Sunday, December 20, 2015

Paris Gun Traced to Syrian CIA ISIS/L/Da'esh Training Camps  (Israel Supports - and Helped to Create - Islamic Terrorist Groups?)  Can Republicans/Neolib Warmongers Buy the Next Election?  (Yemen Crisis:  One More Reason to Re-evaluate the Toxic U.S.-Saudi Alliance)



The United States' Secret African Drone War Against ISIS

Well, what did you expect?
A tattooed woman?
- Melvyn Douglas to Irene Dunne in "Theodora Goes Wild"


So, one of the guns used in the Paris attacks has been traced to the CIA-trained Syrian Islamics - the same crowd, essentially, who worked with the Cocaine (or was it Heroin?) Contras (just kidding, I remember that it was converted for better saleability into crack cocaine, especially for distribution to the Los Angelenos gangs, with a few special drop-offs in Miami), who were instrumental in the routing of weapons (paid for by the drug sales) to Iran?

It's a small world after all.

These reports further undermine the official presentation of the Paris attacks by governments, media, and pro-imperialist “left” parties. They insisted that the attacks were an act of Islamist terror in which the Islamic State in Iraq and Syria (ISIS) alone was involved and bore full responsibility.

This presentation was always a political fraud, insofar as the NATO powers were undoubtedly politically implicated. The attacks were led by Islamist fighters trained in Syria — where the CIA, European intelligence and Persian Gulf oil sheikdoms have given financial and military backing to such Islamist forces to topple President Bashar al-Assad. Though placed on watch lists and monitored by intelligence services, these fighters were somehow allowed to prepare highly complex, coordinated attacks in Paris.

Revelations of a concrete link between Century Arms and the Paris attacks, however, raise specifically whether elements in the intelligence services aided the attackers — either inadvertently, due to their reckless war policy, or deliberately, to shift the political atmosphere far to the right.

The ruling elite reacted to the November 13 attacks, predictably, by aligning policy on war and democratic rights with the views of the most aggressive sections of the military-intelligence complex. France is now preparing to impose a permanent state of emergency, effectively abrogating key democratic rights and boosting the political fortunes of the neo-fascist National Front (FN). NATO is ramping up support to its proxies in Syria, though this threatens to trigger an all-out military clash with nuclear-armed Russia.

While it remains unclear how the Paris attacks were organized, the link to Century Arms strongly suggests that elements acting for the intelligence agencies, in an official capacity or otherwise, were involved. Century Arms has had close ties to US foreign policy for decades.
In 1987, John Rugg, a former police officer and Century Arms employee, testified to the US Senate that the firm had run weapons to the Contras fighting the Sandinista government in Nicaragua. This illegal operation, led by the CIA in defiance of the Boland Amendment passed by the US Congress cutting off aid to the Contras, had exploded in the Iran-Contra scandal.
In 2004, according to the Palm Beach Post, Italian authorities halted shipment of 7,500 AK-47 rifles to Century Arms from Romania, where the firm had developed commercial ties since before the restoration of capitalism in Eastern Europe.
In 2007, according to a US diplomatic cable published by "WikiLeaks", Century Arms worked with Israeli arms dealer Ori Zeller to illegally recover and sell off American M-1 rifles shipped by Washington to the bloody Guatemalan regime during that country’s civil war. The cable also states that Zeller’s associates were convicted of money laundering in Belgium in 2003, and suspected of laundering $20 million in Al Qaeda funds via West African diamonds.
Nonetheless, the cable called Zeller a “valuable source for the USG [US government] in Guatemala.” It added that the US government used him to obtain information on Guatemala, Israel, Russian arms sales, and Mexican drug cartels.
Century Arms’ relationship with Mexican narco-traffickers apparently goes beyond providing information. The US  Center for Public Integrity reported in 2011 that Romanian WASR-10 rifles sold by Century Arms had “become a favorite of the Mexican drug cartels, and in recent years hundreds of them have been traced to crimes in Mexico.” This is not the first indication that connections existed between state forces and Islamist groups that carried out terror attacks in France.
On Wednesday, French police detained Claude Hermant, a former member of the FN’s security detail who is active in far-right circles in northern France and serves as an informant for police and customs officials, for questioning over the January attacks on "Charlie Hebdo" and the Hyper Cacher. Officials confirmed that he was being held for questioning as to whether he had trafficked weapons to Amedy Coulibaly, the gunman at the Hyper Cacher.
This confirmed earlier reports that Lille prosecutors were investigating a link between Hermant and the January attacks. French Interior Minister Bernard Cazeneuve subsequently invoked the state secrets privilege in an attempt to block the investigation. However, this decision and more details of the investigation of Hermant were leaked to the press. 
The Lille investigation is now apparently considering the possibility that Hermant himself was simply playing the role of middleman in a larger network involved in arming the gunmen. Officials close to the investigating team told "La Voix du Nord," “In such trafficking, there is always one intermediary, or more. Claude Hermant did not necessarily know the final destination of the weapons. It would show, in any case, the links between certain Islamist circles and organized crime.”

The paper also reported that a customs official had been placed under investigation in the Hermant affair.

Epochalypse Apocalypse?


Epocalypse Soon: The Great Economic Collapse is Happening
_ _ _ _ _ _ _

Israel Supports Islamic Terrorists


Posted on  
Israel claims that it’s in a mortal struggle with Islamic terrorists …
But as we reported last year, the Israeli military has admitted to supporting Syrian Islamic jihadis. And see this.
Last week, Daily Mail journalists embedded with Israeli troops reported:
Almost every night, Israeli troops run secret missions to save the lives of Syrian fighters, all of whom are sworn enemies of the Jewish state.
***
Analysts suggest the Jewish state has in fact struck a deadly ‘deal with the devil’ – offering support to the Sunni militants who fight the Syrian ruler Assad in the hope of containing its arch enemies Hezbollah and Iran.
***
Many of the casualties rescued by Israel belong to Salafist groups …. Some may be members of Jabhat al-Nusra, a Syrian group affiliated to Al Qaeda that has kidnapped scores of UN peacekeeping troops in this area, and has massacred Christians deeper in Syria.
***
In the three years that Israel has been running these operations, it has saved the lives of more than 2,000 Syrians – at least 80 per cent of whom are male and of fighting age – at a cost of 50 million shekels (£8.7 million).
***
‘Above all, Israel wants to prevent Hezbollah from gaining control on the other side of the border,’ said Michael Stephens, Research Fellow for Middle East Studies at the Royal United Services Institute (RUSI).

‘The Sunni militants are fighting Hezbollah, so for now they share the same objectives as Israel. That’s why we’re seeing this odd cooperation between people who would be enemies under any other circumstances.
***
Significantly, an Israeli spokesman confirmed that no medical support has been provided to any militants from the Shia alliance.

‘From an Israeli viewpoint, it’s a case of my enemy’s enemy is my friend,’ said Kamal Alam, research analyst at RUSI and an expert in Syrian affairs.
‘There is no one they can trust in the Syrian quagmire, but if you get rid of Hezbollah, that’s the end of Iran in the region. Israel’s main aim has to be to eliminate Hezbollah – and whoever takes on Hezbollah is an uneasy but necessary ally.
‘In giving medical support to these fighters, Israel has done a deal with the devil.’
Indeed, Israel has made no secret of the fact that it prefers ISIS and Al Qaeda to the Iranian backed terrorist groups Hamas and Hezbollah:

In September 2013, Israeli Ambassador to the United States Michael Oren, then a close adviser to Prime Minister Netanyahu, told the Jerusalem Post in an interview: “The greatest danger to Israel is by the strategic arc that extends from Tehran, to Damascus to Beirut. And we saw the Assad regime as the keystone in that arc. … We always wanted Bashar Assad to go, we always preferred the bad guys who weren’t backed by Iran to the bad guys who were backed by Iran.” He said this was the case even if the “bad guys” were affiliated with Al-Qaeda.

In June 2014, Oren expanded on this thinking at an Aspen Institute conference, extending Israel’s preference to include even the hyper-brutal Islamic State. “From Israel’s perspective, if there’s got to be an evil that’s got to prevail, let the Sunni evil prevail,” Oren said.
But it’s not just Iran or Shias … Israel decided long ago to break up Syria and Iraq into numerous mini-states. And Israel wants a compliant government in Syria to allow its pipelines to win out over competing pipelines.

No wonder the Israeli air force has bombed near the Syrian capital of Damascus, and attacked agricultural facilities and warehouses (the Syrian government is the main opponent of ISIS in Syria).

We noted last year:
The "Times of Israel" reported Wednesday:

A Free Syrian Army commander, arrested last month by the Islamist militia Al-Nusra Front, told his captors he collaborated with Israel in return for medical and military support, in a video released this week.

In a video uploaded to YouTube Monday … Sharif As-Safouri, the commander of the Free Syrian Army’s Al-Haramein Battalion, admitted to having entered Israel five times to meet with Israeli officers who later provided him with Soviet anti-tank weapons and light arms. Safouri was abducted by the al-Qaeda-affiliated Al-Nusra Front in the Quneitra area, near the Israeli border, on July 22.

“The [opposition] factions would receive support and send the injured in [to Israel] on condition that the Israeli fence area is secured. No person was allowed to come near the fence without prior coordination with Israel authorities,” Safouri said in the video.
***
In the edited confession video, in which Safouri seems physically unharmed, he says that at first he met with an Israeli officer named Ashraf at the border and was given an Israeli cellular phone. He later met with another officer named Younis and with the two men’s commander, Abu Daoud. In total, Safouri said he entered Israel five times for meetings that took place in Tiberias.

Following the meetings, Israel began providing Safouri and his men with “basic medical support and clothes” as well as weapons, which included 30 Russian [rifles], 10 RPG launchers with 47 rockets, and 48,000 5.56 millimeter bullets.
Also on Wednesday, the Jewish Telegraphic Agency – a 97-year old Jewish wire service – reported:

A senior employee of the Dutch Justice Ministry said the jihadist group ISIS was created by Zionists seeking to give Islam a bad reputation.

Yasmina Haifi, a project leader at the ministry’s National Cyber Security Center, made the assertion Wednesday on Twitter, the De Telegraaf daily reported.

“ISIS has nothing to do with Islam. It’s part of a plan by Zionists who are deliberately trying to blacken Islam’s name,” wrote Haifi ….
In March, Haaretz reported:

The Syrian opposition is willing to give up claims to the Golan Heights in return for cash and Israeli military aid against President Bashar Assad, a top opposition official told Al Arab newspaper, according to a report in Al Alam.
***
The Western-backed militant groups want Israel to enforce a no-fly zone over parts of southern Syria to protect rebel bases from air strikes by Assad’s forces, according to the report.
Perhaps that’s why ISIS, Al Nusra and the other Islamic terrorists in Syria haven’t tried to lay a glove on Israel?

This isn’t an isolated dynamic …


(This entry was posted in Politics / World News.)

Working under the assumption that they can support a campaign better themselves, donors are building their own organizations, staffed by operatives who report to them. “A lot of people who felt betrayed in 2012 set out to build political structures,” says Kellyanne Conway, president of the pro–Ted Cruz super-pac Keep the Promise I, which is backed by hedge-fund billionaire Robert Mercer. Mercer is a prime example of the new breed of activist donor. This presidential cycle, he has donated more than $30 million to a quartet of pro-Cruz super-pacs. A computer scientist by training, Mercer is also part owner of a political data firm called Cambridge Analytica, which boasts on its website that it employs “psychographic profiling” to recruit voters. As a result, Mercer’s pacs have shunned the traditional strategy of saturation TV coverage. Instead, Mercer is focused on targeted radio buys, digital outreach, and field organizing.

So, Citizens United needs to be expanded? Completely re-judged so that Republicans CAN'T LOSE this time?

Well, Rove is currently lacking some funds (not receiving as many mail orders (donations) from widows and orphans as he used to), so something must be done.

And soon!

Rove’s 2012 crash is having profound effects on the 2016 Republican primary. To begin with, George W. Bush’s Brain is no longer considered much of a brain.

“I gave Rove $500,000. What did I get for it? Nothing!” Langone told me. Two of Rove’s most generous 2012 funders, Texas billionaires Bob Perry and Harold Simmons, have since passed away, and their heirs have turned off the cash spigot. “Everyone is still shocked Romney lost,” says Simmons’s widow, Annette. “I haven’t committed at all.”

So far this year, Crossroads has raised just $784,000, according to the Center for Responsive Politics. Rove insists he’s still a player. “We’ll be involved in the Senate races,” he told me. “Depending on who the presidential nominee is, we may be involved in that, but that’s a long way off.” What Rove is not is anywhere near the center of the Republican Party. “But for his perch on Fox News, Karl would be in political Siberia,” says a top Republican strategist. “The going joke is that he must have a picture of Roger Ailes in his underwear to keep his contract.”
It’s not just that Rove is personally marginalized. Donors have awakened to the realization that topflight consultants can earn millions from campaigns regardless of whether they win. “It bothers a lot of people that politics has become a cottage industry. Everyone is taking a piece of this and a slice of that,” says California winemaker John Jordan, a former Rove donor. “Crossroads treated me like a child with these investor conference calls where they wouldn’t tell you what was really going on. They offered platitudes and a newsletter.”
Working under the assumption that they can support a campaign better themselves, donors are building their own organizations, staffed by operatives who report to them. “A lot of people who felt betrayed in 2012 set out to build political structures,” says Kellyanne Conway, president of the pro–Ted Cruz super-pac Keep the Promise I, which is backed by hedge-fund billionaire Robert Mercer.

Mercer is a prime example of the new breed of activist donor. This presidential cycle, he has donated more than $30 million to a quartet of pro-Cruz super-pacs. A computer scientist by training, Mercer is also part-owner of a political data firm called Cambridge Analytica, which boasts on its website that it employs “psychographic profiling” to recruit voters. As a result, Mercer’s pacs have shunned the traditional strategy of saturation TV coverage. Instead, Mercer is focused on targeted radio buys, digital outreach, and field organizing.
The savviest GOP candidates have capitalized on this shift. In fact, Cruz’s campaign fund-raising apparatus seems designed to let donors roll up their sleeves. Cruz contributors can specify how they want their money spent, much in the way universities allow benefactors to earmark their donations for a new science wing or aquatics center. “If you’re a donor, you can say, ‘I want to see this money used for Iowa,’ ” one strategist told me. “It’s a way to entice donors. They look at it like fantasy football.”
The new billionaire-backed operations style themselves as models of superior sophistication. During the last Republican primary, Sheldon Adelson bankrolled Newt Gingrich’s campaign essentially by writing blank checks with little or no oversight. Compare that to the super-pac funded by Chicago Cubs owner Joe Ricketts, who has his own political staff and demands accountability. “I’m used to saying the Ricketts’ spend their super-pac money like it’s their own money — because it is,” the family’s political adviser, Brian Baker, told me.
Or look at the network being built by Elliott Management founder Paul Singer. In 2014, Singer created the American Opportunity Alliance, a group of roughly 40 Republican financiers who gather regularly for secret meetings with candidates. This fall, Singer threw his weight behind Marco Rubio and urged his members to do the same. In the general election, Singer will be a player with America Rising, the opposition-research firm headed by Romney’s dark-arts wizard Matt Rhoades. Instead of funding TV ads, Rhoades’s group offers Singer more predictable returns:  It is narrowly focused on digging up dirt on Democrats, for example by sending video trackers to events in order to build a library of unflattering material.
It’s all about retaining control. In October, billionaire investor Carl Icahn announced he was launching a $150 million super-pac to lobby for corporate tax reform. “At the risk of being immodest, we have one of the best records on Wall Street. And I like doing things myself,” he told me. “Too many cooks spoil the soup.”
John Jordan now supports Republican candidates through his own super-pac, which applies the lessons he’s learned from winemaking. He, too, is backing Marco Rubio. “I know really well how to sell things. I make my own ads,” Jordan said. “The quality of ads produced by most of the ad-makers is just so bad that they’re ineffective. Have you looked at Jeb’s ads? They’re terrible! It’s unforgivable.”
Perhaps Bush is the perfect case study:  The candidate who has underperformed the most is the one with a 2012-style campaign, who steered all his major donors into one super-pac. That organization, Right to Rise USA, is run by the grizzled strategist Mike Murphy, who succeeded in bundling a $100 million war chest and is now finding himself on the receiving end of donor backlash. Last month, for instance, a group of major Bush supporters held a conference call to vent about Murphy after he outlined his strategy in an interview to Bloomberg Politics. “These guys got rip-shit,” said one person briefed on the call.
But the most important lesson the billionaires are learning this year is that they aren’t much better at politics than Karl Rove. Well, not true. There is one billionaire who seems to have contemporary Republican politics figured out. “This is no longer a meteor going through the sky,” Langone told me, observing Donald Trump’s dominance over the race and sounding just shy of panicked. “He’s been in the lead 116 of 120 days.”

Republican Billionaires Just Can't Seem to Buy This Election

"Okay, but all this talk has gotten me thirsty."
"Straight whiskey!"
"Oh, Michael!"
Irene Dunne to Melvyn Douglas in "Theodora Goes Wild"

And a happy holidays election season tip of the hat to our prime American Horror Trump! candidate, courtesy of Blue Gal and Ten Grain. @BlueGal @TenGrain


After almost a year of civil war, the conflicting forces in Yemen sat down on December 15 in Geneva, Switzerland, to discuss the prospect of finding a political solution to the conflict that has been raging since March 2015. While this is a necessary step towards ending the violence that has killed thousands, crippled infrastructure and led to a critical humanitarian crisis, the peace talks should include a mechanism for rebuilding this impoverished nation. Saudi Arabia, which is responsible for most of the destruction with its relentless bombings, should be forced to pay for the terrible damage it has wrought. So should the United States.

The U.S. involvement in the Yemen crisis can be summed up in four words:  allegiance to Saudi Arabia.

The United States’ problematic relationship with Saudi Arabia goes all the way back to World War II, when U.S. officials started to see Saudi’s oil as a strategic advantage. Since then, the U.S. has blindly supported the Kingdom in almost every political and economic effort, despite the fact that Saudi Arabia is an ultraconservative Islamic monarchy rife with human rights abuses.

When the Houthis, a Shia rebel group from northern Yemen, took over the Yemeni capital of Sanaa in January 2015 and forced Sunni President Abdrabbuh Mansour Hadi into exile, Saudi Arabia formed an Arab Gulf states coalition to fight against the Houthis. Naturally, the U.S. agreed to support its close ally in its endeavor to ‘reinstate order’ in Yemen by providing intelligence, weaponry and midair refueling, as well as sending U.S. warships to help enforce a blockade in the Gulf of Aden and southern Arabian Sea. The blockade was allegedly to prevent weapons shipments from Iran to the Houthis, but it also stopped humanitarian aid shipments to beleaguered Yemeni citizens. The American CIA and military intelligence are also on the ground in Yemen, providing targeting and other logistical support, and Uncle Sam’s drones are constantly flying overhead, sending intel to the Saudis.

Since then, the coalition has carried out indiscriminate airstrikes and bombings throughout the country, often targeting highly populated civilian areas. As of late September, the U.N. had documented that the war had killed 2,355 civilians and wounded 4,862, the majority of cases as a result of coalition airstrikes. The Saudi-led military intervention has created a humanitarian crisis that has left over 75% of Yemen’s population (21 million people) in urgent need of immediate aid. Millions of people have been forced out of their homes and left without water or electricity, as the country’s infrastructure continues to disintegrate.

The U.S. is the main supplier of these weapons being used to carpet bomb Yemen. Cluster munitions, which are sold to Saudi Arabia by an American company called Textron, have been used in several coalition strikes. These horrific bombs constitute a particular danger to civilians because of their wide area of effect and the fact that unexploded bomblets can remain hazardous for decades after their deployment, which is why they are banned in over 115 countries. “Saudi-led cluster munition airstrikes have been hitting areas near villages, putting local people in danger,” said Steve Goose, arms director at Human Rights Watch. “These weapons should never be used under any circumstances. Saudi Arabia and other coalition members – and the supplier, the US – are flouting the global standard that rejects cluster munitions because of their long-term threat to civilians.”


Use the internet to unite us and save the planet.





Thursday, December 17, 2015

Gallup Chair Says Employment Number Hinky  (How Citizens Can Stop American Empire Building)  Adelson Election Bullying Pulpit  (Ari Ben-Menashe States U.S. NeoCons/Israelis/Saudis Are U.S. Enemies; Russia/Iran Are U.S. Allies)  Seeing Through the Fog Surrounding the Mysterious Links Between the U.S., Israel, Turkey, and the World’s Most Fanatical Terrorist Organization:  ISIS, ISIL, Islamic State or Da'esh  (There's No Upside Left/Only Downside)



Bernie Sanders Calls Fed Rate Hike Bad News for Working Families


"It was an accident!"
"An accident?
Were you on PCP?"
- Cameron Diaz to Leslie Mann in "The Other Woman"

They decided to raise the interest rate.

Because employment is up. The economy is on the upswing!

And there's no new war spending occurring now as we're getting out of Iraq and Afghanistan and all those other bombing disaster theaters.

Or other huge spending increases (see latest budget deal).

Right?

Jim Clifton, the Chairman and CEO of Gallup, an iconic U.S. company dating back to 1935, told CNBC that he was worried he might “suddenly disappear” and not make it home that evening if he disputed the accuracy of what the U.S. government is reporting as unemployed Americans.
The CNBC interview came one day after Clifton had penned a gutsy opinion piece on Gallup’s web site, defiantly calling the government’s 5.6 percent unemployment figure “The Big Lie” in the article’s headline. His appearance on CNBC was apparently to walk back the “lie” part of the title and reframe the jobs data as just hopelessly deceptive.
Clifton stated the following on CNBC:
“I think that the number that comes out of BLS [Bureau of Labor Statistics] and the Department of Labor is very, very accurate. I need to make that very, very clear so that I don’t suddenly disappear. I need to make it home tonight.”
After getting that out of the way, Clifton went on to eviscerate the legitimacy of the cheerful spin given to the unemployment data, telling CNBC viewers that the percent of full time jobs in this country as a percent of the adult population “is the worst it’s been in 30 years.”
Clifton drilled down further in his on line opinion piece, writing as follows:
“Right now, we’re hearing much celebrating from the media, the White House and Wall Street about how unemployment is ‘down’ to 5.6%. The cheerleading for this number is deafening. The media loves a comeback story, the White House wants to score political points and Wall Street would like you to stay in the market.
“None of them will tell you this:   If you, a family member or anyone is unemployed and has subsequently given up on finding a job — if you are so hopelessly out of work that you’ve stopped looking over the past four weeks — the Department of Labor doesn’t count you as unemployed. That’s right.

While you are as unemployed as one can possibly be, and tragically may never find work again, you are not counted in the figure we see relentlessly in the news — currently 5.6%. Right now, as many as 30 million Americans are either out of work or severely underemployed. Trust me, the vast majority of them aren’t throwing parties to toast ‘falling’ unemployment.
“There’s another reason why the official rate is misleading. Say you’re an out-of-work engineer or healthcare worker or construction worker or retail manager:  If you perform a minimum of one hour of work in a week and are paid at least $20 — maybe someone pays you to mow their lawn — you’re not officially counted as unemployed in the much-reported 5.6%. Few Americans know this.
“Yet another figure of importance that doesn’t get much press:  those working part time but wanting full-time work. If you have a degree in chemistry or math and are working 10 hours part time because it is all you can find — in other words, you are severely underemployed — the government doesn’t count you in the 5.6%. Few Americans know this.” (Read the full article here.)
Another bold truth teller when it comes to the jobs data is Dr. Paul Craig Roberts, the former Assistant Secretary of the Treasury and former Associate Editor of the Wall Street Journal. For years Roberts has written about the lack of attention to the measurement known as U6 – which covers the unemployed, underemployed and those who are not looking but want a job. That figure stood at 11.2 percent in December of last year, exactly double the official unemployment rate known at U3.
The fact that hourly earnings are not improving with the improvement in the official unemployment rate and that the labor force participation rate of working age men (ages 25 to 54) now stands at the lowest level since the BLS started keeping records more than 60 years ago adds further fodder to “The Big Lie” theory.

And the U.S. is getting out of all of those other screwed-up-beyond-all-belief hot spots (Syria, Yemen, Egypt, Somalia and PAKISTAN!) right away.

Right?

Errrrr . . .

Actually, U.S. Army Colonel Lawrence Wilkerson, former National Security Adviser to the Reagan Administration, tells us in the video below that the U.S. will never leave Afghanistan for the next half century at least.

And very few other countries containing current U.S. military operations.

Speaking volumes about the operation and price of empire.


"Okay, okay.
I'll take one for the team."
- Cameron Diaz to Leslie Mann and Kate Upton in "The Other Woman"

Bush Military Official:  US Citizens Must Stand Up to Stop the Empire

Published on Dec 13, 2015
Abby Martin interviews retired U.S. Army Colonel Lawrence Wilkerson, former national security advisor to the Reagan administration, who spent years as an assistant to Secretary of State Colin Powell during both Bush administrations. Today, he is honest about the unfixable corruption inside the establishment and the corporate interests driving foreign policy.
Hear a rare insider's view of what interests are behind U.S. wars, the manipulation of intelligence, the intertwining of the military and corporate world, and why the U.S. Empire is doomed.


A few of the points made by Wilkerson:
US’s foreign bases are “colonial, imperial” stations over the globe.
‘The empire… is run by about one percent of the people, if not fewer, in this country, constituting essentially a plutocracy.’
Military officers retire from the military, go to arms manufacturers and media jobs to make the media ‘want war’.
US is ‘oriented towards first what increases its power, and second what makes it rich.’
US military ‘isn’t an all volunteer force. It’s an all-recruited force, because we’re spending billions of dollars to entice these people, who feel that they don’t have many other prospects, into the armed forces.’
What made Wilkerson speak out?  Bush and Cheney both personally encouraged heinous acts like torture and other violations of the Geneva Conventions.
‘Empire never has enough. That’s the nature of imperial power. It never has enough. It never has a stable status quo. It has an increasingly unstable status quo.’
To stop the empire, ‘a powerful minority, or a majority’ of US citizens must ‘stand up … and say, I’ve had enough.  Does that mean revolution? It might.  It might indeed.’

And how can we ordinary citizens help to end that civilization-eviscerating American Empire?

Enforcing tough campaign finance laws would be a good beginning.


"Look for blind off-shore filings."

"If I were looking to lose money, that's where I'd lose it."

- Don Johnson to Cameron Diaz in "The Other Woman"

Though Rove Is Washed Up, Campaign Finance Will Do Far More Harm To Your Family Than ISIS Will

December 15, 2015
Do they look kind of normal? They're not. It's Robert Mercer and a Texas senator he purchased

The whole country watched Karl Rove make a fool of himself on election night, 2012, as he insisted that, despite massive Democratic turnout for Obama in the Ohio's most populous counties - Cuyahoga (69%), Franklin (60%), Summit (57%), Lucas (64%) and Hamilton (52%) - and a 2,697,260 (50.1%)- 2,593,779 (48.2%) statewide edge, Romney had won Ohio's 18 electoral votes. Many people wondered if he had lost his mind. But it was desperation we were watching. Rove had nearly as much riding on that election as Romney and Ryan did. His entire business was on the line.

In 2012, Rove's various Crossroads PACs and SuperPACs, spent $170 million attacking Obama and trying to bolster Romney. Fascist-front organizations like Harold Simmons' Contrain Corp ($23,500,000), various Adelson entities ($23,000,000), Bob Perry's Perry Homes ($8,500,000) and Robert Rowling's Gold's Gym and Omni Hotels ($6,000,000), to name a few, contributed enormous amounts of money to Rove's operations - which raked millions of dollars off the top in commissions of various sorts - after being assured by Rove that Romney could beat Obama, despite the all reputable polling, if they would just continue writing massive checks to Rove for his negative campaign ads. Some of these right-wing billionaires are still smarting. One idiot even tried suing Rove (and Fox News!).

Over the weekend, Gabriel Sherman, writing for "New York Magazine" explored, among other things, why Rove can't raise the kind of money this cycle that he's raised before and why so many right-wing billionaires are more reticent about spending big money so far when they hear Rove's siren song.

Right-winger Kenneth Langone, for example, isn't a genius; far from it. He's a ruthless dullard who had a good idea and a lot of luck - Home Depot. He wasted half a million dollars of Romney last cycle. "I had every expectation we would be the victors," he whined to Sherman, and he had that expectation because he was taken in by Rove's sweet talk and "top secret" baloney memos. When Romney didn't even come close - remember, Rove promised a "mandate" - gullible billionaires like Langone started to realize they had been duped. "It felt like a mugging," wrote Sherman.

Dan Loeb is another naive billionaire - a vulture capitalist/hedge fund predator - who has wasted millions of dollars on crackpot right-wing PACs and campaigns (including not just to the corrupt conservative NRSC and NRCC but also to the corrupt conservative DSCC and DCCC). Last cycle he gave Rove well over $100,000.

So how desperate are the owners to ensure that this cycle's election stays bought?

It's almost ridiculous to say that maybe they'll start acquiring the media personally.

As if they haven't already.

However . . .

"Yeah, I did say that.
But nothing I ever told you was true."
- Mark (the ultimate mark - husband) to Leslie Mann, Cameron Diaz and Kate Upton in "The Other Woman"


Shel Adelson, casino-owning multimillionaire, who buys elections, has just bought the largest newspaper in Nevada, and is promoting Marco Rubio.

“One of the first thoughts I had was:  Nevada is an early primary state. The "Review-Journal" is the largest newspaper in the state. Was it sold to a player in that event, or people who want to be players?,” asked media critic and New York University professor Jay Rosen.
The timing of this story couldn’t be more fortuitous as the GOP presidential candidates gather for a national debate at Adelson’s flagship Las Vegas hotel, the Sands.  One competitor stands out from all the rest in his relationship with Adelson, Marco Rubio.  Of one thing you can be sure:  Sheldon Adelson wants Rubio to be president so bad he can taste it.  And if buying a newspaper is a down-payment to achieve that goal, it’s small change as far as he’s concerned.
Adelson is especially sensitive to how he’s portrayed in the press. In fact, he’s sued or threatened to sue a number of Israeli TV stations which aired profiles he viewed as defamatory. One such incident resulted in an on-air apology to Adelson followed by the resignation of the news chief, mortified by his company’s capitulation to Adelson’s bullying. Having total control of the state’s leading newspaper would mean news perfectly tailored to Adelson’s taste.


Bill Engdahl enlightens us as to why we can't figure out the War Against ISIS/L/Da'esh from the mainstream media coverage (because they're on our side - yeah, it's tricky - but don't let your attention wander):

That Netanyahu’s Likud and the Israeli military work closely with Washington’s neo-conservative war-hawks is well-established, as is the vehement opposition of Prime Minister Benjamin Netanyahu to Obama’s nuclear deal with Iran. Israel regards the Iranian-backed Shi’a Islamist militant group, Hezbollah, based in Lebanon, as an arch foe. Hezbollah has been actively fighting alongside the Syrian Army against ISIS in Syria. General Allen’s strategy of “bombings of ISIS” since he was placed in charge of the operation in September 2014, as Russia’s Putin and Foreign Minister Lavrov have repeatedly pointed out, far from destroying ISIS in Syria, had vastly expanded their territorial control of the country.

Now it becomes clear that that was precisely the intent of Allen and the Washington war faction.
Since at least 2013, Israeli military have also openly bombed what they claim were Hezbollah targets inside Syria. Investigation revealed that in fact Israel was hitting Syrian military and Hezbollah targets who are valiantly fighting against ISIS and other terrorists.

Watching the Hawks

Deadlocked in Baltimore & America’s Friendly Enemies in the Middle East w/ Ari Ben-Menashe (E147)

16 Dec, 2015
© Eduardo Munoz / Reuters
On this episode of “Watching the Hawks,” Tyrel Ventura and Sean Stone are joined by RT Correspondent Manuel Rapalo to discuss the latest in the Freddie Gray murder case in Baltimore. The team discusses the mystery behind a second JFK assassination tape, what it could reveal and whether it will ever be released to the public.

Saudi Arabia has decided to form a 34 nation anti-terrorism coalition. We react to whether or not this is a meaningful move for the region and the United States.

Ari Ben-Menashe, former member of the Israeli Military Intelligence Directorate and author of the book Profits of War, joins Sean to discuss the reality of American interests in the Middle East.
_ _ _ _ _ _ _

Speaking of Frankenstein's monster?

Take it away, Max!



There’s No Upside Left

December 16, 2015

Charles Hugh Smith

There’s no upside left – not just in the real economy, but in jobs, politics or policy tweaks. Yes, there will be huge relief rallies in the stock market – relief that the Fed is still omnipotent, that the Fed didn’t destroy the world by withdrawing liquidity, etc., etc., etc. – but in terms of sales and profits, there’s no upside left:  an increasingly nervous upper middle class is reining in profligate spending, while everyone below the top 10% is running out of credit cards, student loans, etc. to tap.

Whatever surplus the real economy generated has been skimmed by financiers, lenders and the central state.

Stock buybacks have boosted the wealth of corporate managers and institutional owners while creating zero jobs; lenders have feasted on high-interest credit cards, federally backed student loans and subprime auto loans that are immediately spun off to credulous suckers (Widows and Orphans Fund of Norway, et al.) as high-yield securitized debt.

Anyone working for Corporate America or government has little upside but plenty of downside:  bonuses are being slashed, divisions closed, sold off or privatized in the case of government, all to cut costs.

State and local pension funds, bloated by seven years of speculative frenzy, are about to start bleeding from every orifice as reality and risk intrude on the central banks’ fantasy of never-ending asset bubbles.

Whatever pension and bennies you were promised – start practicing your fractions, because only a fraction of the bloated promises made by politicos desperate to get re-elected can be paid in the real world.

Doing a great job will either get you fired or overworked:  no upside there. If you have the courage (or foolish devotion to truth) to be honest, then you’ll be fired as a disruptive “non-team-player” who stepped on too many toes in the pursuit of excellence.

Or if you knuckled under and kept the truth to yourself but managed to get the impossible tasks completed despite the incompetence and/or shoddy work ethic of your managers and peers, you’ll get promoted to a job that requires twice the responsibility and workload for a 10% raise.

Anyone taking one of the hundreds of thousands of low-paying service-sector jobs has limited upside in pay and benefits; the corporate owners skim whatever upside there is because labor is in surplus except for narrow fields of expertise.

Productivity gains have been skimmed by corporate owners or the managers:  Wage Gains: For Your Boss – Yes; For You – Not So Much ("Zero Hedge")



It’s all downside, Baby.

It would be nice if an elected official could downsize the Empire or the Deep State, but this is wishful thinking. Can anyone force a radical downsizing (i.e., slashing and burning waste and inefficiency, eliminating multiple layers of management, unraveling cartels and monopolies, closing loopholes for patent-troll litigation, etc.) of the weapons acquisition monstrosity, the regulatory monstrosity, the litigation monstrosity, the healthcare/sickcare monstrosity, or the ineffective higher education monstrosity?

The legions living off these inefficient, bloated systems will destroy any real reforms and anyone who dares propose them. The only available process of radical downsizing /rationalization is collapse. That’s The Upside of Down (a book I highly recommend).

I don’t blame anyone for trying to save their job, division or agency; but the systemic cost of protecting privileges, bureaucracies and cartels is collapse.

But labor isn’t the only thing that’s in surplus – so is capital.

That’s why the yield on capital is near-zero or below zero. This has driven money managers to accept extremely dangerous levels of risk to chase yields. That central banks have masked the risk by claiming an omnipotence that cannot exist in the real world has only increased the systemic risks of implosion.

As for the central banks’ favored optical distortion device, the stock market – what will drive long-term upside once the market is de-FANGed?  Another raft of absurdly overvalued Unicorn stocks?

With risk piling up and yields crashing, there is only downside, Baby.

Meanwhile, the engine of distributed wealth creation, people willing to risk their labor and capital on new enterprises, is cratering:


There’s no upside to risking everything when the commercial building owner, bank and local/federal government skim whatever you earn to the point that you’re losing money every month.

Oh, wait – there is some upside:  the black market/cash economy.

Those who sidestep the burdens of regulation, litigation and taxes have plenty of upside.

But it’s all downside for everyone collecting government paychecks and benefits paid with taxes, because the cash economy generates zero income tax revenue and very little junk fees.

That only increases the burden being loaded on the tax-donkeys who have no choice but to pay higher taxes and the legitimate businesses getting socked with ever-higher junk fees and regulatory costs.

The upside is ephemeral, illusory or wishful thinking; the downside is real and lasting.

(Today, nearly 98% of people who inherit money move it from their family's financial advisors within the first year. With $41 Trillion expected to be transferred to the next generation by 2026, it’s imperative that you reach them sooner than later. The next generation will transform the financial and philanthropic landscape. Discussing philanthropy is an easy way to engage them, and open them up to charitable planning strategies they hadn't previously considered, like donor-advised funds.)

Read more here.


Anyone thinking Zuckerberg's ploy yet?
_ _ _ _ _ _ _


[Personally, I've never seen better/funnier "Late Show" stone-cold acting than De Niro just looking at Stephen this evening. Don't miss the UTube clip!]

Wednesday, December 16, 2015

DEJA VU ALL OVER AGAIN  (Rate Hike?)  Pull Back the Curtain on Exchange Traded Funds and Out Pop Wall Street Mega Banks



Speak an undeniable truth to power.
- Václav Havel


[HINT:  Chris Hedges' "Constructing" is on LINK TV right now.  Do yourself a favor and see it in order to learn about some current methods for constructing a new and decent democratic society in the USA! USA! USA!.]

(If you have trouble reading lots of figures, don't despair; just get a tall drink and dive in - it's easier than you think (and way more enlightening).)


DEJA VU ALL OVER AGAIN

Posted on 13th December 2015
Janet Yellen will increase interest rates for the first time in nine years on Wednesday. She isn’t raising them because the economy is strengthening. The economy just happens to be weakening rapidly, as global recession takes hold.

The stock market is 3% lower than it was in December 2014, and has basically done nothing since the end of QE3. Wall Street is throwing a hissy fit to try and stop Janet from boosting rates by an inconsequential .25%. Janet would prefer not to raise rates, but the credibility and reputation of her bubble blowing machine is at stake. The Fed has enriched their Wall Street benefactors over the last six years, while destroying the real economy and the middle class.
The quarter-point increase will be reversed in short order as soon as we experience Market Collapse Part Two. It will be followed with negative interest rates and QE4, as these academics have only one play in their playbook – print money. They created the last financial crisis and have set the stage for the next – even bigger collapse. John Hussman explains how their zero interest rate policy has driven speculators into junk bonds as the only place to get any yield.

Over the past several years, yield-seeking investors, starved for any “pickup” in yield over Treasury securities, have piled into the junk debt and leveraged loan markets.

Just as equity valuations have been driven to the second most extreme point in history (and the single most extreme point in history for the median stock, where valuations are well-beyond 2000 levels), risk premiums on speculative debt were compressed to razor-thin levels. By 2014, the spread between junk bond yields and Treasury yields had fallen to less than 2.4%. Since then, years of expected “risk-premiums” have been erased by capital losses, and defaults haven’t even spiked yet (they do so with a lag).


Years of excessive risk taking, spurred by the reckless Fed policy convinced Wall Street to issue billions in junk bonds, just as ridiculously low rates from 2001 through 2005 spurred billions of subprime mortgage issuance. Wall Street has no care about clients, investors, or the impact on the economy. They care about fee generation and dumping their toxic sludge on someone else. The junk bond market is imploding and any muppet who has been lured in during the last two years is getting slaughtered.

The entire shale scam was funded with easy money and junk bonds. The dozens of companies who issued billions in junk bonds weren’t profitable at $80 oil. They are plunging towards bankruptcy at $36 oil.

The amount of mal-investment created by the Federal Reserve over the last six years is almost incomprehensible. The tremors in the junk bond market portend another Lehman moment in the near future.
From an economic standpoint, the unfortunate fact is that the proceeds from aggressive issuance of junk debt and leveraged loans in the past few years were channeled into speculation. Excess capacity in energy production was expanded at the cyclical peak in oil prices, and heavy stock buybacks were executed at obscene equity valuations. The end result will be unintended wealth transfers and deadweight losses for the economy. Since the late-1990’s, the Federal Reserve has actively encouraged the channeling of trillions of dollars of savings into speculation. Recurring cycles of malinvestment and crisis have progressively weakened the resilience and long-term growth prospects of the U.S. economy.

The coming collapse will be three pronged as stocks, bonds, and real estate are all simultaneously overvalued. Junk bonds are the canary in a coalmine. High end real estate in NYC has topped out. New and existing homes sales growth has stalled out. Retailers desperately slash prices to maintain sales, while destroying their profits. Corporate profits are falling. The stock market is teetering on the edge. If you can afford to lose 50% of your retirement savings, now is the time to buy some Facebook, Netflix, Google, or Amazon on margin.
Given the valuation extremes we presently observe in the equity market (see Rarefied Air: Valuations and Subsequent Market Returns), our view is that spiking yields in the junk debt market are a precursor of significant losses in stocks, as we’ve observed in other market cycles across history.

At current valuations, the notion that “There Is No Alternative” (TINA) to zero-interest cash is profoundly incorrect. The only thing that equities offer here is to promise wider extremes of panic, despair, excitement, and hope over the coming 10-12 years, on the way to overall returns no better than safe, liquid cash equivalents are likely to achieve.

Over the last two decades the Fed’s interventionism has created artificial booms and real busts. Their dreadful mistakes are “fixed” by currency debasement, lower interest rates, and money printing – creating even worse mistakes. They have successfully gutted the American economy and left a hollowed out shell.
Moreover, as we should have learned from the global financial crisis, when the Fed holds interest rates down for so long that investors begin reaching for yield by speculating in the financial markets and making low-quality loans, the entire financial system becomes dangerously prone to future crises. If the Fed’s mandate is really to support long-run employment and price stability, the first priority of Congress should be to rein in this cycle of activist Fed intervention; to end the Fed’s ability to promote yield-seeking speculation and malinvestment that only produces inevitable crises and weakens long-run U.S. economic prospects.

Bernanke is no hero. He did not save us. He saved his cronies on Wall Street and their captured politician lackeys in Washington DC. The unholy alliance between central bankers, corporate America, and corrupt politicians resulted in Glass Steagall being repealed and allowing Wall Street to run roughshod over our economic system, reaping riches during the good times and heaping the inevitable losses onto the backs of taxpayers. That’s the new American Dream.
Some would argue that the Federal Reserve “saved” us from the global financial crisis. I couldn’t disagree more. My view is that the financial crisis was caused because the Fed overly depressed interest rates in the early 2000’s, encouraging investors to reach for yield in mortgage securities.

In response, poorly regulated financial institutions, with banks free from the constraints of Glass Steagall, and other institutions having inadequate capital requirements, created a huge mountain of new, low-grade mortgages in the frenzy to create more “product.” The easy lending created a housing bubble, but someone had to hold the mortgages when they went belly-up, and those holders were banks, insurance companies, hedge funds, and individuals. As the mortgages went into foreclosure, banks had to mark the value of those mortgages to market value on their books, to the point where the value of their assets was less than the value of their liabilities:  insolvency.

The liquidation of insolvent criminal Wall Street banks would have set the country back on the path to legitimate recovery. Instead, the ruling class chose accounting fraud, QE to infinity, and screwing senior citizens with 0% interest rates.


In hindsight, the financial crisis actually ended – precisely – in March 2009. How? The Financial Accounting Standards Board changed rule FAS 157 and overturned the mark-to-market requirement, instead allowing financial institutions “significant judgment” in the way they valued their assets: often called mark-to-model (or as some of us call it, mark-to-unicorn).

John Hussman warned those who chose to listen in 2000 and 2007 about the impending collapses. He has been warning those who choose to listen for months again. This market has gone nowhere in the last 13 months. It’s about to go somewhere, and that is DOWN. Remember 2000 and 2007. Enjoy the trip – deja vu all over again.

In the absence of clear improvement in market internals – and last week was categorically opposite to that – I view the stock market as being in the late-phase of an extremely overvalued top formation that will likely be followed by profound losses over the completion of this market cycle, and the U.S. economy as being on the cusp of a new recession.

Comments

robert h siddell jr says:

Since 1988, every time the FED raises the Fed Fund Rate there has been a recession in about 6 months that required the FED to lower the rate to below where it was before they raised rates and caused the recession. The chart looks like a down staircase since 1988. Raise rates in Dec2015 and by (or before) June 2016 the FED will have to plunge the rate lower than it is now (ie, this time they’d have to give borrowers a cash bonus to borrow some money) or who knows how low the economy would go after about June 2016.

Maggie says:

I think that so many people have seen these warnings and held their breaths (figuratively) for the crash only to have the Power Brokesters pull another trick out of their hat and put it off just a bit longer. We know the crash truly is coming and we aren’t exactly HOPING for it, but we know that every trick that puts it off makes the final crash that much harder and intense.
We had unexpected guests last night, cousins out for a ride in the hills stopping by to “have a cold one.” They were welcome and the talk and chatter was mostly fun, until it wasn’t.
Their grandson is the same age as my son. He will graduate this May from the Colorado School of Mines, where he has been paying out of state tuition for four years to become a Petroleum Engineer. My son lost a semester by getting an associates in Jr. College in programming, allowing me the time to establish residency here to avoid out of state tuition. There is no competition between the boys… they only met twice in their lives and the second time was this past summer. However, my cousins are very much aware that the “boys” are the same age and both pursuing technical degrees.
This comment in the article above has burst his and dozens of his Colorado soon to be grads bubbles. “The entire shale scam was funded with easy money and junk bonds. The dozens of companies who issued billions in junk bonds weren’t profitable at $80 oil.” Apparently, out of 22 of his peers in the Petro Engineering field graduating in May, only 5 have gotten offers from their interviews with companies. Apparently the companies that the college was telling them all were jumping to pay their new Petro Engineers $100K out of the starting gate haven’t gotten there yet.
Well, I told his grandparents to not worry because the oil industry is volatile and has been since the 70s. But, I never understood how they didn’t understand the concept of Peak Oil. I thought everyone had watched Chris Martenson’s Crash Course and realized that shale oil was just a drop in the bucket that wouldn’t last long. It turns out that I was wrong and now that all these young people have gone into six figures of debt to walk into their six figure paying jobs and discovered that they may be working two or three part-time jobs just to make their student loan payments, they are really upset.
Again, I feel like the little red hen, but I am so happy that if my son graduates and can’t get a job in “engineering,” at least there won’t be a loan payment.
What a mess we face. I just wish the Power Brokesters would stop making it worse.

Jfish says:

The controlled demolition begins. When the bond market blows, lights out. Note to self: pick up some more canned goods B 4 Tuesday

Phaedrus says:

Second verse.
The End Of The Bubble Finance Era Zero Hedge 12/13/2015 http://www.zerohedge.com/print/517999

10
14th December 2015 at 8:48 am


Administrator says:
Another High Yield Domino Falls As $900 Million Lucidus Capital Liquidates

Submitted by Tyler Durden on 12/14/2015 07:34 -0500
Last week, the world began to wake up to the fact that all of the “Chicken Littles” screaming that the sky is falling in high yield were right.
There was Third Avenue which announced it would gate investors in a $788 million mutual fund on the way to liquidating over the next several months (as though liquidity is set to return any day now in HY) and then in short order, the “venerable” Stone Lion Capital (founded by none other than Alan Jay Mintz and Gregory Augustine Hanley, both veterans of Bear Stearns distressed debt and HY trading desk) suspended redemptions after receiving “substantial requests.”
Yes, “substantial requests” or, in more colloquial terms, “rats from a sinking HY ship” and as we noted just moments after we confirmed the Third Avenue gate news, “investors in all other junk bond-focused hedge funds, dreading that they too will be gated, will rush to pull what funds they can and submit redemption requests, in the process potentially unleashing a liquidity – and liquidation – scramble within the hedge fund community, which will first impact bonds and then, if the liquidity demands continue, equities as well.”
It’s probably more appropriate to call that a foregone conclusion than “prescient.” That is, if one depositor loses access to his demand deposits and tells a friend about it, it won’t be long before the bank run is on. Same principle here.
Sure enough, just moments ago a third domino fell as Lucidus Capital Partners, a high-yield credit fund founded in 2009 by former employees of Bruce Kovner’s Caxton Associates, has liquidated its entire portfolio and plans to return its $900 million in AUM.
Unsurprisingly, the trouble at Lucidus started in October when a “significant investor” submitted a redemption notice. Following that request, Lucidus decided “to start winding down the portfolio and shedding staff,” according to a person familiar with the fund’s operations who spoke to Bloomberg. “Shrinking trading volume in credit-default swaps and indexes in the wake of the financial crisis posed a challenge to Lucidus, whose founders sought to profit from volatile credit markets when they started the company in 2009, the person said.”
“The fund has exited all investments. We would like to thank our investors and counterparties for their support over the years,” Chief Executive Officer Christon Burrows and Chief Investment Officer Geoffrey Sherry said.
Here’s a look at the management team:
The founders, Geoff Sherry and Darryl Green, were former heads of distressed debt trading at JP Morgan and Donaldson Lukfin, respectively.
Make no mistake, this will just add more fuel to the fire. As we’ve been warning for months, HY faces the dreaded “crowded theatre” scenario wherein the crowd has gotten larger and larger while the exit has become smaller and smaller.
Someone – or, more appropriately, several someones – yelled “fire” and now the rush to the exit is on. The question now is how quickly this spreads across the space and as we said last week, watch HYG and JNK closely to get a read on how quickly the panic is spreading to the more “mainstream” vehicles.
Unfortunately for those funds who plan on liquidating over the course of the coming weeks or months, liquidity is only going to dry up from here, and that means wide bid-asks and firesale prices, triggering harrowing declines that will only serve to spread more panic, leading to more redemption requests, and around we go. “After junk-bond prices posted their largest drop since 2011 on Friday, investors say they are bracing for another difficult week, likely featuring hectic trading and large splits between buy and sell orders,” WSJ warned on Sunday, adding that “gaps as wide as 10% between the price bondholders are willing to accept and buyers are willing to pay are likely to be commonplace until at least the conclusion of the Federal Reserve’s two-day meeting Wednesday, hedge-fund and mutual-fund managers said.”
One hedge-fund manager who spoke to The Journal said he tried Friday morning to sell loans issued by Clear Channel Communications, now known as IHeartMedia (one of the Third Avenue fund’s largest holdings), at 71 cents on the dollar, the price Wall Street traders quoted him. “No buyers materialized until late afternoon when he received a single bid at 64 cents on the dollar, an offer he refused,” WSJ says, rather ominously.
By the way, remember that the Street isn’t going to be willing to inventory any of this paper, especially into a falling market. So ask yourself this: who’s going to buy this stuff? And if buyers can be found, at what price?
We close with the following observation from Bloomberg’s Richard Breslow:
One of the sad side-effects, is successful strategies, with liquid investments that are built for volatile markets and have no gates, become the piggy-bank for everyone that needs cash. Investors end up liquidating the good ones and are forced to keep the bad ones.

40
14th December 2015 at 9:05 am



  • Administrator says:

    High Yield ETFs Are Already Tumbling In The Pre-Market
    Submitted by Tyler Durden on 12/14/2015 08:20 -0500
    Small doors, large crowds. Amid yet more liquidations (Brazilian Bank BTG flushing its European credit exposure and Lucidus US HY fund), the large high-yield bond ETFs are tumbling in pre-market as two years worth of under-water easy-money trend-followers head for the exits from the “highly liquid” ETFs.. . and crush what little liquidity there is in the underlying. When will The Fed step in and buy US HY debt to stymie “fire-sale” prices?
    This will be the 8th drop in the last 9 days…
    As MacroMan noted earlier,
    In the meantime, ponder the idea that there are still 19.6 million more shares of HYG and 41 million more of JNK than existed at the end of last year, and ask yourself what those holders are going to do in the coming weeks.
    Then ponder on what professional holders of high yield and other credit will do after having gorged for the last several years only to see the wheels finally start to fall off.

    50
    14th December 2015 at 9:07 am



  • rob in Nova Scotia says:

    Even though Nova Scotia is long way from Alberta. My province is tied into that economy. Most of the jobs “created” in Nova Scotia in last 5 to 10 years have been actually “Fly in, Fly out” jobs in Fort McMurray Alberta, Fort Mac to everyone around these parts. This is where the heavy oil “tarsands” projects are located and like the shale oil in North Dakota all these jobs flowed while price was high. Projects that are all losing money now. I might be a bit of an exaggeration but while it was happening guys were leaving here and making 6 figure paychecks driving bulldozers and holding shovels. All that hot money flowed back home. It was sunk into you guessed it, Toys and Big houses. I was in Newfoundland in September and situation there is even worse. Big monster homes in places where there is no local economy to support them. Now I sense a change. People, I think, are now realizing the trap that has been set. The jobs have dried up out west and now all these guys are sitting in their red neck mansions collecting Employment Insurance checks. This will last for another 8 to 10 months. In the meantime, much like the banks and zombie retailers, it will extend and pretend. But there is a reckoning coming.
    I mentioned all this in a previous post on how the economy has taken turn for worse. Recently while listening to radio on drive to work a so called expert was talking about the Nova Scotia Economy. The chatter was about predictions for upcoming year. How this Province could lead entire country in GDP growth. If that is bourne out then we are in trouble. But here will be winners just like in depression of 1930’s.

    It is hard to fathom but there is a tremendous opportunity for all us Doomers. Standing on sidelines watching this means that when crash inevitably comes there will be lots of assets to pick from at huge discounts. Some years ago I was standing in a huge barn not far from town I live in. It was built in 1920’s. Calling it a barn undersells the place. It was built as a hall for concerts. Even now almost 100 years later it stands. A testament to the craftsmanship of the builders. It is now owned by the local University and used for special events and weddings. The caretaker of building is ironically from the family that originally built it all those years ago. I asked him why it was sold. He said that during the depression his grand father was forced to sell it. He needed the money. History may not repeat itself but it certainly rhymes.
    The knife has already dropped in my province. The winners will be those brave enough to reach and grab it.
    Read this on zerohedge.
    http://www.zerohedge.com/news/2015-12-13/next-domino-canada

    50
    14th December 2015 at 9:11 am



  • DC Sunsets says:

    Look, I don’t want to burst anyone’s bubble here (pun intended) but I think you all are missing the forest…
    People piled into junk bonds. WHY? Think about it. WHY?
    Were you? No, you were fearful. It looked like a good way to lose money, right? I agree. But we are not the masses.
    The masses of men (and women, God, don’t forget the women!) are optimistic. You look at the world and see danger, but the masses of your fellows do not, they see visions of fabulous wealth in their future, just like purchasers of lottery tickets.
    ONLY in an environment of phenomenal shared optimism could the Fed be allowed (and encouraged) to promote an unimaginably large quantity of IOU’s to be issued. Only a phenomenally optimistic system could generate the pyramiding of value on Wall Street (because recall that there is NO NET MOVEMENT OF MONEY THERE, no money comes in “from the sidelines,” this is a stupid lie oft repeated that makes no sense at all to a 5 year old, but we see it all the time.)
    We read articles about how crappy is the economy (and it is,) but outside events don’t affect Social Mood. Social Mood is unconscious and contagious, and it is endogenously regulated. There is ample evidence of all this.
    Just as in prior epochs, when the mania hits it will run its course. This one has lasted longer and run vastly higher than any in recorded history, but it’s still the same thing Charles Mackay recorded in his 1841 tome, Extraordinary Popular Delusions and the Madness of Crowds.
    Stop attributing this to TPTB or other nefarious characters. They are the symptom, not the disease. The disease is best described as a folie a plusiers, a “madness shared by many.”
    YOU CAN’T CHEAT AN HONEST MAN. You can’t build a Ponzi Scheme without people willing to believe the unbelievable.
    Just because this shared delusion is operating on a scale too large to grasp doesn’t change its nature. Charles Ponzi couldn’t have ever acted without people volunteering to suspend their disbelief. The Fed, the Treasury, Congress, Wall Street, ALL could not be involved in doing this crap if vast numbers of people were not immersed in Lottery Fever.
    From open-borders idiocy to demands to tolerate and enable what amounts to MENTAL ILLNESS (e.g. “transgender” bullshit) to a willingness to trust (for the moment) the value of an OCEAN of IOU-dollars, the same cause underlies all.

    70
    14th December 2015 at 10:21 am



  • DC Sunsets says:

    Maggie, if you think the job market for petro engineers looks like a bad bet, imagine how many people today are borrowing huge to obtain “work permits” in medicine and related fields.
    My guess is that now 30% of decent-paying jobs in the USA are directly tied to the Medical-Industrial-Complex, which is not one iota less dependent upon Uncle Sam than is Lockheed-Martin or Raytheon.
    While there is surely infinite demand for the output of the Med-Ind-Complex (much of it from hypochondriacs and those with Munchhausen’s Syndrome), there is no way to pay for it all.
    When the coming bust finally arrives, the biggest surprise of all will be that Uncle Sam’s borrowing ability will be cut off.
    Expect there to be a 50-80% decline in the ability to pay for medical care. It will utterly DESTROY employment in related fields (as well it should, they are overbuilt many times more than is the McMansion industry.)
    The time will come when what was once a sure path to upper-middle-class comfort will be a guaranteed trip to bankruptcy and destruction.

    40
    14th December 2015 at 10:28 am



  • DC Sunsets says:

    @ Rob,
    “It is hard to fathom but there is a tremendous opportunity for all us Doomers. Standing on sidelines watching this means that when crash inevitably comes there will be lots of assets to pick from at huge discounts. Some years ago I was standing in a huge barn not far from town I live in. It was built in 1920’s. Calling it a barn undersells the place. It was built as a hall for concerts. Even now almost 100 years later it stands. A testament to the craftsmanship of the builders. It is now owned by the local University and used for special events and weddings. The caretaker of building is ironically from the family that originally built it all those years ago. I asked him why it was sold. He said that during the depression his grand father was forced to sell it. He needed the money. History may not repeat itself but it certainly rhymes. ”
    Exactly.
    BUT…………
    The buildup to the coming debacle is almost certainly a degree of trend LARGER than the precursor to the Great Depression.
    It sounds great to say you’ll husband your resources and plan to swoop in and buy when “blood is running in the streets,” but I suspect that just keeping access to “cash” (in any form, from short-dated treasury paper to bank accounts to banknotes) will prove very challenging at some point during the next 10 years.
    There are no obvious sure things in this regard, as I see it.

    20
    14th December 2015 at 10:37 am



  • DRUD says:

    DC – Completely agree that there are no sure things. The only thing we can do is look at a few possible scenarios. I agree that the coming crash will at least begin with a huge wave of defaults leading to devastating deflation. Again, no guarantee, but this seems most likely. How will the worlds governments/central banks react? Again, the most probably is massive money printing combined with starting more wars. There could also be MASSIVE civil unrest/riots/terrorism break out at this point. Then things get out of control and take on a life of their own. Would hot wars lead to nuclear powers launching EMP attacks on each other to avoid total holocaust? Possible for sure. Or would people start “storming the castle” so to speak and literally attacking their own government buildings/people? How long until JIT systems break and gas stations/supermarkets are closed? Another big question we’ve all discussed here: how will military personnel react?
    There are a million ways this can break and no one can predict any of it. The more important questions are 1) How fast does this get from the Financial sector to main street? 2) How long do stores stay open when they can’t get credit, then can’t get supplies? 3) How long, under various scenarios, until people get desperate and crazy (“blood in the streets”) 4) How does one manage each scenario to protect himself, his family and his wealth?

    60
    14th December 2015 at 10:50 am



  • DC Sunsets says:

    @ DRUD,
    Totally agree.
    My answers (so far, subject to change at all times)
    1. Be a mild prepper (so I have some food, some water and some fairly notable firepower) without going Full Retard about it.
    2. Be out of debt. As long as I can pay my property tax extortion I’ll have a roof over my head.
    3. Get used to living small.
    4. Avoid traditional “investments” even though this has been astonishingly costly for most of my adult life.
    5. Try to have some wealth in non-traditional forms (I won’t discuss this in a public forum, other than to say that nothing is at my house so a robbery would net nothing but cops chasing the robbers, assuming the robbers survived, given that I am actually quite a good shot.)
    I think the biggest thing is mental. Only those who can entertain the need to be flexible in their thinking are likely to BE flexible when times change.

    40
    14th December 2015 at 11:00 am



  • Administrator says:

    The Market Has Just Gone Nuts
    Submitted by Tyler Durden on 12/14/2015 10:19 -0500
    Presented with little comment, aside to ask: “where are the liquidity-providers?”
    Extremely heavy volume… and wild swings
    420 Point roundtrip in The Dow in under 9 minutes…



    As HYG hit Friday’s lows…
    And all of this is happening right on cue following JPMorgan’s Marko Kolanovic warnings of “massive stop losses” ahead..
    Not surprisingly, the biggest potential selloff catalyst is the Fed itself and specifically the Dec. 16 FOMC announcement, which the Fed is desperate to guide as being “priced in” by the market, but considering the Fed’s track record with getting any forecast right, concerns are starting to grow. “As for near-term risks—we believe the most imminent market catalyst will be the December Fed meeting in which we are likely to see the first rate hike of the cycle.”
    * * *
    So far so good, but to a market which has traded mostly on technicals and program buying (and selling) in recent months, there is something far more troubling than just what the Fed will announce:
    This important event falls at a peculiar time—less than 48 hours before the largest option expiry in many years. There are $1.1 trillion of S&P 500 options expiring on Friday morning. $670Bn of these are puts, of which $215Bn are struck relatively close below the market level, between 1900 and 2050. Clients are net long these puts and will likely hold onto them through the event and until expiry. At the time of the Fed announcement, these put options will essentially look like a massive stop loss order under the market.
    What does this mean? Considering that the bulk of the puts have been layered by the program traders themselves, including CTA trend-followers, and since the vol surface of the market will be well-known to everyone in advance, there is a very high probability the implied “stop loss” level will be triggered, and the market could trade to a level equivalent to the strike price, somewhere in the 1,800 area, or nearly 200 points below current levels.
    Which would be a tragedy for the Fed: after all, nothing is more important to Yellen, Draghi et al, than affirmative market signaling – pointing to the (surging) market’s reaction and saying “look, we did the right thing”, just as Draghi did on Friday when he explicitly talked the market higher in the aftermath of the ECB’s disastrous announcement.
    The irony will be if, regardless of what the Fed does, the subsequent move is driven not by the market’s read through of monetary policy but by the “pin” in this massive $1.1 trillion option expiry, the biggest in many years, one which if recent market action is an indicator, suggests the stop loss strike level will be taken out in the process setting the “psychological” stage for market participants who will look at the drop in the market, and equate it with a vote of no confidence in what the Fed is doing, potentially forcing the Fed to backtrack in less than 2 days!
    Whether this happens remains to be seen, and we are confident the Fed’s “arm’s length” market-moving JV partner, Citadel, is currently scrambling to prevent any imminent selloff. However, considering Kolanovic’ track record of hinting at key risk inflection risk, it is quite likely that whatever the ultimate closing price on December 16 and, more importantly, December 18, volatility may very soon have an “August 24” type event.

    10
    14th December 2015 at 11:06 am



  • JFish says:

    DC Sunsets – Regarding your first post above and the “Extraordinary Popular Delusions and the Madness of Crowds”; your contestations are fascinating and made with astounding eloquence.
    Yet, I tend to look at the TPTB as the “game-makers” and the “folie a plusiers” crowd (blinded with lottery fever) as simply the “players”. Obviously, both in a symbiotic relationship and making love in an decadent orgy of greed.
    Some may reject the concept of “puppet masters”, but the question remains: Do they exist or not? I think they do. But then again I also know that everyone thinks I am paranoid (get it?) :)
    It could also be likened to a financial game of “musical chairs” whereby all want their “chair” and the rest be damned.
    But they are all fools.
    It reminds me of the old King James Proverb:
    “Wilt thou set thine eyes upon that which is not? for riches certainly make themselves wings; they fly away as an eagle toward heaven.”

    10
    14th December 2015 at 11:38 am



  • DRUD says:

    JFish – Some may reject the concept of “puppet masters”, but the question remains: Do they exist or not?”
    I don’t think that is the question. As I have stated in the past, usually with either/or question the anser lies in a combination of the two. Of course there are extremely powerful people with grand designs to rule world. But they are still only human. They have blind spots, they have pride (which as we know precedes a fall), they do not have the ability to predict the future any more than the next man. They are just megalomaniacs, with lots of money, influence and a few parlor tricks to fool the brain-dead masses.
    Think of it like a cattle drive—while the cows are happy and calm, the drovers are in total control. If the herd stampedes, however, that control is rapidly revealed as illusory.
    And I, for one, am not out to get you…
    as far as you know. :)

    00
    14th December 2015 at 11:55 am



  • DRUD says:

    DC – great list. Almost lock-step with my own thinking.
    I do have plenty of debt–but nothing unsecured. If/when SHTF they can take anything they want without really hurting me that much. The mortgage is an issue–it is large, but right now, at the bubble’s peak, I have a ton of equity as well–but I figure I can hold out longer than most. The whole world can’t become repo men, after all.
    I have some solid preps, but nothing over the top. If it is hell on earth, how long do you want to survive? That is a question each must answer for themselves.
    I have also avoided investing and have therefore made nothing in the few years–except again my home equity–my home’s value is up about 40% in the last 3 years. As far as non-traditional investments, I am on a pretty much month-to-month existence right now. Not much in the way of disposable income.
    I think we live pretty small, all that said—though the wife does like decorating the house and we have gotten new appliances.
    Prepping is mostly mental/psychological since there are so many unknowns. It is also very difficult. I have never lived in a world without grocery stores, readily available gasoline, credit cards and endlessly flowing electricity. How will I deal with it, when it comes?
    No idea, but I hope better than most.

    10
    14th December 2015 at 12:06 pm



  • JFish says:

    I hear ya’, DRUD. If this thread (and perhaps TBP overall) could be allegorically compared to a college thesis paper, I believe most of us monkeys are on the “same page” so to speak. Some of us are now merely quibbling over the “minor punctuation” details…


    14th December 2015 at 12:37 pm



  • Rise Up says:

    “Bernanke is no hero. He did not save us. He saved his cronies on Wall Street and their captured politician lackeys in Washington DC. The unholy alliance between central bankers, corporate America, and corrupt politicians resulted in Glass Steagall being repealed and allowing Wall Street to run roughshod over our economic system, reaping riches during the good times and heaping the inevitable losses onto the backs of taxpayers. ”
    Thanks Admin, David Stockman, John Hussman and others for getting the truth out there.
    But the lies continue, as in today’s FOX Business online section:
    “Seven years ago, during the darkest days of the financial crisis, the Ben Bernanke-led Federal Reserve lowered interest rates to an unprecedented near-zero range in an effort to prevent another Great Depression.
    It worked.
    “They helped stave off a depression and ultimately helped get the economy out of recession and back to (albeit slow) growth,” said Greg McBride, chief financial analyst at Bankrate.com.”
    http://www.foxbusiness.com/economy-policy/2015/12/09/rate-hike-low-rates-averted-another-great-depression/?intcmp=bigtopmarketfeatures


    14th December 2015 at 12:50 pm



  • Administrator says:

    Janet Yellen’s “Junk Bonds Are Contained” Moment
    Submitted by Tyler Durden on 12/14/2015 12:38 -0500
    From Janet Yellen’s February 27, 2014 Testimony before the US Senate Committee:
    Low interest rates can give rise to behavior that poses threats to financial stability and therefore we need to be looking at that very carefully and we are doing so in a very thorough way, I believe. We’re looking at credit growth to see whether or not that has potential worrisome trends.
    We’re looking particularly to our stress tests at financial institutions. In a low-interest rate environment we have to worry about whether or not they’re appropriately dealing with interest rate risk.
    We are watching very carefully for the development of any such excesses. We are very focused on not allowing such a thing to happen again.
    While there might be a few areas where I have concerns, such as deteriorating underwriting standards in leveraged lending, farmland prices, a few things, I don’t see those excesses having developed at this point.
    And then, from Janet Yellen’s news conference after the March 18, 2015 FOMC meeting:
    In some corporate debt markets, we do see evidence of unusually low spreads.
    More broadly, we do try to assess potential threats to financial stability. And in addition to looking at asset valuations, we also look at measures of credit growth, of the extent of leverage being used in the economy and in the financial sector, and the extent of maturity transformation.
    And taking into account a broad range of metrics that bear on financial stability, our overall assessment at this point is that threats are moderate.
    How about now?


    14th December 2015 at 12:53 pm



  • nkit says:

    As Brendan Brown in his book “Euro Crash” alluded to, the sun of asset price inflation is slowly sinking into the sea as the moon of asset price deflation is rising. The Fed’s monetary disequilibrium has caused the virus of speculative fever to spread out of control. The irrational exuberance (that DC Sunsets alluded to in his first post) caused speculators to don their rose colored spectacles that magnified the size of expected gains and filtered out risk. The mal-investment and erosion of risk-appetite that occurred as the sun of asset price inflation was higher in the sky, will ultimately meet a watery grave and rose colored spectacles will be shattered. As the moon of asset price deflation looms higher, it will cast its hue on goods and services deflation causing the Fed to engage in more hopeless monetary disequilibrium. And so it goes, as the Keynesians know no other strategy, (or so it seems) and they will never admit their dangerous folly. Prep on.

    14th December 2015 at 1:05 pm

  • Pull Back the Curtain on Exchange Traded Funds and Out Pop Wall Street Mega Banks


    Number of Active Authorized Participants in Exchange Traded Funds (Source: Investment Company Institute)

    Number of Active Authorized Participants in Exchange Traded Funds (Source: Investment Company Institute)

    By Pam Martens and Russ Martens

    December 15, 2015


    The selloff in junk bonds has rattled the markets and is raising questions about just who it is that is providing liquidity to the junk bond Exchange Traded Funds (ETFs) — which have magically redeemed billions of dollars in withdrawals from retail investors while the underlying bonds in their portfolio are under severe stress in the broader marketplace. (Both a junk bond mutual fund and a separate hedge fund were forced to freeze investor withdrawals of their cash last week due to illiquidity in the junk bond market.)

    Unknown to most retail investors is that there is an entity called an “Authorized Participant” hiding behind the curtain of ETFs that is making that liquidity possible.
    According to an August 8, 2014 written question and answer exchange between the National Association of Insurance Commissioners and BlackRock and State Street – two large sponsors of ETFs — the most active Authorized Participants for corporate bond ETFs include “Deutsche Bank, Goldman Sachs, JPMorgan, Bank of America Merrill Lynch, Morgan Stanley and Cantor Fitzgerald.”

    Let’s pause for a moment and think about that. JPMorgan Chase is the largest insured depository bank in the United States. Merrill Lynch was teetering toward failure during the crash of 2008 and was taken over by Bank of America, also one of the top four largest insured depository banks in the U.S.  Both Goldman Sachs and Morgan Stanley became bank holding companies during the 2008 crash and now have access to the Fed’s discount window for emergency borrowing.

    It seems pretty obvious why these so called “Authorized Participants” are hiding behind that esoteric title. Their liquidity to ETFs is actually being backstopped by their too-big-to-fail status which is actually backstopped by the U.S. taxpayer.

    As Senator Elizabeth Warren told a Senate hearing on March 3 of this year:

    “During the financial crisis, Congress bailed out the big banks with hundreds of billions of dollars in taxpayer money; and that’s a lot of money. But the biggest money for the biggest banks was never voted on by Congress. Instead, between 2007 and 2009, the Fed provided over $13 trillion in emergency lending to just a handful of large financial institutions. That’s nearly 20 times the amount authorized in the TARP bailout.

    “Now, let’s be clear, those Fed loans were a bailout too. Nearly all the money went to too-big-to-fail institutions. For example, in one emergency lending program, the Fed put out $9 trillion and over two-thirds of the money went to just three institutions: Citigroup, Morgan Stanley and Merrill Lynch.

    “Those loans were made available at rock bottom interest rates – in many cases under 1 percent. And the loans could be continuously rolled over so they were effectively available for an average of about two years.”

    So what exactly is the role of these Authorized Participants? According to the Investment Company Institute, an industry group whose members are mutual funds, ETFs, closed-end funds and unit investment trusts, it goes like this:

    “ETF shares are created when an ‘authorized participant’ deposits a daily ‘creation basket’ (or cash) with the ETF. So let’s get the definitions straight.

    “What is an authorized participant? An authorized participant is typically a large institutional investor, such as a broker-dealer, that enters into a contract with an ETF to allow it to create or redeem shares directly with the fund. The authorized participant does not receive compensation from the ETF or the ETF sponsor for creating or redeeming ETF shares.

    “What is a creation basket? A creation basket is a specific list of names and quantities of securities or other assets that may be exchanged for shares of the ETF. The creation basket typically either mirrors the ETF’s portfolio or contains a representative sample of the ETF’s portfolio. The contents of the creation basket are made publicly available on a daily basis.

    “In return for the creation basket or cash (or both), the ETF issues to the authorized participant a ‘creation unit,’ a large block of ETF shares (generally 25,000 to 200,000 shares). The authorized participant can either keep these ETF shares or sell some or all of them on a stock exchange. ETF shares are listed on a number of stock exchanges, where investors can purchase them as they would shares of a publicly traded company.”

    Comparing this process to trading shares of a publicly traded company on a stock exchange is like comparing the Byzantine Empire to Hoboken, New Jersey.

    What could possibly go wrong in this trading model? According to the Investment Company Institute, here’s one possibility:

    “Citigroup, a major AP [Authorized Participant], temporarily ceased transmitting redemption orders to various ETFs that had foreign underlying securities on June 20, 2013, because it had reached an internal net capital ceiling imposed by its corporate banking parent. According to press reports, Citigroup made the business decision to no longer post collateral in connection with redemption activity in these ETFs. Although fewer APs can quickly step into the international space … one large AP that was active in these ETFs was able to process the redemption requests without any problems. In addition, investors could have turned to the secondary market, which was functioning normally and not showing signs of stress, to sell their ETF shares.”

    So what happens when Authorized Participants back away and the secondary market is also under unprecedented stress? Like everything else on Wall Street, there doesn’t seem to be a carefully considered or constructed backup plan.