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Updated: 4 hours 57 min ago

La Danse Mossad: Robert Maxwell and Jeffrey Epstein

5 hours 27 min ago

Authored by Jennifer Matsui via Counterpunch,org,

Media tycoon and former Labour MP Robert Maxwell (father of Ghislaine Maxwell, Jeffrey Epstein’s partner in crime) was given a state funeral in Jerusalem after *accidentally* falling off his yacht – the unluckily named “Lady Ghislaine”.

Later it was revealed Maxwell Sr was a Mossad asset who used his vast network of connections and publishing platforms to run editorial interference over his purchased assets to influence enemies and friends alike, ensuring their fealty to the foreign government that had enlisted him for its espionage work.

His tabloid empire was the piss-colored propaganda organ of the interests he served, overseeing its rapid growth and tentacled reach across the globe. More ominously, he was behind the spy agency’s successful attempt to install a trapdoor in software intended for government use, allowing the Israelis a direct pipeline into a vast network of computers installed with undectable malware.

At the time of his death, the disgraced magnate was under investigation for raiding his companies’ pension funds to cover the losses incurred from his multiple and reckless takeovers, and finance a luxury lifestyle he enjoyed sharing with high profile pals like Henry Kissinger and Barbara Walters. Curiously, many of these fossilized specimens from Robert Maxwell’s roster of friends from the Reagan era would circle around Epstein, most notably Donald Trump whose Mar-a-Lago resort would later become a recruiting center for employer Epstein’s underage “massage therapists”.

Fast forward a couple of decades since the days a casino mogul was gobbling down canapés with the old guard denizens of the ‘swamp’. Notice a similar, if not identical MO in both Maxwell and Epstein’s role in procuring technology for the Israelis, who in turn sold it with undisclosed add-ons, providing an open window into its users’ databases.

Like his predecessor, Epstein had a financial stake in a startup (headed by former Israeli Defense Minister and later Prime Minister Ehud Barak) connected to Israel’s defense industry that provides infrastructure for emergency services as a call handling platform. Considering the company’s connection to military intelligence, it wouldn’t be a stretch to speculate on some of this software’s other ‘special’ features. A variation of the early technology that Maxwell was able to procure for his Israeli bosses was later sold to the Saudis, who leveraged its sophisticated tracking features to assassinate Jamal Khashoggi.

Epstein, like Maxwell, was laying the groundwork for Israeli espionage activities through his interests in companies with a political agenda concealed in products intended for international export. If true, the playboy philanthropist feted and flattered his high profile friends to ensnare them as complicit partners in what amounts to the legal definition of treason. Epstein’s covert activities have undiminished real world consequences for anyone on Israel’s international radar, especially those challenging the status quo policies in place that prioritize “The Jewish State’s” political and financial objectives over actual justice and global stability.

If you have ever asked yourself why Israel’s war crimes and settlement expansion go unchallenged by US lawmakers, consider the career-destroying consequences contained within those dossiers compiled by the braintrust behind Epstein’s ’suicide’.

“We’ll trade you one US Embassy in Jerusalem for 10 minutes of hidden camera footage of you . . . let’s say ‘enjoying’ a rolled up Forbes magazine”.

Were the surveillance apparatuses installed throughout Epstein’s properties merely a voyeur’s tools, or did he use them to leverage the moral failings of his former friends for purposes that might have risked exposure of more than the nether regions of wealthy pedo-punters? Considering his connections to Israeli defense industries and his own Achilles penis that required, by his own admission, “three orgasms a day”, the answer points to an unslakable addiction that dovetailed conveniently with his state-sponsored sex crimes.

Did Epstein make the same mistake of Maxwell (who had asked for nearly half a billion dollar in “loans” from his Israeli backers to relieve him of his mounting debts) believing the dirt he had in his possession would prove radioactive if released? By this time, the corpulent tycoon was nicknamed the ‘Bouncing Czech’ a reference in most part to his worsening money woes. The implication of this request, if turned down, was the exposure of Israel’s state secrets. Epstein could have also attempted to collateralize the cache of damning evidence still in his possession to secure his his freedom with the same fatal consequences.

Both Maxwell and Epstein somehow evaded the electronics that linked them to the outside world at the time of their deaths, even though the latter had reportedly made an attempt on his own life while in custody. Both men, facing ruination and serious prison time gave their executioners an alibi: They had nothing to left to live for. The establishment media is already trotting out ancient, ding-a-ling conspiracy theories from obscure right wing sources (attributed to Russia, of course) to highlight the absurdity and futility of questioning the official story of Epstein’s death. Verdict: Nothing to see here.

By now, it’s a given that the parasitic and preferred daughter of the deceased tycoon, made the fateful introduction between her new boyfriend and the Israeli operatives seeking an entry level plutocrat to carry out their blackmail operations after the untimely death of his predecessor. An impoverished socialite has to survive in pricey Manhattan somehow, and that somehow was re-establishing the shady connections to the espionage underworld that had recruited Maxwell Sr.

Ghislaine’s later role as Epstein’s Chief Procurement Officer (or pimp for short) gives more credence to the rumors that she is more than just a debased, barnacle-like appendage to a billionaire, desperate to please her platonic partner by “organizing his social life”, but a fully cognizant co-conspirator in an operation aimed at strengthening Israel’s hand in all matters pertaining to its national security interests, or more accurately, its overseas criminal enterprises.

The recent raid on Epstein’s Manhattan apartment was not the result of a so-called Justice Department righting the egregious wrong it committed by letting Epstein off with a slap on the wrist after his initial conviction that allowed him to serve his sentence largely outside the minimum-security facility with an open door policy for its billionaire guest. More likely, the reversal of Epstein’s “sweetheart” deal was a joint operation between the oligarch cabal informally known as the Mega-Group, and the state security apparatuses that do their bidding.

It’s seems likely that this sudden pivot towards justice from a Justice Department initially spooked into inaction by the spook in his custody, was motivated by the need to remove the most damning bits among Epstein’s vast trove of physical evidence against the pervy punters who visited his island getaway for unintended photo ops with underage girls.

Perhaps his own abuse of these minors was a perk he felt entitled to, and one that would be overlooked in the service of “national security”. It’s hard for most people to differentiate between the government he actually worked for and the ruling establishment on his home turf.

It’s possible that Epstein felt his serial transgressions were merely par for the plutocracy and justified in the service of a higher calling.

The ‘Israel First’ philanthropist shared an unyielding ideological justification for his own criminality as Robert Maxwell, whom the British Home Office had considered recruiting for its own intelligence gathering in the mid 1960’s. Having determined that the well-connected, multilingual, rising star politician was strictly “Zionist”, the spy agency withdrew his candidacy.

Epstein’s real crimes had little to do with raping children, despite the overturned plea deal that came about when a federal judge ruled that prosecutors had violated the victims rights by by concealing the agreement from them. The one time teflon-coated “member of intelligence” who was “above the pay grade” of a powerful District Attorney (now a now scandal-tainted former Labor Secretary) was ultimately (and lethally) penalized for not destroying the contents of his secret-laden safes, leaving his handlers still vulnerable to their explosive contents.

Had the doomed financier divested himself of the toxic assets still in his possession, he might still be roaming the earth today, scouring it for new specimens to populate his underage petting zoo. As a result of the Justice Department’s decision to reverse the non-prosecution deal meant to bury the most incendiary facts of the case, lower-rung punters like former governor Bill Richardson and Senator George Mitchell are being publicly named for their part in the sordid scandal. Someone has to take the fall. (Rule number one of PR crisis management: Crucify the insignificant and let them hang out to dry until the public tires of watching the slow motion spectacle of their undoing.) Meanwhile, documented and/or photographic evidence against more powerful players like Bill Clinton and Donald Trump will have already been destroyed in the pursuit of selective justice.

The fallout of Epstein’s spectacular downfall predictably miss the mark as scandals involving the rich and powerful tend to do. Much of the controversy will dissolve into a Cheetoh dust maelstrom of disinformation, disseminated on Reddit and 4Chan by incel info-warriors before shooting up a shopping mall or playground.

Subsequent reporting of the case will overlook decades of the elite-driven state craft that elevated corrupt and ruthless entities like Epstein and Trump, both ring-kissing acolytes in their youth of influential mob fixer/politcal power broker Roy Cohn – himself a serial sexual predator who similarly caught the fancy of fellow deviants Joe McCarthy and J. Edgar Hoover. Follow the money trail from Tel Aviv and you’ll discover an ancestral link between the corpse of Epstein and his ghostly godfathers waiting with his rewards in hell.

Along with the other disgraced and expendable patsies left in the wake of this ongoing scandal is Alan Dershowitz, Epstein’s octogenarian chief legal counsel and ‘wing man’ aboard the Lolita Express. The now unemployable cable news pundit will live out the remainder of his pointless life under a cloud of suspicion. Despite all the damning testimony against him, the statutory rape allegations never quite stick, but follow him around like a sneaky fart, forcing a distance between himself and the rest of humanity that will last until he is engulfed by the sulfurous fumes of his own making.

The former Harvard law professor’s lifelong service to Israel will go unrewarded – not as a result of victim testimony placing him at multiple crime scenes, but in consideration of his own inept self-defense strategy: ”I’m a scurvy rat aboard a sinking ship eating its own tail to stay alive. Pity me”! Dershowitz at this point will be lucky if he can achieve the same pay grade and social status of Lindsay Lohan. Ditto for Prince Andrew who can at least be relied on to expire slowly of gout in his time-out corner at Windsor Castle.

The moral of this story could be “Lie down with dogs and never wake up again with a prison-issued sheet around your neck”. A variation of the old “Lie down with dogs and and wake up as fish food”.

It Took PG&E 8 Months To Prune A Tree Where Leaves Had Already Been Burnt By Power Lines "Inches Away"

5 hours 57 min ago

We reported  back in July that PG&E had known for years that hundreds of miles of high-voltage lines running in high-risk fire areas were at risk of failing and sparking a fire. And instead of acting swiftly to make the necessary upgrades, it appears the company routinely failed to identify the infrastructure most in need of maintenance.

As we plumb these depths of incompetence at PG&E, another example has emerged that truly shows off the company's apathy as it related to potential fire hazards: it took PG&E eight months to prune one tree that was at risk of causing a fire, Bloomberg reports.

The tree, located in a "fire prone" area in Northern California, already had leaves singed off of it as wind gusts had blown it into a power line that was "inches away". The tree was first flagged for maintenance back in November of 2018. Several months went by and one of the company's tree-trimming contractors certified in February that the work had been completed. It hadn't been.

In April, a "pre-inspector" again prescribed the tree for work, without noting that it was urgent. The tree was finally pruned - on June 12, about 8 months from it originally being flagged. 

The details of this circus were detailed in a report issued this past week about the progress PG&E was making in Northern California. The company's court appointed outside compliance monitor found that PG&E is overlooking high risk trees and isn't training its contractors properly. It also found that the company is failing to keep up adequate records. 

This may not help the company with the federal judge that is overseeing its probation for "multiple felony convictions in 2016 over shoddy record keeping for its natural-gas operations."

The report could anger U.S. District Judge William Alsup, who has constantly reminded the company of its recklessness and is currently "straining" to punish the company for its poor fire prevention efforts. PG&E, as well as its CEO, are due back in front of the judge September 17. 

A judge is expected to rule over the next few days on whether a group of bondholders can compete with the company in proposing  a plan to restructure the company. 

PG&E said in a statement: “PG&E’s service area includes more than 120 million trees with the potential to grow or fall into our overhead power lines. While we have made progress in many areas to further enhance wildfire safety including vegetation-management work, we acknowledge that we have more work to do.”

The company says that it has a plan to step up its tree trimming in high fire risk areas that span 25,000 miles of power lines as part of a new multi-billion-dollar wildfire safety plan. The court monitor is reviewing those efforts and is tasked with making sure PG&E doesn't violate the terms of its probation. 

The monitor's role has expanded as PG&E's equipment has been found to be at fault for wildfires that have torched Northern California and killed residents over the last few years. The company is under criminal investigation in Butte County, where the Camp Fire started, before killing 86 people.

The court monitor has said in his report to the court that he has found “significant, actionable findings.”

The monitor continued: "Inspections are not only revealing individual trees that are missed, including three active wildfire threats in high-risk areas, but they also reflect gaps in processes, for example, contractor training.”

The now-bankrupt PG&E has put together a contingency plan that would plunge millions of unsuspecting Californians into rolling blackouts reminiscent of the early 2000s (when the utility was last pushed into bankruptcy protection thanks to the market-manipulation hijinx of Enron and other electricity brokers), but as WSJ revealed in an explosive report published in July - a report that was probably the result of months of battles between the paper's lawyers and California's Freedom of Information Commission - PG&E has a long history of deterring maintenance on its lines and towers, a practice that directly contributed to causing the deadliest forest fire in California history.

McMaken: Why Joe Biden Is Winning The Gun-Control Debate

6 hours 27 min ago

Authored by Ryan McMaken via The Mises Institute,

There are two fundamental arguments most commonly made against gun control.

1. The Anti-Crime Argument

The first one is based on the idea that persons have a fundamental right to self-defense against ordinary criminals. That is, in a world where criminals have access to either legal or illegal weapons, ordinary people ought to be able to arm themselves for purposes of self defense.

The benefits of private gun ownership in this regard can be illustrated in a variety of ways. Mexico's strict gun-control regime, for instance, ensures ordinary Mexicans are at the mercy of the cartels and ordinary street criminals. Mexico's astoundingly high homicide rates illustrate the unfortunate reality.

Moreover, within the United States, some of the worst regions for homicides are areas with some of the most strict gun control laws. Baltimore, for example, has a homicide rate ten times that of the United States overall, while the state of Maryland heavily restricts gun ownership.

Studies that assert "more guns means more crime," meanwhile, have never been able to demonstrate a causal relationship here. Not only is there no reliable data on where exactly all the guns are, but the direction of causality can go either way. We would expect people living in a high crime area to be more likely to purchase a gun for protection. In other words, the proper conclusion may just as likely be "more crime means more guns."

The gun-for-self-defense argument is the easier one to make. For the most part, one need only argue that people need to be at least as well armed as ordinary criminals. Shotguns and rifles for home defense, or conceal-carry of handguns, for instance, would arguably be sufficient.

2. The Defense-Against-Tyranny Argument

The other argument for private gun ownership is the argument that weapons ought to be owned by a sizable portion of the population as a defense against an abusive government.

In the current ideological environment, this is the harder argument to make. And, as we shall see, this argument depends heavily on making the case that a standing army controlled by the federal government is a threat to freedom. As it now stands, this argument isn't exactly popular.

The Origins of the Second Amendment

In the late eighteenth century, however, the idea that a standing army was a grave danger to any society was far more common. The eighteenth-century arguments behind the Second Amendment, of course, were always centered around providing a check on the power of the central government's military power. Those argumentsgo far back beyond the Declaration of Independence at least to the days of the English Civil war. In the 1660s it was agreed that troops were necessary to maintain order, but few trusted the central government with the task. Thus, "a nationwide militia, composed of civilians who would — as in earlier days — be summoned in time of need."

In practice, this meant the militia members would have access to their own arms, and be skilled in their use. Much was made of the idea that a national standing army, under the command of the central government was a significant danger to the liberties of the resident population. This idea persisted in Britain even into the nineteenth century.

These ideas eventually made their way to the United States where state and local militias were commonly used during the Revolutionary War, and afterward, such as when the Massachusetts Militia was successfully used to put down Shays' Rebellion. Formal and independent militias — some controlled by cities and states, and some semi-private — continued to exist throughout the nineteenth century. But there was also the "unorganized" militia, which in many state constitutions were defined as "all able-bodied male residents of the State, between the ages of eighteen and forty-five years." As noted by Jeffrey Rogers Hummel, some militias were successfully employed in defense against Indian raids, and as part of the invasion force of the Mexican War.

Under-girding the idea of the militia was always the belief that a sizable federal standing army was a threat to American freedoms, and that outside the Navy, military force ought to be decentralized and subject to state and local control.

These militias — once called into service — were usually subject to control by government officials, whether local or at the state level. But it was often assumed that the ranks of the militia would be filled by residents skilled in the use of their own private arms. This also assumed private gun ownership. Moreover, it assumed ownership of arms — and proficiency with them — at the level of a military unit.

So What does This Have to do with the Gun Control Argument Today?

The idea of the militias as a check on standing armies remains important because gun-control advocates are now specifically targeting the defense-against-tyranny argument in their drive to further criminalize gun ownership.

For example, last week, Democratic presidential candidate Joe Biden was asked about his position on gun control:

COOPER: So, to gun owners out there who say, well, a Biden administration means they're going to come for my guns?

BIDEN: Bingo. You're right if you have an assault weapon. The fact of the matter is, they should be illegal, period. Look, the Second Amendment doesn't say you can't restrict the kinds of weapons people can own. You can't buy a bazooka. You can't have a flame thrower.

     The guys who make these arguments are the people who say the tree of liberty is watered with the blood of patriots, we need the protection against the government. We need an F-15 for that. We need something well beyond whether or not you're going to have an assault weapon.

Biden is not claiming no gun ownership is to be allowed. Instead, he's just saying people don't need guns beyond what's necessary for personal defense. In his mind, that means it's practical to eliminate private ownership of so-called "assault weapons."

The tactic here is clear: Biden is attacking the guns-against-tyranny argument because he knows if he can win on that, he can make a case for abolishing legal ownership of semi-automatic rifles like AR-15s. For now, he won't bother arguing against the guns-for-self-defense argument. That's too much trouble.

But when he says guns can't really fight abusive government, his argument will strike many listeners as quite sensible. Here are the key components:

  • It is silly to assert an AR-15 will defend against tyranny.

  • Why is it silly? Because a tyrannical US government would be armed with F-15 fighter jets and flame throwers and bazookas. Thus, the idea that people could defend against this with some AR-15s is absurd.

  • Should people be allowed to own military hardware then? Of course not!  Everyone knows we can't just let anybody own a bazooka or a machine gun.

The conclusion is this: let's move on form this fantasy about how your AR-15 fights tyranny, and let's get down to making people safe by getting these "weapons of war" out of the hands of people who will use them to slaughter children.

Meanwhile, very few people are willing to go on CNN and say "yes, I think military grade rifles and armored vehicles with belt-fed machine guns should be perfectly legal to everyone at any time." Few are willing to say this for good reason. They'd be mocked and dismissed as utterly irrelevant.

The pro-gun-control side also benefits from the fact the US military is incredibly popular, and we are regularly told that all Americans only have any freedom at all because the US military makes it possible. Why would anyone need a gun to shoot at those American heroes?

Rebuilding the Dike: Yes, Standing Armies Are a Problem, and Yes, We Must Decentralize Military Power

Unfortunately, anyone who wants to really defend the guns-against-tyranny argument has his work cut out for him.

For more than a century now, Americans have been told there is no longer any role for any sort of military force that is beyond the direct control of the federal government. In other words, a huge standing federal army is perfectly fine, and we don't need military hardware — privately owned or otherwise — to defend against them. 

This idea was made a legal reality with the Militia Act of 1903. With the new legislation, the federal government created the so-called National Guard which would spell the doom of the unorganized militia in the US, and serve to completely undermine the Second Amendment and its defense of decentralized military power in the US.

After 1903, the federalization of the state militias only accelerated until, as historian David Yassky concludes, "Today's National Guard is thus a far cry from what the Founders' understood a militia to be" and the result of these changes has brought about "the disappearance of anything the Founders would have recognized as a militia." Far from acting as a bulwark against abuse of federal power, today's National Guard is something the authors of the Second Amendment "would have seen as little better than a standing army."

This change has essentially removed the idea of the unorganized militia from public debate, and has also solidified the notion that all military power in the United States ought to be controlled by generals in Washington, DC. Thus, the idea that anyone outside federally-controlled military units ought to have military-level weapons strikes most as bizarre.

Yes, some vestiges of the old system did persist later than 1903. As late as 1990, it was still possible — at least in theory — for state governors to legally veto deployment of National Guard units ordered by US presidents. But even that independence is gone now.

Historically, however, state governments could — and did — refuse to deploy troops when US presidents demanded it. But today, the idea that standing armies are a danger — or that local and state militias have a role in defending against them — is profoundly unpopular among policymakers and average voters alike.

So now, if one is going to assert that guns (and other weapons) are needed to protect against tyranny, one has to rebuild the entire Second Amendment edifice: an edifice which is fundamentally opposed to standing armies and which imagines both an organized and unorganized militia outside the control of the central government.

After all, even many people who fancy themselves big defenders of the Second Amendment certainly don't act like it. Often, the same people who clamor to thank soldiers "for their service" then say with the next breath that guns are necessary to fight against the military's soldiers. Moreover, the destruction of the militia's independence was historically cheered by conservatives. It was gun-owning social conservatives who supported legislation like the Montgomery Amendment which put the final nail in the coffin of state-control of National Guard units. The bill's sponsor, conservative Congressman Sonny Montgomery of Mississippi, was never punished by his voters for his assault on the Second Amendment.

Pakistan's PM Khan: World Must "Seriously Consider" Safety Of India's Nuclear Arsenal

6 hours 57 min ago

Pakistan's Prime Minister Imran Khan has gone on a blistering attack, in a series of Twitter statements arguing that the world must "seriously consider" the safety of India's nuclear arsenal under control the "fascist" Modi government.

"The world must also seriously consider the safety and security of India's nuclear arsenal in the control of the fascist, racist Hindu supremacist Modi government. This is an issue that impacts not just the region but the world," Khan tweeted early Sunday.

Khan's words came just as the AFP is reporting some 4,000 Kashmiris thrown into detention amid an unprecedented crackdown by tens of thousands of Indian troops enforcing a legal revocation of Jammu and Kashmir's (J&k) autonomous status. 

It also comes two days after Indian Defense Minister Rajnath Singh detailed India's "no first use" nuclear policy, hinting that it could become permanent. Pakistani officials have said this is a distraction from India's "genocidal" policies against Muslim Kashmirs.

India has been captured, as Germany had been captured by Nazis, by a fascist, racist Hindu supremacist ideology and leadership. This threatens nine million Kashmiris under siege for over two weeks which should have sent alarm bells ringing across the world with UN observers being sent there,” Khan tweeted.

India has been captured, as Germany had been captured by Nazis, by a fascist, racist Hindu Supremacist ideology & leadership.This threatens 9m Kashmiris under siege in IOK for over 2 weeks which shd have sent alarm bells ringing across the world with UN Observers being sent there

— Imran Khan (@ImranKhanPTI) August 18, 2019

And speaking of the Hindu nationalist Bharatiya Janata leadership in New Delhi led by Prime Minister Narendra Modi, which on August 5th J&K's status quo ability and rights to maintain their own local governance, Khan described further, “One can simply Google to understand the link between the Nazi ideology and ethnic cleansing and genocide ideology of the RSS-BJP founding fathers.”

“Already four million Indian Muslims face detention camps and cancellation of citizenship. The world must take note as this genie is out of the bottle and the doctrine of hate and genocide, with RSS goons on the rampage, will spread unless the international community acts now to stop it,” he said.

Since the crisis began two weeks ago through New Delhi's voiding Article 370 of the constitution, there's been a reported build-up of Pakistani forces along its side of the Line of Control (LoC) in Kashmir, meaning at any moment the heated rhetoric could spark a major war between the nuclear armed neighbors and rivals. 

"The Southern Poverty Law Center Is A Hate-Based Scam That Nearly Caused Me To Be Murdered"

7 hours 27 min ago

Authored by Jessica Prol Smith, op-ed via,

After internal challenges with discrimination, the Southern Poverty Law Center can't call itself an arbiter of justice.

I’ll never forget the moment I learned we were on lockdown. It was Aug.15, 2012. My frustration mingled with fear. Trapped on the sixth floor, we knew someone had been shot. We knew we couldn’t leave yet. We knew little else.

While I was missing lunch, a crime scene played out in the office lobby below me. My coworker and friend Leo wasn’t armed, but he’d played the quick-thinking and inadvertent hero, disarming a young man on a mission to kill me and as many of my colleagues as possible. The gunman had packed his backpack with ammo and 15 Chick-fil-A sandwiches — later admitting that he’d planned to smear them on our lifeless faces as a political statement. Leo took a bullet in the arm but managed to disarm and hold the attacker until law enforcement arrived.

I wrote and edited for the Family Research Council, a public advocacy organization that promoted the principles I’d cared about since childhood: protecting the family, promoting the dignity of every human life and advocating for religious liberty. It reads like a tagline, but it’s also just what I believed and the way I chose to match my career with my convictions.

I never expected that everyone would celebrate or share my beliefs. But I did expect to be able to discuss and debate these differences without becoming a political target in an act of terrorism, the first conviction under Washington, D.C.’s 2002 Anti-Terrorism Act.

It was the type of violent incident that one could expect a group that purportedly monitors “hate,” like the Southern Poverty Law Center, to notice, research, and decry. In fact, we were on the center’s radar but for all the wrong reasons. The assailant acknowledged later in FBI testimony that he had selected our office precisely because the SPLC had labeled my employer a “hate group.”

It’s always been easier to smear people rather than wrestle with their ideas. It’s a bully who calls names and spreads lies rather than thoroughly reading a brief’s legal arguments or challenging the rationale underlying a policy proposal. The SPLC has chosen to take the easy path — to intimidate and mislead for raw political power and financial benefit.

For years, former employees revealed, local journalists reported and commentatorshave lamented: the Southern Poverty Law Center is not what it claims to be. Not a pure-hearted, clear-headed legal advocate for the vulnerable, but rather an obscenely wealthy marketing scheme. For years, the left-wing interest group has used its “hate group” list to promote the fiction that violent Neo-Nazis and Christian nonprofits peacefully promoting orthodox beliefs about marriage and sex are indistinguishable. Sometimes, it’s apologized to public figures; it’s smeared and recently paid out millions to settle a threatened defamation lawsuit.

The SPLC has its own troubles

These shameful secrets are no longer hidden in shadows. The New York TimesPoliticoNPR and a host of other mainstream publications are reporting on the corruption and widening credibility gap. The SPLC dismissed its co-founder, and its president resigned amidst numerous claims of sexual harassment, gender discrimination and racism within the organization — a parade of disgraces that vividly force the conclusion: The SPLC is hollow, rotten and failing at the very virtues it pretends to celebrate.

The criticism comes from many corners. There’s theCurrent Affairs editor who seems sympathetic to the center’s progressive mission but decries its “hate group” list as an “outright fraud” and a “willful deception designed to scare older liberals into writing checks to the SPLC.” 

There’s the retired investigative journalist who helped research and write an eight-part series on the center’s “litany of problems and questionable practices” in the mid-1990s. His Washington Post opinion piece reads with a thinly-veiled message: We nearly got a Pulitzer Prize for TELLING YOU SO. 

But perhaps most damning of all are the indictments leveled by former employee Bob Moser in The New Yorker. He remembers being welcomed to the “Poverty Palace” and recounts the heart-sinking reality of it all — being “pawns” in a “highly profitable scam.”

Jobs and years have passed, and I work now for Alliance Defending Freedom. ADF ranks among “the top performing firm(s]" litigating First Amendment cases, the “Christian legal powerhouse that keeps winning at the Supreme Court.” And yes, my new employer has also attracted one of the SPLC’s spurious hate labels. The label easily peels and fades away when one actually does the research and listens to truth before deciding to troll.

I won't be intimidated by the SPLC 

If the SPLC thought that their hate would intimidate or silence me and my colleagues, they’re sadly mistaken. I’m lucky — blessed, really — that I didn’t take a bullet for my beliefs back in 2012. But the center’s ugly slander and the gunman’s misguided attack have sharpened my resolve and deepened my faith in my Savior, who commands my destiny and shields me from the schemes of man. The same is true for my colleagues.

Fifty-one years ago, Dr. Martin Luther King, Jr., fell to an assassin’s bullet. The SPLC pretends to carry his legacy but weaponizes hate labels instead. Unlike SPLC's name-calling, Dr. King’s words and vision stand the test of time. “Injustice anywhere,” he warned, “is a threat to justice everywhere.”

The SPLC, as an institution, has thoroughly disqualified itself as an arbiter of justice. But this country would be a better place if the center’s donors, lawyers and friends would truly believe and apply Dr. King’s legacy — his peaceful pursuit of justice and his love of neighbor.

US Air Force Can Now Turn Small Planes Into Robots

7 hours 57 min ago

The Air Force Research Laboratory (AFRL) Center for Rapid Innovation (CRI) and DZYNE Technologies completed a two-hour test flight of a new robot plane Aug. 9 at Dugway Proving Ground in Utah.

"This flight test is a testament to AFRL's ability to rapidly innovate technology from concept to application in a safe build up approach while still maintaining low cost and short timelines," said Maj. Gen. William Cooley, AFRL commander.

The new revolutionary Robotic Pilot Unmanned Conversion Program, called ROBOpilot, interacts with flight controls just like a human pilot.

"Imagine being able to rapidly and affordably convert a general aviation aircraft, like a Cessna or Piper, into an unmanned aerial vehicle, having it fly a mission autonomously, and then returning it back to its original manned configuration," said Dr. Alok Das, CRI's Senior Scientist. "All of this is achieved without making permanent modifications to the aircraft."

The robot manipulates the yoke, pushes on the rudders and brakes, regulates the throttle, observes the instrument panel the same way a pilot does. "At the same time, the system uses sensors, like GPS and an Inertial Measurement Unit [essentially a way for a machine to locate itself in space without GPS] for situational awareness and information gathering. A computer analyzes these details to make decisions on how to best control the flight," AFRL said.

Once the flight is completed, ROBOpilot can be quickly uninstalled from a plane. The system is the size of a pilot's seat, which includes all the equipment needed to control the aircraft including actuators, electronics, cameras, power systems, and a robotic arm.

Das said ROBOpilot is a non-invasive way towards robotically piloted aircraft leverages existing commercial technology and components. It's a low-cost alternative compared to military drones that cost $15 to $200 million.

"ROBOpilot offers the benefits of unmanned operations without the complexity and upfront cost associated with the development of new unmanned vehicles," Das said.

AFRL uploaded a short video of the test flight onto YouTube last week. 

Former CIA Spook: "Russian Hoax Coup & Epstein Are Interlocked"

8 hours 27 min ago

Via Greg Hunter’s,

Former CIA Officer and whistleblower Kevin Shipp says the Russian hoax and attempted coup of President Trump and the sex trafficking case against Jeffery Epstein are linked together by the same Deep State players.

Shipp explains, “The FBI has completely raided his vault, and they have some pretty damning material..."

"I don’t know why it took so long, but they have raided Epstein’s island... So, there is a lot of damning information the FBI has now on certain people. At the top of the list, and the one who flew the most, was Bill Clinton. Then he lied about it. They are intertwined in that regard and with the Clinton Foundation that we know is a fraud. It is known around the world, and you’ve got these two intersections with Bill and Hillary Clinton.

Of course, Hillary Clinton is tied to the dossier in an attempt to get rid of Donald Trump. So, these webs interlocked with each other, and these people interlock with each other. Welcome to the global elite. Welcome to human trafficking. These things are connected, and with Epstein dead, there are a lot of prominent people breathing a sigh of relief—for now. Is Barr aggressive enough? He says he is going to pursue this case anyway. Is he going to call in the people seen on the CD’s, videos and photographs? That remains to be seen.”

On Epstein’s officially ruled suicide while in prison, Shipp says, “Epstein tries to commit ‘suicide,’ and his cellmate, a four-time convicted murderer, said he didn’t see (or hear) it because he had his headphones on. Attorney General William Barr was in charge of the safety of Jeffery Epstein. There should have been an entire contingent of U.S. Marshals to protect this huge witness, but there were none... Why is that? ..."

"It is just unbelievable how they left this huge witness to die in prison. The prison guards were off, as we know. The cameras were not functioning. He was taken off of suicide watch and on and on we go. There are so many things that add up to this not being a suicide that it is remarkable. . . ...

We are all still hoping that Attorney General Barr will do his job and people are charged, but this is starting to bother me a little bit. A major witness that was connected to high level people in government and finance was left alone to die in prison, and I think he was murdered. This was all left to happen by William Barr. The pieces to this just don’t add up...

We’ve got so many strange things going on here that do not add up, and Attorney General Barr is ultimately responsible for this happening.”

Join Greg Hunter as he goes One-on-One with former CIA Officer and author of the top selling book about the Deep State called “From the Company of Shadows.

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Aussie Reserve Bank, Considering "Extreme Measures", Admits "We're Almost Out Of Ammo"

8 hours 57 min ago

At least one reserve bank globally is starting to ponder the question that many central banks across the world will soon inevitably be asking: what happens if we cut to zero and the economy continues to falter?

This has led Australia to start considering QE, following in the footsteps of a world full of central bankers all offering each other as much confirmation bias necessary to continue to walk down the path of eventual economic destruction.

In Australia, the reserve bank has cut to 1% and "nobody expects them to stop cutting," according to The bank released this chart days ago, showing that market is expecting further cuts. 

The average of all expectations is for the market to fall to 0.37% by September 2020. That exact outcome is described as "unlikely", but the RBA could have rates at 0.25% or 0.5% by then. That would only leave room for one or two more cuts before rates are at zero.

Then what? Destroy your currency and print your way out of your problems.

Apparently convinced that economies only exist as permanent booms now, the RBA said last week that it would begin a program similar to QE in the United States, wherein the central bank would buy financial assets in exchange for cash. The RBA is considering buying Australian government bonds.

“We could take action to lower the risk-free rates further out along the term spectrum,” said the RBA Governor.

Justifying this nonsense, the article then gives the quintessential example of how QE bond buying works in practice:

Bonds are how the government borrows. Here’s how it works in simplified terms:

The government offers to sell a piece of paper that says, “Australia will pay you back a million dollars in 10 years” (a 10-year bond).

Someone buys that for, let’s say, $900,000.

In this way the government just borrowed $900,000 and the $100,000 difference, spread over 10 years, is the return on investment for the buyer. The return on investment in bonds is known as the yield. It is usually expressed as a percentage, and it’s really important.

Yields change constantly in the secondary market as people trade the bonds they buy at varying prices.

When the RBA buys Australian Government bonds from the people who hold them, it is expected to have an effect on bond yields. The reason? Bidding to buy bonds will push up their price. The price of a bond determines the return on it, aka the yield.

The higher the price, the lower the yield. For example, imagine if someone bought that 10-year bond mentioned earlier for $1 million, it would have a yield of 0 per cent.

The RBA has said that by buying bonds, it is seeking a "spillover" effect, where it hopes to reduce bond yields across the market, which would in turn encourage economic activity. 

The RBA Governor said: 

“Europe’s the best example... They’ve also had success in lowering government bond yields, which is a risk-free rate, and therefore they’ve had success in lowering interest rates across the economy for private borrowers as well.” 

But even the author of the article, economist Jason Murphy, couldn't do the mental gymnastics necessary to pretend that QE makes sense at this point.

"What’s crazy about all this is we are talking about an extraordinary kind of monetary policy when the economy is not extraordinarily bad," the article states. 

"Australia is talking about bringing it in now. There’s something disconcerting about that," it concludes.

We couldn't agree more. 

Hong Kong's Inevitable Showdown

9 hours 27 min ago

Authored by Patrick Lawrence via,

This reckoning with Beijing’s authority was baked into the cake 22 years ago when the Union Jack came down over Government House...

It is impossible not to admire the bravery and commitment pro-democracy demonstrators display daily as they clog Hong Kong streets, shut down its airport, and disrupt the territory’s beating heart in Central, the commercial and financial district. But neither can one deny the tragic fate that appears near as Beijing stiffens its resolve and signals the threat of military intervention.

The futility of all action, the necessity of any: Maybe those protestors building barricades and hurling Molotov cocktails at tear-gassing riot police are reading Camus in their off- hours.

There is no question of Chinese President Xi Jinping compromising Beijing’s authority to mollify those now in their third month of protests across Hong Kong. He is too firm a believer in the primacy of the Chinese Communist Party to entertain any such risk. But there is too much at stake for the Chinese president to order mainland troops or police units into the territory short of a decisive challenge to the local administration’s ability to govern. This accounts for Beijing’s restraint over the past 10 weeks.

The best outcome in prospect now — and the chances of this appear slim at the moment — is that Xi will authorize influential political allies in Hong Kong to frame a set of reforms sufficient to isolate demonstrators by eliminating the broad public support they have to date enjoyed. In any other resolution of this crisis, the democracy advocates in the streets stand to lose everything. Even as they number in the hundreds of thousands, they are simply no match against a government intent on centralized control over a nation of 1.4 billion.

The escalating protests across Hong Kong were a long time coming. So was Beijing’s refusal thus far to give way to any of the demonstrators’ substantive demands, apart from suspending an extradition bill. The protesters are right: They were promised autonomy, civil liberties and democratic government by way of the “one country, two systems” principle China committed to once it reassumed sovereignty from Britain in 1997. Beijing is right, too: Sovereignty is to be defended as a precept beyond negotiation. Once the Union Jack came down over Government House, no foreign power could credibly purport to tell China how to govern its own real estate. The foreign ministry in Beijing made this clear in a bluntly worded statement two years ago.

From China’s point of view, the markedly pro-American character of at least some of the protestors is concerning as Beijing considers the U.S. a destabilizing force in its sphere of influence.

Government House in 2005. (CC BY-SA 2.0, Wikimedia Commons)

Face-Saving Instrument

In truth, the Sino–British Joint Declaration signed in 1984, setting the terms for the transition of power 13 years later, was never more than a face-saving instrument to spare London the embarrassment of handing over Hong Kong to an authoritarian government ruling on Leninist principles. In the breach, the Basic Law, the mini-constitution that document established, now proves fatally short on detail. It sustains the democratic aspirations of Hong Kong’s 7 million people while opening the door to Beijing’s self-serving interpretations and its creeping interventions into Hong Kong’s courts, legislature and other governing institutions.

What began in late April as a narrow demand that the Hong Kong government withdraw legislation allowing the extradition of criminal suspects across the border to China has mushroomed into a mass movement challenging Beijing to accept authentically democratic political processes in what is formally known as the Hong Kong Special Administrative Region. This is the showdown baked into the cake 22 years ago.

China’s error in pushing its extradition law without testing the local waters reflects another misjudgment, this one further back in history. In the decades after the 1949 revolution, the flood of mainlanders who took refuge in Hong Kong developed a separate identity of their own: They became “Hong Kongers” or “Hong Kong people,” precisely as they are now. The British missed this during the final decades of colonial rule simply because it made no difference to them. Beijing, which considers blood and descent the determinants of one’s status, still fails to understand that “Hong Kong Chinese” has come to mean something different from “Chinese.”

It would be difficult to overstate what is consequently at stake for Hong Kong as demonstrators continue to fill its public space. “We are at a crossroads,” Martin Lee, a long-honored democracy advocate,told The New York Times last Monday. “The future of Hong Kong — the future of democracy — depends on what’s going to happen in the next few months.”

June 9, 2019, demonstration in Hong Kong against the extradition bill. (Hf9631, CC BY-SA 4.0, Wikimedia Commons)

Carrie Lam, Hong Kong’s beleaguered and widely disliked chief executive, agreed with Lee in the grimmest possible terms. “Violence, no matter if it’s using violence or condoning it, will push Hong Kong down a path of no return,” she said after the demonstrators shut down the airport for two days earlier this week. Hong Kong stands poised, she added, at the brink of “a very worrying and dangerous situation.” 

Dangers for Xi

Not to be missed, this crisis is worrisome and dangerous for Xi, too. Given it is the most serious challenge he has faced from political opponents since he took office seven years ago, his reputation as an adroit statesman, well-earned in cases such as North Korea, is on the line. A clumsy move now would obliterate Xi’s dedicated effort to advance China as a responsible regional power and a global power in the making. This is the first direct test of Xi’s alternative — efficient, authoritarian, a depoliticized populace — to Western democracy. He does not want it to end as an echo of Hungary in 1956. 

Hong Kong is less important to China than it once was, given Shanghai’s growth as the mainland’s preferred financial center. But a goodly number of Chinese companies still raise goodly amounts of money in Hong Kong capital markets; roughly 1,500 multinational corporations have regional headquarters in the territory.

Hong Kong is the mainland’s hood ornament, in short. If a single soldier with a People’s Liberation Army uniform were to appear on a Hong Kong street, the territory’s status as a global financial center with reliable legal and administrative systems would shatter instantly. 

China’s President Xi Jinping.

These considerations, hardly lost on Xi and his advisers, leave forceful intervention by the PLA or mainland police units the remotest possibility— Xi’s nuclear option. The PLA’s garrison in Hong Kong recently released a video of troops training to quell demonstrations with machine guns; its contingent in Shenzhen, the industrial city opposite Hong Kong on the mainland, made similar footage public last week. But these can be counted as gestures, signals, warnings without words. Restraint remains the order of the day until Xi comes up with a coherent strategy in Hong Kong. He does not yet have one.

What has so far amounted to Beijing’s daily improvisations effectively dead-ended when demonstrators shut down the airport last week: That was the first step along Lam’s “path of no return.” What is next remains unclear, but “next” is likely to arrive within a few weeks at the outside. For the moment, Xi’s best option is to work through Beijing’s allies in government and the private sector to swing public opinion away from the demonstrators in favor of some form of de-escalation. 

Michael Tien, a Hong Kong legislator who supports Beijing, recently urged it to accommodate some of the demonstrators’ demands for a more authentically representative political process. While it is a sliver, there is a middle ground here. Tien has a precedent to cite: China offered a series of political reforms in response to the Umbrella Movement five years ago. They were rejected for not going far enough; the probability of a similar response this time has to be counted high.

The long view of Hong Kong is not in the demonstrators’ favor. The Sino–British accord put the one-country, two systems principle in place for 50 years; come 2047, Hong Kong is to be a Chinese city like any other. The halfway mark in this interim approaches. This suggests the current crisis is best understood as a step along a bumpy path — a path with neither an exit nor a return.

Bankruptcy Filings Rise Among US Energy Producers, Report

9 hours 57 min ago

According to a new report from law firm Haynes and Boone LLP, bankruptcies in the upstream sector are increasing this year as energy spot prices remain subdued amid a cyclical downshift in the economy.

So far, 26 exploration and production (E&P) firms have filed for bankruptcy through mid-August, with debts totaling $10.96 billion. The firm noticed a surge in bankruptcies began in May, following a -23% correction in WTI prices from mid-April to mid-June.

In 2018, 28 E&P firms filed for bankruptcy, posting $13.2 billion in debt, while 24 firms asked for protection in 2017 with $8.5 billion in debt. The firm points out that insolvencies in the energy patch are gaining momentum.

"So far this year there has been an uptick in the number of filings," Haynes & Boone said.

Oil and gas prices have remained depressed for 2019.

The law firm said it's hard to tell if a new bankruptcy wave is imminent, but said, "some stakeholders may have given up hope that resurgent commodity prices will bail everyone out," especially operators who have been on the verge of bankruptcy.

"For these producers, the game clock has run out of time to keep playing 'kick the can' with their creditors and other stakeholders," the firm warned.

Buddy Clark, a Haynes & Boone partner, told Reuters that many of 2019's bankruptcies are pre-planned, Chapter 11 restructurings, where creditors agree in advance on restructuring plans.

"I don't think you will see a lot of Chapter 7 (liquidations)," he said. "When you see Chapter 7s is when there are no assets left. Typically, there are always assets left."

Natural Gas Intelligence believes a bankruptcy wave for the upstream sector could be nearing. This is because operators across the country have been scaling back since oil crashed -44% in 4Q18. Producers have been faced with margin compression, high debt loads, and oversupplied markets so far this year.

Haynes and Boone said 22 oilfield service (OFS) companies have filed for bankruptcy since last year, most notable was the bust of Weatherford International last month.

The midstream sector has so far weathered the slowdown without the same financial stress of the upstream sector.

Haynes and Boone recorded 192 E&P bankruptcies since 2015 totaling $106.8 billion in debt and recorded 185 OFS bankruptcies involving $65 billion of debt over the same time.

And with SocGen's Albert Edwards warning about a deflationary bust, it seems that the inflation downturn could force commodity prices much lower, could kick off the tidal wave of energy bankruptcies during the 2020 election year.

It's Not A Joke: Trump Confirms He Is Looking At "Strategicaly Interesting" Greenland

10 hours 13 min ago

And here we thought that the WSJ report on Trump wanting to buy Greenland was a joke.

Source: The Ricochet

Speaking on the TV circuit on Sunday, White House economic adviser Larry Kudlow confirmed that the US president is really mulling the purchase of world’s largest island: "It's an interesting story,” Larry Kudlow told Fox News Sunday. “It’s developing. We’re looking at it. We don’t know." He also reminded host Dana Perino that “years ago” another US President, Harry Truman, also considered buying the 2,166,086-sq-km island, 80 percent of which is covered with ice.

According to Kudlow, Denmark - which incorporates Greenland as a self-governed territory - should sell it to America because “Denmark is an ally.”

“Greenland is a strategic place… they’ve got a lot of valuable minerals,” he explained, and he is right: Danish surveys have found that the owner of the island would stake a claim to around 900,000 sq km of the continental shelf in the Arctic Ocean.

And on Sunday afternoon Trump himself confirmed the report was legitimate when he said speaking to reporters that Greenland is "strategically interesting" and "we’d be interested, but we’ll talk to them a little bit. It’s not No. 1 on the burner, I can tell you that,” the president said.

"It’s just something we’ve talked about,” Trump told reporters when asked about the idea. “Denmark essentially owns it. We’re very good allies with Denmark. We’ve protected Denmark like we protect large portions of the world, so the concept came up."

“Essentially, it’s a large real estate deal. A lot of things can be done. It’s hurting Denmark very badly, because they’re losing almost $700 million a year carrying it. So they carry it at a great loss,” he said.

President Trump acknowledges discussing the U.S. potentially buying Greenland: "Essentially, it's a large real estate deal"

— CBS News (@CBSNews) August 18, 2019

As we reported last week, the Wall Street Journal said that Trump "listened with interest" as his advisers discussed Greenland’s strategic location and vast natural resources, directing them to study the possibility of acquiring the island for the US. Not even the fact that Greenland is an autonomous country with over 56,000 people and its own local government, appeared to faze Trump, and while it relies on Denmark for two thirds of its budget, Copenhagen couldn’t sell it even if it wanted to.

So far, no willingness for the latter has been expressed – quite the contrary. Denmark’s prime minister, Mette Frederiksen, ruled out that the country would or could sell Greenland to the U.S. saying "Greenland isn’t for sale, Greenland isn’t Danish, Greenland is Greenlandic,” Frederiksen said Sunday during a visit to Greenland, according to local newspaper Sermitsiaq. “I keep trying to hope that this isn’t something that was seriously meant."

Sorry Mette, it was quite serious.

“It’s important for us to point out that selling Greenland is not an option. Nobody can sell a country like that. Denmark doesn’t own Greenland and you can’t sell something you don’t own,” Aki-Matilda Hoegh-Dam, a Danish MP elected in Greenland has said.

As a reminder, Greenland is part of the Kingdom of Denmark but has extensive home rule. Trump is due to visit Denmark Sept. 2-3.

Greenland’s Foreign Minister earlier responded to the report by saying that the island was “open for business, but we’re not for sale,” while various Danish politicians blasted Trump’s ambitions as “completely ridiculous” and an “April Fool’s joke.”

#Greenland is rich in valuable resources such as minerals, the purest water and ice, fish stocks, seafood, renewable energy and is a new frontier for adventure tourism. We're open for business, not for sale❄️

"Brace For A New Regime" Goldman Warns As Market Finally Pukes Illiquid Bonds

10 hours 27 min ago

For years, this website and many others (such as Goldman), had been warning that in the brave new world of activist central banks in which there is virtually no risk left as any downturn is met with aggressive central bank interventions, there is also no liquidity as central banks themselves have displaced all other actors and have flooded the market with artificial liquifity, and as a result "liquidity has become the new leverage" when it comes to specific risks plaguing various assets, and especially corporate bonds.

Yet while the warnings came and went, bond spreads - both investment grade and junk - continued to grind ever tighter as yields tumbled across the entire fixed income universe, and in some European cases, "high" yield bond yields even turned negative.

All that appears to have come to a long overdue end in recent weeks, as liquidity premiums for both IG and junk bonds have suddenly jumped higher. In a recent bond market analysis, Goldman strategists looked at the relative value performance of illiquid vs. illiquid bonds, with the results of Goldman's estimates of the average spread pickup provided by illiquid bonds over their liquid peers in the IG and HY markets shown in the chart below.

The key takeaway from Exhibit 1 is that the illiquidity premium, i.e., the spread differential between illiquid and liquid bonds, has been drifting wider in both the IG and HY markets, reaching its highest level in two years. The underperformance of illiquid bonds is further illustrated in the next chart, which shows the cumulative excess return (rates-hedged) on a long-short strategy involving illiquid vs. liquid bonds.

As the chart clearly shows, the poor showing of illiquid bonds has been particularly pronounced in HY, with liquid bonds outperforming by 2% over the past two weeks.

As with the relative value of high vs. low price bonds, Goldman thinks the risk-reward in being long illiquid bonds remains poor despite the new highs made by the illiquidity premium, especially when considering recent market repricing events of illiquid securities such as those of Woodford, H2) Asset Management, GAM and so on.

Why is this happening? While we provided an extensive response in "$1.6 Trillion Fund Spots A New, Ticking Time Bomb In The Market", Goldman writes that aside from the more fragile post-crisis market microstructure, weak growth sentiment, lingering policy uncertainty, and relatively expensive valuations leave ample scope for further underperformance of illiquid bonds (and let's not forget the pernicious artificial liquidity provided by central banks and HFTs).

Of course, if the market is finally starting to correctly account for an illiquidity premium, one will expect a violent bond dispersion in both IG and HY, and that is precisely what is happening because as the chart below shows, dispersion is surging from rock-bottom levels, with Goldman warning to "brace for a new regime."

Pointing to the above chart, Goldman warns that "bond-level dispersion in the IG and HY markets has begun to rise, having been muted in the years prior to that." Specifically, the bank uses two measures to capture bond-level dispersion: the first measure shown in the left panel of Exhibit 3 is  calculated as the normalized standard deviation (coefficient of variation) of monthly excess returns across the bond  constituents of the iBoxx IG and HY indices. The second measure shown in the right panel of Exhibit 3 is a normalized inter-decile range, i.e., the difference between the 90th and 10th percentiles of monthly excess returns divided by their sum.

Both measures tell the same story: until recently, dispersion was at or near post-crisis lows, but it has started to trend upwards – a trend that will only gain more momentum if the market continues to punish illiquid bonds, going forward. Key to this view is the increased differentiation in the capital management plans of large issuers in IG as well as rising idiosyncratic risk in HY, particularly in Energy, Retail, Healthcare, and Pharma.

And finally, speaking of idiosyncratic risk, in what may be the most troubling consequence (or perhaps cause) of the market's sudden fascination with liquidity or the lack thereof, Goldman notes that after a very long hiatus, HY defaults are once again on the rise.

Indeed, as Goldman writes, "headlines about bankruptcies and restructuring plans have recently intensified. And while the 12-month trailing issuer-weighted default rate remains at a benign level, higher frequency indicators show a notable acceleration in the pace of defaults. This is illustrated in Exhibit 4, which shows that the 12-month issuer-weighted default rate stands at 3%. The 3-month trailing HY default rate (annualized) now stands above 5% and has been steadily rising since bottoming out at 1.3% in November 2018."

What may come as a surprise to most is that on a dollar basis, 2019 has been a banner year for default volumes with over $36 billion notional of defaulted bonds year to date, which is on track to surpass the $43 billion in 2016 as the highest year for notional default volumes in the post-crisis era (Exhibit 5).

In short a default tide has already appeared, however thus far, defaults have been highly concentrated among Energy issuers, a trend that reflects structural as opposed to cyclical challenges. The lingering weakness in oil prices coupled with weak growth sentiment may push issuers in other structurally-challenged sectors towards defaults.

Will the default tide become a tsunami? That depends on whether or not the economy slides into a full-blown recession. Here, Goldman's US economics remains optimistic and does not expect to occur in the near term, as such the bank's bond strategists think "defaults are unlikely to move meaningfully higher." Of course, it won't be the first time Goldman has been massively wrong about something, and to gauge what the market really thing, keep an eye on just how far it is willing to punish and sell off illiquid names: that will be the best tell if the market thinks that i) a recession is coming and ii) corporate bonds will be the among the first asset class to get crushed once the US economy contracts.

Next Domino To Fall: Inventory Glut Plagues US Auto Sector, New Prices Plunge In July

10 hours 57 min ago

China, Europe, and India, some of the world's largest industrial hubs for automobile manufacturing, have shuttered factories, laid-off workers and reduced average workweek hours, all due to an industrial slowdown that originated in the Eastern hemisphere in late 2017, early 2018. The industrial downturn has spread from East to West, now infecting the US economy.

So far US auto manufacturers have weathered the synchronized slowdown, but in a new report by Reuters, headwinds for the industry are starting to mount in 2H19.

Federal Reserve data shows auto vehicle and parts production was up 3.7% in the three months from May to July YoY. This is far better than the rest of manufacturing was down by 0.3% in May-July YoY, which was the fastest rate of change to the downside since Sept. to Nov. 2016.

Reuters noted growth rates in the auto industry started to come under pressure in 2H18 and 1Q19, but output, employment, and sales ticked higher by the end of April thanks to lower interest rates and springtime buying.

Dealerships for the last several years have been able to boost vehicle prices to levels that could soon be considered resistance among consumers.

New vehicle prices climbed 1% from March to May YoY, the fastest YoY increase from Sept. to Nov. 2013.

But it seems prices have hit a barrier by mid/late summer, outpacing wages, as the consumer starts to pull back.

The University of Michigan's monthly survey of consumers found that the number of people saying "it's a "bad time to buy" a new car because "prices are high" has been increasing this summer.

Vehicle sales have since stalled in the three months May to June YoY, according to the US Bureau of Economic Analysis.

An auto glut is starting to form with dealership inventories at 1.77 months of sales in June, up from 1.55 months in the same month a year ago.

This has resulted in dealerships holding older model years and are resorting to more price discounting to clear excess.

"The inventory glut reflects a continued cooling of the US auto market," according to the Wall Street Journal ("Dealers dangle deals to move outgoing models," WSJ, Aug. 16).

"Sales remain relatively healthy, but auto makers haven't adjusted their production schedules quickly enough to account for slowing demand, leading to a backup of outgoing model-year vehicles."

Reuters said new vehicle prices and discounts plunged in July as dealers were attempting to clear inventory. Because of the glut, manufacturers could slow production in the coming quarters, resorting in loss of hours worked, layoffs, and or shuttered factories.

"If growth in auto manufacturing slows or turns negative, it will have a knock-on effect throughout the supply chain and on employment," said Reuters senior commodity analyst John Kemp.

The auto industry accounts for about 3 – 3.5% of overall US GDP, is a major contributor to all fifty states economies and employs millions of jobs.

If the next domino to fall is the auto industry, this would be more bad news for the Trump economy heading into the 2020 election year.

Muslim Cleric Killed After Cow He Was About To Ritually Slaughter Fights Back

11 hours 27 min ago

Authored by Paul Joseph Watson via Summit News,

A Muslim cleric in East Java who was about to participate in the ritual slaughter of animals to celebrate the Islamic festival of Eid was killed after one of the cows fought back.

The 64-year-old man, known as Sureki, was about to take part in the sacrificial butchering of four cattle and 17 goats as part of a ritual for the Islamic Day of Sacrifice at a mosque in Blitar.

However, one of the cows escaped from its tethering and ran at full speed 100 meters towards Sureki.

“The cow suddenly ran toward him and struck [Sureki’s] chin with its head,” an eyewitness told The Jakarta Post.

“The cow is big and fierce. Its leash was broken when it tried to escape,” he added.

Sureki fell backward and hit his head, rendering him unconscious, before being rushed to hospital.

Sureki was in a coma for three days but doctors couldn’t save him. He was the head of a chapter of the country’s largest Islamic organization.

Despite the tragic nature of the death, most respondents to the Jakarta Post article didn’t express much sympathy for Sureki.

Animal rights activists routinely denounce the festival of Eid, which they say legitimizes animal cruelty.

One such voice is comedian Ricky Gervais, who tweeted yesterday that such barbarism shouldn’t be condoned simply because people claim it to be part of their faith or culture.

Animal cruelty is wrong.
“But, it's tradition", doesn't make it right, "It's part of my religion" doesn't make it right, "It's my culture”, doesn't make it right, and "people are more important" doesn't make it right either. You know why? Because it's just fucking wrong.

— Ricky Gervais (@rickygervais) August 15, 2019

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'Yield-Curve-Deniers': Mainstream Economists Shrug Off Bond Market 'Science'

14 hours 12 min ago

Authored by Jeffrey Snider via Alhambra Investment Partners,

One of the primary reasons Economists go unchallenged is because they’ve made the subject matter dense and complex. Needlessly so, in many cases. Anyone in the financial media or the public who wishes to challenge Jay Powell (well, maybe not Powell) on any economic concept is as likely to get a lecture on regressions and the three or four tests the Fed uses to seek out heteroscedasticity in its models, all of which purposefully avoids answering the question originally asked.

The more uncomfortable the question, the more dissembling the pseudo-scientific rant as reply. That’s the real fedspeak.

In August 2010, for example, then-Federal Reserve Chairman Ben Bernanke was confronted by another challenge he and his fellow policymakers never expected. They never anticipated the Great “Recession”, either, despite numerous market warnings as far back as 2006 that they simply shrugged off. Having just lived through the “somehow” Global Financial Crisis, they couldn’t afford to be so flippant in its aftermath.

In his speech delivered at Jackson Hole, the one that pre-announced a second round of QE, Bernanke began with an honest assessment of the situation. It wasn’t good – even though there had already been a QE1 and ZIRP. Quite naturally, people might have begun to wonder how effective the first one really had been if so soon after (QE1 terminated at the end of March 2010) there’s already a need for a second.

A first option for providing additional monetary accommodation, if necessary, is to expand the Federal Reserve’s holdings of longer-term securities. As I noted earlier, the evidence suggests that the Fed’s earlier program of purchases was effective in bringing down term premiums and lowering the costs of borrowing in a number of private credit markets.

Say what? Term premiums?

Nobody cares about term premiums and Fisherian deconstruction. What anyone wants to know is incredibly simple; whether or not QE actually works. Judging the effectiveness of monetary policy in reality is an end game scenario. Either there is a recovery, or there isn’t. And if there isn’t, it didn’t work.

So, Chairman Bernanke traveled to Wyoming as the nascent and already questionable recovery from the deepest and most sustained (and “somehow” global) economic contraction since the Great Depression was unexpectedly foundering. Officials had already skated by having avoided the uncomfortable questions as to how there was a Great “Recession” on their watch in the first place.

Thus was born policymakers’ longstanding and ongoing infatuation with term premiums. They don’t show up much at all in the mainstream literature before then (not with Alan Greenspan and his series of one-year forwards already confusing things). In the absence of robust recovery, or any sense of real recovery, how does any official justify the eventual four programs of QE?

Should anyone ask if QE was effective, Bernanke (and Yellen) would always answer with “term premiums.” Not recovery, accelerating growth, or robust inflation. Term premiums!


Because these are just complicated enough so that no one really understands what anyone referring to them might be talking about. And since they aren’t observable, term premiums are simulated using complex mathematical models, the questioner is immediately at a huge disadvantage. The perfect getaway setup. 

But it really shouldn’t be this way. Like any good high school math teacher, demand that these people show their work. Don’t ever allow them to just produce an answer without first producing the calculations backing it up. And I don’t mean the regressions.

The thing about term premiums is really two things; first, forgetting the fact that they are a ridiculous made up idea so that Economists can try (and fail) to plug interest rates into econometric models (in the few cases they do), simulations already suggest term premiums have fallen more without QE than with it. Even on its own terms, term premiums fail to live up.

Bernanke in 2015 conceded that point:

What about the decline in longer-term yields since early 2014? In the US at least, that decline is somewhat surprising, as economic fundamentals have recently seemed more consistent with rising, not falling, longer-term yields… By the process of elimination, with fundamentals stable or improving, much of the decline in yields over the past year must reflect a sharp drop in term premiums. [emphasis added]

What did he eliminate in his thought process in order to blame solely term premiums? The other two parts of nominal yields – both of which, unfortunately for Dr. Bernanke, we do have observable inputs for. There are markets which do give us a very good, and robust, sense of the other factors being considered in falling yields.

Those other two pieces are inflation expectations and the anticipated future path of short-term interest rates. (I’ve written about term premiums and rate decomposition here if you want more details and descriptions.) They are Bernanke’s second downfall.

The reason it has to be term premiums is because Bernanke, Janet Yellen, or Jay Powell all say inflation is going to rise and so will short-term interest rates. Guaranteed. Take it to the bank. The Fed will therefore be hiking short-term rates and since they don’t believe the bond market would ever, ever disagree with them, process of elimination, it therefore must be term premiums that are causing yields to fall (when these same people say they should be rising).

Whether in 2015 or more recently, the market evidence for the other two pieces of the yield picture are pretty unequivocal. The market is obviously expecting a very different set of circumstances than policymakers, an increasingly dangerous scenario of lower inflation, not higher, at the same time it is thinking lower short-term rates, not rate hikes.

Not for nothing, the eurodollar futures curve inverted all the way back in June 2018 at a time when everyone thought the very idea of rate cuts was absurd. With one rate cut now in the books, the market-based inputs are showing their work.

It actually isn’t all that difficult to challenge the assertion, especially with market prices in hand. And it’s becoming even more of a necessity now that people are (finally) paying attention to the yield curve.

This week Janet Yellen started the clown show by saying you shouldn’t trust the inversion. Why not? Term premiums. She wasn’t the only one; it spread immediately around the world. Yesterday:

I’m not sure I would be relying on the yield curve as the best signal of that risk given the yield curve has obviously not got the same sort of structure that it’s had historically.

That was the typically unchallenged judgment of one deputy governor from the Reserve Bank of Australia. With nominal rates collapsing in the US and elsewhere, not only must term premiums be low they must now be really, really negative. That’s the only way left to (try to) dismiss what is, and has been for awhile, otherwise a very obvious negative signal.

They get away with what is pretty clear nonsense (deeply negative term premiums fail every measure of logic) because they know they’ll never, ever be asked to show their work.

Not only has the market already done it, unlike Yellen’s and Bernanke’s its proofs are being tested and validated as we speak. As I wrote elsewhere:

The inverted curve is simply the market saying to Janet Yellen, I told you so but like 2007 you refused to listen…

That’s the problem with being forced into looking at everything backward. No matter how much you try to convince yourself that R-stars and term premiums are meaningful and righteous assessments, you can’t ever shake that nagging feeling that the thing really is what it is.

Term premiums are not science nor really math. They are made up and more than that they are rationalizations, truly Orwellian, intended to deny the obvious and straightforward signals coming from the very fundamental building blocks of all finance and economy. The entire notion is purposefully shrouded in unnecessarily complex concepts whose only true use is to attempt to answer for the otherwise inexcusable. 

As I often write, Economists don’t understand bonds. But they know just enough of them to understand that they had better change the subject.

Comet's Fiery Death Caught On Video As It Plunges Into Sun; Conspiracy Theorist Warn Of Planet Nibiru

14 hours 37 min ago

The NASA/ESA Solar and Heliospheric Observatory (SOHO) spacecraft recorded the moment a comet slammed into the Sun, according to Space Weather astronomer Tony Phillips.

Phillips recorded the anomaly in the center of the solar system last week. He described the situation as follows: "a dirty snowball dived right into the Sun."

A video titled "Comet's Death Dive Into Sun Snapped by SOHO Spacecraft" was uploaded onto YouTube by on Friday. The short video shows the comet in the bottom right of the screen traveling towards the round disk in the middle of the screen, otherwise known as the Sun, slams into the Sun's surface around the 18-second mark. On top of the Sun is Venus, and left of center is Mars.

Phillips said the comet is likely connected to a Kreutz sungrazer, which is a group of sungrazer comets that orbit 50,000 kilometers from the Sun's surface. The comet is named after astronomer Heinrich Kreutz, who studied sungrazing comets in the 1880s and early 1890s. Kreutz theorized these comets are fragments from a single comet which had broken up 800 years ago.

This isn't the first time an event of its kind was recorded this summer. Citizen scientists on June 20 spotted two comets, one a Kreutz sungrazer and the other a Meyer sunskirter approaching the Sun. They used data from SOHO and NASA Solar Terrestrial Relations Observatory (STEREO) spacecraft to observe the comets. said the Sungrazer Project had discovered more than half of all known comets. Discoveries of new comets can aid scientist to study comet orbits, comet composition, and comet evolution.

According to VladTime, conspiracy theorists said that "Nibiru became the cause of the abnormal attraction of comets to the Sun [Russian to English translation by Google]."

"Conspiracy theorists insist that the prototype of the Nibiru magnetic field lies in the "invisible" spectra for earth technology. The absence of a detection method exacerbates the situation, because a group of comets Kreutz Sungrazers will destroy the solar system. The SOHO picture confirms the hypothesis of scientists from the center of the solar system, and comets appear like mushrooms after rain," VladTime said.

"Continuing its movement, the comet goes directly to the Sun, where it is charged through the solar atmosphere, and ultimately collapses. Astrophysicists say that on average, the Sun receives 23 thousand ct of energy from the explosion of one comet. If we take into account that the comets are a group, then the Sun receives a "nuclear" supply of energy resources, experts say. Scientists are not 100% guided in the mechanisms of the appearance of energy from the "death of comets", and claim the presence of a hidden source for the explosion. At the same time, it is possible that it is not the Sun that is charged from comets, but Nibiru hidden in it," VladTime said.

VladTime suggests the "SOHO information and hypotheses of conspiracy theorist are very unstable and require observation. Scientists do not believe in the existence of Nibiru, and deny its influence on the cosmos."

And as far as what we can find, there's no concrete scientific explanation of why these comets are all of the sudden gravitating towards the Sun. As for now, conspiracy theorist explanations run wild.

Lessons From Venezuela: Violence, Crime, & Gangs When SHTF

15 hours 2 min ago

Authored by J.G.Martinez D. via The Organic Prepper blog,

This article is related to a recent shooting between a gang, and the death squads used by the red ones, on August 1, 2019.

There are some things in life that still have the potential to surprise guys like me. Especially when such things happen in my own hometown when I was born and bred, and that used to be a safe place in my younger years. Isolated violence is not uncommon in small towns in South America, no matter what country you are, but it´s usually related to crime and drugs, and similar stuff. But the new elements are really something to worry about.

The story starts when Hugo decided to arm civilians (illegally) with AKs to defend the supposed revolution going on. With a pocket full of money to buy Caribbean countries loyalty, and whoever crossed in his path, no one cared about it and what effect this would have in our society. He was going to do whatever he wanted, and so he did. Yes, Hugo, arming people in da hoods was a GREAT idea. Thanks for nothing, moron. Afterwards, the few people really decent who had the terrible idea to receive a weapon would be screwed: many of them were victims of criminals looking to take the guns from them. These AKs and handguns would be under control of the “colectivos”, a word used to mask illegal activities like express kidnapping, blackmailing, retail drug business and small scale money laundry, under organizations that would do “community or social/cultural work” for the poor barrios.

Far from the truth.

Yes, there are some organizations that are doing a good job, within their means. But most of them are just a cover for gangs. Their members are common criminals in many instances, heavily brain-washed with communism, and consumers of some type of substance. Real little jewels, aren’t they?

Authorities are allowing gangs to cause a lot of trouble.

Gangs would organize themselves, usually recruiting very young members with some kind of military or police training. Just like it seems to be happening all over the world. Adding insult to the injury, regular police and armed forces were given orders to not mess with them. To let them be. They steal broad daylight, gun in hand, roaming in swarms and police can’t do anything.

These irregular forces is an (internationally illegal) line of defense that the narcos in power NEED because they have shot the protesters, killed people, and have immunity: THAT IS THEIR JOB, TO CONTROL PEOPLE UNDER THE DISGUISE OF CIVILIAN TURMOIL!! Dudes!

It just happened in China with the massive killing with knives!. “Patente de corso” in Spanish. License to kill. If you believe that the guys sitting there are just corrupt and inefficient, think twice. They’re psychos, and very dangerous. They know exactly what they are doing and what they have to do to keep in power: starve the people, and shoot them massively if rebellion starts.

Did you believe that movies like The Hunger Games were exaggerated?

People, we are facing the exact same situation. A corrupted elite wrapped in designer clothes, toting Gucci purses, eating like queens and kings, they and their families protected by hundreds of bodyguards while people starve in every district.

I’m not talking about politics here. I’m making a profile of the gangs, where they come from, why they are so strong and why civilians and regular forces have been unable to combat them.

To keep social control, another faction was created. Won’t name it here, don’t want to get labeled. They transport in black pickups without a license plate, dress in black, faces covered. Their weaponry and gear is first class. I’ve studied some footage and photos, and I know this is true. Their training is merciless.

What kind of decent country allows that?

Venezuela has a long history of gangs.

The gangs usually need to show their power and impunity to the world, to intimidate their rivals and the general public. Social networks have been useful for this. In this link, you will find something that happened in the immediate vicinity of my hometown, in a hacienda. (Unrelated to the most recent shooting that generated this article) Altagracia Massacre

Now, please allow me to inform what happened in the town where I spent a very happy childhood, and a more than regular adolescence: Altagracia. It used to be a peaceful, quiet town. Lots of migrants, especially from Islas Canarias, Spain. Lots of Italians, too. They learned to love that land that embraced them as their own children. Many of them never came back to their origin place, even though they could, preferring to stay. Lots of farms, both cattle and corn, tomatoes, tobacco, and pastures. A mild climate, very warm, but at the same time welcoming. It’s hard to explain. You would have to experience it to understand it, maybe. It has been quite shocking for me to learn about this and wanted to take my time to do good research and write something meaningful.

Let’s start.

Gangs have been a pain since a long time for everyone, when in the 60s and 70s crime started to band together to gain strength. This was probably related to the appearance of the urban guerrilla (Castro-promoted), who kidnapped and commit crimes all over the country to destroy the stability and the democracy of the country. They recruited members with criminal experience to assist them in the resources collection to finance their political activities, and this started a lot of other criminal actions, on a more serious level. In the barrios, with a large amount of Chavez supporters, these gangs saw where the power balance was, joining to the “cause” and gained impunity and power, oppressing the opposition people.

This said, gangs roamed all over the different regions of the country, respecting each other terrains, enjoying the loot of their crimes. One of the most famous was the called “El tren de Aragua”, dismantled by live fire by death squads some time ago. There is another famous gang now, the main character of this story I am to narrate about.

Criminals are getting a lot bolder and more brazen.

In the last few years, the impunity of criminals has been increasing. Roaming around in packs, they are used to do whatever they want. When one of their members is shot dead, they present their “respect” shooting to the air, just like the Taliban. This incredible demonstration of criminal behavior can be seen in this link: Banda “El Malony” exhibe armas en Altagracia de Orituco, Guárico

This is my hometown. Of course, in one of the barrios, we never went because it was dangerous though. But thinking that those thugs could be in the very same bar I am, it’s just freaking scary. It’s just not something easy to accept, that failure of the state has touched us so close and making our lives a mess.

This gang had previously attacked (with grenades and AKs) a police post, back there in 2017, think. In the same town, Altagracia. The massacre of San Valentin’s day was a breakthrough: it was brutal and merciless, but it wasn’t even half of the death toll of this gang. Well, these last ones were armed, that’s true.

The death squad used by the guys in power to kidnap opposition politicians, members of the National Assembly, and similar tasks, became engaged with the gang in the video and eliminated them. Of course, uploading that video showing their faces was too much of an insult for the uniforms and were hunted. That is a fact.

Let the gangs in Venezuela serve as a cautionary tale.

Why did I decide to write about this?

Because, once regular law and order get lost, this is what you must expect.

This is what you must hide from.

This is what you can’t combat against, unless you are better armed, with numeric advantage, and can take them down silently.

This, dear fellows, is the exact situation that must be avoided at all cost.

This is the situation you don’t want nearby.

These are the guys who are going to be roaming free if things go really bad. Maybe without any family to take care of. Without any desire to keep living. That thin layer, that microns-thick coating of civilization will be lost in much less time than we could imagine. Drugs and alcohol addiction, added to an increasing scarcity of these products, will bring afloat the worst of the criminal personalities that will be common in the streets and roads. Maybe some of them could arrive nearby our homestead. This is why concealing and inaccessibility are so paramount. This is why camouflage and silent operations of self-defense are going to be so important, living in the woods. I am used to city living. There are few things that I used to enjoy of my former life, more than having my Saturday morning foamy and smoking latte, in a table outside the cafeteria while reading my newspaper.

But how are you going to sit peacefully with this kind of things going on around?

Good thing is, I have practiced in the woods enough already how to walk without any noise, and after living in this huge, impersonal city, I know I won’t miss city life ever again.

*  *  *

Jose is an upper middle class professional. He is a former worker of the oil state company with a Bachelor’s degree from one of the best national Universities. He has a small 4 members family, plus two cats and a dog. An old but in good shape SUV, a good 150 square meters house in a nice neighborhood, in a small but (formerly) prosperous city with two middle size malls. Jose is a prepper and shares his eyewitness accounts and survival stories from the collapse of his beloved Venezuela. Thanks to your help Jose has gotten his family out of Venezuela. They are currently setting up a new life in another country. Follow Jose on YouTube and gain access to his exclusive content on Patreon. Donations:

"I Don't Want My Money Trapped Here" - Hong Kong Hit By Capital Exodus As Protests Drag On

15 hours 27 min ago

As the protests in Hong Kong enter their 11th week with a massive rally on Sunday, more Hong Kongers are beginning to worry that their money isn't safe any more, and a great exodus of capital has begun - an exodus that has challenged the Hong Kong dollar's multi-decade standing peg to the greenback, just as hedge fund investor Kyle Bass bet would happen.

Particularly after this week's protests at the airport, and the intensifying threats from Beijing, more people are looking for ways to move their money to safer havens, particularly as the Hong Kong market, which was resilient during the early days of the protests, has started to soften.

Sarah Fairhurst, a 52-year-old partner at the Lantau Group, an economic consulting firm, said she transferred 200,000 Hong Kong dollars (about $25,500) into British pounds last week because of concerns about the protests.

"It’s very unsettling here," said Ms. Fairhurst, who has lived in Hong Kong for 12 years. She said seeing videos of police using tear gas near her office have made her particularly nervous. “I don’t know what’s going to happen, but I know that I don’t want my money trapped here.”

There has been a rash of disappointing economic data as tourism and business confidence have suffered. Meanwhile, the movement has raised uncomfortable questions about Hong Kong's ability to maintain the "one country, two systems" ethos, WSJ reports.

More are beginning to worry about their money.

Though it's clearly not the consensus view at this point, it seems like Bass is no longer alone in believing that the Hong Kong dollar's longstanding peg to the greenback - which has persisted since 1986 - could be in danger. 42-year-old Ming Chung runs a business exporting building materials. He said he dropped plans to buy a property in Hong Kong and instead invested HK$4 million ($510,000), into a greenback-based insurance product.

Why? Because he said he no longer trusts the market in Hong Kong.

"It’s a safer investment as opposed to buying property in Hong Kong," Mr. Chung said. "Because of the protests, I don’t trust the market." He said he was worried about the Hong Kong dollar’s longstanding link to the US dollar breaking and considered the latter a safer currency

And when it comes to remittances and other personal international payments, there's no question: Money leaving HK is swiftly outpacing money moving in.

TransferWise, a London-based international bank transfer company that facilitates international bank transfers, mostly for individuals and small businesses, said it has seen a significant pickup in outbound flows over the past ten weeks since the protests started. Before that, the rate of money moving into and out of HK was pretty consistent.

The company said that for every $1 that customers moved into Hong Kong in August, about $2.64 left the city.

Following the violent clashes at Hong Kong International airport this week, protests this weekend were relatively peaceful. Media reports claimed some 1.7 million marched in the streets on Sunday.

Still, with Beijing still holding military exercises right on the other side of the border, we imagine these fears won't abate any time soon.

Trouble Coming To Walmart Nation?

15 hours 52 min ago

Via Global Macro Monitor,

Not so much for Walmart shareholders after the company beat estimates late in the week helping the stock (WMT) to close on Friday 7.7 percent off its low for the week.  MarketWatch notes the big-box retailer was helped by automation.

Walmart talked about the significance of automation in an April post on its corporate site.

“Smart assistants have huge potential to make busy stores run more smoothly, so Walmart has been pioneering new technologies to minimize the time an associate spends on the more mundane and repetitive tasks like cleaning floors or checking inventory on a shelf,” said Elizabeth Walker, from Walmart corporate affairs.  – MarketWatch, Aug 17th

Walmart Nation

We don’t know how this helps Walmart nation, however.  The company is the largest employer in many states throughout the country.

When excluding public administrative bodies, Walmart is the largest employer in 22 states.  – USA Today

Walmart is also the world’s largest private-sector employer.   The company has over 100k companies in its supply chain worldwide and according to its 2019 annual report,

As of the end of fiscal 2019, Walmart Inc. and our subsidiaries employed more than 2.2 million employees (“associates”) worldwide, with 1.5 million associates in the U.S. and 0.7 million associates internationally. Similar to other retailers, the Company has a large number of part-time, hourly or non-exempt associates. – Walmart 2019 Annual Report 

This compares to the 2018 Annual Report,

As of the end of fiscal 2018, Walmart Inc. and our subsidiaries employed approximately 2.3 million employees (“associates”) worldwide, with 1.5 million associates in the U.S. and 0.8 million associates internationally. Similar to other retailers, the Company has a large number of part-time, hourly or non-exempt associates. We believe our relationships with our associates are good and are continuing to improve. – Walmart 2018 Annual Report

Note the 100k year-to-year decline in employees, which appear to be the shrinking of their international workforce.   We couldn’t find any more current data on employment from the company’s quarterly reports.  Still looking, however.


Jobs At Big-box & Supercenter Retailers Are Collapsing 

We took a look at growth in retail payroll jobs over the past few years, which has been absolutely dismal.   Retail payrolls are down 176k jobs under President Trump while total private nonfarm payrolls are up 5.5 million.

Some Good News

The retail sector’s average hourly earnings (AHE) are up 9.66 percent during the Trump administration, an increase of over 70 percent from the prior 30-months (before Feb ’17) AHE growth rate.  These data should be kept in context as the retail wage gains begin at a relatively low base of around $18 per hour.

The data provides the basis to both those who argue pressuring companies to raise wages leads to layoffs whether it’s true or not, and to those who argue automation augments and makes labor more productive leading to higher real wages.   We are at the beginning of our vacation and are still in a holding pattern awaiting medical clearance for a 15-hour flight given our little episode last Christmas, so we are not going to get into it at this time.

Finally, the following is a chart of monthly and 12-month payroll changes for warehouse clubs and supercenters retailers, of which Walmart and Costco belong.

Payrolls have been in virtual free-fall since 2017 as the warehouse clubs and supercenter retailers have lost over 40k jobs in the 12-month period since June.

Our sense is that automation is going to accelerate and jobs in Walmart nation are going to continue to disappear at an exponential rate.  We are not sure if the wage increases are sustainable without continued political and social pressure on management, which will probably lighten up as more and more jobs disappear.

Life is cruel and unfair sometimes and it is clear, at least to us, in this sector technological change is going to hurt those most vulnerable.  If you are reading this, you are part of the Lucky Sperm Club (LSC), and there but by the Grace of God go we.

Very few politicians have a plan to deal with it and most have their heads in the sand or in the clouds, or blaming others, for that matter.

Whatever the case, it is going to be complicated to resolve and class conflict will surely only increase.

By the way,  Costco and Walmart are on two entirely different planets as to how they treat their employees, in our superficial observation.  That’s a start, at least, treat your employees better it is good for business.

The commitment of executives is clear as well, as the pay ratio of W. Craig Jelinek, Costco’s CEO, to his median employee’s salary is far below that of some of his peers.

In fact, only Amazon’s pay ratio is lower, with Jeff Bezos electing to take a lower salary given his already enormous wealth.  – Real Money, March 8th


How this all plays out politically, we don’t know.   The Democratic candidate, Andrew Yang,  can probably get some traction out of it as he is the only one who seems to understand it and is at least trying to address it with the idea of a universal basic income(UBI).

One thing is for certain, the administration understands the political blowback as it is taking place in many of the home states of their base and is blaming Amazon and their non-BFF, Jeff Bezos, for the Retailgeddon, which hardly applies to Walmart, in our view.

US Treasury Secretary Steven Mnuchin said that Amazon “destroyed the retail industry across the United States” and that it’s appropriate for the attorney general to investigate the company alongside other tech giants in the sweeping antitrust review that the Justice Department announced yesterday. “There’s no question they’ve limited competition,” Mnuchin told CNBC’s Squawk Box. – The Verge, July 24th

Stay tuned, folks, this is one to watch closely.

Kudlow "Doesn't See A Recession At All", Warns Full 10% China Tariffs To Go Ahead In December

Sun, 2019-08-18 23:46

Trump's chief economic advisor, Larry Kudlow, pushed back against fears of an economic downturn on Sunday saying, “I don’t see a recession at all" when asked by guest host Dana Perino whether the Trump administration is considering concrete steps to stave off a potential recession after the 2s10s yield curve inverted last week.

As a reminder, every 2s10s inversion since 1956 has seen a recession follow, with the average length of time until a recession begins is 16 months.

“The Trump pro-growth program, which I believe has been succeeding, we’re going to stay with that,” Kudlow told Perino."There’s no recession on the horizon," he added. "What’s wrong with a little optimism?"

He then repeated for good measure that "I don’t see a recession at all," and added that there were no plans for additional fresh measures to boost the economy, and that the Trump administration would stay the course on its current agenda.

Dana Perino asks @larry_kudlow if the White House is worried about a possible recession #FNS #FoxNews

— FoxNewsSunday (@FoxNewsSunday) August 18, 2019

“Consumers are working. At higher wages. They are spending at a rapid pace. They’re actually saving also while they’re spending - that’s an ideal situation,” he said on a mirror interview later on NBC’s “Meet the Press”, which however begs the question: why is president Trump himself urging the Fed to cut by a 100bps, hinting at an imminent recession.

Host Chuck Todd noted, however, that Kudlow made similar remarks in 2007, shortly before the Great Recession began, and wrote, “There’s no recession coming. The pessimistas were wrong. The pessimistas were wrong. It's not going to happen. ... The Bush boom is alive and well. It's finishing up its sixth consecutive year with more to come."

“I plead guilty to that,” Kudlow responded on NBC.

Chuck Todd reads Larry Kudlow his own quote from December 2007:

"There's no recession coming. The pessimistas were wrong. It's not going to happen. ... The Bush boom is alive and well. It's finishing up its sixth consecutive year with more to come."

— Axios (@axios) August 18, 2019

Fox's Perino also pressed Kudlow on the ongoing trade war between the U.S. and China. Last week, the administration announced several categories of tariffs on Chinese goods would be delayed until December.

The goal here is very simple. We want to minimize any impact [of tariffs] on the American consumer. So far it’s been virtually zero,” Kudlow said, echoing comments by White House trade adviser Peter Navarro.

And in a potential blow to any incipient trade deal optimism, Kudlow also admitted that the US and China are in "kind of a technological war", confirming that the feud between the two superpowers is about much more than just trade; more to the point, he also said that the delayed 10% tariffs on consumer goods imports are likely to go ahead after the Christmas relief period ends, explaining that the administration is giving companies time so they won’t “jack up prices,” he said.

"On December 15, the 10% tariff on the rest of the $300 billion is likely to take place."

.@larry_kudlow "We're kind of in a technological war with China" #FNS

— FoxNewsSunday (@FoxNewsSunday) August 18, 2019

While Trump and his top aides have said repeatedly - and incorrectly - that Beijing, not U.S. companies or consumers, are bearing the brunt of the tariffs imposed on imports from China, the July CPI print jumped in July, driven by costs of shelter, apparel and used cars, and gained the most in a decade in the past two months, the Labor Department reported this month. This website, and other economists, said that the boost in inflation shows the tariffs are gradually filtering through.

The tariff war has increased prices for goods, and U.S. companies are paying the higher levies, according to a survey by the Federal Reserve Bank of New York. The U.S. government collected $57 billion in customs duties in the fiscal year that began Oct. 1, according to the Treasury Department.

* * *

And while Kudlow was laying the party line on Fox and NBC, his fellow Trump advisor Peter Navarro, took to CNN, where he disputed that the U.S. had seen an inverted yield curve, often a forerunner of recession because it signals market expectations for weaker growth ahead.

“Technically we didn’t have a yield curve inversion,” he said on “State of the Union.” “All we’ve had is a flat yield curve.”

Well, technically, if one adjusts the yield curve for central bank intervention, for currency hedging costs, and for the shadow Taylor rate which is also affected by QE, the yield curve has never been more inverted. But we digress.

Navarro also added to Trump's relentless criticism of Powell and the Fed on Sunday. “The Federal Reserve chairman should look in the mirror and say ‘I raised rates too fast,’” Navarro said on CNN, although if one listens to what Powell himself is saying these days, the China trade hawk is right.

Which is why, Navarro added that additional Fed rate cuts beyond the quarter-point move in July will be a good thing - if not for America's yield starved savers and retirees - and a potential easing by the European Central Bank in September will help Europe’s struggling economy.

Navarro also played the bad cop in the China trade war, saying the U.S. still has “significant structural issues” with China, while Kudlow was good cop, and said he was looked forward to a “substantive renewal” of talks with Beijing. However, he provided no specifics on the as-yet unrevealed “positive news” out of recent telephone talks between the two sides.