In early October, when speaking before the NY Fed, Bridgewater’s Ray Dalio made a prophetic warning: a 1% rise in yields from near-record low level would trigger “the worst decline in bonds since the 1981 bond market crash.” Less than two months later he has been proven right because while we have yet to see a move quite as large as the one Dalio envisioned, the November surge in global yields has already resulted in the worst monthly loss in the Bloomberg Barclays Global Aggregate Total Return Index, which lost 4% in November, the deepest slump since the gauge’s inception in 1990, and equivalent to $.17 trillion in losses. Over the past two months, the cumulative loss in the index’s market value is now a massive $2.8 trillion leading leading Bloomberg to declare that “the 30-year-old bull market in bonds looks to be ending with a bang.“

The conventional wisdom behind the move is by now familiar: hopes for U.S. economic momentum and Donald Trump’s election win,  with promises of tax cuts and $1 trillion in infrastructure spending, have spurred investors to dump debt that was offering near-record-low yields and pile into stocks.

Calling an end to the three-decade bond bull market is no longer looking like a fool’s errand: the Federal Reserve is expected to start raising interest rates — and do so more often than once a year, inflationary expectations are climbing and there are hints global central banks may be buying fewer sovereign securities going forward. Investors pulled $10.7 billion from U.S. bond funds in the two weeks after Trump’s victory, the biggest exodus since 2013’s “taper tantrum,” while American stock indexes jumped to record highs.

“A lot of people are beginning to think that it is the end of the bull rally,” said Roger Bridges, the chief global strategist for interest rates and currencies in Sydney at Nikko Asset Management’s Australia unit, which oversees $14 billion. U.S. 10-year yields may rise to 2.7 percent in January, Bridges said. “The trend is your friend.”

While the market’s fixation has been on recent equity market gains, the reality is that these have been more than offset by mark-to-market losses across the bond world. According to Bloomberg, the record rout which wiped our $1.7 trillion from the global index’s value in November, is nearly three times greater than the gain in world equity markets’ capitalization which rose by a more modest $635 billion.

And, as noted this morning, the pain continues: the yield on 10-year U.S. notes rose 56 basis points in November, the biggest jump since 2009, and was at 2.41% in early trading on Thursday. The average yield on the Bloomberg Barclays Global gauge climbed to 1.61 percent on Nov. 23, after touching a record low of 1.07 percent on July 5.

The rise in yields shows the limitations of the quantitative easing policies at the biggest central banks, Bridges said. Bonds will be especially vulnerable if the European Central Bank discusses reducing its debt-purchase program at its Dec. 8 meeting, he said.

With many investors having shifted out of risky assets and into duration in the past year, it remains to be seen how much of this loss will impact retail investor’s investing psychology once month-end P&L statements are sent out at the end of the month.

via http://ift.tt/2gLKiXf Tyler Durden

Hold your real assets outside of the banking system in one of many private international facilities  –>    http://ift.tt/2cyFwvQ;

 

 

 

 

The Fake News Witch Hunt: McCarthy’s Red Scare Redux

Posted with permission and written by Dave Kranzler (CLICK HERE FOR ORIGINAL)

 

 

“Good night and good luck.” – Edward R. Murrow

 

The Washington Post – I should say, Jeff Bezos’ Washington Post – ran an article last week which featured a report from an organization called “PropOrNot” which claims it used “a combination of manual and automated analysis…in order to identify (“red flag”) [actual quote from the site, verbatim] the following as Russian propaganda outlets.”

 

Hmmm…”red flag” as in, “Red Scare?” In what is a bona fide rebirth of McCarthyism, PropOrNot claims to be “an independent team of concerned American citizens with a wide range of backgrounds and expertise” that is currently “volunteering time and skills to identify propaganda – particularly Russian propaganda…”

 

Seriously, is this some kind of joke? Is this the same group of “professionals” who devise the “seasonal adjustments” used to brew up Government economic reports? Has anyone vetted this organization? Apparently Jeff Bezos is unable to answer any of those questions or, as a responsible purveyor of “independent” journalism he would dispelled these questions by disclosing the credibility of this group up front.

 

You’ll note that I specifically single out Jeff Bezos. Bezos was quietly appointed by the Secretary of Defense to the Defense Innovation Advisory Board in July. The Board was formed in March 2016 to “focus on new technologies and organizational behavior and culture.” The Board has been asked to “identify innovative private-sector practices and technological solutions that the DoD could employ in the future.”

 

Clearly this is straight of Orwell’s playbook. It has behavioral modification and thought control seeping from every pore. It is a Deep State operation and Jeff Bezos is now part of the Deep State fabric.

 

This is Orwell’s Thought Police. The new “advisory board” is headed up by Google’s Eric Schmidt. Recall that right after the primaries if you typed “Presidential election” in a Google search bar the first item that popped up was picture of Hillary Clinton standing in front of the Presidential seal. It was eventually removed.

 

This blog was listed as one of the 200 websites that “reliably echo Russian propaganda.” I’m quite honored to be listed among many of the well-respected sites on “the list.” Several readers emailed me to say that “you must doing something right” to be included on that ridiculously absurd “Red Scare” list.

 

The two gentlemen who should be most offended are David Stockman and Dr. Paul Craig Roberts, both of whom stick out prominently on the list. Stockman and Dr. Roberts are former high-level Government officials. Both were, among a long list of prestigious and patriotic accomplishments, members of Reagan’s Cabinet. The accusation that they are conduits for Russian “fake news” is not only absurdly idiotic, it’s libelous terrorism.

 

This development is yet another move down that slippery-slope to Totalitarianism on which the United States Government is sliding. In the 1950’s a Senator named Joseph McCarthy implemented a raging Congressional witch-hunt for “communists.” The inquisition featured more than a month of televised hearings that began looking for communists in Government. For over two years McCarthy was allowed to conduct inquisitions which extended beyond Washington DC and which eventually pointed the finger at prominent writers and famous Hollywood personalities. He singularly destroyed highly successful people in all areas of society. It was an absolute tragedy and a complete disgrace to this country.

 

Fortunately, Edward R. Murrow featured a report that undermined McCarthy’s Red Scare witch hunt. McCarty was eventually censored by the Senate and, even more fortunately, died in 1957.

 

Unfortunately, American journalism no longer has the likes of an Edward R. Murrow – or even Woodward and Bernstein. Corporatism and the Deep State has succeeded in eradicating unbiased and truthful mainstream journalism. The Alternative Media – like the sites featured on the PropOrNot Red Scare list – represent a bona fide attempt to present the truth to the public.

 

I predict this PropOrNot movement, sponsored by the likes of Jeff Bezos and Eric Schmidt, is going to succeed in shutting down the one ray of hope left for this country. Jeff Bezos’ Washington Post has taken the lead in this modern version of a McCarthyism “witch hunt” and the WaPo exemplifies the amount of political power and wealth being directed at suffocating the truth. It is Orwell’s playbook unfolding in front of us.

 

Good night and good luck.

 

 

Please email with any questions about this article or precious metals HERE

 

 

 

 

The Fake News Witch Hunt: McCarthy’s Red Scare Redux

Posted with permission and written by Dave Kranzler (CLICK HERE FOR ORIGINAL)

via http://ift.tt/2gb9rd1 Sprott Money

Following a November to remember, which saw tremendous market gains following the election of Donald Trump, December has started off on the back foot, with US equity futures lower, European stocks halting a two day advance ahead of the Italian referendum, US Treasury yields higher and the US dollar backing away from a 9 month high.

One place where recent euphoria has continued was oil, where following yesterday’s OPEC oil deal and 9% surge in crude, WTI continued its ascent and was trading above $50 in early trading, however skepticism about the rally is building with stories such as “Oil price rally likely short-lived as OPEC deal not enough to reduce glut” from Reuters and “Hangover Awaits as OPEC Celebrates Its Biggest Accord in Years” from Bloomberg.

Analyst were also skeptical: “Oil could go up to $60, but then the shale drillers come out and the price will likely come back down,” Keigo Matsubara, chief financial officer of the Japanese trading house said in an interview Thursday. “Oil can’t continue over $50.” 

“The question is whether this (production cut) is going to put a floor under the oil price from here. The answer to that could well depend on what happens with the global economy in the coming year,” said Simon Smith, chief economist at FXPro.

All eyes are now on whether the OPEC deal will hold together. If the bounce in oil prices gathers pace after the OPEC deal it was expected to have a broad implication on the global economy. OPEC’s output cut is also seen as a boon for U.S. shale producers, rivals to the oil cartel. The S&P energy index .SPNY jumped nearly 5 percent on Wednesday.

While November may have been one of the most unforgettable months in markets in years, December is shaping up just as exciting: this is the month of the Italian referendum, the Austrian election (where Europe’s first far right leader since WWII could be elected), a probable Fed hike (only the second in 10 and a half years) and a big ECB decision on what next for QE.

Ahead of these events, the U.S. dollar declined against most of its 16 major peers before a payrolls report on Friday, while a measure of euro volatility jumped to the highest since before the Brexit vote as investors brace for Italy’s referendum and Austria’s presidential election on Dec. 4 and the European Central Bank’s policy decision in a week’s time.

The jump in oil prices added to inflation expectations in the United States, which were already rising on prospects that president-elect Donald Trump would adopt reflationary policies using a large fiscal stimulus. As a result the rout in U.S. Treasuries resumed, with yields pushing higher, especially on longer-dated bonds. 

The overnight slump in Treasuries extended the biggest climb in 10-year yields since 2009. The 10Y Treasury yield increased three basis points to 2.41% after surging nine basis points Wednesday to their highest close since July last year. It jumped 56 basis points last month. The 30-year yield has climbed more than 40 basis points since the Nov. 8 presidential election, heading back towards a 14-month peak of 3.09 percent marked last week.

“Higher oil prices, talk of ultra-long issuance in the U.S. and strong U.S. data all helped push U.S. yields higher,” RBC Capital markets said in a note to clients on Thursday. “This remains our key theme for next year as well – we believe U.S. yields will keep leading the charge higher on improving macro backdrop and rising inflation expectations.”

10Y German bunds added 4 bps to 0.31%. Not surprisingly, according to Roger Bridges, the chief global strategist for interest rates and currencies in Sydney at Nikko Asset Management’s Australia unit, “a lot of people are beginning to think that it is the end of the bull rally.” The Bloomberg Barclays Global Aggregate Total Return Index of bonds fell 4 percent in November, biggest decline since index started in 1990.

The Stoxx Europe 600 Index lost 0.5% as all but three of the 19 industry groups retreated. S&P 500 Index futures slid 0.1 percent, signaling U.S. shares may continue their Wednesday decline. Glencore Plc gained 3 percent after saying its debt reduction plan is on track and it will reinstate its dividend next year. Banco Popular Espanol SA rose 3.5 percent after a report the lender is weighing a potential merger with another bank and has approached Banco Bilbao Vizcaya Argentaria SA, among others. Daily Mail and General Trust Plc rose 6.4 percent after it reported 2016 revenue that beat estimates.

“We are all waiting for the NFP tomorrow, the referendum in Italy this weekend and the ECB next week,” Athanasios Vamvakidis, head of G-10 currency strategy at Bank of America Merrill Lynch, said in an email. “It’s consolidation ahead of key events.”

Today, traders will be looking to non-farm payrolls data for more clues on the pace of interest-rate increases, after ADP Research Institute reported the biggest jump in private-sector workers since June.

Market Snapshot

• S&P 500 futures down 0.1% to 2196
• Stoxx 600 down 0.5% to 340
• DAX down 0.7% to 10569
• German 10Yr yield up 4bps to 0.31%
• Italian 10Yr yield up 1bp to 2%
• Spanish 10Yr yield up 1bp to 1.57%
• S&P GSCI Index up 0.5% to 378.9
• MSCI Asia Pacific up 0.6% to 137
• Nikkei 225 up 1.1% to 18513
• Hang Seng up 0.4% to 22878
• Shanghai Composite up 0.7% to 3273
• S&P/ASX 200 up 1.1% to 5500
• US 10-yr yield up 3bps to 2.41%
• Dollar Index down 0.27% to 101.23
• WTI Crude futures up 0.5% to $49.70
• Brent Futures up 0.7% to $52.21
• Gold spot down 0.4% to $1,168
• Silver spot down 0.8% to $16.38

Top Global News

• Starboard Said to Push Rockwell Collins to Reassess B/E Deal: Activist said to take Rockwell Collins stake to push for sale
• Destructive Hacks Strike Saudi Arabia, Posing Challenge to Trump: Multiple attacks eminated from Iran, digital evidence suggests
• China Factory Gauge Jumps as Borrowing Boosts Old Drivers: Manufacturing PMI rises to 51.7, services advance to 54.7
• Credit Suisse Said to Freeze Accounts in Search for U.S. Assets: U.S. prosecutors now asking why $200 million was hidden
• Goldman Sees Oil Breaking $60 If OPEC Deal Done as Promised: Full OPEC compliance, Russia’s curb bullish for oil
• United May Amend $12.4 Billion Airbus Deal to Take Smaller Jets: CFO Levy says A350-1000s may be swapped for smaller aircraft
• SAC Capital to Pay $135 Million to End Last Insider Case: Steve Cohen’s old firm agrees to settle with Elan shareholders
• Georgia Won’t Publish Chicken Price This Week on Lack of Data: Agriculture department says too few producers participating
• Russia Weaponized Social Media in U.S. Election, FireEye Says: Senate Democrats want data on Russian hacking declassified

* * *

Looking at regional markets, Asia stocks shrugged off the weak close in the US and traded higher across the board amid encouraging Chinese PMIs and strength in energy following the OPEC output deal. Energy names led in the ASX 200 (+1.1%) on the back of an almost 10% surge in oil prices after OPEC reached an agreement to cut output by 1.2mln bpd to 32.5mln bpd starting in January. Nikkei 225 (+1.2%) initially soared to its best level this year on JPY weakness after USD/JPY broke above 114.00 in the prior session, although the index failed to maintain YTD highs on profit taking and a pull-back in USD/JPY. Shanghai Comp (+0.7%) and Hang Seng (+0.3%) were underpinned after Chinese Official Mfg PMI topped estimates to post its highest since July 2014 and although the Caixin Mfg PMI was at a slight miss, it still represented a 5th consecutive month of expansion. 10yr JGBs saw spill-over selling from USTs, with demand for JGBs also dampened amid gains in stocks. However, 10yr JGBs pared some losses despite a softer 10yr auction than the previous month, as the results were deemed roughly consistent with this year’s averages.

• Chinese Manufacturing PMI (Nov) 51.7 vs. Exp. 51.0 (Prey. 51.2), highest level since July 2014.
• Chinese Non-Manufacturing PMI (Nov) 54.7 (Prey. 54.0) highest level since June 2014.
• Chinese Caixin Manufacturing PMI (Nov) 50.9 vs. Exp. 51.0 (Prey. 51.2).

Top Asian News

• PBOC Seen Shifting Focus in Yuan Battle as Foreign Reserves Drop: China said to have set up new hurdles for yuan, M&A outflows
• India Manufacturing PMI Slips From 22-Month High After Cash Ban: Nov. reading was 52.3, first indicator since cash decision
• Rupee’s November Swoon Casts Shadow on India Unhedged Debts: India Inc. due to repay $10 billion of overseas debt by March
• Alphadyne Said to Spin Off $2 Billion Singapore Hedge Fund Unit: Transition to new firm said to start in first half of 2017
• DBS Eliminates a Dozen Jobs at Brokerage as Trading Slumps: Value of shares traded in city-state down 24% from 2013

European equities have spent the session in the red (Euro Stoxx: -0.4%) with underperformance seen in defensive names. This comes after the significant strength seen during yesterday’s session in tandem with the OPEC deal, with energy names continuing to outperform today. Financials are also higher this morning, with Deutsche Bank leading the way higher in the DAX, Italian Banks the best performers in the FTSE MIB and Banco Popular the best performer in Europe after dual reports of potential interest from BBVA and reports that the chairman may be replaced. Fixed income markets have seen yields rise, with the US 10Y breaking above 2.4% to reach its highest level since July 2015, while over in Europe outperformance has been seen in the periphery. Also of note, today sees supply from both Spain and France.

Top European News

• Glencore’s Reversal of Fortune Marked by Return to Dividends: Investors weren’t expecting a dividend reinstatement, Goldman says
• Maersk Line Teams Up With Oetker Group to Buy Hamburg Süd: World’s No. 1 shipping line will take over the industry’s seventh biggest container liner
• Euro-Area Manufacturing Picks Up as Weaker Euro Bolsters Exports: Purchasing Managers’ Index for manufacturing rose to 53.7 from 53.5 in October

In currencies, the dollar slipped 0.2 percent to 114.27 yen at 10:15 a.m. in London. It weakened 0.3 percent versus the euro to $1.0616, while the pound was also up 0.3 percent to $1.2544. Bloomberg’s Dollar Spot Index slid 0.2 percent after advancing 0.5 percent Wednesday, leaving it up 3.9 percent in November, the most since September 2014.  Traders are paying the most since June’s peak to protect against price swings in the euro versus the dollar, according to one-week implied volatility in the currency pair. The yuan dropped 0.1 percent onshore, reflecting dollar strength, and gained 0.2 percent offshore amid strengthening factory gauges and a crackdown on capital flow.

In commodities, West Texas Intermediate crude added 0.9 percent to $49.87 a barrel after trading as high as $50.24 earlier. It surged 9.3 percent last session, the biggest one-day gain since Feb. 12. It ended November up 5.5 percent. The OPEC-led deal was broader than many people had expected, given that it extended beyond the bloc with Russia agreeing to unprecedented cuts to its own output. U.S. natural gas futures for January rose to highest for front-month contract since December 2014 as cold weather seen sweeping west. Gold slipped 0.3 percent to the lowest level since February. Zinc gained 0.6 percent, while copper fell 0.8 percent. Metals in London in November had their best month since 2010.

Looking at the day ahead, we’ll firstly get the latest weekly initial jobless claims reading, followed then by the final manufacturing PMI revision, construction spending and the ISM manufacturing print for November (market consensus is for 52.5 versus 51.9 in October). Later the November vehicle sales numbers will also be released (expected to decline modestly). Away from the data the Fed’s Mester and Kaplan are both due to speak again, while the ECB’s Coeure is also scheduled to speak.

US Event Calendar

• 7:30am: Challenger Job Cuts y/y, Nov. (prior -39.1%)
• 8:30am: Initial Jobless Claims, Nov. 26, est. 253k (prior 251k)
• 8:30am: Fed’s Mester speaks in Washington
• 9am: Fed’s Kaplan speaks in San Antonio
• 9:45am: Bloomberg Consumer Comfort, Nov. 27 (prior 44.8)
• 9:45am: Markit US Manufacturing PMI, Nov. F, est. 53.9 (prior 53.9)
• 10am: ISM Manufacturing, Nov., est. 52.5 (prior 51.9)
• 10am: Freddie Mac mortgage rates
• 10:30am: EIA natural-gas storage change

* * *

DB’s Jim Reid concludes the overnight wrap

Welcome to December the month of the Italian referendum, the Austrian election (where Europe’s first far right leader since WWII could be elected), a probable Fed hike (only the second in 10 and a half years) and a big ECB decision on what next for QE. So it is unlikely to be quiet. Ahead of this today I find out whether my second knee operation in 18 months was a success or not as the 5-month MRI results will be reviewed by the consultant. Last night I spent an hour on YouTube learning to self diagnose the CD of the scan which was probably a very silly thing to do. All I know is there is a river of swelling still slushing around my knee and that my meniscus doesn’t look anything like the 25-year olds I saw on the YouTube clip.

One asset that made a very late run towards the top was Oil. OPEC yesterday announced their first oil production agreement in 8 years which will see production cut by 1.2 mmb/d to about 32.5 mmb/d for six months from the start of January 2017, with the option to extend the agreement to the end of 2017. Aggregate production has been stated in terms of the 14 OEPC members including Indonesia, although Indonesia is no longer a member as of this meeting. Non-OPEC members including Russia have also agreed to lower production by 600 kb/d. The heavy lifting though looks set to be done by Saudi Arabia who has agreed to reduce output by 486 kb/d. At the same time the Saudi’s appear to have softened their stance on Iran somewhat with the latter now freezing production at just shy of 3.8 mmb/d and marginally higher than current levels. Iraq, who had previously disputed cutting, agreed to a cut of 210 kb/d.

By the end of play WTI had closed up +9.31% at $49.44/bbl. It had been up a little more than 10% at one stage although just failed to break the $50/bbl mark. Brent had no such issue though and smashed through $50 to close +9.55% or $4.50 higher on the day at $51.84/bbl. The move for WTI in particular is the biggest one-day gain since February 12th. In fact we thought it would be interesting to see how many times WTI has risen more than yesterday on a single day. Bloomberg pricing data goes back to 1983 and in the 8435 trading days since then, yesterday ranks 33rd by largest one day moves in both percentage terms and also in Dollar terms.

Our commodity strategists pointed out in their note last night that the agreement is more bullish than market expectations in that first, the 33.0 mmb/d upper limit in the range has been omitted, leaving the 32.5 mmb/d as the sole target level. Second, the non-OPEC contributions of 600 kb/d have been described as nearly agreed, with Russia and Oman having been named as key contributors. That said while the agreement is clearly a big help for the demand-supply rebalancing, our colleagues still remain sceptical that the full non-OPEC reduction will be realised. They retain their pre-existing expectation of OPEC-14 production at 33.2 mmb/d in 2017 (32.46 mmb/d excluding Indonesia which has now left the organisation) and reaffirm their price forecasts for next year at $55/bbl for Brent and $53/bbl for WTI.

The biggest feed through to other asset classes from the Oil move was in sovereign bond markets where the reflationary effect had yields spiking higher. 10y Treasury yields surged 9bps to 2.382% after peaking a little above 2.400%, and in the process closed at the highest yield since July 2015. Yields are now over 100bps higher than where they were just 5 months ago. There was a similar move for EM sovereigns while in Europe 10y Bund yields edged up just over 5bps to 0.271%. BTP’s outperformed again with 10y yields ‘only’ 4bps higher. Aiding the bond-selloff though was some decent data in the US. In particular the ADP employment change reading which came in ahead of consensus at 216k (vs. 170k expected) ahead of tomorrow’s payrolls. More on the other data shortly.

Meanwhile it was a much more mixed performance across equity markets. Despite a near 5% rally for the energy sector and also a strong day for financials following a positive reaction to the appointment of Steven Mnuchin as US Treasury Secretary – who has since told CNBC to expect ‘the largest tax change since Reagan’ – and the move for rates, those gains were more than offset by weakness across utilities, telecoms and the consumer staples sectors resulting in the index closing down -0.27% by the final bell. It was a slightly better tone in Europe though with the Stoxx 600 edging up +0.31% while the Italian FTSE MIB (+2.23%) concluded its second consecutive >2% bounce ahead of this Sunday’s referendum.

This morning in Asia, with Oil largely consolidating gains, a surge for energy stocks has led bourses higher in the region. The standout is the Nikkei (+2.15%) which has also benefited from a much weaker Yen yesterday, while the Hang Seng (+0.69%), Shanghai Comp (+0.52%), Kospi (+0.08%) and ASX (+0.91%) have also edged higher. Helping sentiment too was the release of the November PMI’s in China this morning. The official manufacturing PMI has risen 0.5pts to 51.7 (vs. 51.0 expected) and to the highest since July 2014, while the non-official PMI rose 0.7pts to 54.7 which is the highest since June 2014. The independent Caixin survey did however paint a slightly different picture with the manufacturing reading edging down 0.3pts to 50.9 with most sub indices also softening.

Back to the remaining US data yesterday. There was a positive readthrough from the latest personal income print which rose +0.6% mom in October (vs. +0.4% expected), with data in the month prior also revised up. Personal income rose +0.3% mom during the month (vs. +0.5% expected) but September data was revised up two-tenths meaning the YoY rate rose to +4.2% and the most since January 2015. The PCE core rose +0.1% mom as expected while the deflator rose a little bit less than expected (+0.2% mom vs. +0.3% expected). Meanwhile, the Chicago PMI rose a bumper 7pts to 57.6 (vs. 52.5 expected) which is the highest since January 2015 and a positive read across for today’s ISM manufacturing. The final data to note was the October pending home sales data where sales were reported as rising +0.1% mom as expected in October.

Before we move to today’s diary, a quick wrap up of yesterday’s data in Europe. The highlight was perhaps the flash Euro area CPI report for November which revealed headline inflation of +0.6% yoy which is up one-tenth from October and in fact the highest reading since April 2014. The core was unchanged at +0.8% yoy. In Germany retail sales rose a bumper +2.4% mom in October (vs. +1.0% expected) while Germany’s unemployment was reported as holding steady last month at 6%. In France, CPI came in slightly ahead of consensus for last month in the flash reading (0.0% mom vs. -0.1% expected), helping to raise the YoY rate to +0.5% from +0.4%. The last thing to note is the BoE’s Financial Stability Report and the latest round of stress test results. According to the report the ‘the economy has entered a period of adjustment following the EU referendum’ and so ‘the likelihood that some UK specific risks to financial stability could materialize remains elevated’. Meanwhile the stress tests revealed that there are some ‘capital inadequacies’ at three institutions. It was noted however that ‘the banking system is in aggregate capitalised to support the real economy in a severe, broad and synchronised stress scenario’.

Looking at the day ahead, this morning in Europe we kick off with the November Nationwide House price index reading for the UK. After that it’s all about the manufacturing PMI’s where we’ll get final revisions for Germany, France and the Euro area as well as a first look at the data for the non-core and the UK. Also due out today is the latest unemployment rate print for the Euro area. This afternoon in the US we’ll firstly get the latest weekly initial jobless claims reading, followed then by the final manufacturing PMI revision, construction spending and the ISM manufacturing print for November (market consensus is for 52.5 versus 51.9 in October). Later this evening the November vehicle sales numbers will also be released (expected to decline modestly). Away from the data the Fed’s Mester (1.30pm GMT) and Kaplan (2pm GMT) are both due to speak again, while the ECB’s Coeure is also scheduled to speak.

via http://ift.tt/2gOAZ7D Tyler Durden

Pardon me, but I physically recoil when I read yellow journalism by shills trying to promote a narrative that is either entirely false or exaggerated for political purposes. During the election, at the vanguard of the Clinton talking points were to ignore all of the scandals coming out of Wikileaks or the DNCleaks because they were the byproduct of Russian hacking — a charge that was never backed up with any real evidence. CNN even went as far to say that it was ILLEGAL to possess the Wikileaks and that viewers should only watch CNN to see what it was all about. Utter and complete bullshit. Now we have a consummate professional shill, Chris Strohm, reporting for Bloomberg — suggesting that one of the leading internet security companies in the country believes Russia ‘weaponized social media’ to affect the elections. By doing so, Strohm is attempting to legitimize a talking point that hitherto has proven to be nothing short of conspiratorial guess work. Let’s examine his evidence. Claim: Russia’s government didn’t just hack and leak documents from U.S. political groups during the presidential campaign: It used social media as a weapon to influence perceptions about the election, according to cybersecurity company FireEye Inc.

Material stolen by Russia’s intelligence services was feverishly promoted by online personas and numerous fake accounts through links to leaked material and misleading narratives, according to an analysis of thousands of postings, links and documents by FireEye, which tracks Russian and Chinese hackers breaking into U.S. systems. The operation was a new and belligerent escalation by Moscow in the cyber domain, company Chairman David DeWalt said.

Firstly, FireEye has been making a lot of claims for a very long time. This isn’t anything new. Plus, their stock is a steaming pile of shit, down about 90% over the past few years — the very worst mut in a kennel filled with dogs. Secondly, there are hackers everywhere, many of which live right here in the US. Just because something is coming from Russia doesn’t mean the fucking government is doing it to crush the democrats. This is lazy thinking and not at all rational.

“The dawning of Russia as a cyber power is at a whole other level than it ever was before,” DeWalt said in an interview in Washington. “We’ve seen what I believe is the most historical event maybe in American democracy history in terms of the Russian campaign.”

What does that even mean? Yes, hacking is at an all time high. Yes, people need to remain vigilant. But when you say ‘Russia as a cyber power’, are you implying that the Russian government is doing it? If so, show us the evidence.

The closeness of the Nov. 8 election sparked scrutiny over the spread of fake news and has fueled demands from Green Party candidate Jill Stein, backed by some Democrats and independents, for a recount in key states lost by Democrat Hillary Clinton. President-elect Donald Trump responded on Twitter that “millions” of people voted illegally, which he said may have been what cost him the popular vote, but he offered no evidence.

Fucking idiot.

‘Minor’ Incidents

A computer scientist for Stein said security flaws in voting machines and suspicions of Russian meddling justified the recount efforts. J. Alex Halderman, a professor at the University of Michigan, said hackers could have infected Pennsylvania’s voting machines with malware designed to lay dormant for weeks, pop up on Election Day and then erase itself without a trace. Trump narrowly won Pennsylvania as well as two other states where Stein’s campaign may seek recounts, Michigan and Wisconsin.

None of what he just said in the paragraph above is true. All parties, including Stein and Clinton have said, repeatedly, that there is no evidence that the elections were tampered with. Nate Silver, hardly a fan of Trump, explains to people drolling about the earth, like Strohm, that it’s the demographics stupid, not the Russians.

We found no apparent correlation5 between voting method and outcome in six of the eight states, and a thin possible link between voting method and results in Wisconsin and Texas. However, the two states showed opposite results: The use of any machine voting in a county was associated with a 5.6-percentage-point reduction in Democratic two-party vote share in Wisconsin but a 2.7-point increase in Texas, both of which were statistically significant.6 Even if we focus only on Wisconsin, the effect disappears when we weight our results by population. More than 75 percent of Wisconsin’s population lives in the 23 most populous counties, which don’t appear to show any evidence for an effect driven by voting systems.7 To have effectively manipulated the statewide vote total, hackers probably would have needed to target some of these larger counties. When we included all counties but weighted the regression by the number of people living in each county, the statistical significance of the opposite effects in Wisconsin and Texas both evaporated.

Even if the borderline significant result for Wisconsin didn’t vanish when weighting by population, it would be doubtful, for a few reasons. You’re more likely to find a significant result when you make multiple tests, as we did by looking at eight states with and without weighting by population.9 Also, different places in Wisconsin and Texas use different kinds of voting machines; presumably if someone really did figure out how to hack certain machines, we’d see different results depending on which type of machines were used in a county, but we don’t. And Nate Cohn of The New York Times found that when he added another control variable to race and education — density of the population — the effect of paper ballots vanished.

Back to Bloomberg’s Russian scare.

Kevin Mandia, chief executive officer, of Milpitas, California-based FireEye, and DeWalt said in the interview this week that they haven’t seen any evidence that U.S. vote tabulation systems were hacked. And U.S. officials have said they saw only “minor” cyber incidents on Election Day.

What the fuck is that all about? If you weren’t paying attention, the headline said ‘social media’  was playing a role in the elections, not hacking. But then the reporter delved right into hacking, making it seem like FireEye was implying there might’ve been a breach. Strohm even mentioned some guy who said some miracle voting virus could’ve been planted ahead of time and activated on election day. Yeah, and I could’ve won the lottery the other day, had I played it.

“We did not see anything that I would characterize as significant,” Homeland Security Secretary Jeh Johnson said at a Bloomberg Government event Nov. 14 in Washington. “There were minor incidents here and there of the type that you would normally expect, but nothing significant.”

End of story, right? Of course not, the lies have to be woven into an intricate web of deceit in order to confuse an otherwise idiot public. He continues.

Russian officials have repeatedly rejected accusations that the government hacks or supports groups that does so on its behalf.

That hasn’t quelled concerns. The activity detected in the FireEye analysis echoed the Russian strategy of information warfare seen previously in cyber attacks on Estonia, Georgia and Ukraine, where a simmering border conflict has claimed almost 10,000 lives over 2 1/2 years.

As far as I can tell, the so called ‘information warfare’ is nothing more than a few trolls opening up Twitter and Facebook accounts to fuck with people. Hello, wakey the fuck up. This is stupid.

The strategy isn’t limited to online media. The U.K. in October closed the British bank account for RT, a Russian state-controlled news service that was reprimanded by the U.K. media regulator Ofcom for biased or misleading reporting on Syria and Ukraine. Russia protested the move, saying it was being targeted for political reasons.

Baseless.

Democrats’ Request

On Tuesday, Democrats on the Senate Intelligence Committee sent President Barack Obama a letter asking him to declassify information about Russian activity related to the U.S. election.

“We believe there is additional information concerning the Russian government and the U.S. election that should be declassified and released to the public,” the senators wrote. “We are conveying specifics through classified channels.”

Then do it and show us the evidence. Anything short of evidence is idle speculation or propaganda.

A month before the election, the Office of the Director of National Intelligence and the Homeland Security Department issued a joint statement saying American intelligence agencies were confident that Russia directed hacking against U.S. political groups.

“The recent disclosures of alleged hacked e-mails on sites like DCLeaks.com and WikiLeaks and by the Guccifer 2.0 online persona are consistent with the methods and motivations of Russian-directed efforts,” according to the statement. “The Russians have used similar tactics and techniques across Europe and Eurasia, for example, to influence public opinion there. We believe, based on the scope and sensitivity of these efforts, that only Russia’s senior-most officials could have authorized these activities.”

Remember Seth Rich. Again, there is zero evidence tying Russian agents to DCleaks or Wikileaks. This is childish already.

False Personas

In line with those findings, FireEye has mapped what it says is a Russian-backed campaign using at least six key false hacktivist personas to advance the country’s interests, including Guccifer 2.0, DC Leaks, Anonymous Poland and Fancy Bears’ Hack Team. The company’s autopsy also includes thousands of postings on Twitter as well as fake social-media accounts used to pass the information back and forth to generate an online buzz.

So, FireEye has concluded that people from Russia have Twitter accounts and shitpost. Anything more? This is groundbreaking.

The hacking extends to trying to use legitimate websites to promote stolen material. Guccifer 2.0, for example, first promoted stolen documents from the Democratic National Committee through The Smoking Gun and Gawker. There’s no evidence that those websites knew that hacked material given to them was part of a broad campaign to meddle in the U.S. election.

The ‘evidence’ tying Guccifer 2.0 to Russia is a proxy IP address. How silly is this?  In an interview with RT, Guccifer laughed the whole thing off.

“I read several reports, some experts found out that my proxy IP is hosted at a service that’s somehow connected with Russia and has a version in Russian as well as in English,” the individual wrote as cited by WSJ. “This is their strong evidence,” he wrote, adding a smile emoticon.

“It made me angry they attributed my deals to the Russians,” the hacker wrote. “But then I realised the deeper they go this way the safer I am.”

“My goal is to bring the truth, I call it to bring the light,” the hacker wrote, adding that “the big capital has occupied the policy” and “big [IT] companies are leading us to the disaster.”

Back to Bloomberg.

The campaign also includes what FireEye terms “direct advocacy,” in which the personas direct tweets promoting stolen or false information at the accounts of influential people such as journalists, and “indirect advocacy”in which social-media accounts seemingly unaffiliated with the personas also engage in promotion.

Which social media accounts have been hacked and which ‘influential journalists’ have been infiltrated by Russian hackers? I do this everyday and cannot recall seeing one in the news. Again, show me, the curious reader, actual evidence.

Even after the U.S. election, there are few signs that Russia’s actions are abating, creating a complicated, emerging challenge for the incoming Trump administration, FireEye’s DeWalt said. During the campaign, Trump was deferential to Russia and its president, Vladimir Putin, and repeatedly questioned the conclusion of the U.S. intelligence community that Russia was meddling in American elections. For years, Russian spies carried out stealthy hacking attacks aimed at hiding their identities, said Mandia, the FireEye CEO. Their tactics began to change around the fall of 2014 and have now escalated to include leaking stolen documents and apparently caring less about operational security or getting caught, Mandia said.

“That’s a change in the rules of engagement,” Mandia said. “All of a sudden, they’re more of a tank through the cornfield when they hack, not a whisper or a ghost.”

Fucking drama Queens. Russian spies. Hacked Twitter accounts. People retweeting fake news. Tanks through the corn field. When will the madness end?

via http://ift.tt/2gLxpMJ The_Real_Fly

Corporate tax reform has been a key policy initiative of Trump’s as he has called for slashing the corporate tax rate from 35% down to 15%.  While this is welcome news for most companies, it would result in some fairly staggering writedowns for Wall Street’s largest banks that amassed substantial net operating losses in 2008 and 2009.

According to Bloomberg, Citibank would be hardest hit with writedowns that could hit earnings for up to $12 billion or more. 

Donald Trump’s planned U.S. corporate tax cuts could translate to a big one-time earnings hit for many of the biggest U.S. banks, thanks to tax benefits they generated during the 2008 financial crisis.

 

Citigroup Inc. would take the deepest earnings hit — perhaps $12 billion or more, according to recent estimates by the bank’s chief financial officer and several banking analysts. Mark Costiglio, a Citigroup spokesman, declined to comment. Others, including Bank of America Corp. and Wells Fargo & Co. could face multibillion-dollar writedowns.

 

The banks might have to write down deferred tax assets, which often pile up when a company loses money and can’t immediately enjoy the tax benefits of those losses. Any writedowns won’t have much impact on capital levels for the banks for regulatory purposes, and lower taxes will allow for higher earnings in the long run. But a one-time hit to earnings can make for a bruising quarter — and even year — for a bank’s results.

 

“It’s a traumatic experience for companies with large” amounts of such assets, said Robert Willens, an independent tax and accounting expert in New York. “In one fell swoop, a significant part of their net worth goes up in smoke.”

Among other things, Trump’s major tax policy proposals for businesses include slashing the corporate tax rate to 15% from 35%, providing a one-time repatriation holiday of 10% for cash held overseas and allowing businesses with manufacturing operations in the United States to expense capital expenditures.  While it’s unlikely that he’ll get all of those proposals through Congress, even a rate reduction to 25% would result a meaningful earnings hit for the banks.

Trump and House Republicans, led by Speaker Paul Ryan, have proposed dramatic corporate tax-rate cuts — part of what they pledge will be the biggest tax overhaul since President Ronald Reagan’s era. Trump has called for cutting the rate to 15 percent, while the House Republican “blueprint” for tax changes proposes 20 percent.

 

It’s unclear which rate might prevail — or whether a deal might be reached for a wholly different rate. Amid that uncertainty, some analysts and executives have calculated the potential effects of a 25 percent rate — roughly the average corporate tax rate of the 34 members of the Organization for Economic Cooperation and Development.

 

Even if the U.S. corporate rate declines to 25%, Citigroup could have to take an earnings hit of $12BN while Bank of America, Wells Fargo and Goldman would all be looking at multi-billion dollar writedowns as well.

At a 25 percent rate, Citigroup would be required to lower its earnings by $6 billion to reflect the reduced value of its tax-deferred assets, John Gerspach, the bank’s chief financial officer, told investors at a conference hosted by Bank of America on Nov. 16.

 

But that could change if a Republican call for exempting overseas corporate earnings from U.S. taxation is enacted as part of the tax overhaul. Under that scenario, Gerspach said, Citigroup would have to write down as much as $12 billion — because a large part of its deferred tax assets consist of unused foreign tax credits.

 

Calculations by Brian Kleinhanzl, a financial-sector analyst at KBW, show that at a 25 percent corporate tax rate, Bank of America would face a $6.6 billion writedown, while Wells Fargo’s would be $4 billion. Goldman Sachs Group Inc.’s would be $1.6 billion, according to KBW’s estimates.

Meanwhile, Fannie and Freddie could also be looking at writedowns of over $15BN in aggregate.  According to KBW, that level of earnings hit may be sufficient to trigger the need for another capital infusion from the Treasury Department.

The implications might also reach mortgage giants Fannie Mae and Freddie Mac, which could see write downs of $10 billion and $5.4 billion respectively, according to a Nov. 27 KBW research note. Those hits would be large enough to potentially require both of them to seek a new infusion of money from the Treasury Department, the note said. Peter Garuccio, a spokesman for the Federal Housing Finance Agency, which oversees the government-backed lenders, declined to comment.

Of course, in reality these 1x charges will most likely be dismissed by investors, to the extent they don’t trigger incremental capital requirements, as the long-term impact of lower tax rates is universally positive for corporate cash flow.  Meanwhile, companies with deferred tax liabilities, including AT&T and Apple, will enjoy the reciprocal benefits of 1x paper gains.

“Over time, any impact will be offset by lower rates,” said Jerry Dubrowski, a spokesman for Bank of America. Ancel Martinez, a spokesman for Wells Fargo, declined to comment. “It is impossible for us to comment until we have seen legislative detail,” said Jake Siewert, a Goldman Sachs spokesman.

 

To be sure, any federal tax overhaul might include rules allowing companies more time to generate taxable income and fully harvest their deferred tax assets. Also, the one-time hit to earnings would be followed by higher income over the longer term, which would allow many banks to build capital faster.

 

“Long-term, it’s positive, because companies will report increased earnings-per-share,” said KBW’s Cannon. “Short-term, tax reform won’t have as large a positive effect on banks — Citi is the 800-pound gorilla.”

 

The short-term bad news has a financial flipside: Companies with so-called deferred tax liabilities — future tax bills that they now expect to pay at the 35 percent rate — would get a sudden windfall if the corporate rate is cut. Winners would include AT&T Inc., which could see an immediate, one-time earnings boost of as much as $30 billion, and Apple Inc., which could see an extra $15 billion, Willens said. AT&T’s tax liabilities stem from depreciation and amortization tied to investments in equipment, he said, while Apple’s relate to anticipated U.S. tax bills on overseas earnings.

Like all other financial news these days, the market’s ultimate takeaway from Trump’s tax plan will be to buy more of everything…that said, you have to appreciate the irony here.

via http://ift.tt/2gO84Rn Tyler Durden

Following the overwhelming interest in the newly formed group "Veterans Stand for Standing Rock", Reuters reports more than 2,000 U.S. military veterans plan to form a human shield to protect protesters of a pipeline project near a Native American reservation in North Dakota, organizers said, just ahead of a federal deadline for activists to leave the camp they have been occupying.

As we previously noted, the group has a strict no weapons policy but is stocking up on body armor and protective gear like gas masks to withstand potential attacks from the heavily militarized police, who have arrested at least 400 of protesters so far. According to on-site medics, hundreds of protesters have also been injured. Last week, a 21-year-old woman was reportedly hit with a concussion grenade, leading to a severe injury that may require her arm to be amputated. Though police have blamed protesters for what happened to her, at least one witness claims law enforcement’s version of events is untruthful.

Outrage against incidents like these, as well as attacks on journalists via tasers, rubber bullets, and felony charges has made the ongoing situation ripe for outside intervention.

 

“This country is repressing our people,” Wood Jr. said last week. “If we’re going to be heroes, if we’re really going to be those veterans that this country praises, well, then we need to do the things that we actually said we’re going to do when we took the oath to defend the Constitution from enemies foreign and domestic.”

 

With 2,100 veterans signed up to make a stand, it appears police will be forced to reconcile their aggressive behavior with the nonviolent show of veterans, who intend to march toward police on site.

 

The group has gained substantial financial backing since word of their mission spread. According to their GoFundMe page, they have already raised over $500,000 to fund their trip, which is planned for December 4 to December 7.

Notably, Reuters reports that this comes as North Dakota law enforcement backed away from a previous plan to cut off supplies to the camp – an idea quickly abandoned after an outcry and with law enforcement’s treatment of Dakota Access Pipeline protesters increasingly under the microscope.

State officials issued an order on Monday for activists to vacate the Oceti Sakowin camp, located on U.S. Army Corps of Engineers land near Cannon Ball, North Dakota, citing harsh weather conditions.

 

The state's latest decision not to stop cars entering the protest site indicated local officials will not actively enforce Monday's emergency order to evacuate the camp issued by Governor Jack Dalrymple.

 

Dalrymple warned on Wednesday that it was "probably not feasible" to reroute the pipeline, but said he had requested a meeting with the Standing Rock Sioux Tribal Council to rebuild a relationship.

 

Veterans Stand for Standing Rock, a contingent of more than 2,000 U.S. military veterans, intends to go to North Dakota by this weekend and form a human wall in front of police, protest organizers said on a Facebook page. Organizers could not immediately be reached for comment.

 

"I figured this was more important than anything else I could be doing,” Guy Dull Knife, 69, a Vietnam War Army veteran, told Reuters at the main camp.

 

Dull Knife, a member of the Oglala Lakota tribe from the Pine Ridge Reservation of South Dakota, said he has been camping at the protest site for months.

 

Morton County Sheriff's Office spokesman Rob Keller said in an email his agency was aware of the veterans' plans, but would not comment further on how law enforcement will deal with demonstrators.

Local law enforcement said on Tuesday they planned a blockade of the camp, but local and state officials later retreated, saying they would only check vehicles for certain prohibited supplies like propane, and possibly issue fines. Dalrymple on Wednesday said state officials never contemplated forcibly removing protesters and there had been no plans to block food or other supplies from the camp. "That would be a huge mistake from a humanitarian standpoint," he said on the conference call.

Protesters, who refer to themselves as “water protectors,” have been gearing up for the winter while they await the Army Corps decision on whether to allow Energy Transfer Partners to tunnel under the river. That decision has been delayed twice by the Army Corps.

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Submitted by Shaun Bradley via TheAntiMedia.org,

On Thursday, December 1, a vital Supreme Court order is set to go into effect that dramatically expands the surveillance power of federal agents. The impending alteration to Rule 41 of the Federal Rules of Criminal Procedure softens the legal requirements for obtaining search and seizure warrants that grant the government remote access to individual’s computers and phones.

In the past, law enforcement was required to obtain a warrant from a judge within the jurisdiction where the proposed search was going take place. Under this new system, however, if an individual is using technology to conceal their location, the warrant is considered valid regardless of jurisdiction. A single authorization will have the potential to validate millions of searches on private devices. Any journalist, activist, or whistleblower who values privacy and uses tools like Freenet or the Tor network will fall directly into the crosshairs.

As USA Today summarized, the rule change was “sought by the Justice Department, adopted by the U.S. Federal Courts, and approved on April 28 by the Supreme Court without much fanfare.”

These changes have been on the fast track since the FBI had evidence thrown out in a recent child pornography case. The defendant was using the Tor network to conceal his IP address and operating a child pornography site known as Playpen. The Department of Justice and FBI refused to disclose the legal process used to gain access to the evidence, likely because they did not follow proper legal protocols. As a result, at least some of their evidence was rejected by the court.

The controversy was compounded by the FBI’s use of Playpen’s servers to set up a massive sting, known as Operation Pacifier. The pedophilic porn site was run directly by federal agents for over two weeks in an attempt to round up any individuals using the network.These same agencies are now claiming that without changes to the current rule, their ability to put the scum of society behind bars is severely restricted.

The dark web has been subverting the controllable marketplace for years, but through the eyes of the government, anything outside of their dominance is equivalent to insurrection. Without a doubt, anonymity online creates a double-edged sword of freedom versus lawlessness, so it’s no surprise significant action has been taken to crack down on this space under the guise of national security and public safety.

In this vein, the modification of Rule 41 has been framed as crucial in preventing crime even though implementing it grants sweeping authority to the State.

Typically, any changes that carry these broad implications are openly debated in Congress, but by classifying the move as a simple procedural change, the discussion was instead held by the small U.S. Courts Advisory Committee on the Federal Rules of Criminal Procedure following the Department of Justice’s request to modify the rule. The alteration was approved by the Supreme Court. The lack of publicity received for something so fundamental shows there has been a deliberate effort to conceal the consequences of this scheme.

The Electronic Frontier Foundation has been an outspoken advocate for maintaining the current protections. The organization has voiced its concerns about the new rule:

“The Federal Rules of Criminal Procedure set the ground rules for federal criminal prosecutions. The rules cover everything from correcting clerical errors in a judgment to which holidays a court will be closed on—all the day-to-day procedural details that come with running a judicial system. The key word here is ‘procedural.’  By law, the rules and proposals are supposed to be procedural and must not change substantive rights. But the amendment to Rule 41 isn’t procedural at all. It creates new avenues for government hacking that were never approved by Congress.”

The media has done an excellent job of demonizing the dark web and the anonymous networks that inhabit it. By focusing on stories like the Silk Road and its founder Ross Ulbricht (among others who use anonymous systems to conceal state-designated criminal activity), the media has convinced the public that anonymity and criminality are one and the same. The federal government has long held this belief; during a crackdown in 2014, the FBI targeted more than 400 Tor addresses in an attempt to identify the actual locations of anonymous servers.

Maintaining complete privacy doesn’t matter to those whose biggest worry is having their porn history made public. But it’s the underground railroad for renegades working against the establishment. Journalists who are communicating with sources or establishing an outlet for whistleblowers need a layer of protection that can encourage others to feel safe coming forward. As activism and social media continue to merge, it’s essential that the leadership of dissenting movements can coordinate action without having to worry about infiltration.

There have been multiple bipartisan actions to curtail this erosion of privacy, namely through the Stopping Mass Hacking Act and the Review the Rule Act. Well-known lawmakers who value individual liberty, like Thomas Massie and Rand Paul, have come out in full support of these counter-efforts. Twenty-three members of Congress also sent a letter to Attorney General Loretta Lynch to express concerns and ask for more information.

Senator Ron Wyden, a member of the Senate’s Intelligence Committee, is a sponsor of the Stopping Mass Hacking Act. In a last ditch effort, he called on Congress to take action in an attempt to block the rule change. Unfortunately, the motion was voted down on Wednesday morning.

“If Congress doesn’t stop these changes, a single judge will be able to grant a warrant to hack a million (or more) computers and other devices. By hacking the devices of victims of a botnet, the government will be treating victims the same way it treats attackers. We need to pass my Stopping Mass Hacking (SMH) Act right now.”

Removing these kinds of limitations on power is what, over time, leads to the complete subjugation of a society. This takes a huge step towards further neutering the 4th Amendment of the Bill of Rights, making probable cause on an individual basis a thing of the past. The desire for privacy cannot be considered suspicious in a world where almost all personal information is a matter of public record.

This ruling can easily be rationalized when framed as an effort to stop child trafficking, but the unseen effects it will have on the future of journalism and activism must be seriously examined. Contacting legislators directly may seem futile, but making their lives difficult is one of the best ways to get their attention. If those of us who are passionate about preserving individual freedom become apathetic, there will be nobody left to hold back the constant progression of invasive statism.

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In the world of Krugmanites, there is only one thing better for the economy than digging a hole and filling it back in.. and that is doing it twice. Just days after repairing a giant sinkhole, in the Japanese city of Fukuoka, in record time (and proudly telling the world), the sinkhole has collapsed once again (offering hope for Q4 GDP).

Japan appeared to have given a lesson in efficiency by hastily fixing the gaping 30 metres wide and 15 metres deep hole in Fukuoka in the south west of the country. As The Daily Mail reports, the city became the subject of international plaudits when footage emerged showing how dozens of construction workers laboured through the night with diggers, cranes and cement mixers to fix the 30m wide chasm.

Remarkably the 15m deep hole was filled and the road reopened in a week… But the city's mayor has since apologised after the road had to be shut again – when it emerged the surface had sunk again…

The mayor, Soichiro Takashima, took to Facebook to say sorry for not warning citizens the ground could sink again.

Forget the broken window fallacy, as what is better for the economy than filling in holes created by a total lack of infrastructure spend with other people's money.

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