “misconduct” was among the worst of the housing Bubble. Few know about this history of SunTrust and their particular legacy mortgage origination ‘indiscretions”, so egregious, they would make Angelo Mozillo blush, and which residually live on to this day.

SunTrust’s $30+ Billion Unknown Legacy Mortgage Malpractice: Introduction

SunTrust Mortgage enacted one of the largest whole loan origination malpractice schemes in the ‘Bubble Years’. To date, this egregious misconduct has never been discovered, unpacked, prosecuted, or settled by regulators or a class. 

[It’s important to note that the actual “SunTrust Shortcut” scheme was not covered when SunTrust essentially “bought-out” their Fannie and Freddie rep and warranty liability in Oct 2013 (however, the Shortcut loan significantly increased Fannie defaults and repurchases and if Fannie would have known the fine details the settlement may have been larger). Nor, was the SunTrust Shortcut scheme the basis for the July 2014 $320 Million HAMP or $968 Million (largely FHA related) settlements.]

In summary, SunTrust’s commissioned-based loan officer and underwriter employees essentially learned to ‘hack’ Fannie Mae’s AUS to achieve a “special feature code” on certain popular “fully documented, prime” loan programs they offered. This code was unique to the SunTrust “Agency Shortcut” loan. The name “Shortcut” speaks loudly. This code enabled them to originate, fund and sell these loans missing critical supporting documentation that made them “fully documented”, prime loans in the first place. The resulting loans sold to Fannie Mae exclusively were far worse in quality than program guidelines called for or Fannie knew it was buying.

These low-quality (closer to “Alt-A” than Prime) loans were sold as high-quality, fully documented prime loans and ultimately peppered throughout Fannie MBS. Once the hack was used successfully and refined during the first year it led to a significant increase in loan volume for the Bank at a time when other lender’s and Fannie’s volume was flagging, which was a red flag itself.

From then, it spread like wildfire throughout the company and all lending channels and departments. Before too long, the SunTrust Wholesale division (TPO; Third-Party Originators; Mortgage Brokers) was training mortgage brokers nationwide how to hack the SunTrust Fannie Mae Automated Underwriting System.

Through power of “TPO”, SunTrust was able to act and take on risk like a bank several times its size. After a while, the misconduct was so pervasive and a part of every-day business that a cognitive dissonance set in companywide that what they were doing was not prudent, which perpetuated the mortgage misconduct.

All told, SunTrust originated up to 175,000 “Agency Shortcut” loans nationwide for over $30 Billion over about two years from thousands of SunTrust employee and Third-Party Originator (TPO) conspirator-partners nationally making it one of the largest, longest running and widest spread whole loan origination malpractice schemes of the credit/housing bubble.   

This elegant, intentional, Fannie Mae Automated Underwriting System driven and enabled scheme was differentiated from any other of the period, as thousands of SunTrust commissioned production employees, production support personnel and TPO partners all had hands-on, specialized roles carrying out the misconduct and all benefitted from it.

SunTrust’s mortgage misconduct was highly differentiated and grand in scale. To an analyst, investor or regulator less acquainted with the fine nuances of the mortgage credit and capital markets their misconduct might appear to fit in the mold of the numerous, more ‘vanilla’ mortgage indiscretions that were discovered, investigated and prosecuted or settled over the past decade. But SunTrust’s mortgage misconduct was one-of-a-kind.

In the fullest interest of transparency in markets the general public need to know that these indiscretions did in fact occur and fully examine what occurred. Tens of thousands of homeowners, investors and municipalities were financially injured. While a high relative percentage of these bad loans resulted in default, foreclosure or modification thousands of them, largely 30-year fixed rate in nature, still exist in SunTrust’s and other lender’s servicing portfolios and are identifiable. 

The following is a summary of the SunTrust “Agency Shortcut” scheme.

SunTrust “Agency Shortcut” Scheme Overview

During the credit bubble SunTrust Mortgage was an influential retail, wholesale and correspondent lender, the latter two channels pertaining to the riskiest origination funnel, TPO (Third-Party Originations).  TPO – co-opting thousands of local mortgage brokers and bankers in the best lending markets in the nation -- allowed SunTrust, a relatively small bank and mortgage company, to lend at scale virtually nationwide despite not having a network of traditional brick and mortar bank branches in most states. Instead, it established about a dozen strategically located mortgage sales, processing, underwriting and funding operations centers in large, major metropolitan areas that were exclusive to mortgage and capable of extracting a high volume of business from states outside their bank footprint. 

Through the power of TPO SunTrust was able to compete with massive financial institutions like BofA, Chase and Wells Fargo as equals in loan program variety, origination and secondary market activity but without all the fixed overhead. This was great when the credit markets were compliant as the credit bubble grew. But, when the tide turned it left smaller, TPO-heavy lenders -- that had been pretending to be mega-national banks for the purposes of mortgage lending -- without the balance sheet wherewithal to be able to manage through it. Furthermore, TPO loan volume was so large -- absolutely and as a percentage of their total volume -- and concentrated in the riskiest, high-flying regions it left banks such as SunTrust with massive representation and warranty exposure that dwarfed their loan and legal reserves for years afterward. This forced management into numerical and verbal gymnastics in quarterly financial statements and investor calls for years about such exposure either not existing or being mitigated years sooner than it ever could be.

During the years of 2006 to 2008 – interestingly, these years that encompass the beginning and official start of the credit and housing market collapse, a time other lenders were cutting off exotic loan programs and even shutting down the ability to draw on existing HELOCs -- SunTrust Mortgage originated for sale to Fannie Mae between $19 Billion and $38 Billion in “Shortcut” loans. The name “Shortcut” defines this misconduct well and is reminiscent of names given to other poor-quality exotic loans by lenders such as the Countrywide “Fast & Easy” and “Hustle”. 

The “Shortcut” was SunTrust’s entrant into the high-volume, low-quality, originate-for-immediate-sale game. In fact, based on the timing, it’s obvious that SunTrust took advantage of other lenders leaving the exotic mortgage field or going out of business in order to capture loan volume and revenue through this misconduct.

Shortcut loans were labelled and sold as “fully documented prime” loans but in fact were all missing all of the exact income and asset documentation that makes a mortgage loan “fully documented” in the guidelines of Fannie Mae and investors in its mortgage backed securities. SunTrust quietly discontinued the loan program after two years in 2008 amidst a rush of failing lenders and significant scrutiny by Wall Street, the media and regulators.

Sure, some lenders and capital markets players originated and sold more than $30 billion in GSE residential loans or securities. But SunTrust was the only lender that had a national loan origination manufacturing production line built on malpractice and co-opted/taught thousands of their own bank-employee loan officers and underwriters and well as mortgage brokers and bankers to commit this highly specific mortgage misconduct from their own private PC’s on nearly 200,000 loans through a learned “hack” of Fannie Mae’s Automated Underwriting System.

SunTrust “Agency Shortcut” Scheme Details

Primarily: In their various earnings reports and filings, from 2006 on, SunTrust Bank (“STI”) and its wholly-owned subsidiary SunTrust Mortgage (“STM”) repeatedly misrepresented and omitted disclosing the risks associated with an “Alt-A” Stated Income/Stated Asset (“SISA”) loan program they co-developed for sale to FNMA, named “The Agency Shortcut Mortgage” (“Shortcut”), which was offered from mid-2006 to April 2008.

Also: STM originated and sold to Fannie Mae over $30 Billion of questionable loans that were much closer to “Alt-A” or “subprime” than prime. Shortcut’s atypically lax qualification guidelines (compared to industry standards) and its “same-as-full-doc” pricing meant STM would originate a large volume of these loans. As STM failed to institute meaningful internal controls that could have prevented commissioned sales personnel from submitting non-conforming, questionable and fraudulent loan applications, and as management turned a willful blind eye to problems (such as increasing Early Payment Default rates) when they came to light, the huge volume of Shortcut loans was even lower in quality than most Alt-As/SISAs.

Finally: As misconduct begets more misconduct, STM co-acted with the various Private Mortgage Insurance Companies (“MI Companies”) to cover-up the “reduced doc” nature of the Shortcut Loan Program by implementing special codes - or by ignoring the reduced doc feature altogether - on the MI applications, thereby falsely representing to the MI Companies’ regulators and investors that the Shortcut was a prime/full-doc loan.

Direct victims of the SunTrust Shortcut scheme include past and present STI equity and debt investors and FNMA Mortgage Backed Securities investors. Also, US taxpayers (as a result of the FHFA’s taking over FNMA and Freddie Mac), and unwitting Borrowers (who were unable to make timely payments on oversized loans they could not afford, ultimately resulting in foreclosure) suffered damages as well.

Individual States, municipalities and their citizens were also injured as SunTrust entered these markets far away from their traditional banking footprint, popped-up TPO mortgage origination and operation centers and originated billions of bad loans. Then, when the going got tough, they closed down their operations centers and retreated back to their footprint in the Southern United States leaving far away States and their residents to clean up the mess themselves.

Furthermore, as a result of the Shortcut scheme, substantial ill-gotten gains in the form of commissions, bonuses and other income flowed to STM’s salespersons, managers, directors, TPO originators, Realtors and anybody else involved in the origination and sale process of a Shortcut loan.

(Note: Institutions such as JPM Chase/WaMu, BofA/Countrywide, and others have been found liable (or have settled claims) for victimizing Fannie and Freddie by selling low-quality mortgages that failed to meet the representations and warranties promised. Among those damaged by their frauds were the investors in the GSE’s MBSs. Regardless of the extent Fannie knew or should have known that Shortcut loans were high-risk SISAs and not prime, STI itself knew these sub-standard loans would eventually end up in Fannie MBSs, and therefore that the undisclosed risk would -at the very least - be borne by those investors.)


Summary of Evidence:

A) When developing and Deploying the Agency Shortcut Program, SunTrust knew or should have known:

  1. It was a Stated Income/Stated Asset loan program (“SISA”) and - by virtue of its “reduced documentation” - therefore fit the bank’s own, in-house definition of “Alt-A.”

(Note: on SISA loans, the Borrower merely attests to his/her income and assets on the loan application and does not provide the pay stubs, tax returns, bank statements and like-documentation to support those figures.)

  1. SISAs - ubiquitously called “Liars’ Loans” - were known to be susceptible to fraudulently overstated income and asset figures and carried an outsized risk of serious delinquency and default.

  2. The Shortcut program served to implement the dual strategies STM disclosed at the 2006 Mortgage Bankers Association convention to: a) reduce loan processing times from 61-110 days down to 6 days; and b) “selectively transfer credit risk to other investors” (in this case, FNMA and, ultimately, Fannie’s MBS investors).

  3. By offering Shortcuts at the same price as full doc - which was more than 2 points (or over .50% in rate) cheaper to the Borrower - they would capture a higher market share and originate substantially more volume than they otherwise would have, so not only would the Company’s short-term Gross/Net Income increase, but also commission, bonus and other income for certain personnel.

  4. The mortgages would eventually be placed into FNMA MBSs, but not properly identified as Alt-As/SISAs.  Therefore, the MBSs investors would not be able to properly assess the riskiness of those pools…and the losses would be eventually be borne by those investors (via less-than-anticipated ROI/opportunity costs) and by Fannie (via their guarantees).

  5. As soon as STM actively marketed the availability of the program, it transformed the program from an ostensibly “Lender-Selected SISA” into a “Borrower-Selected SISA” and DQ/Default percentages would thereby skyrocket.

(Note: “Lender-Selected SISAs” are those wherein the Lender decides unilaterally not to review income or asset documentation because the overall risk of the loans(based on dubious criteria) are deemed sufficiently low and thereby presents an opportunity for the lender to reduce its own processing costs - and usually are offered to the borrower at the same rate and price as full-doc loans; “Borrower-Selected SISAs” are those wherein the Borrower specifically requests not to provide income and asset documentation to the lender and - usually - pays an increased rate and/or price for that feature. It’s been reported that “Lender-Selected SISAs” default at 1.4 times Full Doc loans; Per FNMA Filings, Borrower-Selected SISAs default at more than 5 times the rate of Full Doc loans - and that number actually is lower than the true rate due to FNMA’s definitions and methodologies.)

  1. By not requiring a Borrower-signed IRS form 4506 as part of the loan application - and by advertising such in their promotional materials - STM overtly invited Borrowers and Brokers to submit fraudulent loan applications.

(Note: A signed IRS Form 4506-T allows a lender to obtain a Borrower’s tax transcripts from the IRS to confirm income stated on the loan application is reasonably accurate, and - even when not exercised by the lender - serves as a deterrent to fraudulently overstated income on mortgage applications.)

  1. By failing to place adequate controls on brokers and commissioned salespersons in processing of the Shortcut loans - and by instructing them that the income stated on the application need merely be “reasonable” (as opposed to “accurate”) - STM subverted any meaningful risk assessment of the individual loans by their own underwriters.

(Note: examples of inadequate controls included allowing commissioned salespersons and their assistants to run the Automated Underwriting System (“Desktop Underwriter” or “DU”), allowing them to run DU an unlimited number of times, and instructing them they could evade underwriter scrutiny by inputting “reasonable”- not “accurate” - income and asset figures. These lax processes allowed the commissioned salespersons, etc. to modify the various inputs in DU until they reached an optimal configuration that resulted in a Shortcut approval.)

  1. The riskiness of SISA programs without 4506s - characteristics which carried at least a 2.125% (price) premium from their peers and competitors - far outweighed the benefits, if any, of requiring a (rather modest) 680-plus FICO score;

  2. By allowing monthly debt-to-income (“DTI”) ratios as high as 64.99% - far higher than the standard for prime loans, Shortcuts would devolve into something even closer to subprime.

(Note: industry standards for maximum DTI on SISA products were more commonly 45% - 50%, depending on the lender and/or other loan characteristics, such as LTV/CLTV and/or FICO score.)

  1. By advertising “No Payment Shock” publicly and to mortgage brokers as a feature in marketing materials STM obviated yet another risk assessment.

(Note: “Payment Shock” is a term that describes a significant increase in a borrower’s housing payment as a result of the new loan. If DTI ratios are fairly elevated, underwriters traditionally look to the borrower’s “ability to save” as indicated by their liquid assets as an offsetting factor to determine whether the borrower can handle the increased debt load.)

  1. Inconsistencies of Shortcut’s SISA characteristics versus its ersatz “Full doc” labeling had to be reconciled with the MI companies, such that “special negotiations” were required to resolve those inconsistencies.

(Note: Shortcut loans submitted to a majority of the MI companies required “special coding” and - to the extent that the MI companies may have failed to properly disclose to their own regulators and investors the full extent of reduced-document loans on their books - they may have been complicit in a related fraud.)

  1. The difficulties in placing a “Combo 2nd NIV” - (“NIV” = “No Income Verification”) - loan behind a Shortcut First mortgage created special difficulties, because including any income or asset documentation in a loan file - regardless whether it supported or contradicted other data in the file - disqualified it from Shortcut. Initially, STM required that underwriters use a cumbersome form (“The Agency Shortcut Mortgage Eligible Secondary Financing Checklist”) to reconcile the asset documentation requirements otherwise required on the Combo 2nd NIVs with the inability to include those same documents on the Shortcut.

(Note: “NIV” loans - which were offered by numerous lenders - are incrementally less risky than SISAs, as the Borrower’s Liquid Assets are reviewed and are generally required to be at least a given multiple of the Borrower’s stated monthly income. Also: Due to difficulties in requiring its employees to walk such a thin line re asset verifications - and following too many improperly completed “Checklist” forms - eventually STB reconfigured the Combo 2nd NIV program and abandoned the asset-verification requirement altogether, pricing the program slightly higher to include a “Shortcut Documentation Feature,” effectively turning the Combo 2nd into a SISA.)

B) During the SunTrust Agency Shortcut program’s lifespan, SunTrust knew or should have known:

  1. Early Payment Defaults (“EPDs” - deemed industry-wide to be a strong indicator of fraud) were rising significantly by summer 2007, yet - other than tepidly advising underwriters “to be on the lookout for fraud” - few significant steps were taken to reduce EPDs.

  2. The number of submissions to Fannie Mae DU on Shortcut loans was positively correlated to delinquencies and defaults, but it wasn’t until a couple of months prior to the termination of the Shortcut program - and then only at FNMA’s insistence - that a limit of 15 runs (still high) was imposed.

  3. SunTrust employee Account Executives (and their assistants and processors) “manufactured” Shortcut approvals in DU by “laddering” income and/or otherwise tweaking their inputs, not infrequently submitting loans to DU more than a dozen times.

  4. Wholesale area managers encouraged the AEs (and/or their support personnel) to run DU for their third-party client brokers - ostensibly as a “value-added” service, but actually because it increased the likelihood that STM employees (with more experience and understanding of the nuances of DU’s algorithms that generated Shortcut approvals) would input figures that would produce the desired outcome.

  5. Various “enhancements” to the program which were added periodically through most of 2007 served to make the Shortcut underwriting guidelines even “looser.” By December 20, 2007 - and only in the face of indisputably poor loan performance of the Shortcut - some of the program’s loosest guidelines were finally tightened, but even then, they still remained far looser than more traditional underwriting guidelines.

(Note: some of the “tightening” that occurred in December, 2007 (not “mid-2006” as stated in numerous SEC filings) included no longer allowing “outstanding mortgage delinquencies at time of application” or Property Inspection (Appraisal) Waivers - low-level qualification guidelines which really should have been implemented from Shortcut’s outset.)

  1. Area managers - taking their cues from an “anything goes (so long as its ‘sellable’)” mentality that characterized STM’s mortgage operations and from upper management’s mandate to reduce loan processing times - cut corners for risk assessment in not only the Agency Shortcut Program, but other loan programs as well.

(Note: For example, underwriters who questioned the validity of various file components were routinely told by managers to “just go with what you have” and approve the loan. At least one STM region’s policy included moving income, asset, and other critical verifications on Full-Doc loans from “prior to (loan) doc” conditions to “prior to funding” conditions - which served further to pressure underwriters from making adverse decisions. It was no surprise, then, when a complaint issued by the NY Atty. General in October 2012 against JPM Chase/Bear Stearns on shoddy mortgages singled out SunTrust for its eye-popping 86% defect rate on the originations they sold to Bear Stearns.)

  1. Despite guidelines ostensibly requiring “reasonable” income be stated on loan applications, a significant number of Shortcut loans did not meet even to that low standard. Management routinely gave “override” approvals on files the underwriters deemed to have suspect income and/or other shortcomings, and - to the WB’s knowledge - not once did management recommend a loan be declined when the underwriter thought it should be approved.

(Note: it was not until late-summer or fall of 2007 that underwriters were provided with even minimally adequate tools with which to assess reasonableness of salaried income borrowers. Regardless, managers still overrode the guidance offered by such tools, and routinely allowed “higher-than-reasonable” income to be used nonetheless.)

  1. HMDA data showed STM’s loan declinations overall - and specifically declines due to insufficient income - were substantially lower than their banking peers and competitors during the Agency Shortcut’s lifespan.

(Note: In 2007, SunTrust declined 4.4% of its applications and only 1.2% due to income; By way of example, Wells Fargo’s numbers were 18.6% (applications) and 3.6% (income) and BofA’s were 17.0% (applications) and 8.6% (income).)

  1. “Fallout ratios” (i.e. loan applications submitted but not funded) increased substantially after termination of the Shortcut Program, doubling or tripling for some commissioned salespersons.

(Note: This suggests, of course, that significantly fewer loan approvals could be manufactured without the “crutch” of allowing commissioned personnel to input falsified income and asset data into DU and generating Shortcut approvals.)



Tyler Durden

Sun, 10/13/2019 - 20:10


Business Finance

Former UGA Student Pleads Guilty To Running Million-Dollar Ponzi Scheme From Frat House

A former University of Georgia student has pleaded guilty to securities fraud for running a $1 million ponzi scheme out of his fraternity house while a student, according to Bloomberg Law. 

Syed Arham Arbab pleaded guilty to securities fraud in the U.S. District Court for the Middle District of Georgia, according to the Department of Justice.

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 He also faces a SEC suit, separate from the DOJ case against him, in the same court.  

As part of his plea, Arbab admitted to falsely promising investors, including UGA students, returns as high as 56%. He told potential investors that a UGA alumnus who went on to play in the NFL had invested with him in order to convince football fans to trust him with their money. 

He also falsified investment returns, according to the complaint, after allegedly losing more than $300,000 trading. 

During the course of the alleged scheme, Arbab allegedly lost more than $300,000 in trading, leaving just $350 when his brokerage account was closed, the complaint said. Arbab also allegedly tricked clients into sending money to earlier investors through digital payments services such as Zelle and Venmo, telling the client the money was being sent to other partners or employees.

Arbab also claimed to be an MBA candidate, but had instead been rejected by UGA's graduate program. He admitted to using investor funds to cover alcohol purchases, gambling during three trips to Las Vegas and "adult entertainment".

He will be sentenced in January 2020.  

Tyler Durden

Sun, 10/13/2019 - 18:55


Law Crime

Schiff's CIA 'Whistleblower' May Not Testify In Impeachment Probe After All

A CIA 'whistleblower' who worked with former VP Joe Biden as well as two Adam Schiff (D-CA) aides has apparently gotten cold feet, and may not testify in front of the House Intelligence Committee in person or in writing, according to Schiff. This is in stark contrast to what Schiff's late September claim that the man at the center of an impeachment inquiry against President Trump

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 would testify in the House "very soon." 

That was downgraded last week to testimony "in writing." 

And finally, on Sunday, Schiff told CBS' "Face the Nation" that the whistleblower's testimony might not be needed after all. 

"Yes, we were interested in having the whistleblower come forward," Schiff said, to which host Margaret Brennan asked "but not anymore?"

"Well, our primary interest right now is making sure that that person is protected ... given that we already have the call records we dodn't need the whistleblower, who wasn't on the call." 


House Democrats launched their impeachment inquiry into President Trump after the whistleblower claimed Trump was abusing his office and 'pressuring' the new president of Ukraine, Volodomyr Zelensky, to investigate former Vice President Joe Biden and his son Hunter for alleged corruption.

After the White House released a transcript of the call, however, it was clear that no pressure was applied. Zelensky, meanwhile, has said on multiple occasions that there was no pressure or 'blackmail' involved in the request, and that Ukraine would "happily investigate" the Bidens. 

Further crumbling the Democrat credibility is the fact that Schiff lied when he said that his panel had "not spoken directly with the whistleblower," a claim which earned him four pinocchios from the Washington Post for his "flat-out false" statement when it was later revealed that the whistleblower approached Schiff's panel - which then directed him to a Democrat attorney.

"Schiff on 'Morning Joe' clearly made a statement that was false," said the fact-checker. "He now says he’s was answering the wrong question, but if that was the case, he should have quickly corrected the record. He compounded his falsehood by telling reporters a few days later that if not for the [inspector general's] office, the committee would not have known about the complaint. That again suggested there had been no prior communication."

A House Intel Committee spokesperson told The Post that Schiff's reply "should have been more carefully phrased." 

So here we are - with Schiff and House Democrats are continuing forward with their impeachment inquiry as if Trump hadn't released the transcript, and their accuser's credibility wasn't eroding by the day. 

Tyler Durden

Sun, 10/13/2019 - 16:25



Morgan Stanley Makes A Stunning Observation: 28% Of The US Population Has FICO Score Below 650

Authored by Morgan Stanley strategists Vishwanath Tirupattur and Ellen Zentner

The strength of the US consumer has been the bedrock of the current economic expansion. Just a few weeks ago, in a CNBC interview, Fed Vice Chair Clarida said that “I cannot think of a time where in the aggregate the consumer has been in better shape.” With unemploy

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ment at 3.5%, the household savings rate ticking up to 8%, the aggregate debt-to-income ratio hovering around 40-year lows and consumer delinquencies at or near post-crisis lows, policy-makers’ comfort with the strength of the US consumer seems well grounded. As our US economics team has shown, Fed easing has lent support to consumer spending and home buying while sparking a mortgage refinancing wave that should add to disposable income over time. Annualized real consumer spending growth is tracking at 2.9% in 3Q19, and residential investment has turned upward after six straight quarters of declines.

So focusing on aggregate metrics, the strength in the US consumer seems patently obvious. But could this top-down analysis be overlooking potential sources of weakness? Since the household experience is quite different across income groups, we take a bottom-up approach to see where cracks may be appearing.

Let’s start by delving into the low aggregate consumer debt-to-income ratios and delinquency rates. Mortgages constitute about 70% of consumer debt. It’s worth noting that, post-crisis, mortgage debt has been highly constrained, producing an upward shift in mortgage credit quality – the current median FICO score of mortgage originations is over 750 versus ~700 pre-crisis. Unsurprisingly, delinquencies are low when lending in the largest segment of consumer debt is limited to high-quality borrowers. Furthermore, as homeownership rates plummeted from a pre-crisis high of 69.2% to 64.1% currently, the share of households with mortgage debt has declined. Add in sustained low interest rates, and it’s no wonder that debt-servicing rates relative to median incomes sit at multi-decade lows.

But the New York Fed’s financial obligations ratio tells a different story, as our residential credit strategists have recently demonstrated. With the decline in homeownership, the share of rental households has risen, as have rents, which are not included in aggregate debt-servicing costs. In addition to standard debt payments, the financial obligations ratio includes payments towards rent, auto leases, homeowners' insurance and property tax payments, with rents representing the bulk of these non-standard obligations. Looking at this ratio together with debt-to-income, we can tease out the impact that increasing numbers of rental households paying progressively higher rent is having on the health of the consumer. The spread between these two ratios stands at the widest level since 1980. Renters generally tend to be younger, and at the lower end of the income spectrum versus homeowners. Aggregate consumer metrics fail to capture the growing stress on rental households.

For a window into lower-income households’ finances, we focus on auto loan delinquencies in ABS pools. Lower-income households also tend to correlate well with lower credit scores. Within consumer debt, student and auto loans have grown significantly over the last several years, and the share of lower-credit borrowers getting auto loans has seen a meaningful increase. Prime auto delinquencies are at their lows for this time of year since 2014-15, as expected, but non-prime delinquencies are above crisis-era peaks. This suggests another crack in the strength of the consumer at the lower end of the credit and income spectrum.

The bottom line: While the US consumer’s balance sheet is in fine shape overall, mainly because levels of debt and debt-servicing costs remain low, there’s a segment whose income statements are under stress –rental households with lower income and lower credit scores. How big are they? Not small, at least on one metric: borrowers with FICO scores below 650 account for about 28% of the population. If the direction of gains in employment reverses, look for the cracks highlighted by our US economics, cross-asset and equity strategy teams to widen.

These cracks tend to lead an overall downturn in household creditworthiness, so we’re keeping a careful watch to see if they spread to other segments of consumer debt and eventually creep up the income chain.

Tyler Durden

Sun, 10/13/2019 - 16:51
Turkey Warns Of War As Syrian Army Heads To Turkish Border

update2: A top Turkish official warns of bigger escalation now that Syrian Army units appear to be heading to besieged Kurdish towns along the border with Turkey.

Erdogan aide Yasin Aktay has said "conflict between the two armies" is likely if pro-Assad forces enter the northeast region which has now been abandoned by US troops. 

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* * *

update: It's official, after what appears a major deal between the Kurdish-led SDF and Damascus was struck in the wake of a US exit from the region: 

"Syrian military forces will be deployed on the border with Turkey by tomorrow morning in certain areas," reports Danny Makki, a well-known war correspondent in Damascus. 

This as multiple videos have spread online showing pro-Damascus forces entering Manbij:

Erdogan has reportedly vowed that pro-Turkish forces will continue their advance despite the Syrian Army apparently coming to the defense of besieged Kurdish forces. 

It's as yet unclear what the Russian military's role in supporting its Syrian ally will be; however, we could be witnessing the beginnings of Putin's 'deal of the century' unfolding, as we explained previously. 

But Russia is most definitely a lead player in the Damascus-YPG (and SDF) reunion that now appears to be unfolding. 

* * *

A huge development after earlier in the day Sunday Defense Secretary Mark Esper announced Trump has ordered a "deliberate withdrawal" of 1,000 US troops in northeast Syria amid the advancing Turkish incursion: sources close to the Syrian government have announced  the Syrian Army will move in to assist Kurdish militias in Kobani and Manbij

This after shocking statements over the weekend by the head of the US-backed Syrian Democratic Forces (SDF), Mazlum Abdi, who told CNN, "I've been holding myself for two days from going to the press and saying that America abandoned us and that I would like you to get out of our areas now so that I can invite Russian and [Syrian] regime planes to take over this airspace." 

Syrian Army, via AFP/Getty

Reuters now reports on the significant development which could see the Turkish and Syrian armies enter into direct confrontation: "The Lebanese broadcaster al-Mayadeen said on Sunday the Syrian army would deploy within 48 hours to the town of Kobani which is held by the Kurdish-led Syrian Democratic Forces and the nearby town of Manbij which is controlled by SDF-aligned forces."

"The Syrian Governmental Forces (SAA) are preparing to enter the region of Kobani today, based on an agreement with the Syrian Democratic Forces," Syrian official Mohammed Shaheen, was cited as saying. 

As early as last week the SDF was reportedly engaged in intensifying talks with Damascus over assistance from the Syrian Army, after the US withdrew its air support for the Kurdish-led group amid the Turkish assault. 

On Monday the commander of the US trained and armed SDF, Mazlum Abdi, indicated just that in a bombshell statement: “We are considering a partnership with Syrian President Bashar al-Assad, with the aim of fighting Turkish forces.” 

Though Damascus has yet to confirm an official deal with YPG/SDF forces, state-run SANA did say on Sunday that national forces were moving north to "confront" Turkish forces and its "aggression"

Military analysis site, The Defense Post, reports on the potential direct cooperation between the Syrian Army and SDF to push out the Turks:

Kobani official General Ismet Sheikh Hasan said that Russian and Syrian government troops could enter Kobani and Manbij by Sunday night to help secure the cities from a Turkish incursion.

“We did everything we could,” he said. “We have called upon the West [and] the Arab Union but no one is coming to help, so we have no one other than ourselves to defend [Kobani]. Kurdish youth should come and defend their homes, and people should not abandon their homes – this is our land. It looks like this is the fate of the Kurds, to go through this each time.”

Damascus officials had subsequently denied that it was engaged in a wide-ranging deal, however, Sunday's reported development of Syrian Army forces to the north could be the beginning of a more significant deal in the words.

The United States has blocked such talks and cooperation for years, but the White House now appears ready to wash its hands of the matter. 

Tyler Durden

Sun, 10/13/2019 - 16:01



Matt Taibbi: "We're In A Permanent Coup"

Authored by Matt Taibbi via UntitledGate blog,

Americans might soon wish they just waited to vote their way out of the Trump era...

I’ve lived through a few coups. They’re insane, random, and terrifying, like watching sports, except your political future depends on the score.

The kickoff begins when

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a key official decides to buck the executive. From that moment, government becomes a high-speed head-counting exercise. Who’s got the power plant, the airport, the police in the capital? How many department chiefs are answering their phones? Who’s writing tonight’s newscast?

When the KGB in 1991 tried to reassume control of the crumbling Soviet Union by placing Mikhail Gorbachev under arrest and attempting to seize Moscow, logistics ruled. Boris Yeltsin’s crew drove to the Russian White House in ordinary cars, beating KGB coup plotters who were trying to reach the seat of Russian government in armored vehicles. A key moment came when one of Yeltsin’s men, Alexander Rutskoi – who two years later would himself lead a coup against Yeltsin – prevailed upon a Major in a tank unit to defy KGB orders and turn on the “criminals.”

We have long been spared this madness in America. Our head-counting ceremony was Election Day. We did it once every four years.

That’s all over, in the Trump era.

On Thursday, news broke that two businessmen said to have “peddled supposedly explosive information about corruption involving Hillary Clinton and Joe Biden” were arrested at Dulles airport on “campaign finance violations.” The two figures are alleged to be bagmen bearing “dirt” on Democrats, solicited by Trump and his personal lawyer, Rudy Giuliani.

Lev Parnas and Igor Fruman will be asked to give depositions to impeachment investigators. They’re reportedly going to refuse. Their lawyer John Dowd also says they will “refuse to appear before House Committees investigating President Donald Trump.” Fruman and Parnas meanwhile claim they had real derogatory information about Biden and other politicians, but “the U.S. government had shown little interest in receiving it through official channels.”

For Americans not familiar with the language of the Third World, that’s two contrasting denials of political legitimacy.

The men who are the proxies for Donald Trump and Rudy Giuliani in this story are asserting that “official channels” have been corrupted. The forces backing impeachment, meanwhile, are telling us those same defendants are obstructing a lawful impeachment inquiry.

This latest incident, set against the impeachment mania and the reportedly “expanding” Russiagate investigation of U.S. Attorney John Durham, accelerates our timeline to chaos. We are speeding toward a situation when someone in one of these camps refuses to obey a major decree, arrest order, or court decision, at which point Americans will get to experience the joys of their political futures being decided by phone calls to generals and police chiefs.

My discomfort in the last few years, first with Russiagate and now with Ukrainegate and impeachment, stems from the belief that the people pushing hardest for Trump’s early removal are more dangerous than Trump. Many Americans don’t see this because they’re not used to waking up in a country where you’re not sure who the president will be by nightfall. They don’t understand that this predicament is worse than having a bad president.

The Trump presidency is the first to reveal a full-blown schism between the intelligence community and the White House. Senior figures in the CIA, NSA, FBI and other agencies made an open break from their would-be boss before Trump’s inauguration, commencing a public war of leaks that has not stopped.

The first big shot was fired in early January, 2017, via a CNN.com headline, “Intel chiefs presented Trump with claims of Russian efforts to compromise him.” This tale, about the January 7th presentation of former British spy Christopher Steele’s report to then-President-elect Trump, began as follows:

Classified documents presented last week to President Obama and President-elect Trump included allegations that Russian operatives claim to have compromising personal and financial information about Mr. Trump, multiple US officials with direct knowledge of the briefings tell CNN.

Four intelligence chiefs in the FBI’s James Comey, the CIA’s John Brennan, the NSA’s Mike Rogers, and Director of National Intelligence James Clapper, presented an incoming president with a politically disastrous piece of information, in this case a piece of a private opposition research report.

Among other things because the news dropped at the same time Buzzfeed decided to publish the entire “bombshell” Steele dossier, reporters spent that week obsessing not about the mode of the story’s release, but about the “claims.” In particular, audiences were rapt by allegations that Russians were trying to blackmail Trump with evidence of a golden shower party commissioned on a bed once slept upon by Barack Obama himself.

Twitter exploded. No other news story mattered. For the next two years, the “claims” of compromise and a “continuing” Trump-Russian “exchange” hung over the White House like a sword of Damocles. 

Few were interested in the motives for making this story public. As it turned out, there were two explanations, one that was made public, and one that only came out later. The public justification as outlined in the CNN piece, was to “make the President-elect aware that such allegations involving him [were] circulating among intelligence agencies.”

However, we know from Comey’s January 7, 2017 memo to deputy Andrew McCabe and FBI General Counsel James Baker there was another explanation. Comey wrote:

I said I wasn’t saying this was true, only that I wanted [Trump] to know both that it had been reported and that the reports were in many hands. I said media like CNN had them and were looking for a news hook. I said it was important that we not give them the excuse to write that the FBI has the material or [redacted] and that we were keeping it very close-hold.

Imagine if a similar situation had taken place in January of 2009, involving president-elect Barack Obama. Picture a meeting between Obama and the heads of the CIA, NSA, and FBI, along with the DIA, in which the newly-elected president is presented with a report complied by, say, Judicial Watch, accusing him of links to al-Qaeda. Imagine further that they tell Obama they are presenting him with this information to make him aware of a blackmail threat, and to reassure him they won’t give news agencies a “hook” to publish the news.

Now imagine if that news came out on Fox days later. Imagine further that within a year, one of the four officials became a paid Fox contributor. Democrats would lose their minds in this set of circumstances.

The country mostly did not lose its mind, however, because the episode did not involve a traditionally presidential figure like Obama, nor was it understood to have been directed at the institution of “the White House” in the abstract.

Instead, it was a story about an infamously corrupt individual, Donald Trump, a pussy-grabbing scammer who bragged about using bankruptcy to escape debt and publicly praised Vladimir Putin. Audiences believed the allegations against this person and saw the intelligence/counterintelligence community as acting patriotically, doing their best to keep us informed about a still-breaking investigation of a rogue president.

But a parallel story was ignored. Leaks from the intelligence community most often pertain to foreign policy. The leak of the January, 2017 “meeting” between the four chiefs and Trump – which without question damaged both the presidency and America’s standing abroad – was an unprecedented act of insubordination.

It was also a bold new foray into domestic politics by intelligence agencies that in recent decades began asserting all sorts of frightening new authority. They were kidnapping foreigners, assassinating by drone, conducting paramilitary operations without congressional notice, building an international archipelago of secret prisons, and engaging in mass warrantless surveillance of Americans. We found out in a court case just last week how extensive the illegal domestic surveillance has been, with the FBI engaging in tens of thousands of warrantless searches involving American emails and phone numbers under the guise of combating foreign subversion.

The agencies’ new trick is inserting themselves into domestic politics using leaks and media pressure. The “intel chiefs” meeting was just the first in a series of similar stories, many following the pattern in which a document was created, passed from department from department, and leaked. A sample:

  • February 14, 2017: “four current and former officials” tell the New York Times the Trump campaign had “repeated contacts” with Russian intelligence.

  • March 1, 2017: “Justice Department officials” tell the Washington Post Attorney General Jeff Sessions “spoke twice with Russia’s ambassador” and did not disclose the contacts ahead of his confirmation hearing. 

  • March 18, 2017: “people familiar with the matter” tell the Wall Street Journal that former Trump National Security Adviser Michael Flynn failed to disclose a “contact” with a Russian at Cambridge University, an episode that “came to the notice of U.S. intelligence.”

  • April 8, 2017, 2017: “law enforcement and other U.S. officials” tell the Washington Post the secret Foreign Intelligence Surveillance Court judge had ruled there was “probable cause” to believe former Trump aide Carter Page was an “agent of a foreign power.” 

  • April 13, 2017: a “source close to UK intelligence” tells Luke Harding at The Guardian that the British analog to the NSA, the GCHQ, passed knowledge of “suspicious interactions” between “figures connected to Trump and “known or suspected Russian agents” to Americans as part of a “routine exchange of information.”

  • December 17, 2017: “four current and former American and foreign officials” tell the New York Times that during the 2016 campaign, an Australian diplomat named Alexander Downer told “American counterparts” that former Trump aide George Papadopoulos revealed “Russia had political dirt on Hillary Clinton.

  • April 13, 2018: “two sources familiar with the matter” tell McClatchy that Special Counsel Robert Mueller’s office has evidence Trump lawyer Michael Cohen was in Prague in 2016, “confirming part of [Steele] dossier.”

  • November 27, 2018: a “well-placed source” tells Harding at The Guardian that former Trump campaign manager Paul Manafort met with Julian Assange at the Ecuadorian embassy in London.

  • January 19, 2019: “former law enforcement officials and others familiar with the investigation” tell the New York Times the FBI opened an inquiry into the “explosive implications” of whether or not Donald Trump was working on behalf of the Russians.

To be sure, “people familiar with the matter” leaked a lot of true stories in the last few years, but many were clearly problematic even at the time of release. Moreover, all took place in the context of constant, hounding pressure from media figures, congressional allies like Democrats Adam Schiff and Eric Swalwell, as well as ex-officials who could make use of their own personal public platforms in addition to being unnamed sources in straight news reports. They used commercial news platforms to argue that Trump had committed treason, needed to be removed from office, and preferably also indicted as soon as possible.

A shocking number of these voices were former intelligence officers who joined Clapper in becoming paid news contributors. Op-ed pages and news networks are packed now with ex-spooks editorializing about stories in which they had personal involvement: Michael Morell, Michael Hayden, Asha Rangappa, and Andrew McCabe among many others, including especially all four of the original “intel chiefs”: Clapper, Rogers, Comey, and MSNBC headliner John Brennan.

Russiagate birthed a whole brand of politics, a government-in-exile, which prosecuted its case against Trump via a constant stream of “approved” leaks, partisans in congress, and an increasingly unified and thematically consistent set of commercial news outlets.

These mechanisms have been transplanted now onto the Ukrainegate drama. It’s the same people beating the public drums, with the messaging run out of the same congressional committees, through the same Nadlers, Schiffs, and Swalwells. The same news outlets are on full alert.

The sidelined “intel chiefs” are once again playing central roles in making the public case. Comey says “we may now be at a point” where impeachment is necessary. Brennan, with unintentional irony, says the United States is “no longer a democracy.” Clapper says the Ukraine whistleblower complaint is “one of the most credible” he’s seen.

As a reporter covering the 2015–2016 presidential race, I thought Trump’s campaign was disturbing on many levels, but logical as a news story. He succeeded for class reasons, because of flaws in the media business that gifted him mass amounts of coverage, and because he took cunning advantage of long-simmering frustrations in the electorate. He also clearly catered to racist fears, and to the collapse in trust in institutions like the news media, the Fed, corporations, NATO, and, yes, the intelligence services. In enormous numbers, voters rejected everything they had ever been told about who was and was not qualified for higher office.

Trump’s campaign antagonism toward the military and intelligence world was at best a millimeter thick. Like almost everything else he said as a candidate, it was a gimmick, designed to get votes. That he was insincere and full of it and irresponsible, at first at least, when he attacked the “deep state” and the “fake news media,” doesn’t change the reality of what’s happened since. Even paranoiacs have enemies, and even Donald “Deep State” Trump is a legitimately elected president whose ouster is being actively sought by the intelligence community.

Trump stands accused of using the office of the presidency to advance political aims, in particular pressuring Ukraine to investigate potential campaign rival Joe Biden. He’s guilty, but the issue is how guilty, in comparison to his accusers.

Trump, at least insofar as we know, has not used section 702 of the Foreign Intelligence Surveillance Act to monitor political rivals. He hasn’t deployed human counterintelligence “informants” to follow the likes of Hunter Biden. He hasn’t maneuvered to secure Special Counsel probes of Democrats.

And while Donald Trump conducting foreign policy based on what he sees on Fox and Friends is troubling, it’s not in the same ballpark as CNN, MSNBC, the Washington Post and the New York Times engaging in de facto coverage partnerships with the FBI and CIA to push highly politicized, phony narratives like Russiagate.

Trump’s tinpot Twitter threats and cancellation of White House privileges for dolts like Jim Acosta also don’t begin to compare to the danger posed by Facebook, Google, and Twitter – under pressure from the Senate – organizing with groups like the Atlantic Council to fight “fake news” in the name of preventing the “foment of discord.”

I don’t believe most Americans have thought through what a successful campaign to oust Donald Trump would look like. Most casual news consumers can only think of it in terms of Mike Pence becoming president. The real problem would be the precedent of a de facto intelligence community veto over elections, using the lunatic spookworld brand of politics that has dominated the last three years of anti-Trump agitation.

CIA/FBI-backed impeachment could also be a self-fulfilling prophecy. If Donald Trump thinks he’s going to be jailed upon leaving office, he’ll sooner or later figure out that his only real move is to start acting like the “dictator” MSNBC and CNN keep insisting he is. Why give up the White House and wait to be arrested, when he still has theoretical authority to send Special Forces troops rappelling through the windows of every last Russiagate/Ukrainegate leaker? That would be the endgame in a third world country, and it’s where we’re headed, unless someone calls off this craziness.

Welcome to the Permanent Power Struggle.

Tyler Durden

Sun, 10/13/2019 - 15:10



Kansas Girl, 13, Charged With Felony For Making "Gun-Like Hand Gesture" Toward Classmates

Authored by Elias Marat via The Mind Unleashed blog,

A 13-year-old girl in Overland Park, Kansas, was arrested last month and charged with a felony after police say her classmates claim she made a “gun-like hand gesture” at multiple students.

The girl, who is a student at Westridge Midd

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le School, flashed the “finger gun” at four fellow students and then toward herself on September 18 after her classmates asked her which five people in the classroom she would kill, said Overland Park Police Chief Frank Donchez.

The student, who remains unidentified due to laws protecting her privacy, was arrested and charged the day following the incident for threatening a mass shooting, according to the Johnson County District Attorney’s Office. The girl admitted to threatening others, the police have said.

Donchez told USA Today:

“Overnight, some of those students contacted the school administration and expressed their fear of this individual, that based on this incident, they were in genuine fear of this individual.”

The context of the conversation remains unclear but the girl is now living in California, according to the Kansas City Star.

The girl’s grandfather, Jon Cavanaugh, says that she was simply mouthing off. He told the Star:

“I think that this is something that probably could have been handled in the principal’s office and got completely out of hand.”

However, Donchez insists that her classmates had felt legitimately “fearful” of her based on previous encounters, including one incident that was investigated and resulted in her facing some time in juvenile detention.

Dave Smith, a spokesman for the Shawnee Mission School District, told KSHB 41:

“I want to be very clear: The arrest of this student was wholly unrelated to any district policy. It was a municipal police department decision, and our policies don’t impact police department decisions.”

In a statement, police said:

“Ensuring the safety of everyone in a school, or community, is a top priority and requires constant vigilance, parents reminding their children of proper behavior in school and an understanding by the public that each case is thoroughly investigated before any arrest is made and a charge filed.”

On Tuesday, she will appear as a juvenile Tuesday at the District Court of Johnson County.

The girl’s arrest highlights the tense situation at schools across the United States, as well as the region. Just last month at nearby Hocker Grove Middle School, two 13-year-old students showed up to school with real guns stashed in their backpacks.

The children were charged with misdemeanors and the Hocker Grove principal said that no evidence suggested the teens planned to use their guns at school.

However, in the case of the young girl, threatening is a felony. Such charges could haunt her in the future, as felony charges can undermine students’ chances of being accepted into some colleges or the U.S. military.

If convicted, the girl could face a year at a juvenile detention center. Cavanaugh said:

“I’m really worried about my granddaughter’s future.” 

Tyler Durden

Sun, 10/13/2019 - 12:30


Law Crime

Central Bank Issues Stunning Warning: "If The Entire System Collapses, Gold Will Be Needed To Start Over"

It's not just "tinfoil blogs" who (for the past 11 years) have been warning that a monetary reset is inevitable and the only viable fallback option once trust and faith in fiat is lost, is a gold standard (something which even Mark Carney hinted at recently): central banks are joining the doom parade now too.

An article published by the De N

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ederlandsche Bank (DNB), or Dutch Central Bank, has shocked many with its claim that "if the entire system collapses, the gold stock provides a collateral to start over."

While gloomy predictions of a monetary reset are hardly new, they have traditionally been relegated to the fringe of mainstream financial thought - after all, as Mario Draghi stated on several occasions in recent years, the mere contemplation of a "doomsday scenario" is enough to create the self-fulfilling prophecy which materializes it. As such, it is stunning to see a mainstream financial institution open up about the superior value of limited supply, non-fiat, sound money assets. It is also hypocritical given the diametrically opposed Keynesian practices regularly engaged in by central banks and official institutions worldwide: after all, just a few months back, the IMF published a paper bashing Germany's adoption of the gold standard in the 1870s as the catalyst for instability in the global monetary system.

Fast forward to today, when the Dutch Central Bank is admitting not only did gold not destabilize the monetary system, but it will be its only savior when everything crashes.

The article, as loosely translated and titled “Goud van DNB” (“Gold from DNB”) states:

"If things go wrong, prices may fall. But, crisis or not, a gold bar always holds value." This makes it the opposite of "shares, bonds and other securities" all of which have inherent risk.

Photo of gold bars from the DNB's article "Goud van DNB."

According to the IMF's latest data, the DNB holds 615 tons (15,000 bars) of gold mainly in Amsterdam, with other stores in the U.K. and North America; the value of this gold reserve is over €6 billion ($6.62 billion). Calling gold the “trust anchor,” the article details briefly why the hard asset is so important to wealth building and the global economy, claiming: "Gold is... the trust anchor for the financial system. If the whole system collapses, the gold stock provides a collateral to start over. Gold gives confidence in the power of the central bank's balance sheet."

Why this sudden admission of what goldbugs have been saying for years? Perhaps it has to do with the fact that on October 7, the bank announced it would soon be moving a large part of its gold reserves to "the new DNB Cash Center at military premises in Zeist."

Almost as if the Netherlands is preparing for the grand reset, and is moving its most valuable asset to a "military" installation just for that purpose.

As bitcoin.com tongue-in-cheek points out, "DNB is no stranger to playing along with the Keynesian, inflationary games of the global monetary system. A system which, according to some, is now more a Ponzi scheme based on force and blind faith than sound economic principle. That notwithstanding, the centralized financial powers of the world know the real score, and that’s why hard assets like gold are hoarded and locked down while everyday, individual residents of these geopolitical jurisdictions are encouraged to spend and spend, going further into debt to prop up ultimately unsound national economies."

It is hardly a coincidence that in its preparation for monetary doomsday, the Dutsch Central Bank is also set to begin cracking down on crypto exchanges and wallets, stating that "firms offering services for the exchange between cryptos and regular money, and crypto wallet providers must register with De Nederlandsche Bank."

While the push for greater KYC/AML transparency is a growing global trend, and is hardly surprising in a world in which trillions in assets reside in "tax-evading" offshore jurisdiction, the remarkable aspect of this latest crackdown against crypto - which many see as a modern, more efficient form of "gold" - is the fact that invasive regulations and restrictions by central banks can be seen as yet another means of stockpiling precious assets. This time, not gold bars, but bitcoin and crypto.

As for the timing of the "great monetary reset", which other central banks have already quietly hinted at themselves amid massive repatriation of physical gold from the New York Fed to various European central banks such as Germany and Austria, we are confident that the trust-keepers of the current establishment - such as other central banks and the IMF - will be kind enough to provide ample advance notice to the citizens of the "developed" world to exchange their fiat into hard assets. Or, then again, perhaps not.

Tyler Durden

Sun, 10/13/2019 - 13:04


Business Finance

"Anarchy" As 750 ISIS Prisoners Escape Syria Camp After Turkish Shelling

International reports as well as Turkish media has confirmed a mass ISIS prison break at a Syrian Kurdish administered camp following shelling on the area by Turkey's military. Nearly 800 prisoners with links to the Islamic State reportedly fled, though one monitoring group put the number of those who ultimately successfully escaped at 100. 

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p>The Guardian reported of the Sunday incident:

At least 750 people with suspected links to Islamic State have reportedly fled a displacement camp in north-east Syria, local officials have said, raising fears that the Turkish offensive against Kurdish forces in the area could lead Isis to regain strength amid the chaos.

Sources said the detainees began to riot and panic after the secure compound came under Turkish shelling, which further resulted in a state of "anarchy" at the camp

File image of ISIS families at al-Hol camp, via AP/Washington Post

Authorities say "ISIS sleeper cells" took advantage of the situation to mount a large scale prison break, attacking remaining prison guards who had not already fled to defensive positions amid the shelling. 

Syrian Kurdish authorites say say 249 women and 700 children of the “caliphate” had been held at the Ain Issa camp, and that US forces subsequently evacuated the remainder of the camp's inhabitants to another secure location after the incident.  Reuters, citing a Syrian war monitor, suggested that not all of the some 750 who fled ultimately were able to escape: 

Around 100 people - women affiliated with Islamic State and their children - have escaped from a camp guarded by Syrian Kurdish-led security forces in northern Syria, the Syrian Observatory for Human Rights said.

Images published by the Syrian opposition media outlet SOHR showed ISIS families escaping Ain Issa by running through the nearby countryside.

Ain Issa had a prior population of over 200,000 but has since been emptied of nearly all of its civilian residents. Scores of civilian casualties have resulted from the Turkish offensive, now in its fifth day, which has come under condemnation by almost every country.

Current and former US defense officials have warned of an "ISIS resurgence" amid the US troop draw down and Turkish invasion of the region, especially after SDF leaders warned its fighters can no longer safely guard the thousands of ISIS prisoners in custody. 

Map source: The Guardian

Estimates commonly put the number of imprisoned ISIS terrorists in US-SDF custody in the northeast Syria at 11,000.

Further some 70,000 family members believed linked to the former 'caliphate' are being held at the sprawling al-Hol camp, also under threat after internal camp rioting has been reported there. 

Turkey, for its part, has claimed that "YPG/PKK" forces deliberately set the Ain Issa camp on fire, denying Western reports that it came under Turkish shelling.

Meanwhile, the Trump administration has said sanctions on Turkey are "ready to go" as Erdogan has refused to uphold his "responsibilities" related to the operation, which including promises to take custody of ISIS prisoners in the area. Trump has threatened reprisals should Turkey allow even one terrorist to go free. 

Tyler Durden

Sun, 10/13/2019 - 12:00


War Conflict

5,200 Tobacco Shops In France Now Selling Bitcoin

Authored by Helen Partz via CoinTelegraph.com,

French crypto startup Keplerk has relaunched its service to accept Bitcoin (BTC) payments in over 5,200 tobacco shops in France starting from Oct. 10.

image courtesy of CoinTelegraph

Service first launched in January

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"ltr">After suspending the service in less than two months after launch in January, Keplerk says that its customers will be able to buy Bitcoin from tobacconists in coupons of 50, 100 or 250 euros, France’s top news channel BFM TV reports Oct. 10.

According to the report, Bitcoin payments in all 5,200 locations will be feasible through Keplerk’s partner Bimedia, which will provide payment terminals.

As previously reported, Keplerk’s initial launch in January 2019 of the service reportedly involved just six tobacco shops, while other publications reported there were as many as 24 shops participating in the program. At the time, Keplerk co-founder Adil Zakhar stated that the firm was planning to expand the project to 5,200 tobacco shops by February despite the reports that France’s central bank did not endorse the initiative.

Bitcoin adoption surges in France

Meanwhile, France is apparently seeing a surge in cryptocurrency adoption. In late September, Cointelegraph reported that over 25,000 points-of-sale of 30 French retailers including sportswear giant Decathlon and cosmetics store Sephora will start accepting BTC payments by early 2020. As reported earlier in September, the French unit of Domino's Pizza launched an ordering competition with a prize of $110,000 in Bitcoin or cash.

On Sept. 12, French Economy Minister Bruno Le Maire claimed that French authorities do not plan to tax crypto-to-crypto trades, but rather will consider taxation when crypto is sold for fiat money.

Tyler Durden

Sun, 10/13/2019 - 09:20


Social Issues
Business Finance

Trump Orders 1,000 Troops To Evacuate Syria, Warns Sanctions On Turkey "Ready To Go"

Defense Secretary Mark Esper told "Face the Nation" in a Sunday interview that the Trump administration is "preparing to evacuate" about 1,000 U.S. troops from northern Syria "as safely and quickly as possible," CBS reports.

"In the last 24 hours, we learned that [the Turks] likely intend to extend their attack further south than originally plan

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ned, and to the west," Esper said. "We also have learned in the last 24 hours that the... SDF are looking to cut a deal, if you will, with the Syrians and the Russians to counterattack against the Turks in the north."

Image via the AP

This as President Trump has also announced the US Treasury is "ready to go" with sanctions on Turkey

This also comes after a week ago Trump ordered the withdrawal of US troops from northern border posts ahead of a Turkish military incursion to establish a so-called 'safe zone'. That decision has been met with fierce push back among Congressional leaders and pundits, angry at the US "betrayal" of its Syrian Kurdish partners, namely the US-funded and trained Syrian Democratic Forces (SDF). 

In his comments to "Face the Nation," set to air on Sunday, Esper further explained that American forces were now caught between the Turkish assault and the SDF.  

"And so we find ourselves, we have American forces likely caught between two opposing advancing armies, and it's a very untenable situation," Esper said. "So I spoke with the president last night, after discussions with the rest of the national security team, and he directed that we begin a deliberate withdrawal of forces from northern Syria."

Following a Friday incident wherein Turkish artillery shells landed near US positions in Kobani, Pentagon officials accused Turkey of deliberately "bracketing" American forces by firing on both sides of the observation post.

While Turkey claimed it was a 'mistake,' US officials said Ankara had known about that specific base for months and that it could have only been intentional. 

Esper said on Sunday that US troops "have the right to self defense and we will execute it if necessary" when asked about the incident and future rules of engagement. 

Meanwhile Trump tweeted early Sunday: “Very smart not to be involved in the intense fighting along the Turkish Border, for a change. Those that mistakenly got us into the Middle East Wars are still pushing to fight. They have no idea what a bad decision they have made. Why are they not asking for a Declaration of War?”

For now it's unlikely that this means all American forces will make a complete exit from Syria.

When pressed on a timeline for the pullback, Esper merely said it would be done "as safely and quickly as possible"; but given US forces appear to be in the line of Turkish artillery fire, a pullback will no doubt come sooner than later — if not occurring already.

Tyler Durden

Sun, 10/13/2019 - 09:55


War Conflict

Meet The Futuristic, Fully-Autonomous Concept Truck Without A Cab

Swedish manufacturer Scania has introduced a brand new "futuristic fully autonomous concept truck without a cab" called AXL, according to Tuvie.

The vehicle is described as a "heavy-duty self-driving vehicle" and was designed by a group of Scania experts from different fields.

It features the

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company's modular system at the core of its design and could be used in many industries that are seeking out "more sustainable, self-driving vehicles to increase their productivity and performance."

Some examples including mining and construction, which are favorable for self-driving vehicles since they are well-controlled locations.

Scania describes the truck as "a step forward to smart transportation systems of the future". And the software in the truck will play just as big of a role as the hardware: the AXL is directed and monitored by an intelligent control environment.

In places like mines, autonomous operations can be facilitated by a logistics system that tells vehicle how it should perform.

Many self-driving autonomous trucks in use today still have a cab where a driver can sit, should the need to intervene arise. The AXL is designed without a cab, meaning no driver will be in the truck. Its combustion engine is even powered by renewable biofuel.

Scania is a major manufacturer of heavy trucks and buses, in addition to diesel engines for heavy vehicles as well as marine and general industrial applications. The company was formed in 1911. 

Tyler Durden

Sun, 10/13/2019 - 08:45


Technology Internet

Monetary Failure Is Becoming Inevitable

Authored by Alasdair Macleod via GoldMoney.com,

This article posits that there is an unpleasant conjunction of events beginning to undermine government finances in advanced nations. They combine the arrival of a long-term trend of rising welfare commitments with an increasing certainty of a global-scale credit crisis, in turn the outcome of a combination of th

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e peak of the credit cycle and increasing trade protectionism. We see the latter already undermining the global economy, catching both governments and investors unexpectedly.

Few observers seem aware that an economic and systemic crisis will occur at a time when government finances are already precarious. However, the consequences are unthinkable for the authorities, and for this reason it is certain such a downturn will lead to a substantial increase in monetary inflation. The scale of the problem needs to be grasped in order to assess how destructive it will be for government finances and ultimately state-issued currencies.


Listening to recent commentaries about the repo failures in New York leads one to suppose there is insufficient money in the system. This is not the real issue, as the chart below of the fiat money quantity for the dollar clearly shows.

The fiat money quantity is the amount of fiat money (in this case US dollars) both in circulation and held in reserve on the central bank’s balance sheet. Before the Lehman crisis, it grew at a fairly constant compound growth rate of 5.86%. Since the Lehman crisis, it has grown at an average of 9.45%, even after the slowdown in its rate of growth that started in January 2017. FMQ is still $5 trillion above where it would have been today if the massive monetary expansion in the wake of the Lehman crisis had not happened. If there is a shortage of money, it is because the process of debt creation to fund current expenditure is spiralling out of control.

It is not just the US. If we take similar (but less detailed) figures for FMQ in other major nations by adding together broad money M3 and central bank balance sheets, we find that it has increased at varying rates for the most important economies. In China, the compound annual growth rate has been 12%, though the growth in Japan at 5.2% and in the Eurozone at 4.9%. has been more subdued, reflecting stagnant levels of bank credit. When for the lack of any other measure statisticians use a GDP money total as a substitute for defining economic progress, we should not be surprised to see that the economies with the greatest rate of monetary growth are reckoned to be the best performing.

Just as GDP tells us nothing about human progress and its benefits to society, other uses of money as a control mechanism for economic management are equally misleading. Much of the monetary expansion has been to fund unproductive government spending. Most of the balance after the government’s cut has fuelled speculation in the financial sector and has funded consumer credit for those whose savings have been tapped out. Not revealed by the acceleration of money supply growth is the wealth transfer effect which impoverishes every productive individual for the benefit of governments, the banking system and the bank’s favoured customers, who are in the main large corporates and directly or indirectly the hedge funds.

Decades of impoverishment by monetary inflation, which has quickened since Lehman, is a very serious matter and is behind the fragility of economic systems dominated by government spending deficits. The reason there appears to be not enough money is because the acceleration of government liabilities in nominal currency terms is catching up with them. Laurence Kotlikoff’s famous 2012 estimate of the US Government’s future commitments of a net present value of over $222bn is very much alive on arrival.

It would be more accurate to say the figure for the US is trending towards infinity. It is already infinity in Japan and the Eurozone, where negative interest rates and bond yields offer the basis for the net present value calculation. As in most things financial, the public is blissfully unaware of the true implications of low and negative interest rates and ultra-low bond yields. They take the view that very low interest rates permit their government to borrow as much as it likes to provide the public with new hospitals, schools and the like. It is a case of fools of politicians and central bankers having turned everyone else into fools, and the few who realise it have no idea how to reverse the process. What they do not see is the government cannot now fund public healthcare and pensions, which make up the bulk of future obligations in a welfare state, without accelerating monetary debasement even more.

No one can know what the true figure is for future government liabilities, of which welfare is an increasing component. Politicians, who claim that a week in politics is the long term, fail to see any problem. The few governments which have raised retirement ages have done so to deal with escalating current welfare liabilities, not addressing those of the future that will lead ultimately to the destruction of what as Westerners we generally agree is civilised democratic society. That is their successors’ problem.

If history and reasoned economic theory is any guide, the demands for credit by the state will terminate in the destruction of government currencies. For the truth of the matter is inflation of money and credit has created the illusion we can all live beyond our income, our income being what we produce.

Nothing, with the sole exceptions of a central bank and its commercial charges can make money without having to advertise for it: the seigniorage is simply taken without public consent. Without questioning how it arises, the extra money allows us to indulge in all our flights of fancy until at some time reality strikes. Rather like Monty Python’s glutton, Mr Creosote, can we force in a little more inflation before we all explode?

The credit cycle is now on the turn

The complaint that the current precarious position faced by major economies is due to a shortage of money is untrue. The problem is one of escalating expenditures, and anyway, the response to any shortage, as we saw recently with problems in the US repo market, is simply to issue more money. But it is no solution, only making the eventual crisis worse.

It is easy to increase the quantity of money, but virtually impossible to increase the quantity of goods to accompany it. For this reason, increases in the quantity of money disadvantage ordinary people, the everyday producers of goods and services in small and medium sized enterprises. And with more money in circulation but the same quantity of goods, the pressure mounts for prices to rise. For a time, consumers can escape price rises by substituting cheaper goods from abroad. This reduces the impact of price rises in the domestic market. Savers are also beneficial for price stability, because they defer their purchases to a future date. But in the absence of savers taking the steam out of inflation-fuelled demand, and contemporary American tariffs on Chinese imports designed to limit them by erasing the price advantage handed to China by America’s monetary inflation, the effect is bound to raise the general level of prices.

Consequently, legacy businesses in America have hoped for a bonanza through not being forced to compete with China. For too long, they have seen the costs of production rise, driven by rising input costs, government regulations, their own expanding bureaucracies, and the natural tendency for expenditure to rise towards the income available. Having been bound hand and foot by red tape they hope that tariffs will protect them from foreign competitors who are not. They maintain their higher uncompetitive prices only to find that consumers, who have not had the benefit of the new free money, are not prepared to pay them or are unable to afford them. Sales volumes suffer and losses begin to accumulate. An international problem provoked by trade protectionism becomes a domestic setback, which is the transition currently hitting the US economy.

We already see the evidence of a developing slump as well in other countries, not directly involved in the trade spat between China and America, but also dependent on the world’s two largest nations measured by trade engaged in their trade war. The member states of the Eurozone are all reporting disappointing internal trade conditions, as are virtually all other nations which report them. The solution, the inflationists say, is more money.

It is a call that has even evolved into a demand that borrowers should be paid to borrow through negative interest rates, killing off the few savers left in the advanced economies. The source for the investment in production deemed necessary to keep the world’s economy from crashing is no longer backed by genuine savings, but by increasing quantities of money conjured out of thin air directly or indirectly by the banking system.

Those that benefit from inflation by expansion of bank credit are those who do not need it, because they are creditworthy and can always raise funds in the market. The problem lies with those who are not creditworthy. No amount of monetary inflation will rescue them, because the banks, in America for instance, have already loaned almost all of the equivalent of their own capital to non-financial borrowers who are deemed to be less than investment grade, in other words junk, both directly and through collateralised loan obligations. In the coming months, or it might even be just a matter of weeks, the banks will protect themselves by turning from providers of liquidity to withdrawing it. Inevitably, a volte-face on credit by the banks will bring on the slump. A systemic crisis will then ensue, and central banks will be forced to ride to the rescue by printing yet more money.

As we saw following the Lehman crisis, the money will be printed to bolster banks’ reserves in return for government debt accumulating at the central bank, so most of that newly printed money ends up covering the government’s deficit through the purchase of government bonds by the central bank.

A credit cycle will have completed: the post-Lehman stabilisation, followed by an uncertain recovery, then a return to normality. Normality matures into complacency, with bank credit being expanded in favour of increasingly risky borrowers. The post-credit expansion crash, mirroring Lehman, is now in the making.

It is a repetitive cycle, the consequence of earlier monetary interventions by the central banks. They have been unable to stop themselves. The decision to pull the plug on Lehman, only a second-rank investment bank, nearly brought down the entire global financial system. No central bank can take that risk again. We can be certain the solution to the next credit crisis will be a further acceleration of the production of money and credit with no one in the financial system being allowed to fail. And the expansion of base money directed at bolstering the banks’ balances will predominantly favour the one borrower class left with any financial standing, the governments.

But what we see is two forces joining together to accelerate the demise of state-issued currencies, which at the end of the day are only backed by the faith and credit the public holds in their governments’ finances. The upcoming credit crunch will occur against a background of a rapidly increasing burden of welfare liabilities, so dramatically identified by Laurence Kotlikoff seven years ago, and likely to have increased markedly from his alarming estimate.

Inevitably, the prolonged suppression of government bond yields will begin to end, and irrespective of central bank interest rate policies, they will rise as investors realise that adjusted for a more realistic estimate of price inflation than that provided by government statisticians, they are a costly safe haven. Then, government finances will become so visibly out of control that even modern monetary theorists will return to their textbooks to see which bit they failed to understand.

The dawning of monetary inflation on the general public

Today, the public is blissfully unaware of the inexorable trend of monetary debasement while enjoying the continuing benefits of government welfare. Government economists tell them that moderately rising prices, the consequence and justification for expanding the quantity of money and credit, are good for them. And who are they to question the experts?

Fortunately, people pursuing their daily lives usually adapt to the circumstances forced upon them by governments. A targeted two per cent inflation rate of prices is not overtly disruptive, and government statisticians have become skilled at goal-seeking price inflation figures. Everyone’s experience of price inflation is different, so government figures become believable by default. But for some considerable time, increases in peoples’ wages have badly lagged the price rises of their normal purchases, which bear little relation to the composition of governments’ consumer price statistics. Coupled with the financial freedom afforded to them to borrow, they have made up the difference between income and expenditure just like any modern government: by borrowing with little or no intention of repaying.

The cause of the problem people face is the continual destruction of their personal wealth by monetary inflation. It has led to a fundamental difference between the credit cycle today and those earlier described in the textbooks of the Austrian School of economists. Before Keynesianism took hold, investment in production was funded by savings. Those savings have been substantially destroyed. Instead of savings being a cushion against uncertainty, for practical purposes they no longer exist.

There are two consequences that concern us here. The first is that the burden of investment and its continuity now falls entirely on the state and its licenced banks, whose only recourse is yet more monetary expansion. The second is the almost total reliance today’s wage earners place on receiving their monthly salary to survive, with a reported 78% of US workers living pay-check to pay-check. British workers are similarly strapped. They have no means of surviving a credit crisis and the economic consequences that follow. That will be another cost that falls to the government and its central bank to add to already escalating welfare commitments.

It is becoming easy to envision the day that the majority of government spending is financed by inflation and inflationary borrowing, through a combination of falling tax revenues and escalating spending commitments. There is also an imbalance between taxpayers, with a mobile wealthy class bearing the bulk of national tax burdens who can up sticks at any time. The question then arises as to how financial markets will react when the triple conjunction of a credit crisis, sharply increased government deficits, and the long-term escalation of welfare costs, materialise in the public consciousness all at the same time.

Ahead of the next credit crisis, the knowledge that things are not quite right has so far led to a flight to perceived safety: in some countries, investors are even paying to own their government’s debt. In the US, the yield on the 10-year US Treasury bond has declined from 3.2% a year ago to 1.4% today.

As the next credit crisis materialises, perceptions of investment risk are bound to change radically. The imperative to print money at an even faster rate will accompany the trend towards deeper negative interest rates, penalising bank deposits, eliminating residual savers from the system. Consequently, if the Fed makes the mistake of even considering negative interest rates, it will put the whole commodity complex firmly into backwardation from the money side because all commodities are priced in dollars.

We can take anticipation of lower and more widespread negative rates as guaranteed when the credit cycle enters its crisis stage. Last time, everyone was so relieved that life after Lehman’s death continued that they still regarded government debt as the risk-free yardstick for financial investment. It would be foolish for a central bank to think this trick could be pulled a second time. Just imagine how high the fiat money quantity in our introductory chart would be above that long-term pre-Lehman trend line. And just think of the damage to the purchasing power of the dollar and the other major fiat currencies from interest rate policies that are bound to drive deposits towards widespread encashment.

This time, the coincidence of a credit crisis and rapidly escalating short- and long-term welfare commitments adds a new dimension to the inflation story. Far from rescuing the global economy, the spreading of zero and negative interest rates can be expected to expose the true worth of fiat currencies. Next time is different in another respect: there is a new generation of educated men and women who through cryptocurrencies have learned of the fiat currency fallacy ahead of the event. In the past, nearly everyone learned of it too late. Now, around the world, particularly in America and China millennials could accelerate the ending of fiat money by triggering an early shift out of fiat into cryptos. Bitcoin at a million dollars becomes no longer pure fancy, only don’t forget that a million dollars might not buy you much.

It is not an expected outcome, except by the very few who understand what is happening to money and the built-in escalation of its quantity. These will include growing numbers in the cryptocurrency community and the few who have studied the subject away from the influence of macroeconomists. Hopefully, they will now include readers of this article.

Anticipating a crack-up boom

As the credit crisis drives monetary expansion into overdrive or leads into a hyperinflationary slump, people are bound to begin to discard their national currencies in favour of any goods they think they might need in future. Minimal cash liquidity becomes the desired position. It can rapidly lead into the final short-lived boom that marks the death of an unbacked fiat currency, when it dawns on the general public that their government’s currency might be worthless. As the conviction of it grows, the pace at which it is dumped for anything of use that they can get their hands on increases exponentially. In Germany, it lasted from about May 1923 until the following November when the mark finally expired.

It has long been a theme of survivalist libertarians that this will occur.

So long as the alternative of owning physical gold and silver exists, it is not necessary to stockpile necessities, unless, that is, disruptions to supplies are anticipated. In a slump, the prices of goods will decline measured in sound money. This, after all, was firmly impressed upon Keynesian inflationists by the experience of the early 1930s, when measured in gold substitutes prices of nearly everything fell heavily. When gold and silver became more desirable relative to owning goods, their purchasing power increases while that of fiat currencies declines.

Putting supply considerations to one side, if in the wake of the next credit crisis the economic conditions of the 1930s return, those that use gold and silver as money will see the prices of their consumer staples fall, so there should be no hurry to hoard them.

Tyler Durden

Sun, 10/13/2019 - 07:00


Business Finance

Apple Warned Apple TV+ Showrunners Not To Anger China

As Apple embarked on the development of a series of exclusive programming for its Apple TV+ service in early 2018, the company's leadership advised content creators not to piss off China, according to BuzzFeed News

In early 2018 as development on Apple’s slate of exclusive Apple TV+ programming was underway, the company’

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s leadership gave guidance to the creators of some of those shows to avoid portraying China in a poor light, BuzzFeed News has learned. Sources in position to know said the instruction was communicated by Eddy Cue, Apple’s SVP of internet software and services, and Morgan Wandell, its head of international content development. It was part of Apple's ongoing efforts to remain in China’s good graces after a 2016 incident in which Beijing shut down Apple’s iBooks Store and iTunes Movies six months after they debuted in the country. -BuzzFeed

And for all the left's virtue-signaling over 'microaggressions' and the patriarchy depriving every gender their own bathroom, the progressive minds behind Hollywood and Silicon Valley After are hypocritically mum when it comes to China's well-documented human rights violations. 

"They all do it," one showrunner told BuzzFeed. "They have to if they want to play in that market. And they all want to play in that market. Who wouldn't?"

Apple of course relies on China for tens of billions in annual sales - not to mention the annual manufacture of hundreds of millions of iPhones - which as the report notes, makes it "particularly important to avoid running afoul of Chinese government," especially in light of what we've seen over the past weeks with the NBA and other organizations whose employees have expressed solidarity with Hong Kong's pro-democracy demonstrators. 

Apps yanked

Last week, Apple removed HKmap.live from the iOS App Store - an app which helped Hong Kong protesters track, elude, and stage counterattack operations against the police. The removal sparked outrage, including Hong Kong IT legislator Charles Mok, who tweeted in a letter to Apple CEO Tim Cook "We Hongkongers will definitely look closely at whether Apple chooses to uphold its commitment to free and other basic human rights, or become an accomplice for Chinese censorship and oppression."

As BuzzFeed notes, "Apple’s recent actions in China are a continuation of the company’s years-long practice of appeasing Beijing." 

To do business in China, the company adopts to local dictates, distasteful as they may be to its CEO Tim Cook, an outspoken gay rights advocate and privacy crusader. It's an ironic inversion of a longstanding argument in the West that by bringing China into the world trade system, the country would adopt western values. Instead, China is asking tech companies to adopt its values — and Apple is willing to pay that price. 


The removal of HKmap.live was one of a series of actions Apple took at China’s instigation in the past week. Apple removed the Quartz app from its app store in China — “Presumably because of the excellent work our team in Hong Kong has been doing covering the protests,” Quartz technology editor Mike Murphy said — and removed the Taiwan flag emoji for iOS users in Hong Kong. -BuzzFeed

Also noted is that Apple only rejected just two of 56 app takedown requests from Beijing - eliminating 517 apps the communist government disapproved of, according to the Cupertino, California company's transparency report. What's more, "Apple provided customer data to the Chinese government 96% of the time when it asked about a device, and 98% of the time when it asked about an account. In the US, those numbers were around 80% and the US government did not make any app removal requests." 

Read the rest of the report here

Tyler Durden

Sat, 10/12/2019 - 20:20


Technology Internet

The World's Least-Free Countries Reveal Just How Much "Socialism Sucks"

Authored by David Gordon via The Mises Institute,

[Socialism Sucks: Two Economists Drink Their Way Through the Unfree World. By Robert Lawson and Benjamin Powell.  Regnery Publishing, 2019. 192 pages.]

Robert Lawson and Benjamin Powell are well-known free market economists, and they do not look with favor on a di

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sturbing trend among American young people.

“In the spring of 2016,” they tell us, “a Harvard survey found that a third of eighteen-to twenty-nine year olds supported socialism. Another survey, from the Victims of Communism Memorial Foundation, reported that millennials supported socialism over any other economic system.” (p.8)

Unfortunately, the young people in question have little idea of the nature of socialism. Lawson and Powell would like to remedy this situation, but they confront a problem. Ordinarily, one would urge students to read Hazlitt’s Economics in One Lesson, Mises’s “Economic Calculation in the Socialist Commonwealth,” and similar classic works, in order to understand the basic facts about the free market and socialism, but the millennials are unlikely to do so. One must attract their attention. What can be done?

Lawson and Powell have had the happy idea of presenting elementary economics in a humorous way that will appeal to those “turned off” by serious and sober scholarship. In the latter adjective lies the key to their approach. Both of the authors enjoy drinking beer, and they travel around the world to various socialist countries in pursuit of their beloved beverage, making incisive comments about the economy of each country as they do so. They write in a salty style that will make millennials laugh, though some readers will find it jarring.

For the young, “socialism” means no more than vague ideas about “fairness”, but, the authors note, the term has a precise meaning:

“To separate the state from socialism in any large society is like trying to separate private property from capitalism. It can’t be done. I’ll say it once more for the people in the back: socialism, in practice, means that the state owns and controls the means of production.” (p.128)

No country is completely socialist, but some are more socialist than others. How can the degree of socialism be evaluated? Lawson has, along with James Gwartney, produced an annual economic freedom index for the Fraser Institute, which the authors use to answer this question, sometimes with surprising results.

Many professed socialists look to Sweden for inspiration, but according to the freedom index, “Sweden gets a 7.54 rating, which is good enough for twenty-seventh place out of the 159 countries in the study. . .Bottom line: Sweden is a prosperous, mostly capitalist country.” (pp.10-11)

The authors must now confront an objection. Why should we not prefer welfare-state capitalism to the straightforward free market economy the authors want? They reply that Sweden prospered under freedom, but the increased taxation needed to finance the welfare state has brought about stagnation. “Sweden grew most when it was freer than it is today.” (p.13)

If some people admire Sweden, few except fanatics have good words for the economy of Cuba. Nevertheless, must we not recognize the wonders accomplished by the Cuban socialized medicine? We must give the devil his due. Lawson and Powell are not convinced.

“Official Cuban health statistics are impressive. . .Yet, we also know that the hospitals most Cubans use are so poorly equipped that people often have to bring their own sheets. What gives? The silence [on the streets} is part of the answer. The lack of automobiles means a lack of traffic fatalities. Since automobile accidents are a leading cause of death among younger people, the lack of automobiles has a disproportionate impact on life expectancy statistics for reasons that have nothing to do with health care. The low rate of infant mortality is a product of data manipulation.” (p.53)

Why has Cuban socialism, like all other centralized socialist economies, failed? The authors present with great clarity the essential point:

“’[A]lmost a hundred years ago, the Austrian economist Ludwig von Mises explained that socialism, even if run by benevolent despots and populated with workers willing to work for the common good, could still not match capitalism’s performance. Socialism requires abolishing private property in the means of production. But private property is necessary to have the free exchange of labor, capital, and goods that establish proper prices. Without proper prices, socialist planners could not know which consumer goods were needed or how best to produce them. . .Socialism also gives tremendous power to government officials and bureaucrats who are the system’s planners---and with that power comes corruption, abuse, and tyranny.” (p.37)

Socialist tyrants were the greatest mass murderers in history, and the young must be apprised of this melancholy fact.

“Stalin ranks just behind Mao as history’s second greatest mass murderer, with Hitler coming in third---and all three dictators were, of course, committed socialists of one sort or another.” (p.115)

Some millennial socialists respond with a distinction. The despotic governments mentioned were not genuinely socialist. The authors answer with appropriate severity:

“This is the same dirty trick socialists have played for decades. Whenever things go south, as they inevitably do, they claim that it wasn’t ‘real’ socialism. I [Lawson[ find the whole thing more than a little disingenuous and very irritating. When socialists, democratic and otherwise, held up Venezuela as a great socialist experiment in the 2000s, the message was, ‘See, we told you so; socialism works!’ but when failure happened, the message changed to, “No, wait---that’s not real socialism!’ They want to claim socialism during the good times but disavow it during the bad.” (pp.127-128)

A related gross error, the famous “nirvana fallacy,” is to compare an ideal state of affairs, conjured up by socialists, with difficulties of real-world capitalism.

If the authors are ready to rebuke the errors of misguided youth, they look with sympathy on some of their hopes. Many young people condemn the drug war, with its rampant racism and mass incarcerations, and they are right to do so:

“The U.S. government’s war on drugs is unwinnable because, in the language of economists, it is a supply-side war, when demand isn’t very price-sensitive. This means when the U.S. government scores a ‘win’ in the war, the price of the remaining drugs goes up more than the usage falls. As a result, net revenue to drug cartels increases, which increases their ability to corrupt law enforcement and buy weapons and other smuggling equipment. The result has been an endless cycle of increasing violence along the entire supply chain in Central and South America. . .” (p.135)

It is not only the drug war, but the war on terror as well, that ought to be condemned, and here once more, the many millennials who protested against the war are in the right.

“We feel the same about the war on terror. The wars and violence associated with it in the Middle East are a major reason for Europe’s immigration wave. . .advocates for capitalism can be against war precisely because war undermine capitalist institutions and freedoms.. . .Chris Coyne wrote a book entitled After War: The Political Economy of Exporting Democracy, in which he shows that when the U.S. engages in foreign intervention, it rarely creates the kind of lasting institutional change that supports what some might call a ‘neoliberal’ society. Economist Robert Higgs’s classic book, Crisis and Leviathan, shows how crises in the United States, especially wars, have led to expanded government at the expense of markets. Chris’s latest book, Tyranny Come Hone: The Domestic Fate of U.S. Militarism, co-authored with another friend of ours, Abby Hall, has shown how U.S. military interventions abroad ‘boomerang’ back to the United States in ways that decrease our freedoms at home. See, anti-war isn’t a uniquely leftist position. Capitalists should be anti-war too.” (pp.136-137. I regret the use of “neoliberal” as a term of praise and the solecism “advocates for.”)

I confess that I approached the authors’ project of a drinking tour of the socialist countries with skepticism. Would it be more than ajeu d’esprit? Reading the book has laid my skepticism to rest. Socialism Sucks has the potential to do great good, if it gets into the right hands, and its impressive sales suggest that it will do so.

Tyler Durden

Sat, 10/12/2019 - 20:50


Social Issues
Entertainment Culture

American STD Cases Rise To Record High

Health officals are voicing serious concern after it emerged that the U.S. is experiencing a significant spike in sexually transmitted diseases.

As Statista's Niall McCarthy notes, 2.4 million cases of gonorrhea, chlamydia and syphilis combined were recorded in 2018, an all-time high. The data was part of the Sexually Transmitted Disease Surveillance Report which was publis

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hed by the Centers for Disease Control and Prevention on Tuesday. The scale of the problem can be seen by the pace of new infections documented since 2014. Chlamydia went up 19 percent, gonorrhea rose 63 percent, primary and secondary syphilis grew 71 percent while congenital syphilis soared 185 percent.

Numerous factors are being blamed for the increase, particularly funding cuts for local health departments that have caused staff shortages and clinic closures, as well as a decrease in condom usage. Reuters quoted the CDC's directer of STD Prevention, Gail Bohan, who sad that "the resurgence of syphilis, and particularly congenital syphilis, is not an arbitrary event, but rather a symptom of a deteriorating public health infrastructure and lack of access to health care.”

You will find more infographics at Statista

That is resulting in less people going to get screened despite the fact that antibiotics can cure chlamydia, gonorrhea and syphilis.

Cases are highest among adolescents and young adults with over half occurring among young people aged between 15 and 24.

The CDC called for urgent action to curb the problem, with the report stating that "it is imperative that federal, state and local programs employ strategies that maximize long-term population impact by reducing STD incidence and promoting sexual, reproductive, maternal, and infant health".

Tyler Durden

Sat, 10/12/2019 - 22:20


Social Issues
Health Medical Pharma

The CIA Versus Donald J. Trump

Authored by Jacob Hornberger via The Future of Freedom Foundation,

It’s both pathetic and laughable that Democrats, the mainstream press, and Trump critics are referring to the CIA agent who turned in Trump for his telephone call with Ukraine President Volodymyr Zelensky as a “whistleblower.”

It’s pathetic because it denigrates

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real whistleblowers like Edward Snowden, John Kiriakou, Chelsea Manning, Thomas Drake, and William Binney. Those people are the courageous ones. They risked their careers, their liberty, and even their lives to expose criminal wrongdoing within the national-security state agencies they were working for.

That’s not what that supposed CIA agent did when he filed his complaint against Trump. He didn’t blow the whistle on his agency, the CIA, by exposing some secret dark-side practices, such as MK-Ultra drug experimentation on unsuspecting Americans, secret assassinations of Americans, secret assets within the mainstream press, or secret destruction of torture videotapes of incarcerated inmates at a top-secret CIA prison center in some former Soviet-bloc country.

If he had done that, the CIA would have come after him with all guns blaring, just as the national-security establishment has gone after Snowden and those other genuine whistleblowers. In fact, that’s how one can usually identify a genuine whistleblower. That’s obviously not happening here. Instead, the national-security establishment is hailing this “whistleblower” as being a brave and courageous hero for disclosing supposed wrongdoing by Trump, not by the CIA.

That anti-Trump CIA agent isn’t a whistleblower at all. Instead, he’s nothing more than a spy and a snitch. He is obviously a spy. After all, he works for the CIA, the premier spy agency in the world. And by turning in Trump in an obvious attempt to get him into trouble, he’s also obviously a snitch.

A “gotcha” moment

In fact, the entire episode has a “gotcha” feeling to it. For almost three years, Americans have been made to suffer under a constant stream of speeches, commentaries, op-eds, and editorials about what Trump rightly called the “collusion delusion” theory. Democrats, the mainstream press, and Trump critics were 100 percent certain that their real-life hero Robert Mueller, the special counsel, was going to find evidence that Trump conspired with Russian officials to deny Hillary Clinton her rightful place as president of the United States. They had impeachment plans set in place, ready to go.

And then Mueller dashed their hopes. His report disclosed that the collusion delusion was the biggest conspiracy theory in U.S. history, one openly promoted by Democrats, the mainstream press, and Trump critics on a daily basis for almost three years.

All they needed and wanted was an opportunity — any opportunity — to apply their impeachment process to another set of a facts. Fortunately for them, Trump himself gave them that opportunity. That supposed CIA agent was ready with a “gotcha!” and proceeded to snitch on Trump with his “whistleblower” complaint.

Trump is obviously a smart man, both businesswise and politically. But to make that telephone call to Zelensky and request him to investigate Joe Biden, while holding up a foreign aid package to Ukraine, immediately after being exonerated by Mueller of the collusion delusion allegation, was about the dumbest thing he could do. How could he not realize that his enemies would be looking for any opportunity to set their impeachment process into motion against him?

The likely explanation lies with arrogance and hubris. After Trump got his exoneration on the collusion delusion accusation, he figured that he was now all-powerful and could do whatever he wanted. The fact that he was, at the same time, exercising such dictatorial powers as raising tariffs, starting trade wars, building his Berlin Wall along the border, and imposing sanctions and embargoes, all without the consent of Congress, was also making him feel omnipotent and untouchable. His admiration for foreign dictators no doubt filled his mind with the same sense of totalitarian, untouchable power.

That’s what likely caused Trump to give his enemies the “gotcha” episode for which they were clearly thirsting. Trump turned out to be his own very worst enemy.

National security enmity toward Trump

Despite his campaign rhetoric against “endless wars,” Trump has kept U.S. troops in Afghanistan and the Middle East, where they have continued to kill, die, and wreak massive destruction. He has also authorized the continuation of the Pentagon’s and CIA’s assassination program. He has also continued the Pentagon’s and CIA’s indefinite detention and torture center at Guantanamo Bay. He has done nothing to rein in the NSA and its secret surveillance schemes. The fact is that Trump’s term in office, despite his “America First” rhetoric, has proven to be nothing more than a continuation of the Bush-Obama administrations.

That’s what he should be impeached for, but unfortunately his critics feel that those high crimes don’t rise to the level of impeachable offenses.

But it’s also true that Trump has failed to demonstrate the complete deference to authority of the national-security establishment that Hillary Clinton and other Washington, D.C., political elites have. Trump’s failure to bend the knee to the national-security establishment made him suspect from the very beginning, especially since the Pentagon, the CIA, the NSA, and the FBI were certain that their chosen candidate, Hillary Clinton, was going to be the new president.

Thus, there has been a war between Trump and the national-security establishment from even before he was elected and especially after he was elected. In a remarkable moment of candor and honesty, Congressman Charles Schumer, commenting on the war between Trump and the national-security establishment, stated, “Let me tell you: You take on the intelligence community — they have six ways from Sunday at getting back at you.”

One way of getting back at Trump is, of course, through assassination, a power that the Supreme Court has confirmed that the national-security state wields against American citizens, so long it is necessary to protect “national security.”

Another way of getting back at Trump is smear tactics through the use of assets within the mainstream press. The CIA’s Operation Mockingbird comes to mind.

Coup through impeachment 

And other option to get back at Trump is through impeachment and conviction, especially through assets within Congress. But before any collusion-delusion proponent cries “conspiracy theory,” recall that President Eisenhower warned Americans in his 1961 Farewell Address about the threat that the “military-industrial complex” poses to the liberties and democratic processes of the American people. Actually, Ike planned to use the term “military-industrial-congressional complex” but changed his mind at the last minute. He was referring to the intimate, integrated relationship between members of Congress and the Pentagon, CIA, and NSA. At the risk of belaboring the obvious, Eisenhower is not perceived to be a “conspiracy theorist,” the term that the CIA popularized to keep people from examining the Kennedy assassination too closely.

Speaking of the Kennedy assassination, early in his administration Trump announced that he intended to comply with the deadline for releasing the CIA’s long-secret records relating to the assassination. At the very last minute, Trump folded and granted the CIA’s request for continued secrecy.

Why did Trump do that?

One possibility is that he became convinced that “national security” would be jeopardized if the American people were to see the CIA’s long-secret JFK assassination records.

Another possibility is that he struck some sort of secret negotiated deal with the CIA.

A third possibility is that he figured that if he would ingratiate himself with the CIA in the hope that they would leave him alone. If that was the case, Trump might well go down as one of the most naïve presidents in history.

Tyler Durden

Sat, 10/12/2019 - 22:50



Visualizing The Rise And Fall Of Social Media Platforms

Since its inception, the internet has played a pivotal role in connecting people across the globe, including in remote locations.

While the foundational need for human connection hasn’t changed, Visual Capitalist's Nick Routley points out that the platforms and technology continue to evolve, even today. Faster internet connections and mobile devices have ma

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de social networks a ubiquitous part of our lives, with the time spent on social media each day creeping ever upward.

The Scoreboard Today

Over the last 15 years, billions of people around the world have jumped onto the social media bandwagon – and platforms have battled for our attention spans by inventing (and sometimes flat-out stealing) features to keep people engaged.

Here’s a snapshot of where things stand today:

Today’s entertaining video, from the Data is Beautiful YouTube channel, is a look back at the rise and fall of social media platforms – and possibly a glimpse at the future of social media as well.

Below we respond to some key questions and observations raised by this video overview.

Points of Interest

1. What is QZone?

Qzone is China’s largest social network. The platform originally evolved as a sort of blogging service that sprang from QQ, China’s seminal instant messaging service. While Qzone is still one of the world’s largest social media sites – it still attracts around half a billion users per month – WeChat is now the service of choice for almost everyone in China with a smartphone.

2. LinkedIn has been around for a long time.

It’s true. LinkedIn, which hasn’t left the top 10 list since 2003, is a textbook example of a slow and steady growth strategy paying off.

While some networks experience swings in their user base or show a boom and bust growth pattern, LinkedIn has grown every single year since it was launched. Surprisingly, that growth is still clocking in at impressive rates. In 2019, for example, LinkedIn reported a 24% increase in sessions on their platform.

3. Will Facebook ever lose its top spot?

Never say never, but not anytime soon. Since 2008, Facebook has been far and away the most popular social network on the planet. If you include Facebook’s bundled services, over 2 billion people use their network each day. The company has used acquisitions and aggressive feature implementation to keep the company at the forefront of the battle for attention. Facebook itself is under a lot of scrutiny due to growing privacy concerns, but Instagram and WhatsApp are more popular than ever.

4. What Happened to Snapchat?

In 2016, Snapchat had thoroughly conquered the Gen Z demographic and was on a trajectory to becoming one of the top social networks. Facebook, sensing their position being challenged by this upstart company, took the bold step of cloning Snapchat’s features and integrating them into Instagram (even lifting the name “stories” in the process). The move paid off for Facebook and the video above shows Instagram’s user base taking off in 2016, fueled by these new features.

Even though Facebook took some of the wind out of Snapchat’s sails, the company never stopped growing. Earlier this year, Snapchat announced modest growth as its base of daily active users rose to 190 million. For advertisers looking to reach the 18-35 age demographic, Snapchat could still be a compelling option.

5. Why is TikTok so popular now?

The simple answer is that short-form video is extremely popular right now, and TikTok has features that make sharing fun. The average user of TikTok (and its Chinese counterpart, DouYin) spends a staggering 52 minutes per day on the app.

Also propelling its growth is the company’s massive marketing budget. TikTok spent $1 billon last year on advertising in the U.S., and is currently burning through around $3 million per day to get people onto their platform. One looming question for the China-based company is not whether Facebook will co-opt their features, but when.

Tyler Durden

Sat, 10/12/2019 - 23:20


Technology Internet
Business Finance

China's Modern Blueprint For Global Power

Authored by Lawrence Franklin via The Gatestone Institute,

The People's Republic of China, which celebrated its 70th anniversary on October 1, is led by the Chinese Communist Party's General Secretary, President Xi Jinping. In his speeches, Xi often refers to "Qiang Zhong Gwo Meng" ("the Chinese dream"), a code phrase for the era of rejuvenation when China will eventually overta

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ke the United States as the most powerful nation in the world.

Xi claims that China offers the world a different type of rising global leader -- a "guiding power."

Beijing apologists depict China as a non-predatory power, comparing it favorably to Europe's colonial countries in the past and to today's United States.

Similarly, the state-controlled Chinese media depict Chinese statecraft as being based on and reflecting ancient Confucian ethics:

Only when things are investigated is knowledge extended; only when knowledge is extended are thoughts sincere; only when thoughts are sincere are minds rectified; only when minds are rectified are the characters of persons cultivated; only when character is cultivated are our families regulated; only when families are regulated are states well governed; only when states are well governed is there peace in the world.

This portrayal is part of China's traditional self-image as "Jungwo" (the "Middle Kingdom"), a society synonymous with "civilization," as opposed to the "barbarians" beyond its borders. Such was the impetus for China's Great Wall: to keep out uncultured barbarians.

In spite of China's pretense of being a new type of global power, Beijing's attempt to restore its historical role as a world leader involves ancient Chinese political concepts. Xi's call for China's "rejuvenation," for instance, is a signal to his people that under the leadership of the Communist Party, the national humiliations endured during the 19th and 20th centuries will be redressed.

Xi's nationalist sentiment echoes the ideas of Sun Yat-sen, the "founding father" and first president of the Chinese Republic. Sun called for the embrace of "Min-ts'u" ("people's nationalism") to redeem the nation from its status as a "hypo-colony" ruled by many colonial masters, including tiny Portugal, which dominated the South China Sea.

Xi's doctrine includes rejecting as illegitimate any "unequal treaties" forced on China by Euro-Atlantic powers, such as Great Britain's imposition of the McMahon Line, which awarded to the British Crown Colony of India hundreds of thousands of square kilometers of Chinese territory. China never recognized the McMahon Line; it was among the factors ultimately leading to an India-China War in 1962 and periodic skirmishes ever since.

This determination to retrieve Chinese territory might be rooted in Xi's sense of humiliation, still felt among Chinese patriots of all political persuasions, who harbor an enduring resentment over such Euro-Atlantic encroachment.

Xi's posture is also possibly an indirect warning to the West, which may be harboring a desire to assist the people of Hong Kong in their drive for more autonomy from Beijing. This warning underscores the willingness of the Chinese Communist leadership to engage the United States in a limited military conflict, should the US support Hong Kong's or Taiwan's official independence from China or if it positions offensive strategic-weapons systems on those lands.

In his essay, "If You Want Peace Prepare for War" -- using the famous quote from the ancient Roman strategist, Publius Flavius Renatus -- Chinese author Li Mingfu states that if the US attempts to block the Chinese Motherland's unification with Taiwan, China is ready militarily to force unification.

There can be little doubt that Xi's China is deeply committed to the retrieval of Formosa (Taiwan) as an integral part of the Chinese patrimony. Historically, China risked war with Japan after Japanese expeditions to the island province. China also has resisted past attempts by Britain to weaken its hold on Tibet. Moreover, despite fierce resistance to Russia's 19th century invasions in the northwestern province of Xinjiang (Sinkiang), China lost control of the region. That event also might help to explain for China's willingness to invite universal condemnation for its massive human-rights violations against the region's Uighur Muslim population, rather than risk again losing control of the province to Islamist independence movements.

Chinese military exercises, new weapons systems and the surreptitious militarization of several landfill and disputed islands in the South China Sea, all indicate that Beijing intends to become -- at the very least -- East Asia's dominant regional power, thereby supplanting the US as the pre-eminent authority in the Western Pacific Ocean. According to one American analyst on Chinese military affairs, in 2018 alone, China conducted approximately 100 military exercises with 17 countries.

In recent years, the Chinese Navy has been demonstrating better precision targeting by its anti-ship missile system, the presumed targets being US aircraft carriers. The Chinese Air Force now utilizes runways built on some of the disputed islands, and has also landed heavy bombers there.

In addition, the Chinese also have deployed anti-ship missiles and jet fighter planes on disputed islands. These developments suggest that in the event of a crisis or conflict with the West and its Asian allies, the Chinese Communist Party's Military Commission is planning to leapfrog any possible Free World strategy to confine China's naval and air assets to the Chinese mainland.

China's economic model, according to which a socialist regime will for the first time surpass the world's greatest capitalist enterprise, also has historical roots. For millennia, China was the premier power in Asia, if not the world. During that time, China's diplomacy centered on the "Tributary System," whereby regional states recognized the superiority of Chinese Civilization."

Many of China's neighboring states, such as Annam (Northern Vietnam), Korea and even Japan, for a period, rendered an annual tribute to the Chinese imperial court, acknowledging the imperial dynasty's august standing under heaven. The emperor's dynastic administration would in turn provide generous support for compliant neighboring countries. Xi's Belt and Road Initiative bears some -- dubious -- resemblance to the tributary system of dynastic China. This initiative has China providing the income and expertise to build the logistical infrastructure of a recipient nation, which in turn imports Chinese goods and services employing that new infrastructure. Worse, however, China lends countries money; then when the country cannot repay the debt, China helps itself to resources or infrastructure or whatever, in a "debt-trap."

To date, it appears that the strategic objective of China to establish regional primacy in the Western Pacific, and possibly in Asia, is militarily, politically and economically achievable. The world, however, is no longer under any illusions about China's acquisitive intent.

US President Donald J. Trump also indicated recently -- during his September 24 address to the UN General Assembly -- that America harbors no illusions about China's unbridled ambitions.

Trump said, in part:

"In 2001, China was admitted to the World Trade Organization. Our leaders then argued that this decision would compel China to liberalize its economy and strengthen protections to provide things that were unacceptable to us, and for private property and for the rule of law. Two decades later, this theory has been tested and proven completely wrong.

"Not only has China declined to adopt promised reforms, it has embraced an economic model dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping, forced technology transfers, and the theft of intellectual property and also trade secrets on a grand scale...

"For years, these abuses were tolerated, ignored, or even encouraged. Globalism exerted a religious pull over past leaders, causing them to ignore their own national interests.

"But as far as America is concerned, those days are over. To confront these unfair practices, I placed massive tariffs on more than $500 billion worth of Chinese-made goods. Already, as a result of these tariffs, supply chains are relocating back to America and to other nations, and billions of dollars are being paid to our Treasury.

"The American people are absolutely committed to restoring balance to our relationship with China. Hopefully, we can reach an agreement that would be beneficial for both countries...

"As we endeavor to stabilize our relationship, we're also carefully monitoring the situation in Hong Kong. The world fully expects that the Chinese government will honor its binding treaty, made with the British and registered with the United Nations, in which China commits to protect Hong Kong's freedom, legal system, and democratic ways of life. How China chooses to handle the situation will say a great deal about its role in the world in the future..."

It is imperative for the administration in Washington to continue to exert maximum pressure on Beijing, to prevent China's hegemonic aims being realized.

*  *  *

Dr. Lawrence A. Franklin was the Iran Desk Officer for Secretary of Defense Rumsfeld. He also served on active duty with the U.S. Army and as a Colonel in the Air Force Reserve.

Tyler Durden

Sat, 10/12/2019 - 23:50



Retail Investors Are Acting As If A Financial Crisis Is Just Around The Corner

While algos continue to zig and zag, daytraing the barrage of optimistic and pessimistic US-China trade deal headlines, and stock buybacks are set for another record, with a recent report finding that cumulative buybacks YTD are already up +20% YoY compared to 2018 which was already a record year for stock buybacks...

... while insiders quietly dump

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stock, selling an estimated $26BN of their own stock in 2019, the fastest pace since the year 2000, when executives sold $37bn of stock amid the giddy highs of the dotcom bubble...

... retail investors are acting as if a financial crisis is just around the corner.

A recent report by Bank of America found that retail investors haven't been this bearish since the collapse of Lehman. The bank looked at money market fund flows, which attracted a near record $322 billion in the past 6 months, the largest since the second half of 2008 when the global financial crisis was unleashed.

As BofA explains, this means that instead of putting their money to work, investors are doing the opposite and raising cash at a furious pace, expecting a market crash, even though - just like in like 2007 and 08 - rates are now falling, while the S&P 500 put-call ratio has soared to the highest since April 10.

One explanation according to BofA's chief investment strategist, Michael Hartnett, is that investors are suffering from “bearish paralysis,” driven by unresolved issues such as the trade war, Brexit, the Trump impeachment investigation and recession fears. Underscoring this point, in the week ending Oct. 9, investors continued to aggressively exit equity funds globally, with outflows reaching $9.8 billion according to EPFR data, while allocating cash to safe havens, with bond funds enjoying $11.1 billion of inflows.

Picking up on this there, JPMorgan's Nick Panagirtzoglou writes that the bearishness of retail investors with respect to equity funds has been getting progressively worse during the course of 2019, which as captured in the chart below, shows that retail investors globally sold more equity funds in Q3 vs. Q2 and in Q2 vs. Q1.

To the extent that this growing equity fund selling is indicative of retail investors’ confidence, or lack thereof, the JPM strategist writes that "the picture above points to waning consumer confidence reinforcing the message from the negative trend in the economic measure of Figure 3" which shows that after peaking in 2017, consumer confidence has stumbled and is now at 3 year lows.

Such diminishing consumer confidence would naturally raise further expectations of recession by both economists and markets given the key role the consumer is playing in gauging recession risks.

Indeed, the release of the October 2019 Blue Chip Economic Indicators survey which every month presents economists’ forecasts for the US economy, showed a rise in the average probability of a US recession taking place in 2020 to 39%, surpassing the previous high recorded in the February 2019 survey. This 39% probability is also the highest for this cycle. This is shown in the next chart, which depicts the probability of a US recession taking place in different years based on successive Blue Chip Economic Indicators monthly surveys conducted since 2017. There has been an upward shift in the recession probabilities pattern after each successive year and the current 39% US recession probability represents the highest reading for this cycle.

What to the JPM strategist is also striking is that in the Blue Chip Economic Indicators surveys, the probabilities of a US recession taking place in 2020 based on the monthly surveys conducted during the course of 2019 are significantly higher that the probabilities of a US recession taking place in 2008 based on the monthly surveys conducted during the course of 2007.

In other words, according to at least one measure, what is coming will be even worse compared to the financial crisis - after all, this time economists see what's coming; that nobody is acting on it yet, is a different matter.

As Panigirtzoglou recounts, a decade ago, "we had to wait until the December 2007 survey for the probability of a US recession taking place in 2008 to approach 40% and it was only with the February 2008 survey conducted, after the 2008 recession had started, that this probability went above 50%."

Which again brings us back to fund flows, as a proxy of consumer confidence. 

As JPM notes, "the vast majority of the fund universe in the world is owned by households or retail investors. And retail investors’ behavior in the fund space this year has the hallmarks of late cycle investing with outflows from equity funds and inflows into bond funds."

As the next chart shows, the last time we saw such strong outflows from equity funds was during 2008! Admittedly Figure 4 shows that during 2008 we had seen outflows from bond funds also, in contrast to the strong bond fund inflows seen this year. But the difference is less significant than appears in the chart below, as the bond fund outflows at the time had mostly taken place post Lehman crisis once credit spreads rose to unprecedented levels post September 2008

But, Panigirtzoglou asks, "what if this selling of equity funds does not reflect fears of a recession or late cycle dynamics but rebalancing, i.e. an effort by retail investors to prevent their equity weighting from rising too much given the strong 15% rally in global equities YTD."

Indeed the equity share in the fund universe has been hovering at pretty high levels by historical standards since the end of 2017. This equity share is proxied by the AUM of equity funds plus the equity holdings of hybrid funds divided by the sum of the AUM of equity, bond, hybrid and money market funds. And it could be considered as a proxy of how overweight equities retail investors are as shown in Figure 6 (since 1996 for US domiciled funds and since 2005 globally).

As JPM further notes, this equity fund share has exhibited mean reversion since the mid-1990s. It had increased sharply in the five years to 2017 as a result of the equity rally, with most of the increase taking place during 2013 and during 2017. The metrics in Figure 6 declined sharply during the equity market correction of Q4 2018 but all of this decline reversed in the first quarter of this year shifting retail investors to very overweight territory.

As a result, at 59% currently at a global level, retail investors are entering the fourth quarter of this year at a similar equity overweight position to the record high of the end of 2017. For US domiciled investors, the equity share is currently somewhat lower than the record high of 63% seen at the end of 2017. But at 61% this equity share is still pretty high by historical standards and equal to the previous cycle peaks of 1999 and 2006.

In other words, even if they aren't dumping stocks because they fear a financial crisis, retail investors appear to be very overweight equities at the moment given the strong 15% rally in global equities this year. So it is possible to view their growing equity fund selling this year as an effort by retail investors to rebalance and prevent their equity weighting from rising too much rather than as a reflection of waning confidence or increasing fear of recession.

This, however, is also not good news, because even if this alternative "rebalancing" hypothesis is correct, it implies that the equity weighting of the household sector has peaked and thus retail investors are likely to limit any equity market upside from here. Therefore, as JPM concludes, "this alternative hypothesis has rather negative implications for equity markets also" asretail investors could act as a drag on equity market upside from here even if consumer confidence improves.

In conclusion, even an optimistic read of the ongoing liquidation by retail investors "poses a challenge to the bullish equity market thesis emerging from this week's positive news on US-China trade negotiations and Brexit" Panigirtzoglou concludes, because any upside from this week’s news could be constrained by retail investors trying to prevent their equity overweights from rising too much.

Tyler Durden

Sat, 10/12/2019 - 21:20


Business Finance

Will American Exceptionalism Rise Again?

Authored by Richard Moser via Counterpunch.org,

American Exceptionalism remains one of the innermost ideas shaping our national identity and still lies behind all of the war stories used to justify US foreign policy. Exceptionalism has been a part of American culture since the very first European settlers landed.

At its core, exceptio

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nalism places America outside of normal history into a category of its own. Our initial “escape” from history followed two interrelated tracks: one was the religious radicalism of the Puritans, the other was the frontier experience. Both paths were the warpath.

The early settlers believed that they were “chosen” — blessed by a special relationship to their God. They viewed their “errand in the wilderness” as a holy mission destined to bring a new and better way of life to the world. God’s judgment on their progress was revealed in the bounty of a harvest or the outcome of a war.

Exceptionalism was not a free-floating idea but was forged into a lasting culture by the frontier wars aimed at the elimination or assimilation of native people and the conquest of land. America’s frontier history produced a lasting mythology that popularized empire and white settler culture while cloaking their many contradictions.

I know it is hard to believe that the Puritans are still camped out in our minds. The old religious radicalism has taken modern form in the liberal-sounding belief that the US military is a “force for good (read God) in the world.” The double-edged sword of exceptionalism traps us into repeating history: our high moral standards and special role in the world gives us license for wars and aggressions. It is the liberal elements of exceptionalism that are most seductive, most difficult to wrap our heads around, and the most effective at winning our consent to war.

Exceptionalism Wins Our Consent to War With A One-Two Punch

On the one hand, we have the “hard” exceptionalism like that of the Cold War (New and Old) and the War on Terrorism. These war stories revolve around a rigid binary of good and evil. After 9/11, in scores of speeches, George W. Bush repeated the mantra that there were “no gray areas” in the struggle between good and evil.

On the other hand, “soft” exceptionalism takes a slightly different tack by appealing to the liberal in us. Stories of rescue, protection, democracy and humanitarian efforts assure us of our goodness. Obama mastered this narrative by claiming the US had a “duty to protect” the weak and vulnerable in places like Libya.

These two strains of war stories are the narrative one-two punch, winning our consent to war and empire.

Here is how war propaganda works: if authority figures in government and media denounce foreign leaders or countries or immigrants as an evil threat and repeat it thousands of times, they do not even have to say, “We are the chosen people destined to bring light to the world.” They know that millions of Americans will unconsciously refer to the exceptionalist code by default because it’s so deeply embedded in our culture. Once made brave by our exceptional character and sense of superiority, the next moves are war, violence and white supremacy.

Myth Meets the American War in Vietnam

The Vietnam War, and the resistance to it, profoundly challenged all existing war stories. At the heart of this disruption was the soldier’s revolt. Thousands of US soldiers and veterans came to oppose the very war they fought in. An anti-war movement inside the military was totally unprecedented in US history. The war-makers have been scrambling to repair the damage ever since.

Following the defeat of US forces in Vietnam, the elites shifted gears. The idea that the US could create a new democratic nation — South Vietnam — was an utter illusion that no amount of fire-power could overcome. In truth, the US selected a series of petty tyrants to rule that could never win the allegiance of the Vietnamese people because they were the transparent puppets of American interests. The ruling class learned a lesson that forced them to abandon the liberal veneer of “nation-building.”

The Next Generation of War Stories: From “Noble Cause” to “Humanitarian War.” 

Ronald Regan tried to repair the damaged narratives by recasting the Vietnam War as a “Noble Cause.” The Noble Cause appealed to people hurt and confused by the US defeat,  as well as the unrepentant war-makers, because it attempted to restore the old good vs. evil narrative of exceptionalism. For Regan, America needed to rediscover its original mission as a “city on a hill” — a shining example to the world. Every single President since has repeated that faith.

The Noble Cause narrative was reproduced in numerous bad movies and dubious academic studies that tried to refight the war (and win this time!). Its primary function was to restore exceptionalism in the minds of the American people. While Regan succeeded to a considerable degree — as we can see in the pro-war policy of both corporate parties  — “nation-building” never recovered its power as a military strategy or war story.

The next facade was Clinton’s “humanitarian war.” Humanitarian war attempted to relight the liberal beacon by replacing the problems of nation-building with the paternalistic do-gooding of a superior culture and country. In effect, the imperialists recycled the 19th Century war story of “Manifest Destiny” or “White Man’s Burden.” That “burden” was the supposed duty of white people to lift lesser people up to the standards of western civilization — even if that required a lot of killing.

This kind of racist thinking legitimized the US overseas empire at its birth. Maybe it would work again in empires’ old age?

From the “War on Terrorism” to the “Responsibility to Protect.”  

After the shock of 9/11 the narrative shifted again. Bush’s “global war on terrorism” reactivated the good vs. evil framing of the Cold War. The “war on terror” was an incoherent military or political strategy except for its promise of forever wars.

Just as the Cold War was a “long twilight struggle” against an elusive but ruthless communist enemy, terrorists might be anywhere and everywhere and do anything. And, like the fight against communism, the war on terrorism would require the US to wage aggressive wars, launch preemptive strikes, use covert activities and dodge both international law and the US Constitution.

9/11 also tapped into deeply-rooted nationalistic and patriotic desires among everyday people to protect and serve their country. The first attack on US soil in modern memory powerfully restored the old binary: when faced with unspeakable evil, the US military became a “force for good in the world.” It’s easy to forget just how potent the combination is and how it led us into the War in Iraq. According to The Washington Post:

Nearing the second anniversary of the Sept. 11, 2001, terrorist attacks, seven in 10 Americans continue to believe that Iraq’s Saddam Hussein had a role in the attacks, even though the Bush administration and congressional investigators say they have no evidence of this.

The mythology is so deep that at first the people, soldiers especially, just had to believe there was a good reason to attack Iraq. So we fell back on exceptionalism despite the total absence of evidence. Of course Bush made no attempt to correct this misinformation. The myth served him too well — as did the official propaganda campaign claiming Iraq had weapons of mass destruction.

But in due course, some of the faithful became doubters. A peace movement of global proportions took shape. But in the US far too much of what appeared as resistance was driven by narrow partisan opposition to Republicans rather than principled opposition to war and empire.

But fear not war-makers — Barack Obama and Hillary Clinton came to the rescue! As they continued Bush’s wars in the Middle East and expanded the war zone to include Libya, Syria and then all of Africa, they sweetened “humanitarian war” with a heaping dose of cool-coated “Responsibility to Protect.” Once again, American goodness and innocence made the medicine go down and our wars raged on.

Obama restored legitimacy to the empire so effectively that it took years for the illegal, immoral, racist and “unwinnable” wars to reveal themselves to the public. I was told by one of the leaders of About Face: Veterans Against War that they almost had to close shop after Obama was elected because their donor base dried up. Obama’s hope was our dope. Just as the daze was finally lifting, Trump started to take the mask off.

Is The Mask Off?

Today’s we face an empire with the mask half off. Trump’s doctrine — “We are not nation-building again, we are killing terrorists.” — is a revealing take on military trends that began with the first US – Afghan War (1978-1992). US leaders gave up nation-building and opted for failed states and political chaos instead of the strong states that nation-building, or its illusion, required. The US military began to rely on mercenaries and terrorists to replace the American citizen-soldier. The soldier revolt of the Vietnam Era already proved that everyday Americans were an unreliable force to achieve imperial ambitions.

Nothing rips the mask off of the humanitarian justifications better than the actual experience of combat in a war for oil and power — so the war managers tried to reduce combat exposure to a few. And they succeeded. The number of official US troops abroad reached a 60-year low by 2017. Even still a new resistance movement of veterans is gathering steam.

Can the mask be put back on? It’s hard to say, because as The Nation reports, Americans from a wide spectrum of political positions are tired of perpetual war.

Can the “Green New Military” Put The Mask Back On? 

The recycled imperial justifications of the past are losing their power: Manifest Destiny, White Mans’ Burden, leader of the free world, nation-building, humanitarian war, war against terrorism, responsibility to protect — what’s next? If only the military could be seen as saviors once again.

A last-ditch effort to postpone the collapse of the liberal versions of war stories might just be the “Green New Military.” Elizabeth Warren’s policy claims, “Our military can help lead the fight in combating climate change.” It’s a wild claim that contradicts all evidence unless she is also calling for an end to regime-change wars, the New Cold War and the scaling down of our foreign bases. Instead, Warren is all about combat readiness. She did not invent this — the Pentagon had already embraced the new rhetoric. Given that the Working Families Party and some influential progressives have already signaled their willingness to accept Warren as a candidate, she might just silence dissent as effectively as Obama once did.

But, the lie is paper-thin: “There is no such thing as a Green War.” You can fool some of the people all the time and all the people some of the time but you cannot fool mother nature one little bit. War and climate change are deeply connected and ultimately there is no way to hide that.

The New Cold War and More of The Same Old Wars

So far the New Cold War against Russia and China has recycled the anti-communist conspiracy of the old Cold War into the xenophobic conspiracy theory of Russia-gate. Even a trusted tool like Mueller could not make it work as a coherent narrative but no matter — the US did not skip a beat in building up military bases on Russia’s borders.

The media and political attacks on Russia or China or immigrants, or Iran or Syria are likely to continue because propagandists cannot activate the exceptionalist code without an evil enemy. Still, it takes more than evil. An effective war story for the US ruling class must project the liberal ideas of helping, protection, saving and the spread of democracy in order to engineer mass consent to war. Hence the need for “Humanitarian War,” “Duty to Protect” or maybe the”Green New Military.”

Let anyone propose a retreat from any battlefield and the “humanitarian” war cry will rally the empire’s pawns and savior-types. If we practice our exceptionalism religiously — and religion it is — then the US empire will never ever pull back from any war at any time. There is always someone for the empire to “protect and save:” from the “Noble Savages” and innocent white settlers of the frontier, to the Vietnamese Catholics, to the women of Afghanistan, to the Kurds of Syria.

We so want to see our wars as a morality play, just as the Puritans did, but the empire is all about power and profit.

“War is the Continuation of Politics by Other Means.” — Carl von Clausewitz

All the Big Brass study Clausewitz because he is the founder of western military science — but they are so blinded by the dilemmas of empire that they make a mess of his central teaching: War is politics.

None of the war narratives and none of the wars can solve the most important question of politics: governance. Who will govern the colonies? The overwhelming verdict of history is this: colonies cannot be democratically or humanely governed as long as they are colonies. Until the empire retreats its heavy hand will rule in places like Afghanistan.

The empire is reaching the limits of exceptionalism as both war narrative and national mythology. This is why our rulers are forced to desperate measures: perpetual war, occupation, intense propaganda campaigns like Russia-gate, the reliance on mercenaries and terrorists, and the abuse and betrayal of their own soldiers.

Just as damning to the war machine is the collapse of conventional ideas about victory and defeat. The US military can no longer “win.” The question of victory is important on a deep cultural level. According to the original mythology, the outcome of wars waged by “the chosen people” are an indication of God’s favor or disfavor. In modern terms, defeat delegitimizes the state. Endless war is no substitute for “victory.”

But it’s not military victory we want. Our victory will be in ending war, dismantling the empire, abolishing the vast militarized penal system and stopping irreparable climate chaos. Our resistance will create a new narrative but it can only be written when millions of people become the authors of their own history.

The empire is slipping into decline and chaos – one way or another. Will we be actors deciding the fate of the American Empire or will it’s collapse dictate our fate? But these wars will, sooner or later, become the graveyard of empire — or else America is truly exceptional and we really are God’s chosen people.

Tyler Durden

Sat, 10/12/2019 - 21:50


War Conflict

National Security Council Gutted As Establishment Loyalists Undermine Trump

One week after President Trump ordered a serious reduction in staff at the National Security Council, National security adviser Robert O'Brien has announced the size and scope of the cuts, promotions, and other organizational matters following the departure of John Bolton. 

Speaking at a late Thursday town hall event, O'Brien said he's

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aiming to eliminate approximately half of the 178 staff members at the NSC over the next 15 monts, according to PBS  -while Politico has the details on promotions. 

The latest changes include two promotions and one departure, a senior Trump administration official confirmed on Friday. Kevin Harrington, who had been senior director for strategic planning, will now serve as strategic counselor to O’Brien. Also moving up is Victoria Coates, a former adviser to Republican Sen. Ted Cruz who has been serving as the NSC’s senior director for the Middle East.

Harrington is one of the longest-serving officials to serve at the NSC under President Donald Trump. He’s a former investment-fund manager and longtime associate of venture capitalist Peter Thiel. The senior administration official said Harrington’s directorate will be eliminated, but that he and his team will serve as a mini-think tank for O’Brien. -Politico

O'Brien, John Bolton's successor, framed the cuts as a return to prior staffing levels after the headcount grew from around 100 people under President George W. Bush to over 200 during the Obama administration. 

"It just ballooned into a massive, you know, bureaucracy … under the last administration," O'Brien told the Fox Business Network's Lou Dobbs. 

News of the NSC headcount reduction comes amid a national whistleblower scandal in which a CIA officer working at the NSC, who used to work with former Vice President Joe Biden, approached the House Intelligence Committee to lodge a complaint against President Trump for 'pressuring' Ukraine into investigating alleged corruption by Biden and his son Hunter. 

An actual reading of the transcript unexpectedly released by Trump revealed no such pressure - just a simple request.

Of course, a senior administration official insisted on Friday "that the cuts were not related to the leaks," and that the staff reduction would be accomplished through attrition by not replacing people as they finish their assignments at the White House," PBS reports. 

A former staffer said there are a few areas of NSC that could be trimmed, but that some current staff members already work 60 to 70 hours a week and they worry that the job of providing the president with national security policy options will diminish as the unit shrinks. The staffer spoke on condition of anonymity to discuss the staff reductions announced at the closed-door town hall meeting. -PBS

Meanwhile, Bloomberg reported last week that some in the White House believed the NSC was leaking information that would benefit John Bolton.

Some might say a little housekeeping was overdue.

Tyler Durden

Sat, 10/12/2019 - 19:20



The "Safe Drivers Act" Is A Real-Time National Driver Surveillance Program

Via MassPrivateI blog,

A new Senate bill would create a real-time national driver surveillance program that would allow law enforcement to know anything and everything about a driver at the click of a button.

A recent article in WCVB Channel 5 revealed that the “Safe Drivers Act” is designed for one p

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urpose and that is to share everything a motorist has ever done with law enforcement nationwide.

Outside the Danvers branch of the Registry of Motor Vehicles on Tuesday, Congressman Seth Moulton publicly announced legislation he’s filed in hopes of making it easier for traffic safety officials to share information about drivers across state lines.

How Moulton plans to make it easier to share drivers’ personal information with law enforcement across the country is frightening.

The ultimate goal of the bill is to help lead to the creation of a national, real-time data sharing program, Moulton’s office said.

Apparently, knowing a driver’s Social Security Number, address, date of birth, checking their driving record and running their name against a national criminal database is not enough.

There are few places in America that do not use Automatic License Plate Readers to track our every movement and even that does not appear to be enough for Big Brother’s insatiable desire to know everything about everyone.

The Salem News revealed that the bill would “incentivize states” into creating a national real-time driver sharing program.

Moulton said, “the goal is to incentivize states to modernize their systems and work together to make sure their databases are compatible to improve communication on dangerous drivers.”

WCVB Channel 5 explains how the U.S. DOT would offer states more than $50 million to help create a national real-time data sharing program.

Moulton’s bill would also create a $50 million competitive grant program that would allow states to bid for additional grant money and would enable the U.S. Department of Transportation to connect states that have similar modernization needs.

One has to ask, why would states need bribes grant money to help create a national driver surveillance program?

According to The Salem News, this bill would also give law enforcement, real-time alerts of every driver.

Massachusetts Governor Charlie Baker has also called for the creation of a nationwide system to alert states when one of their drivers incurs a violation that could trigger a suspension in another jurisdiction.

Will Amber Alerts become a thing of the past? Because this bill would give law enforcement real-time alerts about every driver.

I wonder if they will be called Bad Driver alerts?


H.R. 4531 would also give law enforcement access to videos of accidents a driver was involved in and much more.

Developing or acquiring programs to identify, collect, and report data to State and local government agencies, and enter data, including crash, citation or adjudication, driver, emergency medical services or injury surveillance system, roadway, and vehicle, into the core highway safety databases of a State.

Collecting and storing court judgments of any auto accident a motorist has been involved in will give law enforcement unprecedented access to a motorist’s driving records.

It would link core highway safety databases of a State with such databases of other States or with other data systems within the State, including systems that contain medical, roadway, and economic data.

Calling this a national, real-time data sharing program really doesn’t do it justice. It should be renamed and called a real-time national driver surveillance program.

You can bet that this bill will be modified to monitor motorists in ways that we haven’t dreamed of yet, making the “Safe Drivers Act” even more of a privacy nightmare.

By storing and tracking everything a motorist has ever been involved in, we are turning every driver into a suspected criminal, and that scares the you-know-what out of me.

Americans do not need or want another national surveillance program. We already have a national ID program called Real-ID, which gives law enforcement an unprecedented look into everyone’s personal lives.

Tyler Durden

Sat, 10/12/2019 - 19:50


Disaster Accident
Law Crime

Locked Up: How The Modern Prison-Industrial Complex Puts So Many Americans In Jail

Via Ammo.com,

"Where you find the laws most numerous, there you will find also the greatest injustice."

- Arcesilaus, Greek philosopher and student of Plato on power and personal sovereignty

There’s no two ways about it: The United States of

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America and its 50 state governments love putting people in prison.

The U.S. has both the highest number of prisoners and the highest per capita incarceration rate in the modern world at 655 adults per 100,000. (It’s worth noting that China’s incarceration statistics are dubious, and they execute far more people than the United States. Indeed, the so-called People’s Republic executes more people annually than the rest of the world combined.)  Still, that’s more than 2.2 million Americans in state and federal prisons as well as county jails.

On top of those currently serving time, 4.7 million Americans were on parole in 2016, or about one in 56. These numbers do not include people on probation, which raises the number to one in 35. Nor does it include all of the Americans who have been arrested at one time or another, which is over 70 million – more than the population of France.

For firearm owners in particular, the growth in this “prison-industrial complex” is troubling because felons are forbidden from owning firearms and ammunition under the 1968 Gun Control Act. As the number of laws has grown and the cultural shift for police has gone from a focus on keeping the peace to enforcing the law, more and more Americans are being stripped of their 2nd Amendment rights (not to mention other civil rights like voting – as of 2017, 6.1 million Americans cannot vote because of their criminal records). All told, eight percent of all Americans cannot own firearms because of a felony conviction.

For American society as a whole, the prison-industrial complex has created a perverse incentive structure. Bad laws drive out respect for good laws because there are just so many laws (not to mention rules, regulations, and other prohibitions used by federal prosecutors to pin crimes on just about anyone). How did we get here?

History of Incarceration in the U.S.

United States law is, of course, based on English common law. Thus, no history of incarceration in the United States can start without first discussing the history of incarceration in the Kingdom of England and later the United Kingdom of Great Britain.

The prevailing notion of where crime came from in the old country and the colonies was idleness. Punishments often involved sending criminals to workhouses, which were quite distinct from the prisons we know today. Rehabilitation and reform weren’t strong currents in the English and later British penal system until the 1700s. Reformers sought to improve the criminal and to make him not want to offend.

Another historical fact worth noting is that incarceration is a relatively recent innovation in punishment. Historically, criminals were punished by shaming, corporal punishment, mutilation, exile and death. The purpose was generally not to make the criminal better, but to deter him from offending again while simultaneously providing the community with some awareness of his crimes for the purpose of allowing them to take measures to protect themselves (for example, branding a “B” on the forehead of a burglar). Where criminals were incarcerated, it was generally a temporary measure prior to trial or post-trial punishment, not a punishment in and of itself.

Remember, a significant portion of early American settlers were convict laborers. This convict labor was not incarcerated, but rather freely mingled with the general population. For the safety of the non-criminal elements, they had to be quickly and easily identified. However, the early American colonies were in no position to expend resources to house, feed and clothe criminals who were not providing productive labor – which is why incarceration made about as much sense as cutting off a criminal’s hand. Only four types of criminals were prohibited from being shipped across the ocean from England: murderers, rapists, burglars, and witches.

Prison became the primary means of punishment for felonies in the years leading up to the American Revolution. Two systems emerged: One where prisoners were incarcerated alone and another where they were incarcerated in groups. For what it’s worth, most prisons were in the North. Throughout the South, crime was largely viewed as a northern problem. Rather than prison, the Antebellum South relied heavily on extra-judicial violence and honor culture to keep their crime rates low.

Prison labor has been a feature of prisons going back to days of English and British colonial rule. However, the convict lease system changed this qualitatively in the late 1880s. This is when prisons began to be paid for the labor of their convicts. Many times, convicts were put to work on plantations. Building railroads and coal mining were other common uses of convict labor during this period. Death rates were high. In Alabama, a full 40 percent of convicts used for leased labor died in 1870.

The convict lease system gradually died out. However, it was replaced with systems not terribly distinct from convict labor. The chain gangs and prison farms closely identified with southern punishment throughout the 20th Century are examples of what began to replace the convict lease system. While there were rumblings about bringing back the chain gang system in the 1990s, it never amounted to much.

Overcriminalization = Less Civil Liberties

One of the fundamental principles underpinning our Constitutional republic is that the citizenry should not accept “trust me” as an answer from the federal government. Yet in one of our most Orwellian of federal departments – the Department of Homeland Security – a surveillance state is growing as our private information “trusted” to the government is used against us.

This surveillance state is made possible by Fusion Centers, police intelligence agencies that allow different police agencies to share intelligence with one another. It is, in effect, the intelligence-gathering method of the burgeoning police state. And the information gathered, received, analyzed and disseminated by local and state police agencies is then shared with the federal government.

Fusion Centers aren't the only way police surveil citizens. Cell-site simulator devices – known as Stingrays – mimic wireless carrier cell towers to connect to nearby mobile phones and cell data devices. These controversial devices can extract data, intercept communications, conduct denial-of-serice attacks, find encryption keys, and more. It's a serious threat to Americans' privacy and civil liberties, first conceived during the War on Terror and now trickled down to local police departments and their militarized approach to enforcing the law.

Of course, while we’re assured that protections are being made for privacy and civil liberties, there is very little reason to trust the federal government – including the growing number of vague laws.

It’s easy to blame the War on Some Drugs as the reason for the explosion in the prison population, however this is simply not an adequate explanation. The real reason is a broad expansion in the total number of laws on the book and the vague manner in which they are written. What’s more, the concept of intent has largely disappeared from our national legal lexicon, meaning that simple mistakes are often enough to land a person in prison.

66-year-old George Norris provides a case study. He was greeted by three pickup trucks filled with six officers outfitted in flak jackets. He was held for four hours while the police searched his house, eventually seizing 37 boxes of his things with neither warrant nor explanation. He was indicted for orchid smuggling under the Convention on International Trade in Endangered Species and for (what else) making false statements to an officer for a simple paperwork error. While being held for trial, he shared a cell with an accused murderer. He was facing five years for the original charge and five years for conspiracy. Because he couldn’t afford his legal bills, he plead guilty and was sentenced to 17 months in prison.

Another broad example is civil-contempt imprisonment. This is where people are put in jail or prison for failure to, for example, respond to a bench warrant for an unpaid parking ticket. This is what Anthony W. Florence was arrested for while riding as a passenger in his family’s car with proof that he had paid the tickets. He spent seven days in jail where he was strip searched twice. Guards also watched him shower and subjected him to a delousing. People have also been imprisoned for failing to pay debts in accordance with court-ordered settlements, which carries the specter of the return of debtors’ prisons with it.

The Principle of Minimum Necessary Force

Minimum necessary force is a concept dating back to Plato, but has recently found expression in Dr. Jordan Peterson’s book 12 Rules for LifeBasically, the idea is that when someone wrongs another person, the correct course of action is always the one requiring the least force. This is why, for example, we can say that the Islamic practice of removing a thief’s hand is somehow objectively unethical – it is a punishment grossly out of proportion to the crime committed.

The secondary aspect to the principle of minimum necessary force is the notion that the best way to go about laws is to have as few as are necessary. While not strictly speaking “libertarian,” it’s sort of “libertarian adjacent.” Laws are, ultimately, a type of force. The more of them we have, the more force we have in society.

The present state of criminal justice in the United States violates both principles. Not only do we have far more laws than we need (criminal asset forfeiture, for example), but the punishments are frequently far out of sync with the crime committed. Is prison time really an appropriate response to someone smuggling orchids into the United States?

The Rise of Private Prisons

You cannot have a discussion on the prison-industrial complex without discussing private prisons. As of 2018, private prisons housed 8.41 percent of incarcerated persons in the United States. While private prisons date back to the colonial days, the modern privatized prisons as we think of them only date back to the 1980s. This was initially due to the explosion of prison population and resulting prison overcrowding that some have tied to the War on Some Drugs.

This spike in incarceration, however, is far more closely tied with the rise of private prisons. Between the years 1925 and 1980, the prison population in the United States remained constant as a proportion of the overall population. In 1983, however, two things happened: First, the first private prisons came into operation. Second, the prison population as a proportion of the overall population began to explode.

The first modern private incarceration company was Corrections Corporation of America (CCA), founded in 1983, and is currently known as CoreCivic. Their first contract was for a facility in Shelby County, Tennessee. This was the first time in American history when a government-run jail was contracted out to a private third party. The company made quick headlines when it offered to take over the entire prison system for the state for the sum of $200 million. The state, for its part, was quite ready to make a deal, but the backlash among the public, the prison guards union, and the state legislature ultimately squashed the deal.

This was hardly the end of the for-profit prison system. Fully 19 percent of all federal inmates are housed in privately owned and operated prisons. A comparatively lower 6.8 percent of all state inmates are housed in private prisons.

Since its founding, CoreCivic has seen a 200-percent increase in its profits. So it’s no surprise that the marketplace for private prison companies has become a bit crowded. Companies like the GEO Group, Inc. (formerly known as Wackenhut Securities), Management and Training Corporation (MTC), and Community Education Centers compete in a marketplace that took in $500 billion in 2011 alone according to Matt Taibbi’s book The Divide: American Injustice in the Age of the Wealth Gap.

The book further points out that major Wall Street money has flowed into this industry. Wells Fargo alone has $100 million invested in GEO Group and another $6 million in CCA. Fidelity Investments, The Vanguard Group, General Electric and Bank of America are likewise heavily invested in private prisons.

Some other numbers give a bit of shape to the scale of private prisons: CoreCivic has 80,000 beds in 65 different facilities. The GEO Group has 49,000 beds spread out over 57 correctional facilities. Most private facilities are in the West and the Southwest, where state and federal prisons freely mingle with one another.

Private Prisons Are Not Safe

Private prisons are, by virtually every metric, a worse place to hang your hat than government prisons. A United States Department of Justice report in 2016 found that private prisons were less secure, less safe, and more punitive than government-run prisons. The DOJ stated that it would cease the use of private prisons. However, soon thereafter, the Department of Homeland Security announced that it would renew its contract with CCA operation of the South Texas Family Residential Center, an immigration detention facility. Stock prices for private incarceration firms spiked upon the election of Donald Trump. President Trump’s Attorney General Jeff Sessions overturned the previous ban on private prisons.

The lax culture of safety and security in private prisons is not just a problem for the inmates. It’s also a problem for the people in the communities where the prisons are located. For example, three murderers escaped from a minimum/medium security prison – Kingman Arizona State Prison – in Mojave, Arizona. This resulted in a murder, robbery and carjacking before the men were captured. The state Attorney General, Terry Goddard, laid the blame at the feet of the private prison system, which he said was not adequate for the task of incarcerating these kinds of hardened criminals.

The state did an extensive report on this prison after the jailbreak, which found a number of problems with the privately-run prison:

  • The prison’s alarm system sent off so many false alarms that prison guards simply began ignoring them.

  • Eight of the floodlights used on the prison yard were burnt out.

  • Prison guards weren’t properly armed, nor were they properly trained with firearms.

  • 75 percent of all inmates in the facility did not have the appropriate identification.

While it’s certainly true that government-run prisons are far from perfect, and often have budgetary issues, it’s hard to ignore the potential corner-cutting that may have led to this escape and the subsequent deaths.

Then, of course, there was the “kids for cash” scandal. The short version of the story is that two judges in Pennsylvania were receiving kickbacks for sending children to private prison facilities. Millions of dollars were processed to the two judges for giving out prison time for such offenses as mocking an assistant principal on MySpace and trespassing in an abandoned building. The two judges were sentenced to a combined 45.5 years in prison. Every juvenile offender who appeared before the judges had their convictions overturned, and a class action lawsuit is currently pending.

Unsurprisingly, cost-benefit analysis of private prisons tend to have a “both sides” feel about them. Studies funded by the industry frequently tout the cost benefits of private operation. Studies funded by state-funded institutions, such as universities, tend to paint private prisons as bloated and inefficient.

Prison Guard Unions and Private Prisons Lobbying Elected Officials

Anywhere government money is being spent or the state is picking winners and losers, there you will find lobbying. Like the military-industrial complex, private prisons are no exception to this rule. The two largest private prison corporations have put more than $10 million into electing favorable candidates since 1989, and more than $25 million into lobbying.

Marco Rubio is an excellent example of the power of the private prison lobby. He has very close ties to the GEO Group, the second-largest for-profit prison company in the United States. GEO was the recipient of a state contract for a $110 million prison during Rubio’s tenure as the Speaker of the House in Florida. This right after Rubio hired an economic consultant with close ties to the company, which has donated nearly $40,000 to his various political campaigns as of 2015. This makes him the politician with the closest financial relationship to the private prisons industry.

The private incarceration industry has stepped up their lobbying game during the Trump Administration, with the GEO Group spending $1.3 million on lobbying between January and September 2017. That topped the total from the previous year, which was $1 million.

The timing of the increase in lobbying funds is worth considering. Immigration and Customs Enforcement (ICE) was looking to build five new detention centers at the time. Unsurprisingly, companies started lobbying hard to be the ones to build and operate these new facilities. That’s over 54,000 beds. What’s more, ICE is the number-one customer for the GEO Group, which is based in Florida.

Rubio is hardly the only politician to receive funding from private prison companies – which claim to never attempt to influence policy in any way other than trying to get contracts for private prison operation. Chuck Schumer has received over $100,000 in donations from both the GEO Group and CCA.

While private prison operations companies claim they do not attempt to influence public policy beyond trying to get those lucrative contracts, the same cannot be said for prison guard unions. The California prison guards union spent $100,000 in 1994 trying to get the three strikes law passed. This was the first of its kind, but quickly became the gold standard across the nation. 28 states have such laws as of 2018. The same union spent over $1 million to defeat Prop 5, which, if passed, would have reduced sentences for nonviolent crimes and created more drug addiction treatment resources in the state. Another $1 million was spent to defeat Prop 66, a measure designed to reduce the number of crimes carrying mandatory life sentences.

Modern Prison Labor

Because compulsory, unpaid prison labor is not prohibited by the United States Constitution, some have argued that prison labor is a continuation of chattel slavery.

However, prisoners are not owned by the state. What’s more, they are generally paid – albeit between $0.12 and $0.40 per hour. Prisoners, when taken as a whole, represent the third largest labor pool in the world. And while they engage in all kinds of labor, it tends to be manually intensive, low-skilled, deeply unpleasant and highly profitable for the corporations who are able to take advantage of it.

The days of prisoners making license plates and breaking rocks are long gone. Employers now receive a substantial tax credit ($2,400) for work-release labor. There’s even a euphemism for private companies who take advantage of prison labor – “Prison insourcing” – and it’s becoming increasingly popular with large firms. The list of organizations with significant prison labor include popular brands like Whole Foods, Target, Starbucks, Victoria's Secret, McDonald's, IBM, Honda, Texas Instruments, Boeing, Nordstrom, Intel, Aramark, AT&T, BP, Microsoft, Nike, Macy's, Wal-Mart and Sprint.

Prison labor is not without its benefits for the prisoners or for society at large. It can be a valuable outlet for prisoners, keeping them from getting into trouble and teaching them new skills. What’s more, many inmates have never had a legal job before. This means they have to learn the most basic aspects of holding down a job – like showing up on time, working with others as a team, and listening to instructions from a supervisor. Many studies show that prison employment leads to reduced recidivism rates.

While companies profit from prison labor, they’re also cleaning up in other ways. JPay, which began as a way to wire money to people on the inside, has seen rapid success with a monopoly on how prisoners’ friends and family can communicate with them inside some state prison systems. All told, JPay had contracts with 21 state correctional facility systems and a number of private facilities as of August 2018. With no paper mail allowed, JPay charges per electronic message – making the company millions, and making prisoners the ultimate captive audience.

The First Step Act: President Trump’s Prison Reform Bill

Few would have expected a Republican president to spearhead prison reform. Then again, President Trump isn’t just any Republican.

Overwhelmingly passed by the Senate – 87 to 12 – in December 2018, the First Step Act is the Trump Administration’s bipartisan victory to save money by reducing prison sentences. While some Republicans feared this vote would reflect as being soft on crime, Senate Judiciary Committee Chairman Sen. Charles E. Grassley stressed that Trump “wants to be tough on crime, but fair on crime.” Shortly after the vote, Trump tweeted that his “job is to fight for ALL citizens, even those who have made mistakes” and that this bill will “provide hope and a second chance, to those who earn it.”

The reform in this criminal justice bill is pretty significant. It reduces mandatory sentences, cutting a collective 53,000 years off existing sentences over the next 10 years. It creates sentencing disparity between powder and crack cocaine, and reduces recidivism rates. And it decreases the “three strikes” penalty for drug felonies from life to 25 years.

But not everyone thinks this reform bill is a "first step" in the right direction. Since it doesn’t apply to local jails or state prisons, those skeptical of this new legislation have pointed out that it only affects about 10 percent of the country’s incarcerated population – hardly a dent. Many also disagree with the fact that this bill will release high-risk inmates and offenders.

Libertarian magazine Reason is in favor of more reform. A 2016 article asked the question “Should Felons Get Their Gun Rights Back?” The argument is roughly the same as that of restoring voting rights to felons: Once people have served their time and been released, society assumes that the ledger has been balanced. If someone cannot be trusted to own firearms once they have been released from prison (presumably because they are dangerous), why are they out on the street and not in a cell?

For those interested in Second Amendment freedom, all of this is important. In a sense, the gun grabbers are getting through our prison-industrial complex what they cannot get through either the legislature or the courts – a disarmed populace.

Tyler Durden

Sat, 10/12/2019 - 18:50
'Not QE' Or 'NotQE' - Is Powell Playing Fed Games?

Authored by James Gorrie via The Epoch Times,

The Federal Reserve will be adding assets to its balance sheet again, but Powell insists it’s not “quantitative easing”...

Apparently, the “repo market” purchases by the Federal Reserve we discussed earlier this week —which don’t count as quantitative easing (QE)—were ju

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st the beginning of the new, non-quantitative easing but money printing period.

Fed “repos,” you may recall, are now necessary to boost weak overnight liquidity reserves of the big banks and don’t permanently expand the Fed’s balance sheet, unless they go on forever, in which case they would be QE. Now they are more of a short-term bail-out.

It’s Time for “Non-Quantitative Easing”

But in his Tuesday speech, Federal Reserve Chairman Jerome Powell explained that for the first time in five years, the “time is now upon us” for the Fed to resume buying U.S Treasury bills and bonds. That means that come November, the American economy will officially enter into another period of quantitative easing, you know, the Fed buying assets to expand its balance sheet.

Or not.

Typically, when the Federal Reserve buys Treasury assets, it’s because of weakness, either in the economy or in the financial system. A weakness that needs to be papered over by money printing, expanding the Fed’s balance sheet and bank reserves. Or the Fed buys other assets that nobody wants to buy at a decent price, like the purchases of mortgage backed securities (MBS) it conducted after the financial crisis.

Not so fast, says Powell. He insisted that there are perfectly good reasons, aside from weaknesses in the financial system, for the Federal Reserve to start printing again. And, he noted, even insisted, what the Federal Reserve will soon begin doing again is NOT quantitative easing.

For example, Powell said that the next round of asset purchases won’t really be the same as prior rounds because the rationale this time is to help maintain an appropriate level of reserves in the financial system. In other words, it’s more than just overnight liquidity that needs propping up. The whole financial system is running low on liquidity.

Almost as telling as the restart of the “non-quantitative easing” program is the way Powell engaged in semantic gymnastics to minimize and avoid using the term, or even evoke comparisons of the same. One would hope he did so for more than just the sake of ambiguity.

This Is QE

Just to clarify to our readers, this is what he is (not) talking about.

The Fed has the power to literally print money, either in paper or electronic form. Both currency in circulation (paper)  and reserves held at the Fed (bits and bytes) count as “base money,” of which banks need to hold a certain amount to satisfy regulatory requirements. They hold this either in their vaults (paper) or at the Fed (bits and bytes.) Since the Fed is the source of both paper and electronic money, it is counted as a liability on the Fed’s balance sheet.

But the Fed can’t just print that paper or bytes and give them to the banks without making another entry on the asset side of its balance sheet, which backs the currency the Fed prints. This is where the concept of asset purchases comes in because banks usually sell Treasury bonds (assets) to the Fed in exchange for the newly printed money. But it’s not just that, the Fed also has bought MBS before, as explained above, or holds other assets on its balance sheet, like gold, which it could also buy, but doesn’t want to

This is what the last round of QE looked like. Banks bought Treasuries from the Federal Government and the flipped it to the Fed in exchange for newly printed mostly electronic reserves. The Treasuries stayed on the Fed balance sheet permanently, hence the name permanent open market operations, and the whole balance sheet ballooned to around $4.5 trillion, whereas it was a few hundred billion before the crisis.

So anytime the Fed either directly or indirectly buys assets and holds them for longer period of time, this is money printing. Actually already the old QE term was already an obfuscation to lead people away from thinking the Fed is just printing money plain and simple.

In addition, this process also monetizes federal government debt, another no-no in orthodox monetary theory.

Only Good Economic News?

To bolster his point, Powell went on to note that although the short-term yield curve needs to be closely watched, vulnerabilities in the financial system remain moderate overall. He also said that continued economic expansion, a strong labor market and inflation near the Fed’s two percent target is the most likely outlook for the economy. In short, Powell sees no reason why economic expansion can’t continue.

But what about those weak reserve levels? What does that really mean for the health of the banking system and the overall health of the economy?

Powell reiterated that asset purchases for reserve building purposes should not be confused with quantitative easing, although quantitative easing does exactly that: build bank reserves and monetize government debt.

It is totally irrelevant as to why the Fed would think the banking system needs more reserves, or why it would think it needs to print more money. Money printing is money printing it doesn’t matter why you do it.

Getting Beyond the Word Games

But perhaps we should get beyond the word games.

Powell rightly pointed out that while the U.S. trade war with China, political unrest in the far East and political gridlock in the West as well as an overall cooling of the global economy are all relatively bad news. But overall U.S. economic figures are relatively strong. That’s true. The U.S. economy looks better than most in the world.

Powell also pointed out that new aspects of the economy, specifically in the digital economy, are not always accurately measured or understood as clearly as they need to be and thus could be providing “goods” the old statistics don’t capure.

That’s true as well. So why are we restarting that quantitative easing program again we last needed to keep the financial system from completely collapsing if the economy is doing so well? And why does Powell balk at calling the Fed’s new asset purchase policy quantitative easing?

The answer to the first question would appear to be that Powell is being proactive. The global economic slowdown combined with the record-breaking levels of new debt being issued by the federal government need enough dollars to keep the money flowing smoothly. Adding more debt than there is base money (bank reserves) or market willingness to buy is a recipe for failure.

Secondly, quantitative easing is a term loaded with negativity. Unlike political candidates on the left, Powell is wary about jawboning the economy into recession. He weighed his words carefully on Tuesday, if not entirely honestly.

Related to that, Powell is making a false distinction between liquidity weakness in the banking system and current economic strength. For the moment, such a distinction is possible but not plausible. Just as a fire at the bottom of a hill may be, for the moment, distinguishable from houses at the top, it’s possible but not plausible to separate the two in terms of threat and consequences. In both cases, the threats are real with predictable outcomes.

Quantitative Easing by any Other Name

Powell’s insistence to not refer to the Federal Reserve buying assets as not quantitative easing stretches the limits of credulity. At the same time, there is some merit to what he is doing. The Fed, after all, seems to want to act to prevent things falling apart and not react too late like it did the last time around.

Given those realities, Powell seems to be doing what he can to shape the viewpoint of the world, manage expectations, and keep the U.S. economy running. As he noted in his talk, “our job is to keep it there as long as possible.”

Considering the alternatives, this attitude might not be a bad thing, although the Fed is slowly but surely running out of credibility to sell to the markets.

Tyler Durden

Sat, 10/12/2019 - 17:50


Business Finance

It's All About The December Tariffs Now: "These Negotiations Look Much More Difficult Than Phase 1"

For all the breathless excitement unleashed by the Trump administration, what happened on Friday as part of "Phase 1" of the US-China trade deal, was rather underwhelming: the tariff increase scheduled to take effect on October 15 (from 25% to 30% on $250bn of imports) has been suspended, in return for greater Chinese purchases of US agricultural products (mostly s

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oybeans and pork, which China desperately needs anyway), as well as some vague currency transparency provisions, and greater Chinese market access for financial services firms. Specifically, as laid out earlier, in return for suspension of the October 15 US tariff increase, China appears to have agreed to:

  1. $40-50bn of purchases of US agriculture and agricultural policy changes,

  2. currency transparency, and

  3. opening market access for US financial services firms.

Additionally, while president Trump indicated that some progress was made on technology transfer, deal enforcement and intellectual property hinting that some aspects might be addressed in Phase 1, it appears that these key issue will be dealt with primarily in subsequent negotiations.

Yet even with this minimal list of actual accomplishments, Goldman notes that there is "still slight uncertainty regarding the details of the agreement" and adds that "the White House has indicated that the details of the deal will be written up over the next four weeks, with an expectation that the agreement would be signed by Presidents Trump and Xi at the APEC Summit in Santiago, Chile in mid-November." That said, given that the core aspects of "Phase 1" look fairly straightforward, there appears to be a fairly low risk that the deal - as it currently stands - falls through at this point.

To be sure, much of this was anticipated with most analysts expecting an extension of the October 15 tariffs, with the December tariff round the wildcard. It is here that things get more complicated.

Indeed, as Goldman's Alec Phillips writes, while the October 15 tariff increase may have been called off, "the White House has not committed to suspending the planned December 15 tariff round."

As a result, the outlook for that next tariff round depends on progress made in “Phase 2” talks, which will likely to take place in November. And since "Phase 2" , which Lighthizer described as as "down to final details", is expected to focus on far more problematic issues such as intellectual property and technology transfer issues, particularly with regard to enforcement of those reforms, Goldman cautions that "these negotiations nevertheless look like a much more difficult undertaking than the issues addressed in Phase 1." As such, while Trump - and the market - may have taken a victory lap, the real test will take place in about 2 months.

Putting all this together in practical terms, this is what Goldman believes will happen next:

At this point, we see a 60% chance that the announced 15% tariffs on List 4B will take effect, though a delay until early 2020 is likely in our view given the proximity of the December 15 deadline to the Christmas holiday. In light of the complexity of the issues in Phase 2, we would not expect a decision on the December 15 tariff round until shortly before the deadline. We also note that the December FOMC meeting will be held on December 10-11, and it looks more likely that if a tariff delay were agreed to, it would be more likely to be announced after the FOMC decision than before.

Finally, it's worth recalling that both previous ceasefire "deals" fall apart in a shorter time than the 2 months we have to wait until Phase 2, so for all those wondering why the market bought the rumor and sold the news...

... it likely has to do with the assumption that Friday's trade "deal" was as good as it will get.

Tyler Durden

Sat, 10/12/2019 - 15:20


Business Finance

The Joke's On You!

Authored by Doug “Uncola” Lynn via TheBurningPlatform.com,

This know also, that in the last days perilous times shall come. For men shall be lovers of their own selves, covetous, boasters, proud, blasphemers, disobedient to parents, unthankful, unholy, without natural affection, trucebreakers, false accusers, incontinent, fierce, despisers of those that are good, traitors, heady, highminded, love

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rs of pleasures more than lovers of God…

– 2 Timothy 3:1-4

As an internet writer seeking common ground, or, rather, a mutual base frame of reference with the readers, I’ll often use widely disseminated resources in order to inspire contemplation and conversation. Obviously, these sources would include movies and books.  So, with that in mind, I recently took advantage of $5 Tuesdays at a theater near me and saw “Joker”.   The antagonist of the film, of course, is Batman’s old arch nemesis, “The Joker”.

The movie was epic comic book fare – but also realistically familiar at the same time.  And this is understandable given the renowned infamy of the DC Comics super-villain.  But there were also more current, and grounded, correlations too.

The actor Joaquin Phoenix’s portrayal of the Joker’s descent from mental illness to evil was sublime, and he’ll very likely be nominated for an Oscar.  I, personally, found the socially awkward scenes to be more cringe-worthy than the blood and guts; and both, seemingly, have appeared right on schedule for the congressional debate on red flag legislation.

In any event, Joker was a disturbing film. And I was riveted.


As stated heretofore, there were many parallels in “Joker” corresponding to our current times. In fact, other than the time-stamped set design and props, the chaos in the streets of Gotham City looked like they could have been filmed in the aftermath of the 2020 election.

Phoenix’s artistic rendering of the Joker agonizingly revealed the suffering of someone mentally ill and lost to the system.  What was actually lost, however, was the main character’s normal view of reality.  Due to a disturbed mind and horrifically abusive experiences, the Joker’s worldview was warped to the extent that his sense of humor was not considered funny by those in the mainstream.  It was an unusual film because the main character was, simultaneously, both the protagonist and antagonist in the story.  Ironically, in other ways, the film also divides the audience in two as well – except with one side seeing light refraction causing scenes to flip upside down; and with both sides listening to separate laugh tracks.

Woe unto them that call evil good, and good evil; that put darkness for light, and light for darkness; that put bitter for sweet, and sweet for bitter!

– Isaiah 5:20

And isn’t that what’s happening in America today?

There are those who laugh at Trump’s tweets while others, like Antifa, riot in the streets.  

In the film, Joker appears as an anti-hero of sorts, standing in contrast to a cold-hearted billionaire campaigning to be the Mayor of Gotham and one who believes he can save the city by bringing jobs back.

Accordingly, there are some who might see the billionaire as Donald Trump trying to restore order and making the city great again, while others may see Trump as the Joker tearing down the established order. 

Depending upon which movie is being seen, it means Joker’s mindless followers in the story will be viewed by some as disaffected deplorables dancing while Rome burns and others as collectivist clowns wearing masks and spreading anarchy.

What is interesting, however, is that both groups would oppose what they each perceive as the establishment; and both camps seemingly lament the worldview breach between the dispossessed and the wealthy elite.

Either way, as anarchist art or comic book fodder, the Joker film illustrates death to establishment via the ideology of Destructionism:

Destructionism is stage two of any unachievable vision of what society should be like against a reality that refuses to conform. Destructionism also proves to be strangely compelling to populist movements that are anxious to externalize their enemies and smite the forces that stand in the way of their reassertion of power. Finally they discover satisfaction in destruction – as an end in itself – because it makes them feel alive and gives their life meaning.

But who are actually the disaffected and who is, in reality, the establishment?

That is the question, isn’t it?

Like so much of entertainment and politics today – the movie Joker is being seen by two separate audiences. And the reaction to the movie has been similar to comedian Dave Chappelle’s recently-released Netflix comedy special entitled “Sticks and Stones”.

Just as Chappelle’s show was panned by critics but enjoyed by audiences, so, too, is Joker.  Just as those on the left and in the mainstream media consider Chappelle’s “Sticks and Stones” as no laughing matter, we are now seeing the same treatment for Joker by those so suddenly serious :

– From VigilantCitizen.com

Why?  Because, to the Political Left, optics are everything.  And this means if the illusion does not fit, then it must be sh*t.

Notice how some of the headlines have reported on Joker as being “boring” or as “numbing emptiness”.  This is because, just like Chappelle’s show, art has mocked life and the leftist gestapo has been revealed as the allegorical emperor standing naked.  They have no defense against truth; and common sense is truth.

Anything debated, created, manufactured or produced, is derived from a certain tension of thought. It is sewn from threads of chaos and formulated with, and for, a purpose. In Dave Chappelle’s “Sticks and Stones” hour-long routine on Netflix, he is very, very careful – almost akin to a surgeon methodically suppurating a wound. Or a serial killer teasing and torturing victims.

Like a Joker.

Chappelle opened his routine by playfully excoriating singer Michael Jackson’s alleged pedophilia. Then the comedian boldly proclaimed that Jackson didn’t do it. So the pedophilia is addressed in a way that Michael Jackson fans can’t hold against Chappelle. The viewers are disturbed and disgusted and laughing, but nothing can be stuck on the messenger.

Chappelle did the same thing when he ridiculed the LGBTQ crowd as the “alphabet people” – the problem isn’t that they’re gay, it’s that they’re so seriously, and stupidly, self-concerned.

On the topic of abortion, Chappelle said he supported a woman’s right to choose. This, of course, would endear the comedian to those supporting “my body, my choice”. But then Chappelle added a new angle: He argued if the woman decided to have her baby, then men shouldn’t be forced to be involved. Because if the mother has a right to kill her baby then the father should have the right to abandon it. Said he: “My money, my choice”.

And regarding guns, Chappelle said he really, really hates them…. but… that he owns several; and followed by an entire humorous bit as to why he owns them.

One wonders if the same sort of subterfuge was incorporated into the movie Joker by its director, Todd Phillips, who also co-wrote the screenplay.  Because there is a scene in the film where Joker’s alter-ego, Arthur Fleck, legitimately used a hand-gun in self-defense against three bad guys on a subway train.  Later, a common office (and school) supply item was used to massacre someone, but you’ll never hear the Political Left demanding Red-Flag legislation for the particular item in question. Why? Because it would not represent a threat to the collectivists should they regain power in the U.S. 2020 elections.

Therefore, if the narrative doesn’t fit, it must be sh*t.

Just as Trump supporters don’t find late-night comedy shows like Saturday Night Live or Jimmy Kimmel funny anymore, liberals have also stopped laughing.

It’s because things are getting serious.

In the movie Joker, Gotham also resembles Democrat run New York City in the 1970s as well as many other Democrat Party run sh*t-holes all over America today. Yet the sad-eyed clowns performing as the Democrat Presidential Candidates are all out on the campaign trail promising utopia while endorsing lies, and promoting lawlessness and tumult – and all wanting to mow down a billionaire making Gotham great again; as other mask-wearing clowns riot in the street and raise hell under the guise of “resistance”.

Before anarchy and chaos takes to the streets, a desire to turn society upside down must first take hold.  Before that, however, those creating the bedlam must be driven into a rage; or, rather, an insane rage.

In an article I once wrote about Ken Kesey’s novel “One Flew Over The Cuckoo’s Nest”, I claimed it could be viewed as more than a fictional story and more than an allegory because it had been proven prophetic. Towards that end, I wrote the following:

It is the story of the Divided States of America; an asylum imprisoning subjects suffering under the final stages of Cultural Marxist Dementia and secured by a police state enforcing a twisted type of morality designed to make the inmates progressively and increasingly loony.  In a deranged world turned inside-out, the sane ones are labeled insane.

Indeed. Life has imitated art.

In the same article I mentioned how Kesey’s novel delineated “the epic contest between individual autonomy versus the Feminine Authoritarianism of Matriarchal Tyranny”.

And isn’t that way of the collectivists currently? Because we never see any negative headlines telling people not to watch shows like Netflix’s recent “In the Shadow of the Moon” where fictional time-travelers retroactively murder American patriots in order to advance the cause of globalism.

Why isn’t that considered boring?

Indeed, the hypocrisy resembles a feminist-type double-standard whereby what is good for the goose is not for the gander – in the same way many modern women condescendingly, and even snottily, lecture men on the perils of “Mansplaining”.

Honestly, who do these people think they are for telling me what shows I should watch? And why is it they can hate Trump, but I’m not allowed to laugh at his tweets?

It was also interesting to watch Joaquin Phoenix’s portrayal of the Joker showing the character transition from hapless schmuck, to imagined virility, to actual evil that manifested in sort of a twisted femininity; pure narcissism demonstrated onscreen to the tune of graceful little dances in the wake of brutal acts.

It is no surprise, therefore, that many have tied Joker to what has become known as “Inceldom”, or “the online subculture of men (mostly young, white, and heterosexual)” who have become violent as a result of being involuntarily celibate.  Many past mass-shooters have been identified as Incels (i.e. the portmanteau of “involuntary celibates”) including Elliot Rodger who killed six people in 2014 at the University of California Santa Barbara and Nikolas Cruz who killed seventeen at Stoneman Douglas High School in Parkland Florida on Valentine’s Day 2018.

In fact, the U.S. Army has warned of possible shootings  at Joker film screenings because of the tendency of violent Incels to imitate each other – or, actually, very similar to what happens in the narrative of the Joker film.

People are also on edge because of the December 2012 mass-shooting in Aurora, Colorado where the killer, James Holmes, killed twelve people in a movie theater at a Batman screening.  What was especially strange is that the killer, Holmes, even looked like the Joker.

But it was while reading Santa Barbara killer Elliot Rodger’s online manifesto, two years after the Batman massacre, that marked my first exploration into Inceldom – although I didn’t become aware of the term Incel until several years later. Rodger, like the Joker, over time developed a desire for revenge upon those whom he perceived had treated him unjustly – a classic example of resentment magnified into full-blown rage.

In this embedded link  there is a six-minute video of Elliot Rodger discussing his forthcoming “day of retribution” where he absolutely comes across as a comic book villain, complete with an unsettling evil chuckle.

To be sure, life does, indeed, imitate art.

Rodger’s disturbing manifesto made it very clear his pre-teen psyche was formulated by television, video games and porn. Perhaps all of these modern-day manifestations have led to a sort of neo-Gnosticism in modern youth; or, rather, the intellect seeking salvation while divorced from reality.  Comic books, movies, gaming, and porn all provide immediate gratification but without any of the fleshly aggravations like body-fluids, bad breath, sweat, and stench.  Is it any wonder, then, why self-concerned spoiled Incels believe they are programmed for pleasure without travail and, then, become hostile when the world operates beyond the range of their remote controls?

Another component of Incel rage is suppressed hostility against masculinity.  Because, after all, it is the more attractive real boys and men who get the girls, thus robbing Incels of their fair share.  In Rodger’s YouTube videos and manifesto, his rage and envy was obvious:  He despised the knuckle-dragging Neanderthals who the girls had chosen over him – the true gentleman.

Accordingly, an ex-girlfriend of the Aurora Batman shooter, James Holmes, ended a two-month relationship with him “following an encounter between Holmes and another man who talked to her during a date on Saint Patrick’s Day”.

In the Joker movie, the old-school masculinity of the future Batman’s father, Thomas Wayne, is displayed in stark contrast to Joker’s pathetic, even effeminate, frailty. Surely any Incel or Antifa snowflake seeing Joker would judge Thomas Wayne as a knuckle-dragging rich prick in the same vein as… say…  Donald J. Trump; and, later in life, perhaps even the crime-fighting Batman himself.

Remember when kids idolized the heroes over the villains? Times have changed.

Certainly, Joker offers legendary comic book plotlines and rising action, but also with a “Taxi Driver” patina of reality at the same time.  Adding to the angst,  the soundtrack’s stringed instruments correspond to the main character’s nervous tension , which remains ever-present throughout the film – even as the Joker deftly dances down the stairs toward hell to the drumbeat and instrumentation of convicted pedophile Gary Glitter’s  1972 “Rock and Roll Part 2”.

And if there’s any question in anyone’s mind whether Joker’s controversy is the result of a middle-finger-flip to Woke Culture, just know Todd Phillips, who also directed the Hangover series and other comedies, has unequivocally answered that question.  In an interview with Vanity Fair magazine, Phillips stated the following:

"Go try to be funny nowadays with this woke culture,” he [Phillips] says.

“There were articles written about why comedies don’t work anymore - I’ll tell you why, because all the f*cking funny guys are like, ‘F*ck this sh*t, because I don’t want to offend you.’ It’s hard to argue with 30 million people on Twitter. You just can’t do it, right? So you just go, ‘I’m out.’ I’m out, and you know what? With all my comedies - I think that what comedies in general all have in common - is they’re irreverent. So I go, ‘How do I do something irreverent, but f*ck comedy? Oh I know, let’s take the comic book movie universe and turn it on its head with this.’ And so that’s really where that came from.”

Yes, liberals, it does appear the joke is on you.  Again. This time.  And that’s why some in the media have claimed comedian Dave Chappelle and director Todd Phillips have lashed out at Cancel Culture, which the urban dictionary defines as follows:

A modern internet phenomenon where a person is ejected from influence or fame by questionable actions. It is caused by a critical mass of people who are quick to judge and slow to question. It is commonly caused by an accusation, whether that accusation has merit or not. It is a direct result of the ignorance of people caused communication technologies outpacing the growth in available knowledge of a person.

And is that not the modus operandi of the mob?

Surely, if the collectivists had their way, they would cancel Joker in the same way the Democrats in congress now wish to cancel Donald Trump. Because both the movie and the president have revealed the mob as being mad like the Joker; and with the same lack of identity and accountability.

Hence, the grand confrontation of our time:  How do crime fighters battle against those not moored to civilized society and who don’t believe in anything except their own will to power?

That was the question I was contemplating as I left the theater.  On the way out, I noticed two police officers in full uniform in the lobby. They were different than the other two I saw while entering, before the movie started.  Did they have a shift change during the movie? Or were there now more cops on location?

As I walked by the armed officers, who were dutifully standing guard against any potentially devastating Incel violence, I looked around at the others leaving the theater and noticed something else.  No one was laughing.

Tyler Durden

Sat, 10/12/2019 - 15:50


Entertainment Culture

IRS Adds Question On Crypto Usage To New Income Tax Form Draft

Authored by Joeri Cant via CoinTelegraph.com,

The United States Internal Revenue Service (IRS) has added a question on crypto ownership to the standard 1040 income tax form for the coming tax season.

image courtesy of CoinTelegraph

IRS wants to know about your crypto i
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n 2019

On Oct. 11, a draft of the “Additional Income and Adjustments to Income” section of the new 1040 form surfaced that included a change was made to the ‘Additional Income and Adjustments to Income’ section. On the new 1040 form, the additional question reads:

“At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”

The question expects a straightforward yes or no, with no additional details requested.

Cointelegraph previously reported that the IRS had issued new guidelines for tax reporting on cryptocurrency airdrops and hard forks. The tax agency’s guidance answered questions about cryptocurrency transmissions for investors that hold cryptocurrencies as a capital asset and set general principles of tax law to determine that virtual currency is property for federal tax purposes.

H&R Block helps with crypto taxes

Cointelegraph reported in September that United States-based accounting firm H&R Block started acting as an intermediary between crypto users and the IRS after the agency began sending letters to crypto traders who may have failed to report income and pay taxes.

H&R Block can now assist people who have engaged in digital currency transactions, specifically providing consultations on how to properly file their cryptocurrency gains and losses on tax returns.

Tyler Durden

Sat, 10/12/2019 - 14:50


Business Finance

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