Yet Another Chart That Screams “Look Out!”

Authored by John Rubino via,

So many patterns that have held for decades seem to have broken down, leading to one of two conclusions: Either this time really is different in ways that appear to violate what used to be seen as iron-clad laws of finance, or those laws have been bent but will reassert themselves with a vengeance sometime in the future.

The latest example is the relationship between corporate debt and default rates on that debt. Historically they’ve moved in the same direction, with higher debt levels leading to higher default rates. That makes intuitive sense because rising debt implies that borrowing is easier for less creditworthy companies who should be expected to default at a higher rate.

But not this time:

Here’s why default rates are subdued even as corporate debt levels hit records

(MarketWatch) – U.S. corporate debt levels stand above crisis highs even as default rates among the most leveraged firms remain subdued.

With an economy hitting its stride, it’s perhaps no surprise that the high-yield bond market is placid. The extent of the divergence between debt levels and defaults, however, is worrying to some analysts who feel rising corporate indebtedness will eventually catch out unwary investors and deflate the junk-bond market.

But beyond complacency John Lonski, chief economist at Moody’s Capital Market Research, argued that globalization and the tendency of U.S. businesses to hoard cash as reasons why corporate debt levels may no longer move in sync with default rates and credit spreads.

The high-yield default rate in the fourth-quarter of 2017 fell to 3.3%, even as U.S. nonfinancial-corporate debt ended in 2017 at 45.4% of GDP. This compares with a much higher default rate of 11.1% in the second quarter of 2009, with corporate debt levels at 45% of GDP. Granted, the current levels come with the economy in the eighth year of an expansion, while the second quarter of 2009 marked the final quarter of the longest and deepest U.S. recession since the Great Depression.

The yield spread between high-yield bonds and safe government paper, as represented by the 10-year Treasury note narrowed to an average 3.63 percentage points in the fourth quarter of 2017, from an average 12.02 percentage points in the second quarter of 2009. The tight credit spreads reflects that borrowing costs are still close to historic lows, and that investors are demanding minimum compensation for holding arguably the riskiest debt in the bond market.

Moody’s Analytics

One answer “might be supplied by the ever increasing globalization of U.S. businesses where the more relevant denominator is not U.S. GDP, but world GDP” said Lonski.

The fortunes of U.S. companies are now woven into the broader global economy. When commodity prices took a hit in 2015 and early 2016, crimping growth in China and other emerging markets, high-yield bonds were also slammed.
With commodity prices on the rise and global growth making a comeback, it’s no mystery that issuers of high-yield bonds aren’t in any serious trouble.

The tendency of U.S. corporations to accumulate cash could also be to blame. Lonski says net corporate debt to GDP, which subtracts total debt levels by the amount of cash in business balance sheets, was at a much more subdued 33.2%, well below the 45.2% seen in the broader debt to GDP measure.

But the meaningfulness of this statistic may be limited by the “high concentration of cash among relatively few companies,” many of which are considered highly creditworthy.

Tech companies like Apple and Microsoft have been the main components of this trend. In the past, such firms issued debt backed by the collateral of their overseas profits for share buybacks and other forms of shareholder remuneration.

So has the correlation between corporate debt and defaults been broken for good or just for now? “Just for now” remains the most likely answer, since the business cycle is embedded in human nature rather than some kind of external constraint that we can evade with clever tricks. In fact, it’s clever tricks – most recently the fiat currency printing press — that fool us into thinking we control events that used to control us.

And is it worth speculating about what might happen to restore those historical relationships – that is, cause a crisis that spikes junk bond defaults and causes corporate debt to start shrinking? Probably not, since there are so many candidates right now. Something will happen and the lines on the above chart will converge in the upper right corner – and then the bottom right.

via RSS Tyler Durden

Liberty Links 3/18/18 – U.S. Government Planned False Flag Attacks, JFK Documents Show

If you appreciate my work and want to contribute to independent media, consider becoming a monthly Patron, or visit the Support Page.

Event Note: I’ll be part of an excellent Bitcoin panel in Denver on April 25th. If you’re in the area or want to be, it’d be great to meet some of you.

Top Links

U.S. Government Planned False Flag Attacks to Start War with Soviet Union, JFK Documents Show (Newsweek)

Saudis Said to Use Coercion and Abuse to Seize Billions (Disturbing but unsurprising article about the U.S. government’s brutal “ally,” The New York Times)

French Judge Issues Arrest Warrant for Daughter of Saudi King (Gotta love the Saudi royal family, The New York Times)

U.S. Arms Exports Surge Amid Growing Middle East, Asian Demand (Explains a lot, Bloomberg)

China to Bar People with Bad ‘Social Credit’ From Planes, Trains (This is nuts, Reuters)

Iran, Syria and Saudi Arabia: Top Three Stunning Admissions From the Top U.S. General in the Middle East (Haaretz)

How A Twitter Fight Over Bernie Sanders Revealed A Network Of Fake Accounts (Really enlightening piece on Twitter bots, Huffington Post)

Bitter Hillary Clinton Trashes America’s Heartland, Calls States That Didnt Vote For Her “Backwards” (Latest reminder of what a jerk she is, YouTube)

Why Are World Leaders Backing This Brutal Attack Against Kurdish Afrin? (David Graeber writing in The Guardian)

Empire Files: Post-Soviet Russia, Made in the U.S.A. (Really good discussion on U.S. intervention in modern Russia, YouTube)

Ron Paul Interviews Nassim Nicholas Taleb (YouTube)

See More Links »

from Liberty Blitzkrieg

China Unexpectedly Names Yi Gang As Next Central Bank Chief

Nearly a month after Reuters reported  that Liu He – a Harvard-educated senior government bureaucrat and longtime friend of Xi – had become the frontrunner to replace outgoing PBOC head Zhou Xiachuan, surpassing banking regulator head Guo Shuqing and veteran banker Jiang Chaoliang who were said to be leading contenders for the PBOC job until last October’s Congress, today the WSJ reported that President Xi Jinping has somewhat unexpectedly picked PBOC deputy governor Yi Gang to run the country’s central bank.

Yi Gang, deputy governor of the People’s Bank of China, and its new

Yi, an American-trained economist who has long pushed for pro-market overhauls will take over from his mentor Zhou Xiaochuan, who has run the People’s Bank of China for a decade and a half and who “steered the institution through the global financial crisis, overhauled monetary policy tools and oversaw the elevation of the yuan to reserve-currency status during his record 15-year term” as Bloomberg recaps.

Yi’s nomination, which was reviewed by nearly the 3,000 delegates to the National People’s Congress on Sunday afternoon, is set to be approved by China’s “rubber-stamp” legislature in a formal vote on Monday.

And for those wondering, no Gang never worked for Goldman Sachs.

* * *

As the WSJ writes, the changing of the guard at the central bank, part of a broad reshuffle of party and government posts following last fall’s inauguration of a new Communist Party leadership, is a key component in Mr. Xi’s effort to shape an economic team, which now mostly consists of his trusted allies in order to cement himself as China’s “president for life”.

Some background from Bloomberg:

Yi joined the central bank in 1997 and served in a succession of roles before promotions to deputy governor and administrator of the State Administration of Foreign Exchange. As head of the currency regulator, he presided over expansion of the world’s largest foreign reserve stockpile, which peaked in 2014 at nearly $4 trillion, along with more loosening of currency trading restrictions and greater emphasis on increasing the yuan’s international use.

Like Zhou, Yi is also a fluent English speaker with longstanding links to global economic leaders. Yi earned a business degree at Hamline University in St. Paul, Minnesota, and a Ph.D. in economics at the University of Illinois before moving to Indiana University at Indianapolis as a professor in 1986, according to his official PBOC biography.

And now comes the hard part: Yi inherits a central bank which while more influential at home and abroad than the one that Zhou took over in 2002, faces much more complex challenges. The biggest threat will be the PBOC’s “calibration” of its response to 3 or more Fed rate hikes this year, while pushing forward with Xi’s financial cleanup and deleveraging campaign without crashing an economy whose debt/GDP according to the IIF is already well above 300%.

Meanwhile, the PBOC will be keeping a watchful eye on accelerating inflation too, and if that wasn’t enough, Yi will also be tasked with maintaining a stable currency just as Trump prepares to launch a trade war with Beijing.

“The PBOC is in more of bind than ever with its monetary policy,” said Zhao Yang, chief China economist at Nomura. “While it was fine to just look at inflation and economic growth targets in the past, the central bank now has to strike a balance among more targets, some of them conflicting.”

Furthermore, the PBOC faces those tasks at a time of major institutional changes. As we reported last week, in a sweeping, $43 trillion overhaul, China merged its bank and insurance regulators, a move which gave the central bank power to write rules for the financial sector, and likely makes it the most powerful body in the new Financial Stability and Development Committee.

Perhaps the biggest unknown is how Lie will respond to a developed world that is shifting away from years of easy money. Jerome Powell succeeded Janet Yellen as Fed chair in February and Bank of Japan Governor Haruhiko Kuroda is set to begin another term. And though European Central Bank President Mario Draghi doesn’t conclude his time in office until late next year, jostling over his replacement has already begun, while the ECB is preparing to end its QE by the end of the year.

* * *

In conclusion, here are the five most pressing tasks that Yi Gang will be facing on his first day as the new PBOC governor, via BBG:

1. Financial Sector

If the $40 trillion financial sector is a ticking time-bomb, then the PBOC governor will be among those sweating over which wire to cut. Reducing risky inter-bank lending, weeding out dangerous behavior by asset managers, and corralling internet credit will all be key tasks, all while trying to prevent funding to the real economy from cratering.

While it’s done a decent job so far with that balancing act, the central bank now also must find its place in a new regulatory structure for the bodies in charge of oversight. Whether the PBOC is the leading light of this effort or one among many may depend on the profile of the new governor. And the clock’s ticking — the financial sector faces further shakeups now that authorities have lifted some curbs on foreign ownership.

2. Policy Framework

How the PBOC interacts with markets in pursuit of its nominal policy goals — maintaining stability in the value of the currency and thereby promoting economic growth — is undergoing a shift. From the credit quotas of the planned-economy era that focused on the quantity of money in the system, the central bank is ultimately headed toward letting short-term interest rates set the price of money, as its global peers have long done.

Under Zhou, the PBOC has developed a bewildering array of instruments to guide market rates — but now it’s trying to focus attention on just two at a time when it’s actually increasing the range of maturities it uses.

Streamlining the policy framework will be a key task for the new governor, especially as the central bank has already announced that it’s moving to a “two-pillar” system that pairs rates policy with tools geared to regulate prices of financial assets.

3. Communication

Of the world’s major central banks, the PBOC talks the least. Whereas Federal Reserve and European Central Bank officials give hundreds of policy speeches each year, Zhou does just a handful.

There are signs, though, that the central bank wants to better explain itself to markets, and has slowly increased commentary this year. In an ever-more complex market environment, Zhou’s successor may have to engage in open-mouth operations a little more.

4. Currency Management

Managing China’s massive capital inflows and outflows, and their effect on the yuan, complicates PBOC efforts to regulate the amount and price of liquidity in the market. It’s a task they may ultimately be glad to be rid of, but for now heading toward a freer-floating yuan is something that the next governor is likely to continue.

Moving in that direction may aid another big goal for Beijing: boosting global use of the yuan. Despite the International Monetary Fund conferring a reserve-currency status last year, the currency’s share of global payments is down from a 2.79 percent peak in August 2015.

5. Inflation

With hefty financial-sector and currency tasks already on its plate, it would be easy for the PBOC to forget a little about its inflation mandate. With a damaging episode of runaway inflation in the 1990s in mind though, Zhou’s successor should keep a close eye on developments.

Consumer prices adjusted for food and fuel held at their fastest since 2011 in October, evidence that surging factory prices are beginning to feed through. The government’s drive to reduce pollution could also spur inflation, making a tightening of policy not unthinkable.

While PBOC has to take instruction from the State Council for major policies, the governor can always leverage his knowledge and experience to guide the direction of the policy debate, said Ding Shuang, chief economist for Greater China & North Asia at Standard Charted Bank Ltd in Hong Kong.

“It’s an important ability to make good arguments for its policies to top leaders, which helps the PBOC find a louder voice among policy makers, even though it may not enjoy full independence,” he said.

via RSS Tyler Durden

Fear of a Free, Prosperous Internet: New at Reason

Say you’ve sprained your ankle. You consult Google, where you find copious information about using compression bandages to stabilize your sprain. But you’d like some back and forth with someone who has experience. You post about your injury on Facebook, triggering a real-time conversation with volunteer first responders offering pro tips.

You then pop over to Amazon, because the nearest drug store is more than 16 miles away and you don’t want to drive with a sprained right ankle. You’ve got too much debt riding on your credit card to add to it blithely, but no problem—you use PayPal to get a bandage delivered to you that same day. And if your sprain leads to hard-to-handle bills, you can put out a call for help using GoFundMe.

A totally banal incident, and unimaginable at every step just two decades ago. Our abilities to learn, discuss, buy, receive, and give have changed magnificently for the better because of the behemoth internet companies on which every step of that dull anecdote hinges, writes Brian Doherty in his review of The Know-It-Alls: The Rise of Silicon Valley as a Political Powerhouse and Social Wrecking Ball by Noam Cohen.

View this article.

from Hit & Run

In Angry Tweetstorm, Trump Accuses Comey Of Perjury, Slams McCabe “Fake Memo”

In one of his signature early morning tweetstorms, President Trump raged on Sunday about the political slant of Special Counsel Robert Mueller’s investigative team and accused former FBI Director James Comey of lying under oath.

The tweets followed an Axios report published late Saturday night claiming that former FBI Director Andrew McCabe – who was fired by Attorney General Jeff Sessions on Friday and was stripped of his pension benefits – had met with Mueller, who asked him about Trump’s firing of Comey nearly a year earlier, and also turned over “contemporaneous” memos that he’d taken detailing his conversations with the president.

According to Axios, the memos contained a corroborating account of Comey’s firing.

Trump claimed that Comey lied during public Senate testimony last Spring, when he said he’d never been an anonymous source for the news media – then admitted that he had “authorized” a friend to leak one of his memos to the New York Times, which Comey said he did in hopes of sparking a special counsel investigation.

In this particular case, Trump may be referencing what he discussed last night, namely that McCabe may himself have jeopardized Comey, a point made by constitutional law professor Jonathan Turley on CNN, who suggested that McCabe’s statement following his firing “immediately” raised a flag, which may lead to serious consequences for his former boss. McCabe’s statement reads in part:

The OIG investigation has focused on information I chose to share with a reporter through my public affairs officer and a legal counselor. As Deputy Director, I was one of only a few people who had the authority to do that. It was not a secret, it took place over several days, and others, including the Director, were aware of the interaction with the reporter.

Turley notes “There was one line in the case statement last night that I immediately flagged. Because he said that he had authority to do this and he conferred with the director – the director at the time was James Comey.”

“Now, the problem there is that James Comey said under oath that he never leaked information and never approved a leak,” said Turley. “So, if the Inspector General believes this was a leak to the media, it raises serious questions about Comey’s previous testimony and could get him into serious trouble.”

This contradicted Comey’s statement under oath that “he never leaked information, and never approved a leak.” Turley continued. “So if the Inspector General believes this was a leak to the media, it raises serious questions about Comey’s previous testimony that could get him into serious trouble.”

And here’s Trump this morning:

Trump then turned his attention to McCabe, saying he “never took notes when he was with me. I don’t believe he made memos except to help his own agenda, probably at a later date. Same with lying James Comey. Can we call them Fake Memos?”

Trump then turned his attention the Mueller probe, and asked why does Mueller have “13 hardened Democrats, some big Crooked Hillary supporters and Zero Republicans? Another Dem recently added…does anyone think this is fair?”

Late last night, Trump tweeted that the Mueller probe “was based on fraudulent activities” and insisted that it should never have been authorized.

In a statement, Trump lead attorney John Dowd said in a Saturday morning to the Daily Beast that “I pray that Acting Attorney General Rosenstein will follow the brilliant and courageous example of the FBI Office of Professional Responsibility and Attorney General Jeff Sessions and bring an end to alleged Russia Collusion investigation manufactured by McCabe’s boss James Comey based upon a fraudulent and corrupt Dossier.” Dowd initially said he was speaking for the president before clarifying his statement, and claiming he was speaking in personal capacity.

In a statement published by McCabe – who was offered a security position by Wisconsin Congressman Mark Pocan, which should allow him to finish his tenure and collect his pension – the former deputy FBI director said that his dismissal was a deliberate effort to slander him and part of an “ongoing war” against the FBI and Mueller’s investigation, according to the Washington Post.

This is likely just the start of Trump’s angry tirade about McCabe’s firing, especially if the career FBI employee does go on to collect his full pension with the help of some Congressional democrats.

via RSS Tyler Durden

India And Pakistan: Inching Toward Their Final War?

Authored by Mohammed Ayoob via National Interest,

Both India and Pakistan have between 120 and 140 nuclear warheads, according to estimates provided by the Arms Control Association. However a report produced in 2015 by the Carnegie Endowment for International Peace and the Stimson Center asserts that Pakistan may be outpacing India in terms of its nuclear stockpile, and may possess 350 nuclear warheads in the next five to ten years. A 2016 SIPRI report confirmed the assessment that Pakistan has more nuclear warheads than India.

However, what distinguishes the two neighbors’ nuclear-weapons programs from each other is not so much the pace of production or the size of the stockpiles, but their radically different nuclear doctrines.

The major difference between the two countries’ nuclear doctrines is that while India has renounced first use of nuclear weapons, Pakistan has refused to do so by reserving its right to use nuclear weapons in the face of India’s conventional superiority.

So far, uncertainty regarding Pakistan’s nuclear threshold is the principal factor preventing a major conflagration in South Asia. Pakistan’s refusal to disavow first use of nuclear weapons, and its emphasis on amassing tactical nuclear weapons and short-range missiles as a corollary of its nuclear doctrine, can be explained in light of its conventional-force inferiority vis-à-vis India. It is in fact a mirror image of the American nuclear doctrine as applied to central Europe during the Cold War. The United States refused to disavow first use of nuclear weapons, and deployed tactical nuclear weapons in central Europe on a large scale, because of NATO’s presumed inferiority in terms of conventional power vis-à-vis that deployed by the Warsaw Pact.

But for Pakistan, the uncertainty introduced by its nuclear doctrine has achieved another major objective as well. It has provided Pakistan with the shield behind which terrorist groups armed and trained by Islamabad, such as Lashkar-e-Taiba and Jaish-e-Muhammad, can engage in acts of terror that create mayhem not only in Indian-administered Kashmir but also in other parts of India. The fear of escalating a conflict with Pakistan to the nuclear level has prevented India from retaliating to these provocations with the massive use of its superior conventional force.

India desisted from retaliating against terrorist bases or Pakistani military installations even when a massive terrorist operation launched from Pakistan targeted India’s financial capital, Mumbai, in November 2008. This attack lasted for more than sixty hours and left at least 174 people dead.

However, it seems that the logic of this deterrence is fast eroding. Attacks such as the one in Mumbai, and subsequent assaults on Indian military installations in Kashmir and elsewhere, have also provided justification for India’s hard-line Hindu nationalists to heighten anti-Pakistan rhetoric, and putting pressure on the Indian government to intensify its military response. In the past few months, Indian retaliatory attacks have targeted not only terrorist bases but also Pakistani military facilities, causing significant casualties among Pakistani forces.

The escalation in the last two years in terror attacks, especially by Jaish-e-Muhammad, with the obvious connivance of the Pakistan army, on Indian military targets in Kashmir and surrounding Indian states has made the situation very perilous. In the past several months, terrorist groups operating from Pakistan have undertaken several such major attacks, causing significant loss of life among Indian security forces.

A major terrorist attack on the Uri camp in Jammu and Kashmir in September 2016, which left seventeen military personnel dead, motivated the Indian government to reassess its strategy for responding to such attacks. On September 29, 2016, India launched its first publicly acknowledged “surgical strike” against terrorist bases in Pakistan. Although there had been speculation that India had conducted such strikes earlier as well, this was the first admission by New Delhi that it was ready to launch major retaliatory attacks against targets in Pakistan and Pakistan-occupied Kashmir.

In the latest incident, in February 2018, Jaish terrorists attacked an Indian military camp in Jammu; five army personnel and four militants were killed. In retaliation, the Indian army destroyed a Pakistani army post with the help of rocket launchers, killing, according to Indian sources, twenty-two Pakistani personnel. This tit-for-tat exchange is reaching dangerous proportions.

So far, the Pakistani military has downplayed Indian incursions and retaliatory attacks and refused to recognize their seriousness, because it does not want to appear weak in the eyes of the Pakistani public, which is then likely to clamor for revenge. However, the Pakistani military cannot continue to downplay Indian attacks, especially in light of the increasing fatalities. There is the danger that at some point, either by miscalculation or by design, an Indian surgical strike in Pakistani territory will push the Pakistani military—which controls the nuclear weapons—to retaliate in force.

If a full-scale war erupts, at some point Pakistan, unable to counter superior Indian conventional forces, could resort to battlefield nuclear weapons, as its doctrine proclaims. While India subscribes to a no-first-use doctrine, it has made it abundantly clear that it will massively retaliate against any use of battlefield nuclear weapons by Pakistan without making a distinction between tactical and strategic nuclear weapons. This strategy, as enunciated in a statement issued by the government of India on January 4, 2003, is designed to inflict unacceptable damage on the enemy.

Former Indian national security advisor Shivshankar Menon elaborated this strategy in his memoirs:

“India would hardly risk giving Pakistan the chance to carry out a massive nuclear strike after the Indian response to Pakistan using tactical nuclear weapons. In other words, Pakistani tactical nuclear weapon use would effectively free India to undertake a comprehensive first strike against Pakistan.”

This is a very scary scenario. Pakistan’s overreliance on its nuclear deterrence, especially its refusal to subscribe to the no-first-use doctrine, when combined with its reckless support for terrorist groups attacking Indian military and civilian targets, could unintentionally usher in a nuclear winter – and spell doom not only for South Asia, but for a much wider area surrounding the subcontinent.

via RSS Tyler Durden

And The US Town With The Highest Average Income Is…

A few days ago, we published a Property Shark analysis of the wealthiest zip codes in America, and found that – to our complete lack of surprise – the wealthiest towns are clustered around the Bay Area and New York City A, attend their own schools, shop at their own stores and live in their own exclusive enclaves of wealth.

While those data were largely anticipated, that study also showed that midwestern and even some southern areas had seen remarkable gains.


The same pattern applies to Property Shark’s latest study, which ascertained the wealthiest zip codes in the country by median income. Contrary to what one might expect, PS found that most of the nation’s 100 most expensive zip codes were on the West Coast, while most of the wealthiest 100 zip codes were on the East Coast.

The ultimate takeaway from these data are that, as one might expect, being able to afford an expensive home doesn’t necessarily mean a wealthy family will buy one. After all, frugality is inevitably one of the traits that helped them accumulate wealth.

* * *

The East Coast Dominates The Light Of High-Earning Zips Codes

Of the nation’s top 100 earning zip codes, 70 are located on the East Coast…

Predictably, there are two areas where most zip codes are clustered: The Northeast with 48 zip codes, and the suburbs around Washington DC, with 28 spots in the top 100.

Going by state, the ranking of the most expensive zip codes for housing was dominated by California, with 77 spots on the list. However, the picture changed drastically when PS looked for the highest-earning zip codes. By that measure, Cali only took 17 spots in the top 100, while New York led with 20 codes. Of those, 8 are located in Manhattan. Most of the others cover well-established communities in Westchester County.

Maryland and Connecticut trail New York and California, each claiming 10 spots in the ranking. New Jersey and Virginia follow, further strengthening the East’s dominance, thanks to the D.C. suburbs. Washington, DC itself only managed to claim 1 spot in the ranking.

Unlike the list of priciest zip codes for home prices, the by-income scale is more heterogeneous, with 15 states taking spots on the list. Virginia, Washington DC, Delaware, Illinois, Texas, and Pennsylvania were all absent from the top 100 most expensive zip codes, but they were present in the homeowner income ranking.

* * *

Here’s Where Zip Codes With $250k+ Income Stand In Terms Of Home Prices

The first 11 highest-earning zip codes all feature a yearly median household income of over $250,000. New York leads with 5 of the 11 zip codes that feature top-bracket median incomes, followed by California with 4 zip codes. Of the top 11 zip codes by median income, the highest ranked based on median sale price is 10013 in Manhattan, which took the 2nd spot.

On the other hand, San Diego’s 92145 did not even make the cut in the 100 priciest zips for housing, although the median income here exceeds $250,000. The median price here clocked in at $1,332,500, not enough to secure it a spot in the top 100. Furthermore, 2 of the 11 zip codes have median sale prices well below $1 million—Chappaqua’s 10514 and Chicago’s 60603. In zip code 60603, the median sale price recorded in 2017 was $495,000 and, with a median gross income of over $250,000, it stands out as the market with the smallest gap between median price and income.

Check out Property Shark’s interactive map here:








via RSS Tyler Durden

Law Prof: Did McCabe Just Throw Comey Under The Bus For Perjury?

Fired FBI Deputy Director Andrew McCabe may have just thrown former FBI Director James Comey under the bus – perhaps intentionally.

Recall that McCabe was fired for, among other things, an “improper media disclosure.” In other words leaking. 

In a Saturday morning appearance on CNN with host Michael Smerconish, Constitutional law professor Jonathan Turley suggested that McCabe’s statement following his firing “immediately” raised a flag, which may lead to serious consequences for his former boss. McCabe’s statement reads in part: 

The OIG investigation has focused on information I chose to share with a reporter through my public affairs officer and a legal counselor. As Deputy Director, I was one of only a few people who had the authority to do that. It was not a secret, it took place over several days, and others, including the Director, were aware of the interaction with the reporter.

Turley notes “There was one line in the case statement last night that I immediately flagged. Because he said that he had authority to do this and he conferred with the director – the director at the time was James Comey.” 

“Now, the problem there is that James Comey said under oath that he never leaked information and never approved a leak,” said Turley. “So, if the Inspector General believes this was a leak to the media, it raises serious questions about Comey’s previous testimony and could get him into serious trouble.

This directly contradicts Comey’s statement under oath that “he never leaked information, and never approved a leak.” Turley continued. “So if the Inspector General believes this was a leak to the media, it raises serious questions about Comey’s previous testimony that could get him into serious trouble.”


Turley writes in The Hill:

McCabe is accused of misleading investigators about allegedly giving information to a former Wall Street Journal reporter about the investigation of Hillary Clinton and the Clinton family’s charitable foundation. McCabe asserts in his post-firing statement that he not only had authority to “share” that information to the media but did so with the knowledge of “the director.” The FBI director at the time was Comey. The Hill

Turley continues: 

If the “interaction” means leaking the information, then McCabe’s statement would seem to directly contradict statements Comey made in a May 2017 congressional hearing. Asked if he had “ever been an anonymous source in news reports about matters relating to the Trump investigation or the Clinton investigation” or whether he had “ever authorized someone else at the FBI to be an anonymous source in news reports about the Trump investigation or the Clinton investigation,” Comey replied “never” and “no.”

Former FBI Assistant Director Chris Swecker said on Friday that the upcoming OIG report will contain some “pure TNT,” whenever it comes out – which should shed more light on the FBI’s transgressions surrounding the 2016 U.S. election. 

The timing of McCabe’s statement and Comey’s apparent perjury comes at an inconvenient time for the former FBI director, who’s selling $100 tickets to attend stops on his upcoming book tour to promote: “A Higher Loyalty: Truth, Lies, and Leadership.”

As Turley notes, “If he gave McCabe the green light for his “interaction,” the title could prove embarrassingly ironic.”

via RSS Tyler Durden

“The Only Full Fridge In Venezuela Is In The Morgue”: Tomas Paez

Authored by Sabrina Martin via,

Sociologist Tomas Paez argues that the disastrous socialist public policy of Chavez and Maduro has been the primary factor in the massive exodus from Venezuela.

“The main cause of Venezuelan emigration is socialism of the 21st century,” said sociologist Tomás Páez, coordinator of the Global Project of the Venezuelan Diaspora; responding to Nicolás Maduro’s comments admitting to a “brain drain” in the country.

The Venezuelan dictator said on Wednesday, March 14, there existed a massive “brain drain” in Venezuela, and also confessed that the diaspora is seeking to “improve their life abroad.”

“There are some young people who have left Venezuela with the idea of improving their life abroad. It’s okay, go and come back because they will not find a better country than Venezuela,” said Maduro.

But Maduro conceals that most migrants are doing so to escape the dictatorship and its disastrous consequences.

“The Cause of Venezuelan Emigration is Socialism”

According to studies of the Global Project of the Venezuelan Diaspora, since Hugo Chávez and his successor Maduro came to power, more than three million citizens have decided to leave Venezuela. The main causes, it says, are insecurity, impunity, and of course, the unprecedented economic crisis.

In an interview, the sociologist Tomás Páez explained the reasons for this massive exodus and explained why “migration is always good.”

What are the main reasons why Venezuelans have decided to leave their country?

There are two fundamental reasons that are summarized in the following sentence: the only full refrigerator in Venezuela is in the morgue. This phrase summarizes the two main problems facing Venezuelans: insecurity and economic deterioration.

This is fueled by the great problem that is the socialist model that was installed in Venezuela and that has destroyed the country.

When we asked Venezuelans if they were willing to return, the majority answered yes, but not in these conditions.

The Venezuelans we interviewed responded that in order to return to their country it would be necessary to change the political model and that the country need prioritize the right to property and the most important thing of all: the right to life.

What do Venezuelans look for when they leave their country?

Venezuelan migration has more or less repeated the same pattern of all Latin American emigration. The desired destinations offer greater freedom and development: generally those in the north, such as the United States, Canada, and countries of the European Union.

However, in recent years, due to the economic failure of Venezuela, which has impoverished 87% of the population, it has become impossible to buy plane tickets to those northern countries, so now the migrants decide to go by land and reach countries such as Colombia, Brazil, Ecuador, Peru, Chile, Uruguay, Argentina, Panama and even by sea, to the Caribbean islands.

I give the example of a university professor who earns between 5 and 7 dollars a month; a university professor in Venezuela would have to work between 15 and 18 years without stopping to buy a plane ticket; that’s why now they emigrate by bus, on foot, or by boat.

What is the economic profile of Venezuelan migrants?

From Venezuela, more and more people of lower socioeconomic status are leaving, but, above all, it remains working professionals.

Most of the Venezuelan society has been impoverished, except those who have done business with the Chavez and Maduro regimes; all others have become impoverished.

“A university professor in Venezuela would have to work between 15 and 18 years without stopping to buy a plane ticket”

Impoverished people are leaving, but most of them have studied at the college level, but with their salaries in Venezuela, they can’t even buy a bicycle. The migrants are young entrepreneurs with a high level of academic training.

There are three million Venezuelans distributed in 90 countries in more than 300 cities in the world today.

What are the consequences of this massive exodus from Venezuela?

I must emphasize that for the government there is no diaspora. The regime does not disclose emigration statistics. All the information we obtain, therefore, we do with the help of other countries.

We go to Venezuelan organizations throughout the world, to researchers from different universities, because currently, the Maduro regime hides the records, so that they can deny what is happening.

” Those who have left have been able to develop their skills, learn, and make new contacts”

In Venezuela, there is no brain drain as the government says. If those people had stayed in the country, they would not have jobs or access to technology or research. There would be no possibility to study.

Although all socialism generates a diaspora, fortunately, those who have left have been able to develop their skills, learn, and make new contacts,

What is your impression in relation to the migratory policies followed by countries such as Peru, Colombia, Argentina, etc?

Every time I can, I thank all these countries for the aid they are giving to Venezuelans. They are nations that have understood the situation and have assumed that migration is always good.

How do you explain to the world the contention that migration “is always good”, especially at a time when xenophobia is increasing?

Emigration is not just about people; these people also represent knowledge and investment. The countries that have grown the most economically for decades did so because of the great contribution of migrants. As occurred in Venezuela in the late 70s, or with countries like the United States that are full of migrants.

“Migration adds value, knowledge, and skill.”

For example, in Europe rice companies grew by 300% thanks to the arrival of migrants who consumed much of that product. It is a chain; the migrants began to demand rice and then their subsequent sales grew: that impelled the production and the hiring of new workers for cultivating and harvesting rice. Migration adds value, knowledge, and skill.

via RSS Tyler Durden

Trump Asked Saudi King For $4 Billion So US Troops Can Leave Syria

The Washington Post has revealed that President Trump attempted to extricate US troops from Syria by asking ally Saudi Arabia to foot the bill for postwar reconstruction and “stabilization” projects in the area of northeast Syria currently occupied by US coalition forces, to the tune of $4 billion. The deal would involve US allies like Saudi Arabia moving into a lead position regarding coalition policy in Syria, while hastening a US exit.

Though the coalition continues to claim that its occupation of Syrian soil is toward anti-terror and humanitarian efforts, including the reestablishment of civilian infrastructure in a region previously controlled by ISIS, America’s top general, CENTCOM chief Gen. Joseph Votel, admitted in congressional testimony this week that the Syrian government along with its Russian and Iranian allies have effectively won the war.

General Votel’s very frank admissions on Syria stunned hawks like Senator Graham, who were looking for more muscular policy goals. The Washington Post summarized this part of the exchange as follows

[A]sked on Tuesday in a Congressional hearing if Bashar al-Assad had “won”, Gen. Joseph Votel, head of US Central Command, replied, “I do not think that is too strong of a statement. I think [Russia and Iran] have provided him with the wherewithal to be ascendant at this point.”

Senator Lindsey Graham asked Votel, “And it is not your mission in Syria to deal with the Iranian-Assad-Russia problem?” Graham asked Votel. “That’s not in your ‘things to do,’ right?”

The general replied, “That’s correct, senator.”

Votel declined to say whether he believed the US military should pursue that broader objective. And asked whether it was still policy that Assad must leave power, Votel said: “I don’t know that that’s our particular policy at this particular point. Our focus remains on the defeat of ISIS.”

However, US policy does remain fundamentally aimed at preventing Assad and his allies from reasserting control over oil and resource rich northeast Syria, and this is where Trump reportedly envisions the Saudis as having a greater role to play, taking the pressure off US forces.

According to the Washington Post the deal was articulated by Trump directly to Saudi Arabia’s King Salman in a December phone call. The Post reports:

In a December phone call with Saudi Arabia’s King Salman, President Trump had an idea he thought could hasten a U.S. exit from Syria: Ask the king for $4 billion. By the end of the call, according to U.S. officials, the president believed he had a deal.

The White House wants money from the kingdom and other nations to help rebuild and stabilize the parts of Syria that the U.S. military and its local allies have liberated from the Islamic State. The postwar goal is to prevent Syrian President Bashar al-Assad and his Russian and Iranian partners from claiming the areas, or the Islamic State from regrouping, while U.S. forces finish mopping up the militants.

But missed (or more likely deliberately ignored) by the Post reporters is the central irony that Saudi Arabia could possibly “stabilize” anything in Syria at all. As the New York Times concluded in a lengthy investigation over the kingdom’s role in fueling the rise of ISIS and directing the broader jihadist insurgency in Syria, the Saudis are “both the arsonists and the firefighters” in Syria and throughout the region.

Revelation of the $4 billion proposed deal comes as Crown Prince Mohammad bin Salman is set to arrive in Washington on Monday for high level talks with US officials, including a Tuesday meeting with President Trump. The Saudi Embassy in Washington refused to comment on the offer, and neither side has yet confirmed or denied that a deal was reached or is in the works.

Last month the US announced a mere $200 million pledge toward reconstruction efforts in Syria – a paltry sum (considering total rebuilding costs have been widely estimated at $200-350 billion) perhaps intended to highlight the need of other countries to share in the burden. The Washington Post continues:

For Trump – who has long railed against insufficient burden-sharing by allies under the U.S. security umbrella – getting others to foot the bill for expensive postwar efforts is important. A $4 billion Saudi contribution would go a long way toward U.S. goals in Syria that the Saudis say they share, particularly that of limiting Assad’s power and rolling back Iran’s influence. By comparison, the United States last month announced a $200 million donation to the stabilization effort.

The more simple translation of Trump’s message to the Saudis seems to be something like this: “Our occupation of Syria is costly. If you don’t want Assad and Iran to regain the whole country, then you’re invited to take over the occupation yourselves.” 

Judging by Trump’s recent maneuvers with the Saudis and CENTCOM chief Votel’s congressional testimony, it appears we are in for more long, painful mission creep and perpetuation of the illegal occupation of Syria with no end in sight. 

via RSS Tyler Durden