Citizens Assembly: Towards a Politics of Considered Judgement’

Naked Capitalism - 4 hours 22 min ago
Experts in deliberative democracy have been working across the world for around twenty years. Now, all of a sudden, their expertise is in high demand. Interview.

These Statistics Show Why the Status Quo Is Failing Most Americans

Naked Capitalism - 6 hours 53 min ago
Ugly but important statistics on America's fraying social fabric.

Whether It’s the New NAFTA or the Old NAFTA, It Serves the 1 Percent

Naked Capitalism - 8 hours 58 min ago
By Leo W. Gerard, the international president of the United Steelworkers Union (USW). Produced by the Independent Media Institute Mick Mulvaney, a millionaire who is President Trump’s acting chief of staff and director of the Office of Management and Budget, awarded himself another job last week: spokesman for labor. Referring to the proposed new NAFTA, […]

"Migration Is Part Of The Model": The Real Roots Of Central America's Migrant Crisis

Zerohedge (BFFBT) - 10 hours 33 min ago

When the average American thinks about Guatemala, Honduras and El Salvador, their initial impression is typically that these are destitute countries overrun by crime, poverty and malnutrition, with central governments that are, at best, only semi-functioning. The crisis at the southern border has only helped reinforce these perceptions, as the mainstream media spins a narrative about impoverished migrant families fleeing the ravages of gang violence.

But if these Central American countries are so extremely impoverished  poor,

then why are bond investors willing to lend to Guatemala, Honduras and El Salvador at interest rates on par with the preferential terms enjoyed by regional economic powerhouses like Brazil? The truth, as it turns out, is more complicated: All three countries are viewed as stable, even safe, investments because they spend almost nothing on government services. And most of what little is spent is siphoned off by graft.

But if these countries can borrow so cheaply, then why aren't they? Until last week, the group of three countries had gone more than two years without issuing a bond.

Fearing the type of runaway inflation presently plaguing Venezuela, fiscal austerity has become "almost like a religion" among the leaders of all three countries. Even the IMF, an institution that’s been criticized for years for pushing draconian budget cuts, has urged Guatemala to spend more.

"There’s an obsession with this issue," said Ricardo Castaneda, an economist with ICEFI, a Guatemala City-based think tank that focuses on fiscal policy.

But with their infrastructure in shambles and their people reportedly suffering from high maternal mortality rates, why aren't these governments willing to borrow more?

Well, as it turns out - and as a team of Bloomberg reporters explained in a lengthy report published on Wednesday - there's a good reason. And it's that the corrupt leaders of these countries don't want to upset the apple cart that allows the system of widespread corruption and graft to flourish.

Perhaps inadvertently, the region has developed a system that encourages the poorest members of the population to emigrate by offering inadequate social services and almost no opportunities for advancement. That system is reinforced by the role that the growing remittance payments sent by illegal migrant workers in the US send back to their families. The payments represent a reliable flow of dollars that serves to underpin the financial systems of Guatemala, Honduras and El Salvador. That sum is larger  more than 30 times greater than the annual aid payments President Trump just scrapped.

Put all of these factors together, and this is what you get: an economic model that appears to be based upon the illegal export of citizens.

When all of these elements are stitched together and viewed holistically, it can appear as if the economic model these governments have adopted is one based on exporting people. That might be an oversimplification - and it may not be the governments’ intent - but it is the net effect of the policy mix, according to longtime observers of the region.

"Migration is part of the model," said Seynabou Sakho, the World Bank’s director for Central America. “A country may not have a big deficit, but at the same time, the needs of its people aren’t being met.”

Regardless of the political class's intentions, this is the situation and it doesn't look likely to change any time soon. As the NYT just reported, Guatemalans have elected a new president who leveraged her connections within the country's corrupt legal system to secure her victory.

And with Guatemala's citizens receiving almost no support from the government...

The World Bank also tracks social spending on a per-capita basis. In El Salvador, the number came to $562. It was even lower in Honduras, $278, and Guatemala, $258. That’s a fraction of the $2,193 spent in Costa Rica or the $2,269 in Brazil. The World Bank hasn’t updated that data set since 2012, but analysts say there have been few signs of improvement in recent years. Patronage and corruption, they say, is compounding the shortfall, siphoning off funds earmarked for the poor. Transparency International ranks the three nations in the bottom half of its Corruption Perceptions Index, with Guatemala in the lowest quartile.

Lucrecia Mack said she was astonished by how rampant graft was when she took the top job at Guatemala’s Health Ministry in 2016. It’s “everywhere,” she said. Documents are falsified, signatures are forged, invoices are made up. She remembers one scheme where officials bought new tires for ambulances, re-sold them to pocket the cash and left the old ones on the vehicles..

The little money that the Health Ministry has winds up in the wrong hands,” said Mack, the daughter of a renowned human rights activist who was slain in 1990.

According to her calculations, Guatemala only spends about one-fifth of what it should annually on health care. “The budget has always been extremely tight.” As a result, she said, the ministry only has enough public clinics and hospitals to attend to about 6.5 million people. That was the population in 1975. It’s more than doubled since.

...As one analyst put it: People don't just pick up and  cross multiple borders for no reason.

"Immigration is a symptom of the diseases we have: violence, lack of economic growth, lack of investments in all of the rural areas," Nayib Bukele said at a conference in Washington a few weeks before being sworn in as president of El Salvador this month. "People don’t leave their families and country to cross three frontiers and a desert because things are fine."

DHS is installing a contingent of boots-on-the-ground agents to work with these governments to try and dampen the flow of migrants.

But without structural reform, there's little hope for real, lasting change on the immigration front.

Drones, F-35s feature in Israel’s largest military drill in years as Iran tensions rise

RT - 10 hours 35 min ago
Israel has held its largest military drill in years, simulating war with an unnamed “challenging and responsive” enemy amid heightened tensions between the US and Iran, a conflict it has long cheered from the sidelines.
Read Full Article at
Categories: America, Forbidden, MENA, RT, World

Dominoes, Hegemonies, & The Future Of Humanity

Zerohedge (BFFBT) - 10 hours 53 min ago

Authored by Mahwah Salamah via,

What did the domino tile say to its neighbour?

“Don’t worry, it is happening far away!” and they both happily continued to stare at their ‘white dots’, ignoring the collapsing carnage down the line. Dominoes aren’t very smart; they are, after all, inanimate objects!

People, however, are supposed to have brains and are expected to be cognizant of what’s happening around them and able to assess its implications on their wellbeing. Unfortunately, this rarely is the case, which may add credence to the theory that by settling into early agrarian communities, humans became more caring and supportive of each other, thus undermining the successful natural selection process by retaining idiot genes!

It is not as though the concept of danger is a new phenomenon. Ever since humans got over the fear of carnivorous beasts and learnt how to kill them, they have concentrated on killing each other. Hegemonic tendencies have existed for thousands of years; as early as the Sumerians and Assyrians and continued through to the colonization monsters of the past few hundred years.


Hegemonies come in different sizes; small, medium and big; an amusing “pecking order” whose interaction can be observed on the daily news broadcasts. It also comes in different styles; softly spoken but treacherous, generous with economic assistance but containing hidden strings to hang you, belligerent with a viscous warmongering streak and lastly, schizophrenic; oscillating between all the previous styles. There are also the would-be-hegemons if given half a chance.

More recently, the hegemony arena has, though knock-out matches, been narrowed down to one grand hegemon and a couple of runners-up, and the heat is now rising as the final tournament approaches – Let us hope it will not be too bloody and Armageddon-ish.

Despite that, many nations continue to dream of becoming hegemons. But at the same time, they continue to concentrate on their ‘white dots’ and disregard the likelihood that they are already in the crosshairs of a bigger hegemon.

They seem oblivious to the hegemonic ploys that undermine their political and economic structures through unending sanctions, onerous trade or military treaties, contemptuous disregard for local and international laws, negative and false news reporting, regime change tactics, false flag incidences, scaremongering, and outright threats that are occasionally translated into destructive military action. Like the proverbial deer, they are frozen in the headlights of the oncoming speeding car and wait until it is too late to save themselves.

What happened in Yugoslavia, Iraq, Libya, Syria, Ukraine, Gaza, Lebanon, Somalia, Grenada, Venezuela, Argentine, Brazil, Cuba, Greece, Iran, North Korea and many other places are only the tip of the iceberg. What is likely to happen elsewhere is still being baked in the oven and will come out once done and ready. What is surprising is that, not only were the signs written on all the walls but, again, the victims failed to comprehend the messages and continued to stare at their ‘white dots’!

Southeast Asia, South China Sea, Ex-Eastern Europe, the Middle East, South & Central America and Africa are all candidates for destabilization and possible splintering into smaller pieces – especially those that exhibit economic weakness or cracks in their demographic, ethnic, religious makeup and are rife with internal disharmony.

Even the European EU is now beginning to feel the brunt of the hegemon pressure of tariff and sanctions threats. Japan, Mexico, India and Canada too, have just got a taste of an ear pinching to remind them to dance to the grand hegemon’s tune. Who is left? Not even Timbuktu!

What about the runner-up hegemons? What about the smaller hegemons? Well, all hegemons have the same strain of nasty genes. However, they are dormant and only begin to grow as their host’s power increases. This, most likely, is a genetic relic from the early human hunters-gatherers’ need for viciousness to survive. Maybe natural selection and/or wisdom will eventually weed out those nasty genes, but don’t bet your farm or country on it.


Not necessarily, because all hegemons (big and small) also suffer from the same weaknesses and dis-harmonies that beset their victims, although they cunningly keep them secret. Powerful mass media and propaganda are used extensively to camouflage all the ills that would otherwise stumble their seemingly confident and steady footsteps. This means that they are as also vulnerable to the same ploys that they have repeatedly used on others.

Also, history confirms that all empires eventually collapse and disappear, regardless of how long they last. Some lasted over a thousand years, which may sound too long, but in the modern world of technology, digital communications, social media and financialized economies, the average lifespan of hegemons has been drastically cut short.

Empires and hegemons generally start with a strategic vision of expansion and moderate usurpation of other nations’ resources; then, gluttony takes over at a rapidly increased pace.

But as the world and its resources are limited, they sooner or later bump into and clash with other hegemons; and are forced to change their tactics. As matters heat up, their tactics not only become shorter and shorter-term, but become ad hoc not fully thought through and, even haphazard – until they begin to shoot themselves in the foot.

This usually is an early sign of their demise (compare this to the Roman/Byzantine, Safavid Iran and Ottoman empires and their confusion with multi-front wars – in addition to their poor governance systems and economic mismanagement).


In all events, we cannot wait out the hegemons to die out as the dinosaurs did; it would take far too long.

More realistically, we can address the modern hegemonic world threat via a two-pronged approach. The first is individual effort and the second is collective action.

Individual effort means to treat the sources of weakness and internal disharmony that make individual countries susceptible to hegemonic ploys. This requires the recreation of the governance systems to tackle all the maladies that drag nations down, including poor economic policies, corruption, inequality, ineffective representative systems, etc.

In short, seal the cracks that invite enemies to destabilize a country. It is not easy but is certainly better than being sucked dry off your freedom, resources and future.

As for collective action, this means getting together with other small and medium nations to form groups/alliances that can stand up to hegemons and resist, at least, their economic sanctions and threats. The Non-Aligned Movement was, and still is a good idea, but needs more teeth. Alternatively, new and more practical types of groupings could be envisaged and created – always conditional that no one nation, big or small, is allowed to become the group’s hegemon.

Dominoes may be flimsy and unstable, but if laid in parallel rows and columns and closely bonded (zero-spaced), they become much more difficult to topple. So, don’t be a lone domino dumbly staring at your ‘white dots’!

Iran claims it shot American drone, US military doesn't comment

RT - 11 hours 1 min ago
Iran has shot down an American RQ-4 reconnaissance drone flying over Hormuzgan province , Tehran claims. The US military declined to comment, according to AP.
Read Full Article at
Categories: America, Forbidden, MENA, RT, World

Lululemon Shutters Two Men's Stores, Despite Luring Beta Males With Cold Brew Coffee And Ping Pong

Zerohedge (BFFBT) - 11 hours 13 min ago

Shockingly, the appeal of men in yoga pants isn't anywhere near as close to the appeal of women. Lululemon is finding this out the hard way, watching two of its "Men's exclusive" stores shutter in short order, despite the fact that a large part of the company's business going forward is going to be reliant on men's clothing, according to Bloomberg

Instead, Lululemon is finding out that it works better “as a dual-gender brand,” company spokeswoman Erin Hankinson said. She continued: “We continually test and learn at Lululemon -- which is what we did with the men’s stores.”

That, of course, will beg the question from millennials: what if I don't identify as one of the two genders? Riots and protests incoming...

The Toronto location had opened in December 2016 - and even had a ping pong table and cold brew coffee. Because, what better ways to lure in beta males than table tennis and pretentious drinks? It shuttered last year and the New York location in Soho that opened in 2014 was made part of a larger women's store about 4 blocks away. 

But this doesn't mean that Lululemon is giving up on men. Instead, it says that it expects to "more than double its men’s revenues by 2023." And in the first quarter, Lululemon men’s same-store sales were up 26%. 

Lululemon has also recently announced its intention to introduce shoes and personal care products for both men and women. 

Its new stores "will continue to create space for category expansions and will help to grow our business, specifically in men’s," Hankinson commented.

She continued: "When we expand our stores, we create space to merchandise the men’s assortment in a more impactful way."

Canada Has A Long History Of Ignoring Reports Like That Of The MMIWG Inquiry

Popular Resistance - 11 hours 13 min ago
The hullabaloo over the missing and murdered Indigenous women and girls (MMIWG) inquiry's use of the word genocide has obscured its broader message, and that is more than a pity. It is a tragedy. The inquiry's report builds a powerful case about the systemic causes for the frighteningly large number of cases of Indigenous women and girls who have been victims of violence, abuse and, too often, murder. The report focuses, as one might expect, on the justice system, especially on the police.
Categories: America, Foreign Policy

Rejoice. The End Of Banking Is Nigh...

Zerohedge (BFFBT) - 11 hours 33 min ago

Authored by Simon Black via,

On January 3, 2009, about six months before I launched Sovereign Man more than a decade ago, the Bitcoin blockchain came into existence.

50 bitcoins were mined by the network’s creator in that very first transaction. And within a few days, the first open-source Bitcoin software was released.

Few people noticed. By October of 2009, the value of a single Bitcoin was still just $0.0009 (9/100th of a penny).

A decade later, Bitcoin has seen a 10,000,000x increase and triggered perhaps the most spectacular financial bubble in human history.

For the next few weeks I plan on writing about how the world has changed over the last decade– Sovereign Man just celebrated its 10-year anniversary a few days ago, and I thought it was an appropriate opportunity for reflection.

Today I want to kick off that series of emails and discuss crypto.

Ten years of cryptocurrency has been a wild roller coaster. In 2009 few people had heard of it. Today, most of the world knows about Bitcoin. Tens of millions of people have bought some. And a fair number of those have been burned.

The 2017 bubble saw the Bitcoin price rise from less than $1,000 in January to nearly $20,000 by the end of the year.

It was a classic bubble mentality– people threw money at something they didn’t understand based solely on an uninformed belief that the Bitcoin price would keep rising.

And no one wanted to miss out. Some people even went into debt and mortgaged their homes to speculate in cryptocurrency.

By the end of 2017, there were far more cryptocurrencies than fiat currencies, not to mention innumerable ‘tokens’ and ICOs that had taken place.

It got to the point that anyone under the age of 30 who could write a White Paper was able to raise a few million dollars through an ICO.

By the middle of 2018, most cryptocurrencies had been left for dead.

But now there are real signs of life: just yesterday, Facebook announced details on a cryptocurrency that they have been developing for more than a year.

They’re calling it the Libra. It’s quite a bit different than most existing cryptocurrencies like Bitcoin:

Libra is less decentralized. It’s backed by fiat currency. And it has already attracted huge partners like Visa– the same types of companies that early cryptocurrency developers hoped to displace.

But out of everything in the marketplace, Facebook’s Libra is the only cryptocurrency that could have global, mainstream appeal.

Within the next 12 months there could be hundreds of millions of users worldwide sending payments to one another as easily as sending an email… or using their Libra to buy coffee at Starbucks.

I doubt this is the end of the road, either. While I’m wary of Facebook, I believe Libra will likely serve as a catalyst, opening doors for more interest, more development, and better applications of the technology.

One thing is certain– banks are in big trouble.

They’ve had a monopoly on our money for thousands of years and have abused this trusted privilege countless times.

Today, the primary functions of banks– holding deposits, making loans, payments & transfers, and exchanging currency– can all be done better, faster, and cheaper outside of the banking system.

There are already plenty of Peer-to-Peer websites where borrowers and lenders can arrange their own loans.

And even more ways to send money, make payments, and exchange currency– from older establishments like Western Union to newer ones like Google Wallet, TransferWise, and PayPal.

Facebook’s Libra represents a direct threat to the banks’ sole remaining monopoly– holdings customer deposits.

We already have a few alternatives for holding our savings, including physical cash, short-term government bonds, gold, crypto, etc.

But with Libra, people will have an easy, mainstream option to hold their money, as well as make transfers and payments. They won’t really need a bank account any longer.

Just in the same way that a lot of people stopped signing up for home telephone lines in favor of their mobile phones, it’s now much more realistic that people (especially younger people) will forgo bank accounts for their crypto wallets.

This is an enormous change from where we were ten years ago. Over the past decade crypto has seen its genesis, bubble, collapse, and resurgence.

And now there’s finally a catalyst to mainstream use that poses a direct threat to banks’ financial dominance. It’s about time.

10,000 Of The 'World's Best' Spies Operating In Washington DC

Zerohedge (BFFBT) - 11 hours 53 min ago

Over a million people flood into the nation's capital every day; lawmakers, lobbyists, civil servants, students and tourists - and around 10,000 of the world's best spies

As WTOP's J.J. Green notes in his three-part series on Washington D.C.; "Woven into that orderly bedlam are sophisticated networks of foreign nationals whose sole purpose is to steal secrets.

Green's figure for 10,000 spies comes from the International Spy Museum in D.C. - and while there is "some quabbling about the numbers," the FBI apparently agrees with the premise. 

"It’s unprecedented — the threat from our foreign adversaries, specifically China on the economic espionage and the espionage front," said the FBI's Brian Dugan - Assistant Special Agent in Charge of Counterintelligence in the Washington Field Office. 

"A spy is nondescript. A spy is going to be someone that’s going to be a student in school, a visiting professor, your neighbor. It could be a colleague or someone that shares the soccer field with you," Dugan added. 

The archetypal international spy in Washington for many years has been undercover diplomats and foreign intelligence agency assets.

There are more than 175 foreign embassies, residences, chanceries and diplomatic missions in D.C. Tens of thousands of international students reside in the region. And untold numbers of business people with links to foreign intelligence services flow in and out every day.

The training of highly skilled spies, especially those who work in Washington, makes them virtually invisible to ordinary, unsuspecting people.

Washington, according to current and former U.S. intelligence sources, is normally the place where most countries send their best spies. -WTOP

Longtime CIA covert operative Robert Baer told WTOP that even the best spy chasers have a hard time catching foreign operatives in Washington. 

"Everybody in the espionage business is working undercover. So if they’re in Washington, they’re either in an embassy or they’re a businessman and you can’t tell them apart because they never acknowledge what they’re doing. And they’re good, so they leave no trace of their communications," according to Baer, who added: "With the darknet and various private encryption platforms, algorithms and the rest of it, you can operate right here in Washington, D.C., and if you’re good and you’re disciplined and careful, the FBI will never see it."

Russia Russia Russia

According to Kremlin defector Sergei Tretyakov before his untimely death in 2010, Russia regards the USA as its "main target," where they sent their best assets. 

Retired CIA official and Russia expert John Sipher agrees - telling WTOP in April 2018 that Moscow has hundreds of spies living on American soil

"They have somewhere on the order of 175 to 200 spies in the United States," said Sipher. That said, Green notes that Russia's actual intelligence footprint in the United States is much larger. 

"The Russians are hyper focused on the United States. They see us as their main adversary, the main enemy. All the elements of state power — whether it be their diplomatic service or intelligence services or police services — are focused on the United States, Sipher added." 


According to Baer, one focus of D.C. spies is enlisting the help of Americans willing to break the law to help them. 

"There’s a large population in retirement or getting close to retirement. The baby boomers are all leaving and that population is looking for post-government jobs," said Dugan, adding that foreign spies are using social media and other resources to recruit those with national security and intelligence backgrounds. 

"Of course there’s always going to be moments that we’re going to have people decide to cooperate with the enemy. And we’re going to find them, and we’re going to catch them," said an optimistic Dugan. 

Goldman Finally Capitulates, Sees Rate Cuts In July And September

Zerohedge (BFFBT) - 11 hours 57 min ago

Three weeks ago, at the start of June, we mocked Goldman's economics team for having come up with "Schrodinger's Fed Funds", when with Powell telegraphing an imminent easing cycle, the team of Jan Hatzius et al refused to throw in the towel and change its long-running forecast of no rate cuts in 2019 and one rate hike in 2020 even though at the same time it said that its "modal path" called for at least one rate cut by 2020. In other words, Goldman - which last December predicted 4 rate hikes in 2019 - was hoping to have its cake and eat it too.

Schrodinger's Fed Funds: Goldman expects both 2 more rate hikes (modal path) and 1 more rate cut (expected path) at the same time

— zerohedge (@zerohedge) June 3, 2019

This followed just one month after Goldman, whose predictions in recent years have been absolutely disastrous, said that "the next move is more likely to be a hike than a cut, with the next rate increase coming after  the election in 2020Q4, followed by  another hike in 2021."

Goldman: "the next move is more likely to be a hike than a cut, with the next rate increase coming after the election in 2020Q4, followed by another hike in 2021."

— zerohedge (@zerohedge) May 1, 2019

And so, with Powell dropping hint after hint that the hawkish Fed chair of 2018 is no more, and has been replaced with Trump's spineless footstool, we predicted two weeks ago, on June 7, that Goldman would finally capitulate as the Fed made clear that it is only a matter of time before rate cuts begin.

Goldman will capitulate today and project rate cuts

— zerohedge (@zerohedge) June 7, 2019

We were wrong... but by only 12 days because moments ago following today's capitulation by Powell, Goldman has similarly capitulated and in the latest humiliation for the predictive abilities of Goldman's economics team, which is now competing with Gartman for batting -1.000, Goldman writes that it now "expects cuts in July and September, as well as an end to balance sheet runoff in July. Our base case is for moves in 25bp increments, but a 50bp cut is possible if the news flow disappoints and/or Fed officials feel compelled to get ahead of bond market pricing (which currently implies a 32bp cut in July). Conversely, the hurdle appears to be very high for the committee to forego a cut in July"

Admitting that its weekend analysis that the Fed would disappoint the market was dead wrong, Hatzius writes that "the Fed... delivered a dovish message, even relative to market expectations" as "seven of the 19 participants projected 50bp of easing  this year, and the statement provided an unqualified “will act as appropriate” signal that cuts are now likely."

Separately, with Powell "strongly suggesting" that runoff will conclude as soon as the Fed delivers a rate cut, Goldman now expects that "the end of balance sheet runoff will be moved forward by two months, with an announcement at the July meeting that halts runoff in early August."

While it is hardly relevant, considering just how gruesomely wrong Goldman has been about, well, everything, here is Goldman's take on "what were the most important takeaways from today’s meeting" starting with...

1. The magnitude of the declines in the dots, the starkness of the change in Chair Powell’s tone relative to the May press conference, and the unqualified “will act as appropriate” phrase in the statement. First, eight participants projected at least one cut in 2019, including seven who saw a 50bp move, and the majority of the Committee now projects a cut by 2020 (see Exhibit 1).

And while this would imply a divided committee, in the press conference Powell suggested that there was a broader consensus moving in the direction of rate cuts and did nothing to discourage the interpretation that his own dot is calling for lower rates this year.

2. Second, the tone of the June press conference was much more dovish relative to the May press conference, at which Powell refused to discuss cases in which the Fed might cut rates and did not express immediate concern about downside risks to inflation expectations. As shown in Exhibit 2, Powell offered quite a different take today on several central issues.

What is bizarre, as we noted earlier, is that despite the sharp divergence in the dot "camps", most of the changes in the Summary of Economic Projections were similar to our expectations, with the exception of lower projected core inflation next year (-0.1pp to 1.9%) and a surprising upgrade to the GDP projection (+0.1pp to 2.0% for 2020 growth).  In other words, the Fed is cutting even with the economy firing on all 8 cylinders.

3. Third, when comparing the Fed's statement to his redline, Hatzius points out that the phrase “will act as appropriate” was not qualified by the words “as always,” as it had been in Chair Powell’s speech at the Fed conference in Chicago on June 4. This kind of language, unless qualified, usually presages policy action Hatzius writes.

* * *

Here Goldman makes an interesting observation, asking why the Fed would cut rates if its baseline outlook remains "favorable"?  The answer, according to Hatzius, is that growth concerns are the primary justification, with low inflation lowering the hurdle required for Fed action.

After all, Powell kicked off the press conference by emphasizing the Committee’s “overarching goal” of sustaining the expansion. Powell also offered a list of uncertainties that could warrant accommodative policy, ranging from global growth and trade policy to relatively minor headwinds such as the grounding of the Boeing 737 MAX and the drop in oil prices (-$10 since the May meeting).

As Goldman concludes, the statement and press conference strongly suggest that at least part of the Fed leadership believe rate cuts are appropriate. As shown in Exhibit 2, the Treasury market now views even larger cuts as likely.

So now that even Goldman accepts a rate cut is coming, the next question is whether it will be a single (25bps) or double (50bps) in July. Here Goldman predicts just one cut (so bet it all on 50bps) , as “Insurance cuts” that are more preemptive in nature "tend to be 25bp", with larger cuts saved for circumstances in which the economy already appears at risk of sliding into recession. According to Hatzius, the rationale is that providing accommodation gradually in small doses "seems more natural when the motivation is to provide insurance against ongoing uncertainty rather than to provide a large immediate boost to growth."

The punchline? Goldman's admission that the Fed has not only capitulated, but also abdicated its role of being ahead of the market instead of being dictated to by it. Case in point, "the results of today’s meeting suggest that many FOMC participants are increasingly influenced by the expectations embedded in bond market pricing and other outside influences."

This means that any time the bond markets wishes to, it can force the Fed's hand from now on... even if it results in making the biggest cheap liquidity-driven asset bubble of all time even bigger.

So with the bond market already discounting a 32bp rate cut at the July meeting, and if expectations continue to creep toward 50bp, "the FOMC might well deliver a 50bp cut for fear of disappointing the market, even if the economic data do not paint a particularly worrisome picture."

For those who still don't get the picture.

The apparent influence of the bond market recalls the well-known comment by political strategist James Carville: “I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.” Carville spoke in the 1990s when the bond market worried about upside inflation risk, but the same basic logic might apply today.


... if it is true that the Fed’s decisions have become increasingly responsive to bond market expectations, it might prove hard to stop cutting. The bond market might continue to price cuts even if downside risks merely linger, the White House is likely to continue calling for lower interest rates, and the idea that “an ounce of prevention is worth a pound of cure” when the effective lower bound limits the ability to respond to recessions might continue to gain popularity in monetary policy discussion. This creates a risk that easing will remain the path of least resistance beyond September.

Translation: the bond vigilantes are back, only this time it is not to push rates higher, but to make sure the Fed wins the race to the bottom, even as the biggest asset bubble of all time gets even bigger, creating a "huge risk" that in just a few months the Fed will be forced to intervene and to stop the ensuing melt up or risk losing all credibility.

Celebrating Juneteenth With Bold New Ideas

Popular Resistance - 12 hours 19 min ago
One day in late June, 1865, Union soldiers arrived in Galveston, Texas. They carried some historic news: Legal slavery had ended some two and a half years ago with President Lincoln’s Emancipation Proclamation. And so some of the last enslaved people left in America were freed. The day became known as “Juneteenth,” a holiday still celebrated today in black communities across the United States. Yet more than 150 years after slavery, black wealth still lags centuries behind white wealth.
Categories: America, Foreign Policy

Biden Tells The Rich "Nothing Would Change" If He Wins, As Dems Slam His Segregationist Remarks

Zerohedge (BFFBT) - 12 hours 33 min ago

For all of Joe Biden's political experience - Jeff Gundlach recently said that Biden had spent 32 years running for president (unsuccessfully) - the former vice president has an uncanny habit of inserting his foot in his mouth at the worst possible times.

That's precisely what happened to Joe Biden on Tuesday when he reassured a room full of mega-rich donors that “nothing would fundamentally change” if he wins the presidency in 2020, hardly the stuff progressive Democrats' dreams are made of. Speaking to a room full of wealthy donors in New York City’s Carlyle Hotel, Biden said he would not "demonize" the rich and promised them that their lifestyles would not change under his watchful eye, the Hill reported.

“I need you very badly,” Biden told the room, explaining that he had “got in trouble” with some of his team for defending the rich, but said he did it because “rich people are just as patriotic as poor people." He was also defending the rich when he told the rich he was defending them.

“No one’s standard of living will change, nothing would fundamentally change,” Biden told the room of 100 less than progressive supporters, who were served lobster hors d'oeuvres. The moderate Democrat also balked at the kind of revolutionary-style politics advocated by his more progressive-left opponents Bernie Sanders and Elizabeth Warren, promising the donors that he would be the candidate of marginal, incremental change.

The day before, Biden held a $2,800 per-person fundraiser at the $34 million New York City penthouse belonging to investment billionaire Jim Chanos, where he assured his most financially comfortable supporters that they are “going to do fine” if he wins.

To be sure, Biden’s opponents - and there are plenty of those - will likely seize on his latest comments to accuse him of being out-of-touch.

And speaking of Joe Biden criticism, the presidential candidate was also slammed by fellow Democratic presidential contenders Wednesday for something totally different: speaking kindly of two 1970s-era pro-segregationist senators.

“I have a great deal of respect for Vice President Biden,” Senator Kamala Harris of California told reporters. “But to coddle the reputations of segregationists — of people who, if they had their way, I would literally not be standing here as a member of the U.S. Senate — is I think, it’s just misinformed and it’s wrong.”

“Vice President Biden’s relationships with proud segregationists are not the model for how we make America a safer and more inclusive place for black people, and for everyone,” Booker said in a statement Wednesday. He was responding to Biden’s comments about the late Democratic Senators James O. Eastland of Mississippi and Herman Talmadge of Georgia during a fundraiser on Tuesday in New York.

“He never called me boy, he always called me son,” Biden said of Eastland, taking on a heavy Southern drawl as he recalled his early years representing Delaware in the Senate. Talmadge, he added, was “one of the meanest guys I ever knew, you go down the list of all these guys” but “at least there was some civility.”

The criticism by Harris and New Jersey Senator Cory Booker, who is also African-American, occurred as the race enters a new phase, with the South Carolina event and the first debates of the 2020 election next week.

Even Bill de Blasio, who for some unknown reason is running for president, tweeted his own condemnation of Biden’s remarks, accompanied by a photo of himself with his African-American wife and children.

“It’s 2019 & @JoeBiden is longing for the good old days of ‘civility’ typified by James Eastland," de Blasio wrote. "He repeatedly demonstrates that he is out of step with the values of the modern Democratic Party.”

Democrats have in the recent past criticized Biden for praising the late Senator Strom Thurmond of South Carolina, another segregationist, as well as a string of Republicans who he’s described as decent people despite not sharing his political views.

Polls show Biden with a lead in South Carolina - a state where the majority of Democratic primary voters are African-American, and that is crucial to the hopes of Booker and Harris.

FBI arrests ISIS sympathizer accused of plotting to blow up Christian church

RT - 12 hours 46 min ago
A Syrian refugee, suspected of planning to bomb a church in Pittsburgh, Pennsylvania, has been arrested and charged with an attempt to provide material support to the Islamic State and spreading manuals on explosives.
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Categories: America, Forbidden, MENA, RT, World

Rich-Kid Democrat Staffer Who Doxxed Political Enemies Gets Four Years In Prison

Zerohedge (BFFBT) - 12 hours 53 min ago

A 27-year-old former Democratic staffer who doxxed Republican senators during Supreme Court Justice Brett Kavanaugh's 2018 confirmation hearings was sentenced to four years in prison on Wednesday. 

Jackson Cosko - a Sanders supporter and son of a millionaire San Francisco developer tied to both House Speaker Nancy Pelosi (CA) and Sen. Dianne Feinstein (D-CA) - pleaded guilty in April to five felonies "related to an unparalleled effort to ransack a Senate office, extorting a Democratic senator, illegally harming Republicans for their political views, and blackmailing a witness," writes the Daily Caller's Luke Rosiak. 

Cosko was a staffer for Sen. Maggie Hassan (D-NH), and later Sen. Sheila Jackson Lee (D-TX). While in Hasan's office working as a systems administrator - and completely separate of the doxxing incident, he installed keylogging equipment that stole work and personal email passwords, downloaded a "massive trove" of data from Senate systems, and repeatedly used someone else's key to enter the office. You know, like a spy would do. 

Sen. Maggie Hassan (D-NH)

Prosecutor Demian Ahn said during trial that Cosko's actions resulted in "the largest data breach in Senate history." 

"These are deliberate and malicious crimes that the defendant engaged in," said Ahn, accusing the defendant of a "months-long, deliberately planned, meticulously executed crime spree."

Prosecutors say that after Cosko was fired from Hassan’s office last year, he used Deforest-Davis’s keys to repeatedly return to the office, copy dozens of gigabytes of sensitive data, and install sophisticated keyloggers that captured the work and personal computer passwords of Hassan staffers as they logged in.

Prosecutors say Deforest-Davis didn’t give Cosko permission to use her keys the first time he surreptitiously entered Hassan’s office, but the colleague later agreed to loan Cosko her office key and agreed to “wipe down” computers in the office to erase traces of Cosko’s fingerprints. Deforest-Davis and Cosko had a “close relationship” and she also owed borrowed money from Cosko to pay her rent, court papers say. -Politico

Notes from Jackson Cosko entered as evidence in court. (US District Court) via Daily Caller

Cosko also published the home addresses and phone numbers of GOP Sens. Lindsry Graham, Orrin Hatch, and Mike Lee to Wikipedia during Kavanaugh's confirmation. Once the doxxing made headlines, he also released information about Majority Leader Mitch McConnell and Sen. Rand Paul, according to Politico. In one of the Wikipedia posts, Cosko appeared to engage in an extortion attempt - writing "Send us bitcoins." 

"We have … a society that has become very vicious," said US District Judge Thomas Hogan, adding "It’s very concerning to the court and unfortunate that you played into that."

Cosko apologized shortly before the sentence was handed down. 

"I take full and complete responsibility for my actions," he said. "I am embarrassed and ashamed for what I did."

Cosko said that he’d been struggling with substance abuse and mental health issues and that the judge’s decision earlier this year to let him enter a treatment program was pivotal.

“I firmly believe that it saved my life,” he said.

Prosecutors had sought a 57-month sentence, while lawyers for Cosko asked for a two-year prison term. -Politico

Judge Hogan excoriated Cosko for putting the lives of senators, their families and others at risk. "You exposed them. People may want to harm them in our polarized society," Hogan said. 

Another Hassan staffer, Samantha Deforest-Davis, is expected to plead guilty to two misdemeanor charges related to the same scheme: tampering with evidence and aiding a computer fraud. There is no arraignment date set for her as of this writing. 

Gold Spikes To 6Y Highs As Dollar, Bond Yields Plunge

Zerohedge (BFFBT) - 13 hours 3 min ago

The 10Y US Treasury yield is now down 11bps from the FOMC Statement, plunging back below 2.00% for the first time since November 2016, erasing almost the entire move since President Trump was elected...

Citigroup sees 10-year Treasury yields falling to about 1.65% by year’s end as the Federal Reserve cuts interest rates up to three times to boost U.S. economy, senior technical strategist Shyam Devani tells Bloomberg.

“Yields have been falling across the curve, and this has been something you haven’t been able to fight,” Singapore-based Devani said by telephone.

“You’ve got a Fed that’s now changed its language and we’re on a path where there’s going to be rate cuts ahead -- whether it’s two or three times, it’s hard to say -- but there will be cuts”

“It’s a combination of things driving this including a slowing global growth environment, trade tensions and low inflation”

30Y is also extending its gains, with the yield dumping to 2.50%, erasing all of the post-Trump growth move...

Gold has spiked up to almost $1400...

Its highest since September 2013

Gold in Yuan is also breaking out to 6 year highs...

The Dollar is extending its losses...

And the jaws of death keep yawning wider...

Something's gotta give (reminder, Friday is quad witch)!

Here Are The Cities With Highest 5-Figure Credit Card Balances

Zerohedge (BFFBT) - 13 hours 13 min ago

About 1 in 5 cardholders in New York City has a five-figure credit card balance, making it one of the nation's most debt-burdened cities, reported CompareCards.

The study analyzed 1.2 million anonymized credit reports from LendingTree in 100 of the largest metropolitan areas across the country. It found a majority of the cities with the most significant percentages of people with five-figure credit card debt are located in metro areas on the East and West Coast.

Bridgeport, Connecticut had the highest rate of cardholders with five-figure debts at 22.9%. Virginia Beach, Virginia had 20.5% and Washington, DC with 19.9%, the survey revealed. New York City was ranked fourth with a rate of 19%.

CompareCards said cities with high credit card balances also had high levels of income inequality.

Of the five metro areas with the highest percentage of cardholders with five-figure card balances, three — Bridgeport, New York, and Los Angeles — are among those with high wealth inequalities.

The study investigates: Why is Bridgeport number one? Well, the wealth disparity between Greenwich and Bridgeport (separated by 29 miles) is some of the widest in the nation.

"When you have a large number of people like that in the same city or metropolitan area with a large number of people with poor credit who either can't get credit or just get small lines of credit that prevent one from running up a high balance, you get a situation like we see in Bridgeport: a high percentage of people with high balances," the report reads.

Furthermore, this is all happening as credit card charge-offs have spiked to a seven-year high, indicating US consumers are in far worse shape than assumed.

Regular readers may recall that two years ago we wrote that "Credit Card Defaults Surge Most Since Financial Crisis." And while this deteriorating trend had more or less plateaued for much of 2018, it has taken another big step higher in 2019 and as Bloomberg reports "red flags are flying in the credit-card industry after a key gauge of bad debt jumped to the highest level in almost seven years."

That said, a crisis is undoubtedly brewing in cities where five-figure credit card balances are high. On the other hand, with overall interest rates in the US still near historic, record lows, and possibly reverting to the zero lower bound before the next recession, it seems millions of consumers are sleepwalking into insurmountable debts ahead of the next downturn.

Israeli Holocaust museum schools AOC on concentration camps after comparison to migrant facilities

RT - 13 hours 49 min ago
The Israeli Holocaust memorial center Yad Vashem lit up US Democratic congresswoman Alexandria Ocasio-Cortez online for comparing US migrant detention centers to fascistic concentration camps, even offering to help educate her.
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Categories: America, Forbidden, MENA, RT, World

PEPE ESCOBAR: Iran Squeezed Between Imperial Psychos and European Cowards

Greanville Post - 14 hours 21 min ago
PEPE ESCOBAR—In Cold War 2.0 terms, from Central Asia to the Eastern Mediterranean and from the Indian Ocean to the Caspian Sea, Tehran is able to count on quite a set of formal and informal alliances. That not only centers on the Beirut-Damascus-Baghdad-Tehran-Herat axis, but also includes Turkey and Qatar. And most important of all, the top actors on the Eurasian integration chessboard: the Russia and China in strategic partnership.