Authored by Sven Henrich via NorthmanTrader.com,

Tech Oddity

Tech making new highs again in July as markets are anticipating rate cuts from the Fed later in the month. It’s still early in the earning season, but about to get heavy with reports.

$NFLX was a stinker last week, but $MSFT delivered, technically as extended as it may be.

All eyes then on the standard bearers for $FAANG, $GOOGL,$AMZN, $AAPL and $FB. But when an index makes new highs it’s always useful to look under

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the hood and there’s a signal chart that raises some eyebrows.

Indeed one might call it a tech oddity. New highs on $NDX? Yes, but check the cumulative advance/decline index $NAAD, it tells a very different story:

What does this chart tell us?

Well, for one, during the run up from the 2016 lows into the 2018 highs $NDX ran in a steady trend higher as did $NAAD. Very clean channel as a matter of fact. Then it all fell apart in Q4 2018. But on the heels of the Fed pivot markets recovered and are now back to all time highs. $NDX made a new all time high again in April and also last week in July.

But note $NAAD did not play along. Far from it. First making a notable lower high in April it made yet another lower high last week. And by doing so it has formulated a new trend line. Instead of a steady uptrend as in 2016-2018 it has formed a line of resistance & is potentially forming topping pattern.

Notable also the relative weakness on the RSI above.

What’s the message here from a technical perspective?

Firstly note that $NDX, despite making new highs remains below the broken 2016 trend line, but new highs are also coming on an ever weakening trend in the cumulative advance/decline index.

Something’s not quite right. This is not your 2016/2017/2018 bull market. This is a different animal, it’s an oddity. A tech oddity.

Ground control to Major Tech: Put your helmet on.

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With Morgan Stanley reporting Q2 results yesterday, the first half earnings of all "big 5" US banks are now public, and when it comes to sales and trading they are nothing short of a disaster.

With the S&P at or near all time highs, institutional traders have, paradoxically, been increasingly moving to the "sidelines" for much of the second quarter as Wall Street trading desks posted their worst first half to a year in a decade, according to Bloomberg calculations. David Solomon, CEO of Goldman Sachs, made note of this over the last two quarters, and other

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major banks like JP Morgan and Citigroup have followed.

The slowdown in trading revenue has been due to uncertainty about trade war politics and global Central Bank policy. However, in the past, these types of uncertainties have spurred more trading, not less. This has raised the question of whether or not the slowdown in trading is permanent, instead of temporary.

Morgan Stanley CFO Jon Pruzan said in an interview Thursday: “It’s more of a subdued up than sort of the animal spirits you would generally characterize in this type of environment. We haven’t seen some of the traditional things in a market like this -- we haven’t seen a lot of people repositioning their portfolios, we haven’t seen leverage increase.”

Trading revenue at the five biggest Wall Street banks was down 8% in the second quarter, which followed a 14% slide in the first quarter. European banks are expected to post even larger drop offs next week when they report.

This will likely push revenue from equity and fixed income trading substantially below the $60.8 billion that was posted in the first half of 2017. These major firms generated $77.5 billion as recently as the first half of 2012.

One reason for the shrinkage - hedge funds have suffered outflows, which has also helped slow down trading volume. In addition, new rules that have limited lenders' ability to make principal bets with their own money have acted as a headwind. Technological advancements have also narrowed spreads in many areas of trading.

And over the last couple of quarters, Wall Street firms can’t decide whether or not they want to complain about too much volatility – or too little.

Jim Shanahan, an analyst at Edward Jones said: “I’m not sure what the Goldilocks scenario is for the banks. Part of the problem is that it’s too late to hedge interest-rate volatility, there’s not currency volatility to hedge. Speculators need volatility to hedge and enter the market.”

As a response, banks have cut costs. Front office headcount in trading units is down over the last five years and divisions like consumer lending and wealth management have picked up the slack that have led banks to record profits. As a result, the six biggest US banks set another record with $32.6 billion in (adjusted, non-GAAP) net income in the second quarter.

Go figure.

Citi CFO Mark Mason bemoaned the top-line sluggishness of the trading business: “Many of the investor clients remained on the sidelines,” he said on Monday. 

One can only imagine if equity revenue is slumping when the S&P is at all time high what will happen when the market finally crashes...


Submitted by Ronan Manly, BullionStar.com

There is probably no other topic in the gold and silver markets which incites heated debate more than the subject of precious metals price manipulation.

That prices in the precious metals markets are manipulated is not speculation, it is fact, a fact made clear again recently by the Commodity Futures and Trading Commission´s (CFTC) ruling against investment bank Merrill Lynch Commodities Inc (MLCI) for spoofing pricing of gold and silver futures contracts on the COMEX exchange.

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The number of investigations, legal cases, class actions and financial headlines involving precious metals manipulation are now so pervasive that it’s hard to keep track of which cases are in motion and which investment banks are under scrutiny at any given time.

But beyond the profit and greed driven bullion bank manipulations gold and silver prices, there is also the issue of central bank policy interventions to suppress the gold price by outright gold sales or using the opaque and secretive gold leasing and lending market. This is a less talked about manipulation given the secrecy of everything to do with central banks and gold, as well as a reluctance of the financial media to broach the subject and a reluctance of regulators to ´go there´ by even looking at central bank gold market activities.

That central bank operations in the gold market have existed is also fact, with such operations covering price smoothing and price stabilization, price pegging, and coordinated gold pools. See BullionStar articles “New Gold Pool at the BIS Basle, Switzerland: Part 1” and “New Gold Pool at the BIS Basle: Part 2 – Pool vs Gold for Oil” and “The Bank of England and the London Gold Fixings in the 1980s” for more background. There is also ample evidence about central bank manipulation documented in various places including on the GATA website. The motivations for such central bank interventions include protecting the existing financial system, engineering low real long term interest rates, and preventing gold acting as a barometer of inflation.

But beyond even commercial bank manipulation of gold and silver metals prices and central bank policy manipulation of gold, there is arguably another form of manipulation in the precious metals markets which is far more influential in subduing price discovery and which takes the form of the very structure of how these markets trade vast quantities of futures contracts and synthetic and paper gold and silver positions that are completely unconnected with any underlying physical metal. The home of this trading is of course on the US COMEX exchange and the unallocated gold and silver markets in London. Both venues of which are ruled by the LBMA bullion banks.

Blundering Herd – Merrill Lynch Commodities Inc

Merill ´Spoofing´ Lynch

Turning first to the recent Merrill Lynch case, in late June this year the CFTC announced that it had fined Merrill Lynch Commodities Inc (MLCI) $25 million for manipulating gold and silver futures contracts on the COMEX exchange between 2008 and 2014. This was done ‘thousands of times’ according to the CFTC, by MLCI traders ‘spoofing’, or placing and then cancelling orders before they were executed. By creating artificial demand or supply and thus false prices, this interfered with the (already broken) precious metals price discovery that would have otherwise occurred.

Interestingly though not surprisingly, much of the direct evidence the CFTC used in its verdict was from the myriad log files of trader chat apps which were used to coordinate the spoofing. For example, in one 2010 chat, a trader was quoted as saying “guys the algos are really geared up in here.  [I]f you spoof this it really moves . . .”.

While a lot of money for most people, a $25 million fine is a paltry amount for a global investment bank such as Merrill Lynch and is just a cost of doing business on bank-ruled Wall Street. However, the ruling at least demonstrates that what many always thought about precious metals futures price discovery as being rigged and manipulated is in fact correct. As well as the $25 million fine, Merrill entered into a non-persecution agreement with the US Department of Justice (DoJ), agreed to cooperate with the DoJ investigation into criminal violations, paid a $11.5 million civil monetary penalty to the CFTC, and had indictments against two of its former MLCI precious metals traders, Edward Bases and John Pacilio.

UBS – Precious Metals Spoofers

The Usual Suspects – UBS, HSBC and Deutsche

But the recent case against Merrill is not an isolated event. It follows similar moves by the CFTC in early 2018 where the CFTC chargedinvestment banks UBS, Deutsche Bank and HSBC and a number of their traders for spoofing precious metals futures from as early as 2008, while fining the banks a combined $46.6 million (of which $30 million was levied against Deutsche, and $15 million against HSBC). In those cases, the CFTC worked with the US Department of Justice and the FBI to bring the charges.

Moving forward to this year, in February 2019, the U.S. District Court for the District of Connecticut fined ex UBS precious metals trader Andre Flotron $100,000 for price spoofing and price manipulation in violation of the Commodity Exchange Act (CEA) and CFTC Regulations. In that action, the CFTC found that Flotron had spoofed large orders in the precious metals markets between “at least August 2008 through at least November 2013, while employed at UBS”. This followed the CFTC reopening the case against Flotron in December 2018.

For excellent insights into how these UBS and other investment bank traders operated their spoofing, see the articles by Allan Flynn from April 2018 titled “US Gold and Silver Futures Markets – ‘Easy Targets’” and “UBS and Deutsche Bank gold and silver traders, April 2018”. For example, in evidence at the Flotron trial, Mike Chan, a UBS junior trader to Flotron while they worked in Singapore stated to the court that “during training, I’d seen him spoof and –  enough that I replicated it immediately to do the same thing. And as my career progressed at UBS, the more traders I interact with, the more people I’ve seen spoof.

The Fix is In – Manipulating the Gold and Silver Benchmarks

Beyond the gold and silver futures markets, but interfacing with the futures, a similar group of bullion bank traders are, not surprisingly, also involved in antitrust court cases alleging that these banks manipulated the London gold and silver fixing benchmark auction prices. While these cases are still winding their way through New York courts, and have not yet been fully ruled on, the chat room transcripts on manipulative price collusion can only be described as shocking, chat transcripts which anyone who bothered to think about it knew they existed from at least 2004.

The cases in question have been brought by groups of precious metals investors against the cartelesque London Gold Fixing and London Silver Fixing companies with allegations that Bank of Nova Scotia and HSBC manipulated silver fixing prices from 2007 to 2013, and that ScotiaBank, HSBC, Barclays and Societe Generale manipulated fixing prices from 2004 to 2013. Noticeably absent is Deutsche Bank which settled its way out of both cases, and UBS which successfully dismissed itself from both cases using cooperation and expensive lawyers.

Again we turn to an article by Allan Flynn from December 2016 titled “How to Trigger a Silver Avalanche by a Pebble: ‘Smash(ed) it Good’ which has a host of excellent quotes from chat room transcripts on how traders allegedly manipulated the silver market, for example:

UBS Trader A: “gonna bend this silver lower”; “i will bend it lower told u”; ”hah cool its gonna get ugly”; “use the blade on silver rg tnow it’ll hold it up”, gona blade silver now.

Deutsche Bank Trader B instructing Barclays trader A: “today u smash,

UBS Trader A: “an avalanche can be triggered by a pebble if you get the timing right” and “silver still here, u can easily manipulate silver”

With the cases against the London Gold and Silver Fixing companies still in discovery in the New York courts, expect further revelations later this year, but given the leniency of the system, not a lot of penalties.

For those readers alert to the way trading of precious metals futures contracts and trading around the London gold and silver fixes works, you will see that the pushing around of prices occurs in both ‘venues’, on COMEX and in the London gold and silver market, especially in the lead up to and during the fixes.

The same investment bank precious metals traders trade gold and silver futures contracts and London OTC contracts, and they trade these in the London and COMEX ‘venues’ at the same time. Price movements in one location instantly are reflected in the other. This is all explained in the BullionStar article “Spoofing Futures and Banging Fixes: Same Banks, Same Trading Desks” from April 2018. At the time I said the following, which is even more apt now given the CFTC’s recent prosecution of Merrill Lynch Commodities Inc (MLCI):

Prosecuting banks and traders for price manipulation on COMEX futures while ignoring the far larger London market and its gold and silver fixings looks like a job half done. Trading desks and their traders are agnostic to trading venues and with interlinked markets, the COMEX and the London Fixings are two sides of the same coin.”

Who needs real metal when you can trade 'Screen' gold and silver?

Conclusion – The Greatest Trick ever Pulled

Manipulating gold and silver prices by spoofing futures trades and cancelling them is one thing. Central bank intervention into physical gold markets to dampen the gold price is another. But perhaps the most far reaching yet unappreciated method of manipulation is sitting there in plain sight, and that is the very structure of the contemporary ‘gold’ and ‘silver’ markets where prices are established by trading in vast quantities of fractionally-backed synthetic gold and silver credit, be it in the form of vast quantities of unallocated positions that are ‘gold’ or ‘silver’ in name only, or in the form of gold and silver futures which haven’t the slightly connection with CME approved precious metals vaults and warehouses.

By siphoning off demand for real gold and silver and channeling it into unbacked or fractionally-backed credits and futures, the central banks and their bullion bank counterparts have done an amazing job in creating an entire market structure of futures and synthetics trading that is unconnected to the physical gold and silver markets. This structure siphons off demand away from the physical precious metals markets, and in doing so, creates a system of price discovery which is nothing to do with physical gold and silver supply and demand.

Apart from fractional-reserve banking, precious metals market structure is perhaps one of the biggest cons on the planet. So next time you think of precious metals manipulation, remember that in addition to spoofing and secretive central bank gold loans, the entire structure of the precious metals markets is unfortunately one big manipulation hiding in plain sight.

This article was originally published on the BullionStar.com website under the same title "Gold & Silver Price Manipulation - The Greatest Trick ever Pulled".


Over the weekend, we pointed out that in addition to the biggest conundrum facing markets in 2019, namely that the higher stocks rise, the greater the (now record) outflows from equity funds, there has recently emerged another especially bizarre divergence: whereas discretionary investors have been cutting equity positioning as growth has slowed...

... systematic strategy allocations - i.e., quants, "robots", and the like - have been buying up stocks the worse the economic picture became, and have been pushing the S&P higher.

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And here an odd observations: whereas historically, positioning for both discretionary and systematic strategies have typically moved together and were highly correlated with growth indicators, this year however, discretionary investors have steadily reduced their exposure which is now below average, in line with their behavior historically when growth is slowing.

What this means is that not only do broader markets track systematic rather than discretionary flows, but the marginal price setter is no longer of human (discretionary) origin, but rather robotic.

In other words, the good news is that while humans may have gotten cold feet, robots continued to buy... for now.

And now the bad news: whereas global equities have maintained upward momentum for the most part, that momentum seems to be losing steam, and at least one major class of robotic investors may soon seek to exit too.

As Nomura's quant team writes, with the FOMC having now entered the blackout period ahead of next week's potentially historic FOMC meeting (30-31 July) when the Fed is widely expected to restart monetary easing, market participants are converging on the view that the Fed will cut interest rates by 25bp - but not by more - and as a result market sentiment is softening in markets worldwide.

Indeed, it appears to Nomura that, rather than expecting a risk rally once the rate cut decision has been made, the market is starting to worry that a rate cut would be followed by a round of "selling the fact". As a result, given that Nomura sees signs of ebbing risk appetite, the Japanese bank thinks it best to be on the lookout for selling of global equities for profit-taking purposes ahead of the event, particularly among speculative traders. Furthermore, the bank's quant team also notes that "hedge funds have staked out positions that look especially vulnerable to a combination of rising volatility and falling stock prices."

Global stock market sentiment has continued to soften, most obviously in the US, as the perceived likelihood of a 50bp rate cut has dropped off. Although sentiment is still slightly on the risk-taking side of neutral, we would expect investors to remain fairly unenthusiastic if the July FOMC meeting ends innocuously with a 25bp rate cut.

Hedge funds, meanwhile, are still positioned in a way that would lead one to believe that they:

  1. expect volatility to remain consistently low; and

  2. see little downside risk for equities.

For example, the overall performance of hedge funds as measured by the HFRX Global Hedge Fund Index (HFRXGL) is still closely correlated with returns on an S&P 500 put write strategy, which leads Nomura to believe that speculative traders are by and large not taking profits on this sort of high-risk, bullish position in equities.

At the same time, the growth in VIX futures shorts is another manifestation of this risk-taking behavior on the part of speculative traders. According to latest data from the CFTC (dated 16 July), the net short position of non-commercial traders has grown to around 140,000 contracts, which is to say that the outstanding net position of hedge funds is now highly vulnerable to a rise in volatility paired with a drop in stock prices.

Which brings us to the proverbial "robots", or CTAs, which after bidding up stocks for much of the past month are preemptively taking profits on long positions in US equity futures.

As mentioned above, US stock market sentiment has softened somewhat. Even if the Fed were to go through with a 25bp rate cut at the July FOMC meeting, the appetite for risk may continue to fade unless the Fed pairs the rate cut with some additional dovish surprise. And, as the charet below shows, trend-following CTAs have already begun preemptively taking profits on long positions in US equity futures.

And as Nomura's Masanari Takada writes, "trend-following CTAs are in the process of scaling back their net long position in US equity futures." Specifically, CTAs have been shrinking their net position in S&P 500 futures in increments since 17 July.

Finally, because the outstanding net long position of CTAs breaks even at around 2,955 (based on what Nomura calculates the average cost of their net buying since the beginning of June), this selling is still mostly a matter of preemptive profit-taking commensurate with what the market is actually doing.

Said otherwise, should the S&P dip below 2,955 ahead of next week's FOMC, the Fed may have no choice but to cut 50bps as the market will be delighted to once again force Powell's hand.

On the other hand, discretionary traders (global macro hedge funds and equity long/short funds) following aggressive selling for much of 2019, are slightly on the side of adding to their net exposure and BTFD, or as Takada notes, "the buying of US equities by global macro hedge funds sticks out here."

Nomura's conclusion: "The US stock market is currently the scene of a head-on collision between selling by technically minded CTAs and buying by fundamentals-oriented global macro hedge funds."

Whether this collision will result in an acceleration in the market's meltup, or a painful reacquaintance with gravity will depend on what the Fed does next week.


Seemed appropriate...


Chinese stocks were not pretty. Despite STAR soaring, ChiNext tumbled along with Shenzhen as it appears liquidity moved to the new index...


European markets (except Spain) managed to cling to gains on the day thanks to 4 notable impulses...


Nasdaq dramatically outperformed led by semis. Small Caps were the biggest losers. Dow ended unchanged (Boeing down vs Apple up)

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NOTE - Trannies and Small Caps notably decoupled at around 1400ET only to see a mysteriously large buy program strike at 1500ET


Small Caps continue to dramatically diverge from big caps (and mega cap tech)...


Small Caps also closed below their 100DMA...



Volume was low - around 20% below average...


There were two 'failed' attempts at yet another short-squeeze today...


Semis soared on the day following Goldman's upgrade on Micron...


But while Semis spiked, FANG stocks were flat...



Bonds and stocks remain in their own - buy all the things - worlds...


Treasury yields traded in a narrow range today, with yields down across the curve led by the belly...


10Y Yield dropped to 2.02% intraday but the yield curve (3m10Y) remains inverted (41st day in a row)...


The T-Bill curve remains kinked around potential debt ceiling X-date...


The dollar index managed very modest gains, holding above last week's Williams' speech plunge levels..



Cryptos were mixed over the weekend with Bitcoin Cash holding gains but ETH and BTC lower after a leg lower this morning...


Bitcoin continues to hover between $10,000 and $11,000...


Dr.Copper is lagging as silver resurges...


Oil prices managed some gains today as Iran tensions resurfaced in the narratives...


Silver continues to rise...


Silver has outperformed gold for six straight days (longest streak since June 2018), erasing most of the relative gains for the year...


Finally, don't forget, it's different this time...

Except it's all about liquidity, stupid...


Prolific pedophile Jeffrey Epstein was introduced to former President Bill Clinton through Epstein's longtime confidant and alleged procurer of young women - Ghislaine Maxwell. 

The daughter of embattled publisher and suspected Russian-funded Mossad agent Robert Maxwell, The 57-year-old Maxwell maintained a high orbit as an East Coast socialite, according to Politico.

It is unclear how Epstein and the Oxford-educated Maxwell first met, however they reportedly dated around 1992 shortly after her father's death. Then in 1995, Eps

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tein named a now-defunct Palm Beach business "Ghislaine Corp." In 2003, Epstein described Maxwell as his "best friend." 

She was also procuring young, often underage girls, to feed Epstein's sexual urges according to Epstein accusers and witnesses. 

According to court filings, Maxwell was said to have hired, supervised and fired household staff, while directing the visits of dozens of "massage therapists" to Epstein's residence, according to a Wall Street Journal report earlier this month. 

In depositions taken in 2009 and 2010 as part of civil lawsuits against Mr. Epstein, household employees said Ms. Maxwell was a central figure in Mr. Epstein’s private life. Several said Ms. Maxwell hired, supervised, and fired household staff, while directing the visits of dozens of "massage therapists”—typically young women.

Juan Alessi, who said in one of the depositions that he served as the Palm Beach house manager from around 1992 through 2002, described a basket of sex toys in Ms. Maxwell’s bathroom closet. He said he would find them around when he cleaned up after visits from the young women. -WSJ

"The defendant worked with others, including employees and associates who facilitated his exploitation of minors, by among other things, contacting victims and scheduling their sexual encounters with the defendant," according to US prosecutors, ostensibly referring to Maxwell. 

And then there's the Clintons...

According to Politico, "Maxwell first grew close with the Clintons after Bill Clinton left office, vacationing on a yacht with Chelsea Clinton in 2009, attending her wedding in 2010, and participating in the Clinton Global Initiative as recently as 2013, years after her name first emerged in accounts of Epstein’s alleged sexual abuse." 

Chelsea was in turn introduced to Epstein through Maxwell's ex, billionaire founder of Gateway computer, Ted Waitt of La Jolla, CA. 

A person close to Chelsea Clinton described Waitt as a “very close family friend” of Clinton and her husband, Marc Mezvinsky, and said the couple met Maxwell through him in 2011. The person said Clinton and her husband ended their friendship with Maxwell when she and Waitt broke up in early 2011, and disputed that Maxwell and Chelsea Clinton were ever “close.” 

Two people familiar with the relationship between Maxwell and the Clintons said Maxwell, Clinton and Mezvinsky flew together on a private plane to rendezvous with Waitt for a trip on Waitt’s yacht. One of those people said the trip took place in 2009.

Waitt, whose philanthropic endeavors focus on the world’s oceans, has given somewhere between $10 million and $25 million to the Clinton Foundation. -Politico

Not true, according to a friend of Maxwell, who told Politico: "The Clintons were relatively intimate with her," a friend of Maxwell told Politico. Meanwhile, "In 2002 and 2003, flight logs reportedly show that Bill Clinton flew on 26 flight legs on Epstein’s private jet," according to the report. 

So that we're clear - the Clintons became "relatively intimate" with Maxwell - who was known as Epstein's inseparable assistant and 'sex scheduler' - long after Epstein admitted to being a pedophile in a controversial 2008 plea deal.

Maxwell’s ties to Clintonworld, meanwhile, would last another decade.

One friend of Maxwell’s, who spoke on the condition of anonymity, described their surprise upon showing up at a dinner party at her Upper East Side apartment around 2005 to find Doug Band, then a top adviser to Bill Clinton and the Clinton Foundation, among the 8 to 10 guests. In 2006, a charity run by Epstein, C.O.U.Q. Foundation, gave $25,000 to the Clinton Foundation, the Daily Beast reported. -Politico

"Ghislaine was the contact between Epstein and Clinton," a person familiar with the relationship told Politico. "She ended up being close to the family because she and Chelsea ended up becoming close.

A spokesperson for Clinton has disputed that the two women were ever close, while Bill Clinton issued a statement via spokesman Angel Urena, claiming "President Clinton knows nothing about the terrible crimes Jeffrey Epstein pleaded guilty to in Florida some years ago, or those with which he has been recently charged in New York." 

Urena said the flight legs comprised four trips in 2002 and 2003 and that staff and Secret Service were present on all flights. Urena said Epstein visited Clinton at his Harlem office once in 2002 and that he briefly visited Epstein’s apartment one time. -Politico

The Trump connection

Politico also reveals the depth of President Trump's relationship with the Maxwells - in particular Robert Maxwell - which went back "to at least the late 1980s" until the Czech-born Daily Mirror owner died after falling off his Yacht, Lady Ghislaine, in the Atlantic Ocean (ruled an accident). 

An item from a May 1989 gossip column placed Trump and both Maxwells at a party aboard the elder Maxwell’s yacht, named the Lady Ghislaine, that featured caviar flown in from Paris and former Republican Sen. John Tower of Texas. The item notes that Trump compared his own larger yacht with Maxwell’s.

As it happened, Trump’s yacht, the Trump Princess, had originally belonged to the Saudi arms dealer Adnan Khashoggi — the uncle of slain Washington Post contributor Jamal Khashoggi — and Maxwell’s yacht had originally belonged to one of Adnan’s brothers.

"He was a character and a colorful guy, and I think we were lucky to have seen even a short time of him in New York," Trump told Larry King of Maxwell two weeks later. "He was my kind of a guy." 

In 1997, Maxwell "bummed a ride" on Trump's private jet along with the author of a New Yorker profile of Trump - Mark Singer, who referred to Maxwell's father as an "inadequate swimmer." 

Meanwhile, Maxwell was instrumental in Jeffrey Epstein's rise within her sphere of influence. 

It is unclear whether Ghislaine Maxwell first introduced Trump and Epstein, who socialized together at least as early as 1992, but she was crucial in ensuring Epstein’s access to Trump’s world. Archival video unearthed on Wednesday by NBC from that year shows Trump and Epstein surrounded by dancing women at Mar-a-Lago, with Maxwell smiling in the background.

"Ghislaine was his path to social acceptance,” said Thomas Volscho, a professor at the City University of New York who has been researching Epstein. “They don’t always accept you. Ghislaine was really a conduit for him to start to socialize with people who are way beyond his level." -Politico

And with that, Maxwell also began recruiting for Epstein - as detailed in a lawsuit brought by former Mar-a-Lago changing room attendant Virginia Roberts Guiffre - who claims she was approached by Maxwell in 1998 to meet Epstein, after which the two of them participated in her sexual abuse.

Maxwell has denied the entire thing.  

According to the Daily Telegraph, Maxwell also introduced Epstein to British Royal Prince Andrew - the two of whom were pictured with Epstein accuser Virginia Roberts, who claims to have seen Bill Clinton on Epstein's infamous island while she was being sex-trafficked. 

Epstein also attended a birthday party for Queen Elizabeth at Windsor Castle in 2000. That same year, Maxwell and Prince Andrew attended what the Daily Mail described as a “hookers and pimps”-themed Halloween party hosted by Heidi Klum.

A month later, in early December 2000, Trump, his future wife Melania, Epstein and Maxwell all attended a surprise 60th birthday for Barbara Amiel, a British socialite, that was also attended by the likes of Anna Wintour, Charlie Rose and William F. Buckley.

Tina Brown, a notable magazine editor, recalled that around this period Maxwell would reach out to her to socialize when Prince Andrew came to New York. “She was a bit mysterious,” Brown recalled.

In short - when it comes to the socially awkward Jeffrey Epstein and his connection to the elite circles he mingled in, it's all about Ghislaine. 


Authored by Mike Shedlock via MishTalk,

The Fed meets on July 31 to make an interest rate policy decision. What should the Fed do?

Jim Bianco at Bianco Research says Only a Half-Point Rate Cut From the Fed Will Do.

"Anything less would fail to fix the imbalances in the global bond market, continuing to weigh on economic sentiment," says Bianco.

"By lowering its target for the federal funds rate by just a quarter point, the Fed risks no less than a recession. The

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Fed has a history of moving too slow to respond to evidence of weaker growth, and a bold move now would help ensure the economy achieves the rare soft landing.”

I replied

I stand corrected. With his charts, I concede that Bianco made a solid case for cuts.

Yet, his charts highlight something more important.

Fed's Asymmetric Bubble-Blowing Policy 1992-Present

Chart courtesy of Bianco. The title and blue boxes are my anecdotes.

Bianco notes "In the 1990s the fed funds contracts only went out 6 months. That is why the lines are short. In the 2000s they went out a year, lines are a little longer. Around 2007 they started going out three years, the longest lines."

Each calendar years is a different color.

So the yellow to the upper right is 2018 (each month end … so Jan 31, Feb 28 and so on, the forward curve projected up to 2021. Black, in a downtrend, is 2009)

Let's hone in on the period starting 2009.

Fed's Asymmetric Bubble-Blowing Policy 2009-Present

Market Screaming for Hikes

The market was screaming for hikes for five years.

The Fed did not deliver.

Too Low, Too Long

That the Fed did not deliver hikes as expected is part of its asymmetric policy of keeping interest rates too low, too long,

Bubbles Blown

Without a doubt the Fed blew more bubbles, and likely the biggest in history.

The market responded with a prolonged yield-curve inversion.

Yield Curve


  • The effective Fed Fund Rate is currently 2.41%.

  • The yield on the three-year Treasury Note is 1.80%.

  • The spread is -0.61 percentage points

Behind the Curve

Bianco is correct. The Fed is behind the curve.

And by his logic it's not clear that 50 basis points is enough of a cut.

But to what avail?

So What? Bubbles Already Blown

Let's return to Bianco's opening gambit: "Anything less would fail to fix the imbalances in the global bond market, continuing to weigh on economic sentiment."

On July 18, I wrote Half-Point Rate Cut Odds Explode to 71% - So What? It Doesn't Matter!

The Fed, with its asymmetric too-low too-long policy blew bubbles that are impossible to fix.

Too Late for Insurance

Rate cuts now as economic insurance is like trying to buy insurance on your car after you wrecked it.

The bubbles have been blown.

Even if the Fed can correct current "imbalances" it cannot "unblow" bubbles anymore than it can unblow a horn.

Deflationary Bust Baked in the Cake

In the Fed's foolish attempt to stave off consumer price deflation, the Fed sowed the seeds of a very destructive set of asset bubbles in junk bonds, housing, and the stock market.

The widely discussed "everything bubble" is, in reality, a corporate junk bond bubble on steroids sponsored by the Fed.

For discussion, please see Junk Bond Bubble in Pictures: Deflation Up Next

Rate Cuts Don't Matter

The bottom line at this point is an economic recession is baked in the cake. The global economy is slowing and the US will not be immune.

The debt deflation horn has already sounded. It will not be unblown no matter how big the cut.


A huge escalatory step in the US-led economic war on Tehran and its global oil exports, and amid continued trade tensions with Beijing: the US State Department said Monday the US will impose new sanctions against a Chinese company for transporting Iranian crude in contravention of US sanctions. As the WSJ reports: 

Secretary of State Mike Pompeo told The Wall Street Journal on Monday that Chinese company Zhuhai Zhenrong and one of its executives knowingly violated U.S. law barring the import of Iranian crude oil.

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China had previously been part of the so-called waiver program, which had granted eight countries exceptions which allowed temporary imports of Iranian oil, but which expired May 2 of this year.

Crude oil is unloaded at Zhoushan, East China's Zhejiang province in February 2018. Image source: VCG

The US did not renew the waiver program, known as 'Significant Reduction Exceptions,' in what was seen globally as a serious escalation by Washington attempting to bring Europe and other economic partners to heel over continued dealings with Tehran. 

The Chinese company has been identified as Zhuhai Zhengrong Co Ltd, which Pompeo accused of violating US law over its continued Iran crude imports. Notably, its CEO will also be under sanction. 

The WSJ continued:

The company and the executive will be barred from engaging in any foreign exchange, banking or property transactions under U.S. jurisdiction. The company couldn't be immediately located for comment. Chinese officials did not respond to a request for comment.

Pompeo said while addressing reporters in Florida, “We’ve said that we will sanction any sanctionable behavior and we mean it.”

Crucially, CNN noted late last week following Iran's navy capturing a British-flagged tanker that the White House could once again be on a war footing following President Trump backing off the previously planned strike on Iranian positions last month: "President Trump has privately adopted a more hawkish tone on Iran in recent days, according to three people familiar with the developments, as tensions increase in the Gulf," the report said.  


With the ongoing debacle over the 737 MAX seemingly getting worse by the day, a potentially far more ominous development hit today when rating agency Fitch warned that it may downgrade Boeing as the grounding of the ill-fated airplane stretches into the 5th month.

Citing regulatory uncertainty around the return to service of Boeing's workhorse jet and the “growing logistical challenge” of getting parked planes back in the air, Fitch said Boeing's credit rating was threatened as its cut its credit outlook for the aerospace giant while confirming its single-A, the sixth-high

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est investment-grade rating, and adding that there’s also a risk that the company will have to make costlier concessions to airlines.

The challenge for Boeing is not just how to get the grounded planes in the air; in the longer term, Fitch said the Max’s grounding presents a significant public-relations challenge that will remain a risk for “Boeing’s reputation and brand” into next year and beyond.

“Fitch also expects there will be a lingering operating-margin impact for several years after the 737 Max returns to service,” the ratings company said.

Boeing is currently rated A2 by Moody and A by S&P, which both have stable outlooks on the company, although we expect these to be cut soon now that Fitch has broken the seal. S&P said last week that Boeing’s announcement that it will be taking a $5.6 billion pretax charge to compensate for the grounding of the 737 Max wouldn’t affect the company’s credit ratings. But S&P warned that more damaging effects to Boeing’s financials or a “substantial loss” in market share to the 737 could warrant a downgrade.

While Boeing’s bonds were unchanged after Fitch’s report, BA stock dropped and since Boeing is the most important Dow member, the industrial average quickly slumped to session lows.



Authored by James Howard Kunstler via Kunstler.com,

What Goes Around

Just how dead is the RussiaGate story - and how brain-dead are the House Democratic Committee chairmen, Nadler (Judiciary Committee) and Schiff (Intelligence Committee) to haul RussiaGate’s front-man, Robert Mueller back into the spotlight where the next thing to roll over and die will be Mr. Mueller’s evanescent reputation? The entrapment operation that was the Special Counsel’s covert mission has turned out to be Mr. Mueller own personal booby-trap, prompting the q

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uestion: is it possible that he’s just not very bright?

Though Mr. Mueller’s final report asserted that the Russian government interfered in “a sweeping and systemic fashion” to influence the 2016 election, the 450-page great tome contains zero evidence to support that claim, and the discrepancy was actually noticed by federal judge Dabney Friedrich who is presiding over the case against the alleged Russian Facebook trolls that was one of the two tent-poles in the RussiaGate fantasy. The case is now blowing up in Robert Mueller’s face.

In early 2018, Mr. Mueller sold a DC grand jury on producing indictments against a Russian outfit called the Internet Research Agency and its parent company Concord Management, owned by Russian oligarch Yevgeny Prigozhin for the so-called election meddling. The indictment was celebrated as a huge coup at the time by the likes of CNN and The New York Times, styled as a silver bullet in the heart of the Trump presidency. But the indicted parties were all in Russia, and could not be extradited, and there was zero expectation that any actual trial would ever take place — leaving Mueller & Co. off-the-hook for proving their allegations.

To the great surprise of Mr. Mueller and his “team,” Mr. Prigozhin hired some American lawyers to defend his company in court. Smooth move. It automatically triggered the discovery process, by which the accused is entitled to see the evidence that prosecutors hold. It turned out that Mr. Mueller’s team had no evidence that the Russian government was involved with the Facebook pranks. This annoyed Judge Friedrich, who ordered Mr. Mueller and his lawyers to desist making public statements about Concord and IRA’s alleged “sweeping and systemic” collusion with Russia, and threatened legal sanctions if they did.

Judge Friedrich’s rulings were unsealed in early July, after Messers Nadler and Schiff had already scheduled Mr. Mueller’s testimony before their committees. And now they’re stuck with him. The only purpose of his appearance was to repeat and reinforce the narrative that the Russian government interfered in the election, which he is now forbidden to do, at least in connection to the Concord and IRA’s activities. But the other tentpole of the two-year-plus inquisition has also collapsed: the allegation that Russian intel hacked the DNC servers. It’s now a matter of public record that the DNC servers were never examined by federal officials. They were purportedly scrutinized by a DNC contractor called CrowdStrike, co-founded by Russian Dimitri Alperovitch, an adversary of Vladimir Putin, active in US-based anti-Putin lobbying and PR. CrowdStrike’s “draft” report on their review of the server was laughably incomplete, and the Mueller team’s lawyers took no steps to validate it.

It would be interesting to hear Robert Mueller’s explanation for how come US computer forensic experts were never dispatched to take possession of the DNC servers. Surely a ranking member on either House committee would have to ask him that, along with many other embarrassing questions about the stupendously sloppy and disingenuous work of the Special Counsel’s team. It was only one glaring omission among many.

The whole affair now takes on tragic contours of Shakespearean dimensions. The Attorney General, Mr. Barr, is said to be an “old friend” of Mr. Mueller. They clashed pretty publicly after the release of Mr. Mueller’s long-awaited final report. Mr. Barr must at least be dismayed by the bad faith and deliberate deceit in his old friend’s final report,  and he really has to do something about it. The entire Mueller episode smacks of prosecutorial misconduct. In retrospect, it can only be explained as a desperate act undertaken by foolishly overconfident political activists.

If Mr. Mueller thought he was being enlisted to play an historically heroic role to help get rid of an elected president detested by the Establishment, then he made the blunder of a lifetime. It was not the first blunder of his long career, but it was the final and fatal one. It is not out of the question that Mr. Mueller himself may eventually be the one indicted and convicted of real crimes against the people of the United States.


Iran has handed down the death penalty to alleged members of a CIA-spy ring inside Iran's military, which authorities said they uncovered earlier this year. And now for the first time, state media is circulating photos purporting to show some among the alleged CIA-linked operatives.

“The identified spies were employed in sensitive and vital private sector centers in the economic, nuclear, infrastructure, military and cyber areas... where they collected classified information,” Iran's Ministry of Intelligence said on state television. They had been

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working "contractors or consultants," the statement said.

Iranian judiciary spokesman Gholamhossein Esmaili had first announced in June that a number among seventeen total alleged spies rounded up were facing execution because of the "severity of their crimes," as reported by NBC. The unnamed defendants were reportedly associated with the Iranian military and also followed a similar announcement made last August the arrest of "tens of spies" uncovered within the government. 

The agencies "successfully dismantled a (CIA) spy network," an official only identified as head of counter-intelligence at the Iranian intelligence ministry, told reporters in Tehran. Arrests reportedly began in March

"Those who deliberately betrayed the country were handed to the judiciary... some were sentenced to death and some to long-term imprisonment," he said, as cited by the AFP. However, the photos published - which appear to show Americans - only claim these are officers which had been "handling" the spies supposedly caught inside Iran

None of the initial photos released showed those pictured in any kind of detention or interrogation, but instead most appeared to be personal or family photos. As Reuters reports:

Iranian state television published images it said showed the CIA officers who were in touch with the suspected spies.

There was no immediate comment on the Iranian allegations by the CIA or U.S. officials.

Additionally, in another stunning development, an Iranian television documentary aired Monday which claimed to show footage of an alleged CIA officer attempting to recruit an unidentified Iranian man. The footage was presented as taking place inside the United Arab Emirates.

Documents alleging to "prove" the allegations were also posted online by Iranian media channels. 

“Because there are so many intelligence officers in Dubai. It is very dangerous... Iranian intelligence,” a blond-haired woman was shown telling the man. According to Reuters:

The woman spoke Persian with an accent which appeared to be American.

State media outlets had touted the documentary as dealing a heavy blow "to a CIA spy network in the region and beyond. 

The photos and video purporting to show CIA assets and operatives have yet to be confirmed or denied by US political or intelligence officials and come amid already soaring tensions have put the region on edge, and as Britain has demanded the release of the UK-flagged tanker Stena Impero, captured in the Strait of Hormuz Friday.


Authored by Lance Roberts via RealInvestmentAdvice.com,

Do you remember this commercial?

The Etrade commercial aired during Super Bowl XLI in 2007. The following year, the financial crisis set in, markets plunged, and investors lost 50%, or more, of their wealth.

However, this wasn’t the first time it happened.

The same thing happened in late 1999. This commercial was aired 2-months shy of the beginning of the “Dot.com” bust as investors once again believed “inve

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sting was as easy as 1-2-3.”

Why this trip down memory lane? (Other than the fact the commercials are hilarious to watch.)

Because this is typical of the mindset seen at the end of extremely long “cyclical” bull market cycles. 

Investing is simple. Just throw you money in the market and it goes up. Its so easy a “baby can do it.”

Here is something else you see at the end of bull market cycles:

 “This couple retired at 31 with $1 Million: Want to retire early? How “going against the grain” allowed this FIRE couple to ditch their jobs and travel the world.

How did they make this happen? Shen and Leung, who was also a computer engineer, are part of the FIRE movement — which stands for Financial Independence, Retire Early — where the goal is to save a lot so you can retire early. The couple retired at 31 with roughly $1 million in the bank. They’re currently withdrawing 3.5% a year from that nest egg, and say they can easily travel the world on that money — as they’ve got lots of practice being frugal.”

First, I want to give the couple a “fanatical thumbs up” for saving $1 million by their 30’s. That is an amazing feat which deserves respect and acknowledgment. 

Secondly, they are very budget conscious and willing to sacrifice the luxuries most people long for to live their dream.

Another “thumbs up.”

However, the rise of the “F.I.R.E.” movement is symptomatic of a late stage bull market advance. More importantly, we can also predict how things will turn out for Shen and Leung.

For this discussion I want to use the data provided by Shen and Leung to build our examples.

  • Invested asset value:  $1 million

  • Annualized withdrawal rate: 3.5%

  • Annualized return rate: 6% (Not specified but a reasonable estimate)

  • Living needs: $35,000 annually.

  • Life expectency: 85-years of age.

With these assumptions in place we can begin to do some forecasting about how things eventually turn out. However, we also have to assume:

  • The couple never has children

  • Never requires serious medical care (hopefully)

  • Never considers buying a house

  • Has no major life events, etc.

First, we need to start with the cost of living. As I showed recently in Part 1 of “Everything You’ve Been Told About Savings & Investing Is Wrong” is that the cost of living rises over time due to inflation. However, for most the increase in living costs rises dramatically more as needs for housing, children, education, travel, insurance, and health care occur through stages of life.

For this exercise, we will assume our example couple never changes their lifestyle so only inflation is a factor. We will use the historical average of 2.1% and project it out for 50-years.

Understanding this, we can now take their $1 million, compound it at 6% annually (the preferred mainstream method), and deduct 3.5% annually adjusted for inflation over their 50-year time horizon.

We need to assume that since our couple is in their 30’s, the investable assets are in taxable accounts. Also, if this is the case, and they are not touching the principal, then we need to adjust the annual withdrawals for capital gains tax. The bottom two area charts adjust for 2.1% annual inflation and inflation plus a 15% tax on withdrawals. (Tax is paid on the gains taken to fund the withdrawal and the dividends paid in on an annual basis)

Not surprisingly, if our couple can indeed live on $35,000 a year, even when adjusting for inflation and taxation, a $1 million portfolio growing at 6% annually can indeed support them for their entire lifespan.

Reality Is Different

In Part 3 of our recent series on “saving and investing,” we laid out the issue, and importance, of variable rates of return. To wit:

“When imputing volatility into returns, the differential between what investors were promised (and this is a huge flaw in financial planning) and what happened to their money is substantial over long-term time frames.”

The chart below is exactly the same as above, however, this time we have used the average annual 50-year returns from previous periods in history where starting valuations were greater than 20x earnings as they are today. (High starting valuations beget lower future returns historically speaking.) 

Over a 50-years, our couple will get the benefit of complete valuation and market cycles. In this case, since they are starting with high valuations at the outset, the first 30-years contains a long-period of lower returns, but that last 20-years receives the benefit of higher returns due to valuation reversion.

Due to market volatility and periods of negative growth, the original $1 million portfolio only grows to $3 million when including nominal spending. However, when accounting for volatility, inflation, and taxes, the survival rate of the portfolio diminishes sharply due to two reasons:

  1. Down years reduce the growth rate of the portfolio over the given time frame.

  2. Withdrawals in down years exacerbate the decline in the portfolio. (i.e. Portfolio declines by $65,000 plus the $35,000 annual withdrawal increases the 6.5% decline to 10%.)

Obviously, not accounting for volatility when planning to retire early can have severe future consequences. In this case they will run out of money in year 47.

The Big Bad Bear

As I said at the beginning of this missive, the “F.I.R.E.” movement is the result of a decade-long bull market cycle.

Most likely, our young couple will be met with a “bear market” sooner, rather than later, in their early retirement. If we use the return model from our recent article on “investors and pension funds,” we see a rather dramatic shift in life-expectancy of the portfolio.

“The chart below is the S&P 500 TOTAL REAL return from 1995 to present. I have projected an average return of every period in history where the market peaked following P/E’s exceeding 20x earnings. This provides for variable rates of market returns with cycling bull and bear markets out to 2060. I have also projected ‘average’ returns from 3% to 8% from 1995 to 2060. (The average real total return for the entire period is 6.56% which is likely higher than what current valuation and demographic trends suggest it should be.)”

The benefit of this model is that it shows the impact to portfolio returns when bear markets are “front-loaded,” as will likely be the case for most the “F.I.R.E.” followers. (Note, in the return model above the “bear market” is 5-years into the future)

The reason for the dramatic short-fall is that a major, “rip your face off,” bear market will cut asset values by 50% very early on. All of a sudden, the annual withdrawal rate of 3.5% becomes 7%, which outpaces the ability of the portfolio to grow fast enough to catch up with the withdrawal rate and the loss of principal. In this more realistic example, our couple will run out of money in 30 years.

This is the exact problem “pension funds” face currently.

The Other Problems From “Playing With F.I.R.E.”

While we have mainly addressed the issues surrounding assumptions being used by the ‘F.I.R.E.”movement in having enough assets to retire, there are some other important issues which should be considered.

  1. Loss of your skill set. In retirement it is probable your skill set erodes and becomes outdated over time. New technologies, trends, innovations, etc. are running at a faster pace than ever.

  2. Becoming unemployable. One of the things seen following the financial crisis was employers preferring to hire individuals who were already employed rather than hiring those out of work. The reasoning was that if you were good enough to keep your job during the recession, you obviously have a valuable skill set. Once you are out of the “labor force” for a while, it becomes more difficult to regain employment as employers tend to prefer those with a very steady work history, a growing career, and relevant skill sets.

  3. Life. Besides simply running out of money sooner than you planned because of a bear market, a rising cost of living more than you counted on, or higher taxes (all of which are very likely in the near future) there is also just “life.”  It doesn’t matter how carefully you plan; “S*** Happens!” More importantly, it always happens when you least expect it and at the worst possible time. These things cost money and impact our best laid spending and saving plans. The problem with “retiring early,” is that it leaves plenty of time for things to go wrong. 

  4. Unplanned Accident/Medical Problem. Young people suffer from an “invincibility syndrome.” They tend to not carry insurance, due to the cost, because they “never get sick.” While we certainly hope it never happens, a major accident or health issue can extract tens to hundreds of thousands of dollars of capital critically impairing retirement plans.

  5. Too Old To Do Anything About It. The biggest problem for “F.I.R.E.” practitioners is that running out of money late in life leaves VERY few options for the rest of your retirement years. If our math above is even close to correct, which history suggests it is, then our young couple will be faced with going back to work in the 70’s. That is not exactly the retirement most are hoping for. 

As I stated in our previous series, retiring early is far more expensive than most realize. Furthermore, not accounting for variable rates of returns, lower forward returns due to high valuations, and not adjusting for inflation and taxes will leave most far short of their goals. 

While it sounds like I am bashing the “F.I.R.E. Movement,” I am not. I am for ANY program or system that gets young people to save more, stay out of debt, and invest cautiously. The movement is a good thing and it should be embraced.

But, it is also a symptom of a decade-long period of making “easy money” in the financial markets.

These periods ALWAYS end badly and the next “bear market” will quickly “extinguish the F.I.R.E.” as losses mount and dreams have to be put on hold.

It will happen. It always appears easiest at the top.

And, given one of E*Trade’s latest commercials, the next bear market may be coming sooner than we expect.


This weekend's record-setting heatwave roasted 200 million Americans inhabiting the eastern two-thirds of the country, but some had it worse than others.

While most of those affected had the option of beating the heat by staying indoors, power outages in Brooklyn and Queens left more than 50,000 people temporarily without power - and thus, no AC - subjecting them to the punishing heat, which was blamed for at least six deaths.

New York Daily News

Now, New York Gov. Andrew Cuomo is expanding a pr

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obe into the recent power failures, as some 20,000 customers remained without power early Monday morning. Cuomo said he had directed the State Department of Public Service to expand its investigation into ConEd outages, which it opened after a failure last weekend left 72,000 customers in Manhattan’s West Side without power for hours.

Con Edison said its crews are responding to power outages and will continue working throughout the day to restore power to as many customers as possible.

Cuomo also declared the heatwave "a natural disaster" and insisted that ConEd should have been better prepared.

"We have been through this situation with ConEd time and again, and they should have been better prepared," Cuomo said in a statement. "This was not a natural disaster; there is no excuse for what has happened in Brooklyn."

While it didn't respond to Cuomo, the company has said that it took some customers in southeast Brooklyn out of service to protect sensitive equipment, and said it would restore power as quickly as possible. Brooklyn neighborhoods impacted include Canarsie, Flatlands, Mill Basin, Old Mill Basin, Bergen Beach and Georgetown. Another 27,000 lost power on Long Island.

The exact number of people impacted was difficult to tally, since an individual ConEd customer could be a single-family home or a large apartment building, according to Bloomberg.

As usual, Mayor de Blasio was no help, though at least this time he was present at his office, and not out campaigning in Iowa, during the outage. He provided regular updates on his twitter feed.

Several NYC public schools will be closed on Monday due to the outages.

The outages created dangerous conditions on the road, leading to many near-accidents like this one at certain particularly dangerous intersections.

ConEd has asked customers to try and conserve power while it works to repair equipment.

But whether ConEd turns the AC back on or not, everybody will feel some relief on Monday as the heat wave is expected to pass and heat advisories are expected to be lifted for a large swath of the US. The heatwave initially stretched from Oklahoma to Ohio toward the middle of the country, and along the East Coast from Maine to South Carolina.


In what appears to be a gesture of contempt for Washington, Chinese companies have continued to import Iranian crude, but instead of reporting the crude imports, which would violate US sanctions, they're storing the oil in bonded storage tanks situated at Chinese ports.

The phenomenon began when Washington reimposed sanctions back in May. And two months later, Iranian crude is still being shipped to China, only to end up in the tanks. Possibly the strangest aspect of this whole arrangement is that the oil sits in the tanks, unused. So far, none of it has b

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een cleared through Chinese customs, so the oil is still technically "in transit."

So far, Washington hasn't commented on how it views this stash of oil looming over global markets. If Chinese companies were to ever tap this store of oil, it could dampen demand in the world's second-largest economy, which could rattle global markets.

The arrangement clearly benefits Iran, which has retained at least one major buyer of its crude.

"Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny," said Rachel Yew, an analyst at industry consultant FGE in Singapore. "We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point."

Bloomberg ship-tracking data show there could be more Iranian oil headed for these massive tanks. At least ten very-large crude carriers and two smaller tankers owned by the state-run National Iranian Oil Company and its shipping arm are currently sailing toward China or idling off its coast. Combine, the vessels can carry some 20 million barrels. Most of this oil is still owned by Tehran, which creates a grey area in terms of whether China is violating US sanctions. It's widely believed that most of the oil is payment in an oil-for-investment deal, which are fairly common in China.

The bulk of Iranian oil in China’s bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn’t crossed Chinese customs so it is theoretically in transit. Some of the crude, though, is owned by Chinese entities that may have received it as part of oil-for-investment schemes. For example, a Chinese oil company could have helped fund a production project in Iran under an agreement to be repaid in kind. Whether this sort of transaction is in breach of sanctions isn’t clear, and so the Chinese companies are keeping it in bonded storage to avoid the official scrutiny it would get once it is registered with customs, according to the people.

Bloomberg has been tracking the discrepancy between the volume of Iranian crude shipped to China and the volume cleared by Chinese customs for months. China received about 12 million tons of Iranian crude from January through May, according to ship-tracking data, versus about 10 million that cleared customs over the period.

And the White House's refusal to address the flow of Iranian crude has created confusion, Bloomberg said.

The White House cancelled all waivers allowing certain countries to keep importing Iranian crude on May 2. Any nation "caught" importing Iranian crude would, presumably, be in violation of Iranian sanctions.

More oil arrives almost every day.

Several other Iranian-owned tankers offloaded in China or were heading there, according to ship tracking data. VLCC Stream discharged at Tianjin on June 19, while Amber, Salina and C. Infinity offloaded crude at the ports of Huangdao, Jinzhou and Ningbo. Tankers Snow, Sevin and Maria III were last seen sailing in the direction of China.

At some point, Washington will need to clarify whether this constitutes a violation of US sanctions.

"The US will now need to define how it quantifies the infringement of sanctions," said Michal Meidan, director of the China Energy Programme at the Oxford Institute for Energy Studies. There’s a lack of clarity on whether it would look at "financial transactions or the loading and discharge of cargoes by company or entity," she said.

Aside from providing a steady income, the arrangement will free up Iranian tankers, instead of pressing them into service as storage hubs. Then again, addressing this now might seem like Washington is deliberately picking a fight to sabotage trade talks.

Or maybe the Iranian oil will factor into a final agreement?

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Authored by Con Coughlin via The Gatestone Institute,

With tensions rising in the Gulf by the day as a result of Iran's increasingly provocative conduct, the refusal of the major European powers to back the Trump administration's determination to confront Iran is looking increasingly untenable.

In the past few months Iran has been blamed for a series of attacks on oil tankers operating in the Gulf, and forced a British Royal Navy warship to intervene when a number of fast patrol boats operated by the naval division of the Islamic

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Revolutionary Guard Corps (IRGC) attempted to harass a British-owned tanker sailing through the Strait of Hormuz, the main shipping route into the oil-rich Gulf.

Additionally, US military officials at Central Command (CentCom) are currently investigating claims that Iran was behind the mysterious disappearance of the oil tanker Riah while sailing in Iranian waters at the weekend.

Also, Iranian-backed Houthi rebels have been blamed for carrying out a number of attacks against targets in neighbouring Saudi Arabia, including a missile attack on a Saudi civilian airport and a drone attack on a key Saudi pipeline.

Iran's most audacious act so far has been to shoot down an American naval drone conducting a reconnaissance mission in the Strait of Hormuz last month. The strike came within hours of provoking a military response from the Trump administration.

Meanwhile, as all this has been going on, the ayatollahs have announced that they have resumed work on enriching uranium, a blatant breach of the controversial nuclear accord Tehran signed with the world's leading powers in 2015.

Yet, while Iran shows no sign of scaling down its aggressive stance towards the US and its allies in the region, Europe continues to cling to the wreckage of the Joint Comprehensive Plan of Action (JCPOA), to give the nuclear deal its proper name, in the misguided belief that the deal remains the best means of preventing Iran from developing nuclear weapons.

Europe's insistence on adopting a different approach to the White House in its dealings with Iran dates back to US President Donald Trump's original decision last year to withdraw from the JCPOA, after arguing it was the "worst deal ever."

That, however, is not a viewpoint supported by the European signatories to the deal -- Britain, France and Germany. They still wrongly cling to the illusion that the agreement is a triumph of diplomacy, and has severely limited Iran's ability to pursue its ambition of becoming a nuclear-armed power. Under the JCPOA deal, upon its sunset, a mere ten years away, in 2030, "Iran will be permitted to build an industrial-size nuclear industry" with the ability to build and potentially deliver as many nuclear weapons as it liked.

To this end the Europeans have actively sought to undermine the Trump administration's new sanctions regime against Tehran by trying to find ways to continue trading with Iran. The Europeans have even come up with their own trading framework -- the so-called Special Purpose Vehicle -- which is supposed to enable European companies to continue trading with Iran without attracting punitive measures from the US.

In fact the measure has become an exercise in futility, as major European business conglomerates such as Airbus have shown that they are far more interested in protecting their lucrative business ties with the US than dealing with an economic basket case like Iran.

But not even this setback has deterred the Europeans from pursuing their policy of appeasement towards the ayatollahs. The determination of the Europeans to stick with the nuclear deal at all costs was very much in evidence earlier this week during a meeting of European Union foreign ministers in Brussels at which they came up with the decidedly bogus notion that Iran's breaches of the 2015 nuclear deal were not significant and therefore did not require the Europeans to withdraw from the JCPOA.

"Technically all the steps that have been taken, and that we regret have been taken, are reversible," Federica Mogherini, the EU's foreign policy chief, told EU foreign ministers.

As none of the signatories to the deal considered the breaches to be significant, they were not prepared to trigger the dispute mechanism which could lead to further sanctions.

"We invite Iran to reverse the steps and go back to full compliance," were her final words on the matter.

Pictured: Mogherini (left) stands with Iranian Foreign Minister Javad Zarif, during her August 2017 visit to Iran. (Image source: European External Action Service/Flickr)

Europe's insistence on sticking with the nuclear deal, and its refusal to support Washington's attempts to provide naval protection for international shipping through the Strait of Hormuz, could ultimately prove self-defeating.

Europe is far more dependent on energy supplies from the Gulf than the US, and any further attempts by Iran to disrupt oil and gas supplies from the Gulf would have catastrophic consequences for Europe's economy.


As both countries struggle with demographic and economic challenges, Africa's potential work force is set to surpass Asia's by the end of the 21st-century, according to Bloomberg.

15 to 64 year old Africans today represent just a quarter of the size of Asia's working age population, but the story could be different by the year 2100. Africa will then surpass Asia, as Asia will be confronted by an aging population and Africa will become flush with youth looking for employment.

However, it isn’t clear that economies

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on the African continent will expand enough to accommodate a robust and growing working age population. Additionally, potential employees may not have the skills that these jobs require.

Nigeria's potential labor force should spike by almost 350%, or 375 million people, by the end of the century to more than 485 million. The IMF, however, recently noted substantial inequality in access to education by gender in between the rich and poor in Nigeria. A recent study found that a girl born into a family in the poorest 20% of society spends only about one year in school.

William Lee, chief economist at the Milken Institute said:

“As global supply chains reduce labor inputs with better technology and machines for even lower value-added production, it will be difficult for young workers in Africa to find unskilled manufacturing jobs in the future similar to those now employing Asian youth.”

The number of available employees worldwide will rise 29% to 6.5 billion from 5 billion by the end of the century. Of this, Africa's share will rise to more than 33% around 2100 from almost 15%. The working age population of the continent will grow by 2 billion to 2.75 billion over the next 80 years and Asias is set to decline by 415 million, or 13%.

“Most people overlook the fact that the Chinese dependency ratio -- the working-age to over-65 population -- is deteriorating rapidly and is already showing signs of straining,” Lee continued.

The total number of people aged 15 to 64 globally will peak at 6.5 billion around 2090. This marks an increase of 1.5 billion from today. About 80% of this gain is expected to come from low income countries and the remainder from middle income nations. High income countries will see their potential labor force shrink as birth rates remain low.

These large shifts will take place in a very short period of time. For instance, in 2020, everyone over 65 will be supported by an estimated seven workers. By 2050, this ratio will drop to about four workers per person.

These shifts will create challenges for governments in a number of countries, according to Bloomberg:

  • Taxation, assets prices and the use of resources will come under pressure while innovations in artificial intelligence, machine learning, engineering and computing power may cause trepidation about employment within many industries.

  • A recent Oxford Economics report estimates that 20 million manufacturing positions will be lost by 2030 with lower-skilled regions hit the hardest. Oxford’s econometric model found that, on average, each newly installed robot displaces 1.6 manufacturing workers. About 1.7 million factory jobs already have gone to robots since 2000, including 400,000 in Europe, 260,000 in the U.S. and 550,000 in China, the report found.

  • The labor force in North America and Oceana will increase by close to 38 million and 17 million, respectively, while Europe will experience a decline of 137 million or 28%. The working-age population in Latin America and the Caribbean will shrink by 15% or 66 million.

  • While birth rates have fallen sharply in much of the developed world, migration has enabled the population in North America to continue growing. The number of working-age men and women in the U.S. will rise 1.2% to 243 million by 2030 and then climb 14% to 278 million by 2100. The number of people in North America living longer 100 years will soar to almost 1.9 million from about 1 million today.

The two most populous nations in the world are also aging quickly.

China and India will account for 31% of total population and 39% of the world's seniors by the year 2050. Both are also slated to see their share of the global labor force shrink.

The working age population in India is projected to peak around 2050, but 40 years later there will be fewer 15 to 64 year olds than there are today. In China, the shift will happen even quicker. The working age population of the country is already shrinking and will contract by 27.5 million by 2030. India's working age population is expected to overtake China’s in 2027 and potential labor forces in Russia, Japan, Germany and South Korea will also be reduced due to slow birth rates and migration.


The 2011 Fukushima nuclear incident in Japan made international headlines for months, but it also changed Japanese attitudes towards nuclear energy. After a devastating tsunami hit Japan on March 11, 2011, emergency generators cooling the Fukushima nuclear power plant gave out and caused a total of three nuclear meltdowns, explosions and the release of radioactive material into the surrounding areas.

Before the incident, the Japanese had been known as steadfast supporters of nuclear energy, taking previous nuclear catast

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rophes at Three Mile Island (USA) or Chernobyl (Ukraine) in stride. But a meltdown on their own soil changed the minds of many citizens and kicked the anti-nuclear power movement into gear.

After mass protests, the Japanese government under then Prime Minister Yoshihiko announced plans to make Japan nuclear free by 2030 and not to rebuild any of the damaged reactors. New Prime Minister Shinzo Abe has since tried to change the nation’s mind about nuclear energy by highlighting that the technology is indeed carbon neutral and well suited to reach emission goals.

As Statista's Katharina Buchholz notes, despite one reactor restart at Sendai power plant in Southern Japan in 2015, nuclear energy has almost vanished from Japanese electricity generation. 

You will find more infographics at Statista

In 2016 (latest available), only 2 percent of energy generated in Japan came from nuclear power plants.

Coal and natural gas picked up most of the slack, but renewable sources, mainly solar energy, also grew after 2011.


Authored by Mark Curtis via TruePublica.org.uk,

The British government is refusing to release a 1941 file on Palestine, as it might “undermine the security” of Britain and its citizens. Why would a 78-year-old document be seen as so sensitive in 2019?

One plausible reason is that it could embarrass the British government in its relations with Israel and Iraq, and may concern a long but hidden theme in British foreign policy: creating false pretexts for military intervent

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The Colonial Office document, at the National Archives in London, was uncovered by journalist Tom Suarez and concerns the “activities of the Grand Mufti [Haj Amin al-Husseini] of Jerusalem” in 1940-41.

After the assassination of Lewis Andrews, British district commissioner for Galilee, in September 1937, the British Government dismissed al-Husseini from his post as president of the Supreme Muslim Council and decided to arrest all members of the Arab Higher Committee, including Husseini.

He took refuge in the Noble Sanctuary (al-Haram al-Sharif), fled to Jaffa and then Lebanon, and ended up in Iraq, where he played a role in the Iraqi national anti-British movement.

He spent the Second World War moving between Berlin and Rome and took part in the propaganda war against Britain and France through Arabic radio broadcasts.

A plan ‘to clip the mufti’s wings’

In April 1941, nationalist army officers known as the Golden Square staged a coup in Iraq, overthrowing the pro-British regime, and signalled they were prepared to work with German and Italian intelligence. In response, the British embarked on a military campaign and eventually crushed the coup leaders two months later.

But Suarez discovered in the files that the British were already wanting such a “military occupation of Iraq” by November 1940 – well before the Golden Square coup gave them a pretext for doing so.

The reason was that Britain wanted to end “the mufti’s intrigues with the Italians”. One file notes: “We may be able to clip the mufti’s wings when we can get a new government in Iraq. FO [Foreign Office] are working on this.” Suarez notes that a prominent thread in the British archive is: “How to effect a British coup without further alienating ‘the Arab world’ in the midst of the war, beyond what the empowering of Zionism had already done.”

As British troops closed in on Baghdad, a violent anti-Jewish pogrom rocked the city, killing more than 180 Jewish Iraqis and destroying the homes of hundreds of members of the Jewish community who had lived in Iraq for centuries. The Farhud (violent dispossession) has been described as the Iraqi Jews’ Kristallnacht, the brutal pogrom against Jews carried out in Nazi Germany three years earlier.

There have long been claims that these riots were condoned or even orchestrated by the British to blacken the nationalist regime and justify Britain’s return to power in Baghdad and ongoing military occupation of Iraq.

Historian Tony Rocca noted:

“To Britain’s shame, the army was stood down. Sir Kinahan Cornwallis, Britain’s ambassador in Baghdad, for reasons of his own, held our forces at bay in direct insubordination to express orders from Winston Churchill that they should take the city and secure its safety. Instead, Sir Kinahan went back to his residence, had a candlelight dinner and played a game of bridge.”

1953 coup in Iran

Could this be the reason that UK government censors want the file to remain secret after all these years? It would neither be the first, nor the last time that British planners used or created pretexts to justify their military interventions.

In 1953, the covert British and US campaign to overthrow the elected nationalist government of Mohammad Mosaddegh in Iran included a “false flag” element. Agents working for the British posed as supporters of the communist Tudeh party, engaging in activities such as throwing rocks at mosques and priests, in order to portray the demonstrating mobs as communists. The aim was to provide a pretext for the coup and the Shah of Iran’s taking control in the name of anti-communism.

Three years later, in 1956, Britain also secretly connived to create a pretext for its military intervention in Egypt. After Egyptian President Gamal Abdel Nasser nationalised the Suez Canal and Britain sought to overthrow him, the British and French governments secretly agreedwith Israel that the latter would first attack Egypt. Then, London and Paris would despatch military forces on the pretext of separating the warring parties, and seize the canal. The plan went ahead but failed, largely owing to US opposition.

Five years later, in 1961, it was a similar story in Kuwait. This little-known British intervention was publicly justified on the basis of an alleged threat from Iraq, but the declassified files that I have examined suggest that this “threat” was concocted by British planners. When Kuwait secured independence in June 1961, Britain was desperate to protect its oil interests and to solidify its commercial and military relations with the Kuwaiti regime. The files suggest that the British therefore needed to get the Kuwaitis to “ask” Britain for “protection”.

Kuwait intervention

On 25 June 1961, Iraqi ruler Abdul Karim Qasim publicly claimed Kuwait as part of Iraq. Five days later, Kuwait’s emir formally requested British military intervention, and on 1 July, British forces landed, eventually numbering around 7,000.

But the alleged Iraqi threat to Kuwait never materialised. David Lee, who commanded the British air force in the Middle East in 1961, later wrote that the British government “did not contemplate aggression by Iraq very seriously”.

Indeed, the evidence suggests that the emir was duped into “requesting” intervention by the British, and his information on a possible Iraq move on Kuwait came almost exclusively from British sources. The files show that the “threat” to Kuwait was being pushed by the British embassy in Baghdad but contradicted by Britain’s consulate in Basra, near the Kuwaiti border, which reported no unusual troop movements.

British intervention was intended to reassure Kuwait and other friendly Middle Eastern regimes that were key to maintaining the British position in the world’s most important region. The prime minister’s foreign policy adviser said that letting go of Kuwait would have meant that “the other oil sheikhdoms (which are getting richer) will not rely on us any longer”.

By the time we reached the invasion of Iraq in 2003, creating false pretexts for interventions had become a familiar theme in British foreign policy.

A matter of routine

To return to the 1941 document, British authorities have had a policy of either censoring, “losing” or destroying historical files that could undermine relations with current governments.

In 2012, an official review concluded that “thousands of documents detailing some of the most shameful acts and crimes committed during the final years of the British empire were systematically destroyed to prevent them falling into the hands of post-independence governments”, according to a report in The Guardian.

The files covered policies such as the abuse and torture of insurgents in Kenya in the 1950s, the alleged massacre of 24 unarmed villagers in Malaya in 1948, and the army’s secret torture centre in Aden in the 1960s.

Other papers have been hidden for decades in secret foreign office archives, beyond the reach of historians and members of the public, and in breach of legal obligations for them to be transferred into the public domain.

Whatever is in the 1941 document, if the British government is withholding its release for fear of upsetting relations with key allies, this would be less than surprising and more a matter of routine.


Authored by Dmitry Orlov via Club Orlov blog,

Within the vast bureaucratic sprawl of the Pentagon there is a group in charge of monitoring the general state of the military-industrial complex and its continued ability to fulfill the requirements of the national defense strategy. Office for acquisition and sustainment and office for industrial policy spends some $100,000 a year producing an Annual Report to Congress. It is available to the general public. It is even available to the general public in Russia, and Russian experts had a really good ti

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me poring over it.

In fact, it filled them with optimism. You see, Russia wants peace but the US seems to want war and keeps making threatening gestures against a longish list of countries that refuse to do its bidding or simply don’t share its “universal values.” But now it turns out that threats (and the increasingly toothless economic sanctions) are pretty much all that the US is still capable of dishing out—this in spite of absolutely astronomical levels of defense spending.

Let’s see what the US military-industrial complex looks like through a Russian lens.

It is important to note that the report’s authors were not aiming to force legislators to finance some specific project. This makes it more valuable than numerous other sources, whose authors’ main objective was to belly up to the federal feeding trough, and which therefore tend to be light on facts and heavy on hype. No doubt, politics still played a part in how various details are portrayed, but there seems to be a limit to the number of problems its authors can airbrush out of the picture and still do a reasonable job in analyzing the situation and in formulating their recommendations.

What knocked Russian analysis over with a feather is the fact that these INDPOL experts (who, like the rest of the US DOD, love acronyms) evaluate the US military-industrial complex from a… market-based perspective! You see, the Russian military-industrial complex is fully owned by the Russian government and works exclusively in its interests; anything else would be considered treason. But the US military-industrial complex is evaluated based on its… profitability! According to INDPOL, it must not only produce products for the military but also acquire market share in the global weapons trade and, perhaps most importantly, maximize profitability for private investors. By this standard, it is doing well: for 2017 the gross margin (EBITDA) for US defense contractors ranged from 15 to 17%, and some subcontractors - Transdigm, for example - managed to deliver no less than 42-45%. “Ah!” cry the Russian experts, “We’ve found the problem! The Americans have legalized war profiteering!” (This, by the way, is but one of many instances of something called systemic corruption, which is rife in the US.)

It would be one thing if each defense contractor simply took its cut off the top, but instead there is an entire food chain of defense contractors, all of which are legally required, no less, to maximize profits for their shareholders. More than 28,000 companies are involved, but the actual first-tier defense contractors with which the Pentagon places 2/3 of all defense contracts are just the Big Six: Lockheed Martin, Northrop Grumman, Raytheon, General Dynmics, BAE Systems and Boeing. All the other companies are organized into a pyramid of subcontractors with five levels of hierarchy, and at each level they do their best to milk the tier above them.

The insistence on market-based methods and the requirement of maximizing profitability turns out to be incompatible with defense spending on a very basic level: defense spending is intermittent and cyclical, with long fallow intervals between major orders. This has forced even the Big Six to make cuts to their defense-directed departments in favor of expanding civilian production. Also, in spite of the huge size of the US defense budget, it is of finite size (there being just one planet to blow up), as is the global weapons market. Since, in a market economy, every company faces the choice of grow or get bought out, this has precipitated scores of mergers and acquisitions, resulting in a highly consolidated marketplace with a few major players in each space.

As a result, in most spaces, of which the report’s authors discuss 17, including the Navy, land forces, air force, electronics, nuclear weapons, space technology and so on, at least a third of the time the Pentagon has a choice of exactly one contractor for any given contract, causing quality and timeliness to suffer and driving up prices.

In a number of cases, in spite of its industrial and financial might, the Pentagon has encountered insoluble problems. Specifically, it turns out that the US has only one shipyard left that is capable of building nuclear aircraft carriers (at all, that is; the USS Gerald Ford is not exactly a success). That is Northrop Grumman Newport News Shipbuilding in Newport, Virginia. In theory, it could work on three ships in parallel, but two of the slips are permanently occupied by existing aircraft carriers that require maintenance. This is not a unique case: the number of shipyards capable of building nuclear submarines, destroyers and other types of vessels is also exactly one. Thus, in case of a protracted conflict with a serious adversary in which a significant portion of the US Navy has been sunk, ships will be impossible to replace within any reasonable amount of time.

The situation is somewhat better with regard to aircraft manufacturing. The plants that exist can produce 40 planes a month and could produce 130 a month if pressed. On the other hand, the situation with tanks and artillery is absolutely dismal. According to this report, the US has completely lost the competency for building the new generation of tanks. It is no longer even a question of missing plant and equipment; in the US, a second generation of engineers who have never designed a tank is currently going into retirement. Their replacements have no one to learn from and only know about modern tanks from movies and video games. As far as artillery, there is just one remaining production line in the US that can produce barrels larger than 40mm; it is fully booked up and would be unable to ramp up production in case of war. The contractor is unwilling to expand production without the Pentagon guaranteeing at least 45% utilization, since that would be unprofitable.

The situation is similar for the entire list of areas; it is better for dual-use technologies that can be sourced from civilian companies and significantly worse for highly specialized ones. Unit cost for every type of military equipment goes up year after year while the volumes being acquired continuously trend lower—sometimes all the way to zero. Over the past 15 years the US hasn’t acquired a single new tank. They keep modernizing the old ones, but at a rate that’s no higher than 100 a year.

Because of all these tendencies and trends, the defense industry continues to lose not only qualified personnel but also the very ability to perform the work. INDPOL experts estimate that the deficit in machine tools has reached 27%. Over the past quarter-century the US has stopped manufacturing a wide variety of manufacturing equipment. Only half of these tools can be imported from allies or friendly nations; for the rest, there is just one source: China. They analyzed the supply chains for 600 of the most important types of weapons and found that a third of them have breaks in them while another third have completely broken down. In the Pentagon’s five-tier subcontractor pyramid, component manufacturers are almost always relegated to the bottommost tier, and the notices they issue when they terminate production or shut down completely tend to drown in the Pentagon’s bureaucratic swamp.

The end result of all this is that theoretically the Pentagon is still capable of doing small production runs of weapons to compensate for ongoing losses in localized, low-intensity conflicts during a general time of peace, but even today this is at the extreme end of its capabilities. In case of a serious conflict with any well-armed nation, all it will be able to rely on is the existing stockpile of ordnance and spare parts, which will be quickly depleted.

A similar situation prevails in the area of rare earth elements and other materials for producing electronics. At the moment, the accumulated stockpile of these supplies needed for producing missiles and space technology—most importantly, satellites—is sufficient for five years at the current rate of use.

The report specifically calls out the dire situation in the area of strategic nuclear weapons. Almost all the technology for communications, targeting, trajectory calculations and arming of the ICBM warheads was developed in the 1960s and 70s. To this day, data is loaded from 5-inch floppy diskettes, which were last mass-produced 15 years ago. There are no replacements for them and the people who designed them are busy pushing up daisies. The choice is between buying tiny production runs of all the consumables at an extravagant expense and developing from scratch the entire land-based strategic triad component at the cost of three annual Pentagon budgets.

There are lots of specific problems in each area described in the report, but the main one is loss of competence among technical and engineering staff caused by a low level of orders for replacements or for new product development. The situation is such that promising new theoretical developments coming out of research centers such as DARPA cannot be realized given the present set of technical competencies. For a number of key specializations there are fewer than three dozen trained, experienced specialists.

This situation is expected to continue to deteriorate, with the number of personnel employed in the defense sector declining 11-16% over the next decade, mainly due to a shortage of young candidates qualified to replace those who are retiring. A specific example: development work on the F-35 is nearing completion and there won’t be a need to develop a new jet fighter until 2035-2040; in the meantime, the personnel who were involved in its development will be idled and their level of competence will deteriorate.

Although at the moment the US still leads the world in defense spending ($610 billion of $1.7 trillion in 2017, which is roughly 36% of all the military spending on the planet) the US economy is no longer able to support the entire technology pyramid even in a time of relative peace and prosperity. On paper the US still looks like a leader in military technology, but the foundations of its military supremacy have eroded. Results of this are plainly visible:

  • The US threatened North Korea with military action but was then forced to back off because it has no ability to fight a war against it.

  • The US threatened Iran with military action but was then forced to back off because it has no ability to fight a war against it.

  • The US lost the war in Afghanistan to the Taliban, and once the longest military conflict in US history is finally over the political situation there will return to status quo ante with the Taliban in charge and Islamic terrorist training camps back in operation.

  • US proxies (Saudi Arabia, mostly) fighting in Yemen have produced a humanitarian disaster but have been unable to prevail militarily.

  • US actions in Syria have led to a consolidation of power and territory by the Syrian government and newly dominant regional position for Russia, Iran and Turkey.

  • The second-largest NATO power Turkey has purchased Russian S-400 air defense systems. The US alternative is the Patriot system, which is twice as expensive and doesn’t really work.

All of this points to the fact that the US is no longer much a military power at all. This is good news for at least the following four reasons.

First, the US is by far the most belligerent country on Earth, having invaded scores of nations and continuing to occupy many of them. The fact that it can’t fight any more means that opportunities for peace are bound to increase.

Second, once the news sinks in that the Pentagon is nothing more than a flush toilet for public funds its funding will be cut off and the population of the US might see the money that is currently fattening up war profiteers being spent on some roads and bridges, although it’s looking far more likely that it will all go into paying interest expense on federal debt (while supplies last).

Third, US politicians will lose the ability to keep the populace in a state of permanent anxiety about “national security.” In fact, the US has “natural security”—two oceans—and doesn’t need much national defense at all (provided it keeps to itself and doesn’t try to make trouble for others). The Canadians aren’t going to invade, and while the southern border does need some guarding, that can be taken care of at the state/county level by some good ol’ boys using weapons and ammo they already happen to have on hand. Once this $1.7 trillion “national defense” monkey is off their backs, ordinary American citizens will be able to work less, play more and feel less aggressive, anxious, depressed and paranoid.

Last but not least, it will be wonderful to see the war profiteers reduced to scraping under sofa cushions for loose change. All that the US military has been able to produce for a long time now is misery, the technical term for which is “humanitarian disaster.” Look at the aftermath of US military involvement in Serbia/Kosovo, Afghanistan, Iraq, Libya, Syria and Yemen, and what do you see? You see misery—both for the locals and for US citizens who lost their family members, had their limbs blown off, or are now suffering from PTSD or brain injury. It would be only fair if that misery were to circle back to those who had profited from it.


Authored by Daisy Luther via The Organic Prepper blog,

Just in case we haven’t provided you with enough creepy dystopian news lately, the nation’s leader in Creepy Dystopia, California, has a brand new program. The “Cradle to Career Data System” will study and document everything about a child born in the state.

But don’t worry, it’s for your children’s own good.

What the heck is the “Cradle to Career Data System”?

Beginning at birth and stalking the child until he or she joins the

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workforce, California wants to keep on eye on all sorts of demographics and variables. They’ll do this by collecting information from “partner entities.” They’ll use this information, according to the Pasadena Star, to “provide appropriate interventions and supports to address disparities in opportunities and improve outcomes for all students.”

Who are these partner entities, you ask?

The “partner entities” include (but are not limited to) “state entities responsible for elementary and secondary education data, entities responsible for early learning data, segments of public higher education, private colleges and universities, state entities responsible for student financial aid, childcare providers, state labor and workforce development agencies, and state departments administering health and human services programs.” (source)

So, your kid’s teachers, principles, professors, babysitters, and the purveyors of any state services you happen to use will all cough up every detail of your child’s life.

Of course, California just wants to help.

This to me has hints of communist countries who pluck the brightest students from their home and educate them to work for the state. However, the admitted goal is data collection for the folks who make the rules.

Easily the creepiest thing to come out of California since “The Silence of the Lambs” was released into theaters, the “Cradle to Career Data System” aims to collect the ethnic, economic and educational records of every child in the state, track their grades and their progress into early adulthood, and make some form of the data available to policy makers, analysts and activists. (source)

This isn’t a maybe. It’s already passed as a trailer bill (so it didn’t go through the usual legislative process) and has been funded with a budget of $10 million.

The governor’s Office of Planning and Research is now authorized to enter into contracts with “planning facilitators” who will convene advisory groups “comprised of representatives of students, parents, labor, business and industry, equity and social justice organizations, researchers, privacy experts, early education experts, school districts, charter schools, and county offices of education.” (source)

Californians, your children’s privacy is at stake here. They are going to become part of a pile of data that will be used to enact future laws to assure “equity.” But at any time, these records will be there, the life of your child, every time they got sent to the principal’s office, who stands up to authority, who has special skills or talents, what the child’s parents are like. That person’s entire life in one handy file. And pardon me if I don’t believe the data collection will stop once they get a job. Data is king right now, so why give up on a good thing?

We’re already tracked everywhere we go once we’re old enough to have a cellphone or use the internet. But this starts right, as the title of the program points out, at the cradle.

Why are they doing this?

It’s all about “social justice.” Think quotas on steroids.

“Advocates have been demanding data for the people in the Golden State for years,” the Equity Alert explains, to “answer key questions about whether and how our state schools, colleges, universities, and workforce systems are closing racial equity gaps and serving Californians.”

It sounds as if the goal is to go beyond laws that ban discrimination and beyond affirmative action into a brave new world, one in which government bureaucrats tally the economic success of each racial and ethnic group and sub-group and award government funding in an effort to reach “equity.” (source)

Of course, we all know that things like this are actually not equitable, at least not to kids from groups who are not considered to be “at risk.”

There’s no word yet on whether or not parents will be able to opt out on behalf of their offspring.

This certainly normalizes being surveilled.

We’ve written a great deal on this site about the social credit system and the surveillance state in which we live. To me, a program like this seems like just another nail in the coffin of privacy. Don’t think that this will stop at the border of California.

These kids will, from their first moment of awareness, be concerned about their permanent record. That’s an awfully big burden to put on someone who still eats with his fingers and wears pull-ups to bed. These children will spend their entire lives under a microscope, for better or for worse, while some data entry person types their every action of note into their record.

If you want to have a social credit system like the one in China, I guess you’ve got to start early.


As we've said in many articles, a new wave of investments in automation is already underway, could eliminate 20% to 25% of the current American workforce by 2030, or about 40 million jobs.

In the latest installment of robots plotting a takeover, we set our eyes on a Singapore-based firm called LionsBot International - who has developed an autonomous robot that can sing, rap, wink and even tell jokes while scrubbing floors, reported Yahoo.

The company debuted the robot at a live demonstration ceremony on July 17 at the Gardens by the Bay

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, a resort located in the Central Region of Singapore, adjacent to the Marina Reservoir.

About 300 of these robots will be produced by March 2020, will allow the company to be the first in the world to offer cleaning robots on a subscription model to clients.

Prospective and current clients can rent the robots at a rate of $1,350 to $2,150 per month.

As of last week, two of the robots have been deployed at National Gallery Singapore and Jewel Changi Airport in April, with more expected at other commercial facilities in the coming months.

LionsBot said at least six of its clients would deploy the robots early next year.

According to LionsBot, the cleaning robot is more efficient than a human and can work longer hours.

"Multiple cleaning robots are able to coordinate and clean a given area simultaneously, without the need for human programming," the company said in a statement.

Besides regional demand, LionsBot has also received orders from companies based in Australia and Japan, said a company spokesperson, with the possible introduction to the US by 2021 to 2022.

LionsBot's clients will be able to choose from 13 different types of robots including ones that scrub, mop, vacuum, and sweep across various terrains, effectively eliminating low wage cleaning jobs. Another version of the robot can also transport up to 1,000 pounds of equipment.

At the launch event at Gardens by the Bay, Senior Minister of State for the Ministry of Trade and Industry Koh Poh Koon said cleaning robots could raise productivity, adding that the government will continue to promote the proliferation of automation.

However, the trade minister made zero mention of the upcoming labor force shift due to automation, how hundreds of thousands of people across the region will be displaced because of robots in the years ahead.

More importantly, once these robots wash ashore in the US (maybe in the next few years), and most likely on the West Coast first, a tidal wave of job losses due to automation will be seen as corporate America continues to streamline their operations with technology to curb margin compression.


In the Senate, Bernie Sanders is battling to raise the national minimum wage to $15 an hour (a decision that would almost certainly lead to the destruction of millions of low-skill, low-pay jobs, but we digress). But some of his own campaign workers say they're being forced to survive on less - some calculate their pay at $13 an hour for a 60-hour workweek - and now they're demanding more.

Sanders' unionized campaign organizers have leaked a story to the Washington Post where they complain about how their pay doesn't meet the standards that Sanders suppose

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dly believes should be applied to all Americans.

The embarrassing story, Sanders' campaign field organizers, who occupy the lowest rung on the campaign staff ladder, complain that they're being forced to depend on payday loans to survive and that, in one state, four people have quit in the past month because of their financial struggles (though, if one is struggling financially, giving up one's only source of income would seem to make little sense).

One field organizer complained in the Sanders' campaign internal Slack that he needed more money "because I need to be able to feed myself."

Another utilized the rhetorical concept of irony by quoting a Sanders speech: "As you know, real change never takes place from the top on down, it always takes place from the bottom on up."

Furthermore, the demands for higher salaries come just months after the Sanders campaign workers union and the campaign leadership reached a collective bargaining agreement that was effective as of May 2.

The agreement established wage classifications for national and state staff, ranging from $15 an hour for interns and canvassers to $100,000 annual salaries for bargaining unit deputies.

Field organizers, who are on the front lines of the campaign’s crucial voter contact efforts, were to be paid not by hours worked but via an annual salary set at $36,000. Regional field directors were to be paid $48,000 annually, and statewide department directors were allocated $90,000 per year.

But shortly after the agreement was reached, the complaints started pouring in. Sanders' campaign manager Faiz Shakir swiftly called an all-staff meeting where he proposed a modified agreement with modestly higher pay. But in a vote, Shakir's deal was rejected.

The messages caught Shakir’s attention, and later that day he sent an email to the staff thanking them for their comments. "I do believe you are owed an explanation for the situation we find ourselves in," he wrote in an email obtained by The Post.

In his email, Shakir recapped his thinking from May 17 and expressed regret with the outcome.

"I have no idea what debates and conversations were had, but candidly, it was a disappointing vote from my perspective," he wrote of the union’s decision to reject his proposal. “But the campaign leadership respected the union process and the will of the membership.”

Shakir said that it would be damaging to the campaign’s budget to implement a pay hike after expanding field staff based on previously planned salary figures. In conclusion, he said, he would negotiate the matter only through the channels established by the union arrangement.

Now, the union is preparing to send Shakir and the rest of the campaign leadership a new (presumably budget busting) proposal.

Here are some of their demands:

  • That field organizers receive a salary of $46,800, while regional field directors be paid $62,400.

  • That the campaign cover 100% of the health-care costs for employees making $60,000 or less a year (currently, the campaign pays all premiums for salaried employees making $36,000 or less, while those making more are covered at a rate of 85%).

  • That campaign staff be reimbursed for automobile transportation at $0.58 per mile while they're traveling around canvassing for Sanders.

In a draft letter to Sanders' campaign manager obtained by the Washington Post, the campaign workers said they "cannot be expected to build the largest grassroots organizing program in American history while making poverty wages Given our campaign's commitment to fighting for a living wage of at least $15 an hour, we believe it is only fair that the campaign would carry through this commitment to its own field team."

Their union issued a nebulous statement about the workers' demands on Thursday night.

In a statement issued earlier Thursday night, the union representing the campaign workers, United Food & Commercial Workers Local 400, said it could not comment "on specific, ongoing internal processes between our members and their employer."

"As union members, the Bernie 2020 campaign staff have access to myriad protections and benefits secured by their one-of-a-kind union contract, including many internal avenues to democratically address any number of ongoing workplace issues, including changes to pay, benefits, and other working conditions," the statement said.

"We look forward to continuing to work closely with our members and the management of the Bernie 2020 campaign to ensure all workers have dignity and respect in the workplace."

While some of Sanders' campaign workers insist they won't be able to build a primary-winning machine without being paid "a living wage" the sad reality - for Bernie - is that raising the pay of the campaign's lowest-paid workers by 50% will force the campaign to shed personnel and ultimately have fewer people in the field out there canvassing.

We wonder: What kind of impact do they think that will have on Bernie's chances?


When Ray Dalio issued a public warning last week that in the coming "new paradigm" investors will be forced to buy gold while selling stocks, which "are unlikely to be good real returning investments and that those that will most likely do best will be those that do well when the value of money is being depreciated and domestic and international conflicts are significant, such as gold", many accused the manager of the world's largest hedge fund of hypocrisy at worst, and talking his book at best, namely that he was pitching gold even as he was going ever longer stocks.


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turns out he wasn't, and in fact Dalio appears to have been putting his money where his skeptical mouth was; 4.9% less money than he had at the start of the year to be precise, because according to the FT, Bridgewater’s flagship (non risk-parity) "Pure Alpha" fund suffered one of its worst first-half performances in two decades this year after being whipsawed and wrong-footed by rebounding markets.

The $150 billion Bridgewater saw its Pure Alpha fund, which is the discretionary fund whose returns are linked to macroeconomic forecasts and trades, lost a whopping 4.9% in the six months to June even as global equity and bond markets soared on hopes of looser monetary policy, with the S&P posting one of its best first half returns in history; Bridgewater not only underperformed the FTSE All-World index, which up 15% by the end of June, but also its peer group, as the average macro hedge fund returned 5.2% over the same period according to HFR.

The startling underperformance followed a strong year for Pure Alpha in 2018, when the clearly bearish biased fund delivered a net 14.6% return, even as most other hedge funds lost money.

Still, as the FT notes citing a source, Bridgewater has reportedly pared some of its earlier losses, and was down 1.45% cent in the year to mid-July, implying a solid rebound in the first two weeks of the month.

While it is unclear which trades hit Bridgewater, the FT notes the fund's particularly poor performance in January when Pure Alpha declined by 4.5%, suggesting it went into the new year expecting further turbulence and instead suffered as the market recovered on the back of a shocking reversal by central banks.

Some have also suggested that Bridgewater was one of the whales hit by the stunning reversal in the Eurodollar market in recent months, as rate cut odds soared in the past two months.

Meanwhile, offsetting much of the Pure Alpha losses, Bridgewater’s passively managed All-Weather fund, which unlike Pure Alpha is immune from macro-economic shifts and is instead a risk-parity, "balanced" fund, returned 13% through June, which was to be expected in a year where both stocks and bonds have soared, resulting in the best returns for risk parity funds in over two decades.

As the FT reminds us, Pure Alpha also had a difficult start to the year in 2009 and in 2016, according to data seen by the FT, but managed to claw back its losses in the second halves of those years. It was unclear if the Pure Alpha fund was still positioned bearishly as of this moment.


Authored by David Hutt via The Asia Times,

Southeast Asian nation has dramatically whipsawed between US-China trade war winner to potential next big tariffed loser

The popular consensus is that Vietnam has been one of the world’s biggest US-China trade war winners, as global supply chains shift production away from tariff-hit China and towards the low-cost Southeast Asian nation.

That upshot, one that may have added as much as 8% to Vietnam’s gross domestic product (G

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DP) according to one bank’s research, has apparently already run its full course as US President Donald Trump slaps new punitive tariffs on Hanoi’s exports.

In May, Vietnam was added to the US Treasury Department’s list of possible currency manipulators, a designation that could result in punitive measures if proved. That threat presaged this month’s imposition of a whopping new 400% US duty on Vietnamese steel imports that originate from South Korea and Taiwan.

The US could next slap punitive tariffs on certain Vietnamese imports based on allegations Hanoi is allowing Chinese-made products to be rebranded as Vietnamese goods before export to the US to circumvent tariffs on China, a process officials refer to as “transshipment.”

Some economists predict that, for instance, if the US moves to impose a 25% tariff on Vietnam’s exports, as it has done with China for reasons of national security, the move would cause Hanoi’s exports to fall by a quarter and shave off more than 1% from GDP.

That could be in the offing, analysts reckon, in light of Trump’s scathing comment last month that Hanoi was “almost the single worst abuser of everybody” in regard to trade and that “Vietnam takes advantage of us even worse than China.”

That critique was aimed at Vietnam’s high and rising trade surplus with the US, which hit a record US$40 billion last year, up slightly from 2017 and in spite of a concerted Vietnamese effort to buy more from the US.

In the first five months of this year, Vietnam’s trade surplus with the US hit $21.6 billion, double the amount compared with the same period in 2018.

Beyond the rhetoric, America’s new tariffs on Vietnam represent a drastic course shift, one that has caught Vietnamese officials off guard amid what was a strong bilateral warming trend under the Trump administration.

In February, when Hanoi staged a second historic round of US-North Korea peace talks, Trump lavished praise on his Vietnamese hosts.

“You’ve made tremendous progress and it’s a great thing for the world to see,” he told Vietnamese Prime Minister Nguyen Xuan Phuc while referring to the one-time battlefield adversaries as “friends.”

Soon after Trump took office in January 2016, Vietnam was one of the first targets of his complaints that certain nations maintained big, unequal trade surpluses with the US.

Those complaints were mollified somewhat after Phuc visited Trump at the White House later that year with a multi-billion dollar purchase order for several Boeing-made commercial aircraft.

Communist Party sources, who spoke on condition of anonymity, say they are perplexed by Trump’s volte face. For the last two years, Trump has acted as though Vietnam and the US were “best friends”, one Vietnamese official told Asia Times.

The officials say it is unclear whether the Trump administration is genuine about its threat of possible future sanctions on Vietnamese imports, or whether it is a dramatic negotiating tactic to extract more concessions.

Sources say that Vietnam has made the kind of trade-related commitments that they think Washington supports, and that Trump’s latest comments could merely aim to accelerate their implementation.

For instance, a planned law to create three new special economic zones, which sparked rare nationwide protests last year as many thought they would allow Chinese firms to purchase large swathes of Vietnamese land, has now been indefinitely postponed.

Meanwhile, National Assembly delegates recently called on Communist Party functionaries to curb Chinese investment in Vietnam, with lawmakers arguing that Hanoi should be more particular about which foreign-invested projects it accepts.

Vietnamese authorities have also stiffened a crackdown on Chinese products being re-routed through Vietnam on their way to the US, a circumvention of tariffs that has greatly peeved the Trump administration.

To some extent, Vietnam has mitigated the costs of possible US sanctions by signing trade deals with other partners. Earlier this year, it formally became part of the reformed Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a multilateral trade pact which Trump took the US out of in one of his first acts as president.

Moreover, on June 30, Vietnam finally signed a free-trade agreement with the European Union after several years of protracted negotiations.

The deal, which will remove import duties from 99% of Vietnam’s exports within seven years, up from 71% when the deal was signed, could boost Vietnam’s exports to the EU by 20% in 2020, according to official estimates.

Last year, the EU purchased $42.5 billion worth of Vietnam’s exports.

Still, the US is Vietnam’s most important trading partner, a fact that is not likely to change any time soon. Last year, the US imported $49 billion worth of Vietnamese goods, while exporting just $9.6 billion to Vietnam.

In the first five months of this year, US imports of Vietnamese goods have jumped to $25.8 billion, compared to $18.9 billion over the same period last year, evidence that Vietnam is benefitting immensely from the trade war.

In June, Japanese investment bank Nomura estimated that Vietnam had gained the equivalent of 7.9% of its GDP from trade diversion and supply chain shifts caused by the US-China spat. (The second largest beneficiary was Taiwan, which has gained about 2.1% of its GDP, the research shows.)

Some analysts believe Washington’s reaction to Vietnam’s trade practices is perfectly normal, particularly in light of allowing Chinese companies to use it as a base to disguise their exports to the US.

Vietnam, now one of the world’s 50 largest economies, is simply being asked to abide by the same rules the US expects from other trading partners – the same rationale that led to the US-China trade spat.

“Every fast-industrializing Asian nation has been at first indulged by the US and other major Western trading partners and then, as its market power became formidable, pressed to play by the rules of international trade,” wrote David Brown, an expert on Vietnam, in World Politics Review this month.

“Japan, Taiwan, South Korea, Singapore and Taiwan all cleared that hurdle years ago, none without considerable turmoil. Vietnam is still on probation, and must find the self-discipline to prioritize its larger interests,” the ex-US diplomat added.

Geopolitics, however, are confusing matters. Hanoi has enjoyed US preferential treatment for years because of its strategic importance to American interests, including vis-à-vis China in the South China Sea.

When former US president Barack Obama launched his “pivot to Asia” policy earlier this decade, Vietnam was considered an important new ally because it was one of the few claimants that strongly opposed Chinese expansionism in the maritime area.

Overlooking Vietnam’s many faults – namely it’s abysmal human rights record – has been the price Western nations paid to secure cordial relations with a government that agrees on the need to contain China’s regional rise.

Vietnam has willingly flaunted this position to extract concessions from the West while often playing the US and China off one another to maximize diplomatic benefits from both.

Trump’s recent moves have certainly and unexpectedly put Hanoi on the back foot. Sources say its bureaucracy is working overtime to reform its system on export permits, while also mulling new ways of to reduce its trade surplus.

It is no secret that the US wants Vietnam to purchase more American-made military equipment, and move away from its traditional arms supplier, Russia.

Buying a big-ticket cache of new US military hardware would certainly be looked upon kindly in Washington, a move that would help to narrow Hanoi’s trade surplus while further cementing US-Vietnam defense ties.


Authored by Jeff Desjardins via VisualCapitalist.com,

The sun never sets on the creation of new data.

Yes, the rate of generation may slow down at night as people send fewer emails and watch fewer videos. But for every person hitting the hay, there is another person on the opposite side of the world that is turning their smartphone on for the day.

As a result, the scale of data being generated—even when we look at it through a limited lens of one minute at a time—is quite mind-boggling to behold.

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The Data Explosion, by Source

Today’s infographic comes to us from Domo, and it shows the amount of new data generated each minute through several different platforms and technologies.

Let’s start by looking at what happens every minute from a broad perspective:

  • Americans use 4,416,720 GB of internet data

  • There are 188,000,000 emails sent

  • There are 18,100,000 texts sent

  • There are 390,030 apps downloaded

Now lets look at platform-specific data on a per minute basis:

  • Giphy serves up 4,800,000 gifs

  • Netflix users stream 694,444 hours of video

  • Instagram users post 277,777 stories

  • Youtube users watch 4,500,000 videos

  • Twitter users send 511,200 tweets

  • Skype users make 231,840 calls

  • Airbnb books 1,389 reservations

  • Uber users take 9,772 rides

  • Tinder users swipe 1,400,000 times

  • Google conducts 4,497,420 searches

  • Twitch users view 1,000,000 videos

Imagine being given the task to build a server infrastructure capable of handling any of the above items. It’s a level of scale that’s hard to comprehend.

Also, imagine how difficult it is to make sense of this swath of data. How does one even process insights from the many billions of Youtube videos watched per day?

Why Big Data is Going to Get Even Bigger

The above statistics are already mind-bending, but consider that the global total of internet users is still growing at roughly a 9% clip. This means the current rate of data creation is still just scratching the surface of its ultimate potential.

In fact, as We Are Social’s recent report on internet usage reveals, a staggering 367 million new internet users were added in between January 2018 and January 2019:

Global internet penetration sits at 57% in 2019, meaning that billions of more people are going to be using the above same services—including many others that don’t even exist yet.

Combine this with more time spent on the internet per user and technologies like 5G, and we are only at the beginning of the big data era.

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

Tens of thousands of criminal files from 2018 were reviewed and show that the city's homicides have not risen by a third this year, as previously reported. Instead the number is only up about 12%,

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according to Ernestina Godoy, Mexico City’s chief prosecutor. In addition, violent crimes as a whole have dropped by 8% this year, she said.

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

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

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

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

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


Authored by Marshall Auerback via TruthDig.com,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

The pri

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

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

Prime Minister Stefan Lofven

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

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

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

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





View this post on Instagram












A post shared by PRETTY FLACKO (@asaprocky) on Jul 2, 2019 at 8:06am PDT



Submitted by Eric Peters, CIO of One River Asset Management

Capitulation Collage

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

“The trade war and America’s domestic political drama has sparked an economic soft patch. The Fed has panicked. It’ll cut rates even though it doesn’t need to. Every other country is stimulating too. And just as the stimulus kicks in, we’ll have a tra

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de war truce which will reignite animal spirits in corporate board rooms everywhere, lifting capital investment."

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

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


"The continued shift toward passive investing is pushing more cash into the market,” I continued.

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

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


Authored by Eric Margolis via EricMargolis.com

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

But none was odder than the day I was invited to lunch in New York City with the by now notorious figure Jeffrey Epstein. The golden boy of Manhattan and Palm Beach society no

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w sits in a grim jail cell accused of having sex with underage girls. He’s been doing this in plain view since the early 1990’s but, until recently, he seemed bullet-proof.

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

Image source: Getty

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

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

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

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

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

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

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

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

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

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

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

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

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