The Biggest Stock Bubble In U.S. History

Via Investment Research Dynamics,

Please note, many will argue that the p/e ratio on the S&P 500 was higher in 1999 than it is now. However, there’s a number of problems with the comparison.

First, when there is no “e,” price does not matter. Many of the tech stocks in the SPX in 1999 did not have any earnings and never had a chance to produce earnings because many of them went out of business. However – and I’ve been saying this for quite some time and I’m finally seeing a few others make the same assertion – if you adjust the current earnings of the companies in SPX using the GAAP accounting standards in force in 1999, the current earnings in aggregate would likely be cut at least in half. And thus, the current p/e ratio expressed in 1999 earnings terms likely would be at least as high as the p/e ratio in 1999, if not higher. (Changes to GAAP have made it easier for companies to create non-cash earnings, reclassify and capitalize expenses, stretch out depreciation and pension funding costs, etc).

We talk about the tech bubble that fomented in the late 1990’s that resulted in an 85% (roughly) decline on the NASDAQ. Currently the five highest valued stocks by market cap are tech stocks: AAPL, GOOG, MSFT, AMZN and FB. Combined, these five stocks make-up nearly 10% of the total value of the entire stock market.

Money from the public poured into ETFs at record pace in February. The majority of it into S&P 500 ETFs which then have to put that money proportionately by market value into each of the S&P 500 stocks.   Thus when cash pours into SPX funds like this, a large rise in the the top five stocks by market cap listed above becomes a self-fulfilling prophecy. The price rise in these stocks has nothing remotely to do with fundamentals. Take Microsoft, for example (MSFT). Last Friday the pom-poms were waving on Fox Business because MSFT hit an all-time high. This is in spite of the fact that MSFT’s revenues dropped 8.8% from 2015 to 2016 and its gross margin plunged 13.2%. So much for fundamentals.

In addition to the onslaught of retail cash moving blindly into stocks, margin debt on the NYSE hit an all-time high in February. Both the cash flow and margin debt statistics are flashing a big red warning signal, as this only occurs when the public becomes blind to risk and and bet that stocks can only go up. As I’ve said before, this is by far the most dangerous stock market in my professional lifetime (32 years, not including my high years spent reading my father’s Wall Street Journal everyday and playing penny stocks).

Perhaps the loudest bell ringing and signaling a top is the market’s valuation of Tesla.  On Monday the market cap of Tesla ($49 billion) surpassed Ford’s market cap  ($45 billion) despite the fact that Tesla deliver 79 thousand cars in 2016 while Ford delivered 2.6 million.    “Electric Jeff” (as a good friend of mine calls Elon Musk, in reference to Jeff Bezos) was on Twitter Monday taunting short sellers.  At best his behavior can be called “gauche.”   Musk, similar to Bezos, is a masterful stock operator.   Jordan Belfort (the “Wolf of Wall Street”) was a small-time dime store thief compared to Musk and Bezos.

Tesla has never made money and never will make money.  Next to Amazon, it’s the biggest Ponzi scheme in U.S. history.  Without the massive tax credits given to the first 200,000 buyers of Tesla vehicles,  the Company would likely be out of business by now.

Once again the public has been seduced into throwing money blindly at anything that moves in the stock market, chasing dreams of risk-free wealth.  99% of them will never take money off the table and will lose everything when this bubble bursts.  And only the biggest stock bubble in history is capable of enabling operators like Musk and Bezos to reap extraordinary wealth at the expense of the public.   The bell is ringing, perhaps Musk unwittingly rang it on Monday with hubris.  The only question that remains pertains to timing…

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

Brave New World of Weed: The Astonishing Potential of a Complex Plant [Reason Podcast]

“[Some computer coders] use cannabis when they’re working,” says journalist Joe Dolce. “[And] I’ve met a lot of people…who use it for physical training—runners and certain athletes, swimmers…It really helps them focus.”Brave New Weed |||

In our latest podcast, Nick Gillespie chats with Dolce, a former editor-in-chief at Details and Star, about his new book, Brave New Weed: Adventures into the Uncharted World of Cannabis. They chat about how legalization has opened up new frontiers in marijuana use, and why Donald Trump and Jeff Sessions won’t destroy this burgeoning industry.

“[Weed] is being used..to help people with certain types of medical conditions, not to get high, but to relieve pain…to intensify sex, or other activities,” says Dolce. “We have a gigantic pharmacopoeia of prescription drugs, now we’re looking to increase the more natural drugs that are available to us.”

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This is a rush transcript—check all quotes against the audio for accuracy.

Nick Gillespie: You start the book with a trip to your cousin’s house that turned you on to a world that you didn’t really know existed. Describe that experience for us and how it got you interested in this topic about the new world of cannabis?

Joe Dolce: Well, I certainly knew that weed existed and I certainly used my fair share; but over the last couple of years, I had really stopped. I was visiting my cousin.

He woke me up one morning and said, “Hey, want to see this new hobby of mine?” He brought me downstairs into the basement and unzipped a couple of Mylar bags in which he had a couple of … Well, he called them “the girls.” A couple of young cannabis plants.

Nick Gillespie: These are “the girls in the basement,” okay, opening chapter.

Joe Dolce: “The girls in the basement,” yeah.

Nick Gillespie: Right.

Joe Dolce: Exactly. Then, we started talking and he starts showing me how he was growing them. He started showing me these amazing macro photographs of trichomes on leaves, and all these details about the cannabis plant that I just didn’t really know about. I was pretty far removed from it all. It occurred to me that ‘Wow, man. My cousin in rural New England has learned all this stuff about weed, mostly through the internet, and guys at the local grow shop. Maybe there’s something to be looking into here. Maybe there was something.’ This was long before Colorado, and Washington, and 29 states voted for legal or medical marijuana. It was about five years ago, I would say. It was happening under the surface, but it certainly wasn’t happening in front of our eyes the way it is today.

That’s when I started. I got interested. He gave me some of this strain, the big part of the story, called ‘super lemon,’ which is a great strain. It’s a strong strain, very stimulating. I liked it a lot. It made my mind tick along, and it didn’t get me tired. I felt just a little, not a lot; so I didn’t get paranoid. I thought, ‘Wow, I better get to know this plant a little better. Maybe I need to reacquaint a little bit more.’

Nick Gillespie: Yeah, and talk about … your previous experiences, because I think we’re of a similar vintage. We would go back to a time when you were … Or, when a person was listening to record with a gate fold album sleeve, and maybe rolling a joint there. It was all dust and dirt, seeds and stems. The world out there, even the way that you started talking about it, it’s much more like wine, isn’t it?

Joe Dolce: Absolutely.

Nick Gillespie: Where people are picking up on different strains. How far along are we into all of that kind of boutique, more … directed types of pot that have different effects on different types of people?

Joe Dolce: Well, we know a lot, actually. We know a whole lot. Yeah, you’re right. When we started smoking pot, probably in the 1970s, we were picking stems out. That’s no longer the case. Today, pot is a very refined plant and it’s grown with great specificity. In fact, even in Northern California now, in certain counties, they’re creating a terroir system, which is exactly what they have for the wine. In other words, the soil, the climate, the temperature conditions of one particular small microclimate define the territory, the terroir. They’re now bundling certain breeds that these growers in upper Mendocino and Humboldt County have nurtured for 40, 50 years. These are heritage strains that have grown in these climates, so they’re now … On the West Coast, you can get a specific terroir, if you will, strain of cannabis by dialing a number. That’s pretty impressive.

Nick Gillespie: Yeah. We can look forward to, in 20 or 30 years, maybe, movies like ‘Bottle Shock’ will be reversed, and it will be French growers coming over here and winning blind taste tests over American pot, or something like that.

Joe Dolce: I think things are moving so quickly it’s not going to take 30 years, if that’s the case. As a matter of fact, I’m going to Tel Aviv tomorrow. Israel’s the capital of cannabis research. From what I understand, they’re now growing … It’s legal to grow and research cannabis there, unlike the United States. They are now growing on the tops of buildings in Tel Aviv, hydroponic gardens.

Nick Gillespie: Wow. How are the older strains? The legendary strains of the 70s and 80s, things like ‘Maui Wowie,’ or ‘Acapulco Gold.’ Are they still in play, or have they been totally superseded by new, better technologies?

Joe Dolce: No, if you can get those real strains, they’re amazing. Somebody just gave me … It was someone from Thailand, the other day, that was just incredible. It’s hard to know what is real, that’s the problem. How do you really discern without genetic testing, if you will, that it really is ‘Acapulco Gold,’ or ‘Maui Wowie?’

Nick Gillespie: Right.

Joe Dolce: How do you know? A lot of people are claiming these things. Obviously it’s good branding, but it’s really tough to know. You got to know your grower. That’s the key. You got to know your grower, and trust that he knows his strains. In a way, it’s really nice, if it still comes down to a personal relationship.

Nick Gillespie: Now your dealer is less likely to break your kneecaps, or get his kneecaps broken if he’s not … If everything isn’t quite up to snuff or anything. Part of what you talked about in the book is that, and with the terroir system and what not, or the Appalachians, controlled Appalachians, there are companies or people, or trade associations that are coming together to certify stuff so it’s like fair trade coffee, or other types of products that get designated by a third party.

Joe Dolce: That’s a bit in the future, but you can see it’s going to come. Look, we have single estate coffees in coffee shops. All over the country, we have this stuff. There’s a definite market for single malt scotch, or small brew beers, and single estate coffees. A certain part of the culture likes this … affinity, if you will. They have an affinity for these sorts of finer quality things. Listen, once you get a taste for it, it’s hard to go back, I think. It’s a really fun pursuit. It is like wine in that way, it takes a lifetime to get to know everything.

Nick Gillespie: Well, and talk about how … part of what you’re talking about in the book, too, is that … which I find genuinely fascinating. It seems to completely comport with my experience and the people I talk about, who are moving not just into pot, but into other types of drugs, whether they’re prescription or not. People are not, and you yourself, are not using pot necessarily to get stoned out of your mind, and then eat a bunch of Twinkies or Ding-Dongs. There are ways to these drugs are being used and being structured to help people with certain types of medical conditions, not to get high, but to relieve pain, to at other times, to intensify sex, or other activities. What is going on there and what does it say about American society? On some level, are we growing up and recognizing that just as we have a gigantic pharmacopeia of prescription drugs, now we’re looking to increase the more natural drugs that are available to us.

Joe Dolce: I think plant medicines have always a part of several cultures. Our pill culture is not that old. It’s about 100 years old, really. Before then, all medicines were plant derived. Obviously, we don’t trust big pharma the way perhaps we once did. Obviously it’s not all their fault that these drugs that they’re pumping and advertising on television every day are getting abused, but there’s a high potential for addiction and death.

Isn’t it great to know that here’s a plant, cannabis, that’s never killed one person, ever, in the history of reported time. There’s a reason for that, a real biological reason for that. We don’t have the receptors that cannabis attaches to in the part of our brain stem that controls the heart and the lungs. We are never going to shut down from over-smoking cannabis. You might get very fuzzy. You might get stupid. You might pass out. You’re never going to die. That’s a really nice thing.

If you could harness that plant and figure out if you use this amount or this strain, or this amount of this cannabinoid, and it helps your pain, it helps your … so many different elements of the central nervous system, the stomach, all across the body. There’s a real reason for that, too. Why would you not want to do that? Why would you choose to take something that might be damaging or deadly?

Nick Gillespie: One of the most memorable characters in the book is Dennis, the fairy godmother, or fairy godfather.

Joe Dolce: Godfather.

Nick Gillespie: Of pot. Explain who he is and why he is so central? Actually, before you do it, let me bigfoot you and just say one of the things that I really find great about this book is the amount of research … Not even research, reporting you did; I mean the conversations you had, the travels you did. It really brings to life a topic which often times either kind of zooms off into mystical abstraction, or it’s very dry, and rote. Talk about Dennis Perone and the central role that he really plays in this brave new world.

Joe Dolce: Dennis was this Vietnam vet who had come back from Vietnam who had learned that he was gay in Vietnam. Came back and decided he was going to stop the war, stop the violence, and he was going to do it through cannabis. He’s smuggled a bunch of pot back in his bag. No one was inspecting military returnees at the time. He really did, almost single-handedly, begin a whole weed collective in the city of San Francisco. He started in the late 70s, kept it going through the 80s and the 90s, interestingly enough, through many arrests. He was a real. He really liked people.

Anyway, in the early 90s, he decided he was going to put a ballot initiative on the California ballot about medical marijuana. He started, and it was a real rag-tag group of volunteers. It wasn’t going quite as well as they wanted to. They were claiming they had hundreds of thousands of signatures, but in fact, most of them were copied out of a phone book, in alphabetical order, also. It was completely visible.

Along comes a guy named Ethan Nadelmann of the Drug Policy Alliance, who also had George Soros as one of his backers. He saw this and he saw an opportunity to go for legal medical cannabis. George Soros thought this was a great idea, because he was very involved in the idea of death with dignity. He did not … It was a big cause of his. He was also very against the fact that we were just arresting hundreds of thousands of black people for possession every single year, which we’re still doing, by the way. Ethan got George to pony up a bunch of money. He got George Zimmer to pony up a bunch of money. George Zimmer was the owner of Men’s Warehouse. Got a few other rich folks to pony up some money. They brought some political mavericks in, and really got the number of signatures that they needed to get on the ballot for this proposition to pass.

That’s what changed the game. That’s what happened in 1996 in California, and that’s when it became legal to use cannabis as a medicine in California. That opened the door. It just opened the door. All the claims that it was dangerous or addictive, all the nonsense that the prohibitionists had been spewing for 80 years were pretty much obliterated in the 20 years that this program’s been going on. None of this stuff had happened, none of it at all.

Nick Gillespie: At this point, as you were saying, it’s now at almost 30 states. About 60% of Americans are in favor of treating marijuana like beer, wine, or alcohol, which is up from about 35% just a decade or so ago.

Joe Dolce: That’s right. Yeah.

Nick Gillespie: Now, by the same token, it’s not like things have completely changed. As you were saying, there’s still hundreds of thousands of people being locked up every year. Before we get to that, the coming legal battle, because it’s still a schedule one drug under the federal drug laws; even in other states where it’s allowed. Before we get there, let’s for Reason’s audience, I would love to talk about the last section of your book, where you talk about the future use of pot, or what’s coming on. You talk about the four enhancements that are offered to humans via marijuana consumption. Discuss those a little bit and how those figure into really the potential for marijuana to become a part of our culture that is … It may never be fully accepted, but it will be more like beer, wine, and alcohol, as well as medicine. What are the four enhancements?

Joe Dolce: They’re different. I just want to say, as we learn more about the plant, we learn how to dose it. We learn how to use it differently. We learn how to eat it differently. We learn how to vaporize it differently. All these new things really change the game, because we can use it much more precisely. We don’t have to go through the same old thing. Also, look, the conversation was pretty much driven by the growers. They were keeping the thing alive, and good for them. They like to get really high. All these things are now shifting as it becomes more of a accepted social thing.

I think pot definitely makes you more receptive to the world. There’s no question about it. It opens up some doors. That’s great. It can lead you to greater intimacy, for example. It’s nice to have a conversation while a little bit enhanced. It’s great to have sex while a little bit enhanced. It’s sort of a different experience, I think. Not what alcohol does, it’s different from that. It’s more of a bringing together. I think that’s great. We always know that it makes you open to seeing art differently, to hearing music, perhaps, on a different level of depth. I think it’s absolutely true that these activities absolutely is one of the things it enhances.

I think it can also be used … Some people really like it for focus. Now, there’s a big bunch of coders that use cannabis when they’re working. They love to write code and be high. It’s hard for me as a writer to use cannabis while working. It’s a real shame, but it doesn’t work for me that way. Linear stuff doesn’t work for me, but I think a lot of people get a lot of focus from using cannabis, which is very interesting. I’ve never had that experience.

These are the kind of things I think that we need to open ourselves to, as we go forward. People who have used cannabis for years have always known these things. I think when you think about it with intention and try to do it as such, it changes the experience.

I’ll tell you one other thing, I’ve met a lot of people since writing this book who use it for training, physical training; runners and certain athletes, swimmers. They really like it. It really helps them focus, dig in a little more into the process of it. It’s interesting.

Nick Gillespie: Which is all also particularly fascinating because the stereotypes and the cliches about pot is that they’re unmotivated, they’re lazy, they’re unfocused.

Joe Dolce: Yeah.

Nick Gillespie: One of the things that is fascinating and I suspect this feeds into a bit about the racial animists against pot and black people. In the NBA, it’s widely understood and in the NFL, as well, that athletes use pot as a way to deal with chronic pain, as well as to recover from training, and-

Joe Dolce: Absolutely.

Nick Gillespie: Just being beaten around. It seems odd that we wouldn’t start thinking about that. Everybody has aches and pains, and to the extent that you can take away some of that.

Joe Dolce: They’re using it. They’re just not using it publicly.

Nick Gillespie: Yes.

Joe Dolce: CBD, which is one of the other cannabinoids, the THC, which is psychoactive, CBD, which is barely psychoactive. Many people say it’s not. It’s an incredible anti-pain medication. I’ve been using it for a little arthritis I have. It’s extraordinary because it doesn’t numb you. It doesn’t make you go … It doesn’t fog your brain, particularly, of the pain. It just makes the pain less there somehow. It’s a very hard way to describe it. It’s a different sort of pain relief than you get from the typical pain reliever that we’re used to. People in the NBA are using this. There are people all over sports who use this stuff.

Nick Gillespie: Will there be, and obviously there have been a number of celebrities, there have been a number of billionaires. You mentioned Peter Lewis as one, who talked about using pot regularly. What is the game changer in terms of the culture? Is it more testimonies by well regarded people, and I’m making air quotes here, but normal people who use pot, successful people who use pot. Is that what is needed to convince the last 40% of Americans that prohibition is not the smartest move?

Joe Dolce: That’s a great question. I don’t know the … Obviously, I don’t have the answer, but it’s happening. That’s all I can say. It’s happening. It’s happening in the hearts and minds of lots of people. My personal prescription is to talk to people. I try to tell … I have no choice, I wrote the book. I’m out. You know what I mean? I’m out.

Nick Gillespie: Yes.

Joe Dolce: Look, 4/20 is coming up. April 20th is a big pot celebration day. Theatrical stuff like lighting a massive three foot joint on the steps of the state capital, that’s going to happen.

I think the more important thing is if you talk to a colleague, or a friend who maybe you know loosely, say, “You know what? I really like pot. Here’s how I use it. What’s your experience?” That seems like a small act, but let me tell you, if all the people who used cannabis were to do that to somebody they didn’t know … First of all, they’d find out that a lot more people are using it, first of all. Secondly, they might open some hearts and minds.

Thirdly, the inevitable question is, “Oh, can you get me something good?” Which.

Nick Gillespie: Well, it is fascinating when you talk about that, and one hopes this will have a particular effect in Washington, D.C.—the District of Columbia decriminalize pot. Now, the immediately, there were services that crept up that sell cookies and then gift you pot when you buy cookies. Depending on what kind of cookie you get, you get a different type of pot and it’s delivered right to your door.

Joe Dolce: Yeah, that happens all the time.

Nick Gillespie: Yeah.

Joe Dolce: That happens all the time. Yeah.

Nick Gillespie: One would hope that, that the more congress starts smoking, maybe the more they’ll relax.

Joe Dolce: Well, we haven’t really talked about Donald Trump or Jeff Sessions. This is a whole nother wrinkle in the picture here.

Nick Gillespie: Yeah, let’s go there. Right.

Joe Dolce: Who knows what these guys … they’re so impenetrable. I don’t think Trump has a big issue with weed. He has said in the past that he knows people who use it. It’s no big deal, okay. Then he appoints this guy like Jeff Beauregard Sessions, who’s a pretty law and order type of guy. He has never said a nice thing about cannabis. He thinks people who use cannabis are quote, bad guys; which is half the American population. There he is, and he can do some insidious things. He can do big, big scale stuff.

I don’t particularly think that’s going to happen, but I do think they’ll be targeting some people who are breaking the laws, or who abuse the laws in the Colorado and California. They’re going to make some big busts. They’re going to send some tremors through the industry. I predict that will happen based on absolutely no evidence whatsoever. It just seems like an obvious thing to do. The guy’s going to want to flex his muscles.

Trump’s all about law and order. Pot’s always been one of the first things you can crack down on with law and order. Why? Because it’s big and it stinks. It’s easy to catch. It’s just that’s what history in America has done. I don’t think these guys are original enough to recreate a great idea. I think they’re just going to copy an old idea, basically. I think there will be some pushback, but I do think that it’s going to be also a likely shut-down at this point, don’t you?

Nick Gillespie: Yeah, I agree. Although this is … I’ve been lately thinking about the novel, ‘All Quiet on the Western Front,’ where the protagonist dies after the armistice is signed. I think in many ways that the pro-pot forces have won the war, but there’s still a surrender to be signed and a lot of damage can be done in the mean time.

Joe Dolce: That’s exactly right, yeah.

Nick Gillespie: It may be fascinating, also, to see that somebody like Jeff Sessions, who as a senator from Alabama, was always talking a lot about federalism and returning control to the states. It will be ironic if his moves-

Nick Gillespie: Gets a state like Colorado. Yeah.

Joe Dolce: Republicans use that when they’re not in power, and the democrats use it when they’re not in power.

Nick Gillespie: Yeah. I’m just saying the irony of somebody like Governor Hickenlooper in Colorado, who was originally against legalization, a democrat, but is now saying like, “You know, I’ve got to admit, it’s working out pretty well.”

Joe Dolce: 134 million extra in taxes in his state. Yeah, I think he’s pretty happy. No increase in crime, no increase in drunk driving or whatever driving you call it. No major problem at all, and huge tax revenue. The tourism in Colorado is through the roof. Arthur Frommer, who’s what now, about 89. The godfather of American travel.

Nick Gillespie: Yeah.

Joe Dolce: He said that canna-tourism is going to be the next biggest boom in American tourism.

Nick Gillespie: It’s going to be something like Colorado on five grams a day, or something like that?

Joe Dolce: Yeah, why not? What a beautiful place to go and use cannabis. What a great idea, by the way.

Nick Gillespie: John Denver was way ahead of his time.

Joe Dolce: We were all there.

Nick Gillespie: Do you, as a final question, do you think, and this may be way premature, but will the cannabis revolution … because again, what’s your book is about is … I don’t actually want to diminish it, all that it’s simple pleasure and the infinite pleasure of getting high and just checking out for a while; but your book is actually … It talks about that, but then it talks about all these other uses of pot. We seem to be in a stage now where we’re reading more and more reports about Wall Street bankers micro-dosing with LSD or psilocybin and other drugs. There is serious groups, like MAPS, are trying to do serious research about psychedelics and other types of drugs. Do you think we’re entering into a new phase where maybe it took us 100 years to get used to pills, and then going back to something that is even more wide-ranging-

Joe Dolce: Without a doubt.

Nick Gillespie: Than simply getting prescribed.

Joe Dolce: There’s a huge, huge movement into psychedelics. I don’t think pills and pharmacology is the same thing. We’re looking at shifting, moving consciousness, and playing with that, and there’s open interests in that. Look, we’re a secular society, despite what they say. The experience of divine is far less available to us than it once was hundreds of years ago. It seems to make sense that we are a society also that is very chemically astute. We are a technical society, and that some of these incredible pharmaceuticals, LSD … It’s also things that are grown, psilocybin, and ayahuasca.

We all know people who are experimenting with these substances, and a wide range of people, and a vast variety of professions and socio-economics. It really cuts across society. People are interested in exploring the limits of human consciousness, I think. They want to scratch the surface. Frankly, that the US government or any government should say, “You are not allowed to do that,” is … It’s indefensible. It’s intellectually preposterous. It’s against every supposed right we have. Think about it, it’s preposterous.

Nick Gillespie: It’s increasingly difficult to police because people can…

Joe Dolce: You cannot police it.

Nick Gillespie: Yup. It brings us back to your cousin’s basement.

Joe Dolce: Exactly.

Nick Gillespie: Where it’s happening all around us, whether you want it or not. We will leave it there.

Joe Dolce: Thank you.

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Bannon Responds: “I Love A Gunfight”

Since it was revealed yesterday that Steve Bannon was removed from Trump’s National Security Council, the mainstream media rumor mill has run wild with speculation over whether the transition was voluntary or a devastating blindside to a man once considered Trump’s right-hand man. 

Not surprisingly, Bannon’s ‘official’ statement, which suggested that his removal was simply a natural progression after Michael Flynn’s dismissal and the appointment of General McMaster, did little to calm the rampant speculation of a rising civil war within the Trump administration.

“I was put on to ensure that [Susan Rice’s NSC] was de-operationalized. General McMaster has returned the NSC to its proper function.”

Pence also downplayed the alleged drama last night on Fox News saying that Bannon would continue to play a key role in the Trump White House.

 

Despite the G-rated statements from the White House, the MSM continues to promote a more sordid tale, with full attribution to anonymous sources of course, that puts Bannon on the outs in the Trump administration, leaving him on the verge of resigning his post. 

And while we suggest consuming anonymously-sourced media speculation with a healthy dose of salt, the latest rumor mill would suggest that Bannon finds himself in the midst of an epic fight for survival in the White House with none other than Trump’s son-in-law, Jared Kushner.  Here is Axios’ take:

The two sides: The Bannonites believe the liberals staged a coup and will turn Trump into a conventional squish who betrays the very voters who brought him to power. The Jared wing thinks the Bannonites are clinically nuts.

 

Killing Bannon won’t be easy: His staunchest ally is one of Trump’s closest confidants — Attorney General Jeff Sessions. Kellyanne Conway will go to the mat for him, as will policy advisor Stephen Miller. He’s also built strong relationships with other cabinet secretaries including Commerce Secretary Wilbur Ross and Treasury Secretary Steve Mnuchin. In the end, though, family matters most and all but dad are done with Bannon and his politics.

Meanwhile, recent moves that seemingly consolidate the power base of Jared and Ivanka have only served to fan the speculation of unrest.

Jared Kushner seizes control over structuring government at home and America’s public face aboard.

 

Ivanka Trump adviser Dina Powell is named Deputy National Security Adviser, and keeps her portfolio as senior counselor for economic initiatives.

But while many in the media would love nothing more than to see Bannon resign from his post, and will undoubtedly progress any narrative required to help bring that to a fruition, the rumor mill would suggest that he’s unlikely to go down without a fight after allegedly telling allies: “I love a gunfight.”

Of course, only time will tell fact from fiction, but much like Mark Twain, we suspect that the reports of Bannon’s early death are greatly exaggerated…

via http://ift.tt/2oOd9h7 Tyler Durden

Tillerson Warns Russia “Coalition Steps Are Underway To Remove Assad”

VIX was being crushed and stocks were leaking higher just as planned, until Secretary of State Rex Tillerson hit the tape beating war drums and announcing a new US policy on Syria, just a week after he said the US had no interest in removing the Syrian president.

Specifically, Tillerson said that steps are underway to remove Syrian President Bashar al-Assad, and that the U.S. is considering an “appropriate response” to the Syrian government’s alleged use of chemical weapons.

“The process by which Assad would leave is something that requires an international community effort both to first defeat ISIS within Syria, to stabilize the Syrian country to avoid further civil war and then to work collectively with our partners around the world through a political process that would lead to Assad leaving,” Tillerson said at the news conference in Palm Beach, Fla.

Tillerson also called into question Assad’s future in Syria, saying there would be “no role” for authoritarian ruler in Syria, and said that there is no doubt the Assad regime was reponsible for the Syria attack.

As a result, Tillerson said that “Assad’s role in the future is uncertain clearly, and with the acts that he has taken it would seem that there would be no role for him to govern the Syrian people” 

Acknowledging that a conflict with Syria would involve Russia, Tillerson said that “it’s very important that the Russian government consider carefully their continued support of the Assad regime.”

All of which was a U-turn from last Thursday’s comments when Tillerson said that “I think the longer term status of President Assad will be decided by the Syrian people.”:

The reaction in the market was quick:

… sending The Dow briefly red for the day.

While he has yet to frame his new policy on Syria, President Trump also had some “insight into next steps regarding Assad.

“He’s there, and I guess he’s running things, so I guess something should happen.”

And just like that, the conflict between the US and Russia over the future of Syria – and of course that Qatar gas pipeline to Europe which start it all – is back on.

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Colorado Cities Compete for Worst Airbnb Regulations: New at Reason

Arbitrary restrictions of Airbnb around Colorado include limiting short-term rentals to one unit per block face in one city and forbidding second homes from being rented out.

Jared Meyer and Andrew Wilford write:

“There is no one-size-fits-all answer for municipalities in regulating short-term rentals.” This conclusion, which comes from the Colorado Municipal League’s recent report on short-term rental regulations, may be true. But Colorado cities’ policies show that there are countless misguided approaches to regulating the growing home-sharing industry.

On January 1, the city of Denver celebrated the new year with regulations meant to limit home sharing. These restrictions, pushed by the hotel industry, represent unnecessary impediments to residents renting out their homes for some extra money. Unfortunately, limiting property owners’ rights is part of a growing trend across the state of Colorado.

Denver’s new rules require a $25 license fee, a 10.75 percent business tax on all income gained, and compliance with certain safety and liability insurance requirements. Some of these requirements are common across the United States, but the major problem with Denver’s rules is that homeowners are only allowed to rent out their primary residence. Even though most Airbnb hosts rent out their primary residences, second homes are nonetheless an important part of the home sharing industry. Second homes can comprise everything from vacation homes to long-time family homes that owners do not want to sell when work opportunities lead them to another city for a few years. A ban on renting them out is unnecessary and arbitrary.

If Denver follows through on its misguided regulations, the next few months will be expensive for local hosts. The vast majority of Denver Airbnb hosts remained unregistered in the weeks leading up to the January 1 deadline, even when they now face fines of up to $999 per incident.

The second most active city in Colorado for Airbnb is Boulder and Boulder County at large has certainly seen an explosion in growth from Airbnb. Six of seven communities in Boulder County nearly doubled their number of annual of Airbnb guests from 2015 to 2016. Even Boulder, the last city (and largest), increased its visits by over 50 percent. This is great news for Boulder County. Airbnb guests stay more than twice as long and spend almost twice as much money in the community as other visitors. Airbnb’s wide footprint in diverse neighborhoods also spreads this travel income around outside of traditional hotel districts.

View this article.

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FDA Loosens Its Shackles on 23andMe Personal Genomics Company

23andMeBack in 2013 the regulators at the Food and Drug Administration basically shut down the burgeoning field of direct-to-consumer personal genomics when it ordered the genotype screening company 23andMe to stop testing new consumers for genetic health risks. Why? Because the regulators had ginned up some speculative scenarios in which, for example, a woman who tested positive for a deleterious BRCA breast cancer variant would run to her kitchen, grab a butcher knife, and lop off her breasts (I exaggerate slightly.) As a long time and happy 23andMe customer, I was particularly irked by the FDA’s nonsensical decision to keep people in the dark about their genetic makeup.

Before the FDA brought its hammer down, 23andMe was developing a wonderful explanatory interface to help customers understand their genetic information. The company provided some insights on more than 200 health risks, drug responses, and inherited traits – and was adding more all of the time.

After 2013, the company was allowed to tell folks what their genes suggested about their ancestry and traits like dry earwax or the likelihood that their second toes are longer than their big toes. (As if anyone needs genetic tests to discern that information.) In their “wellness” reports, the company could inform customers about how their genes affect the speed with which they metabolize caffeine or their tolerance for milk.

Today, the company is announcing that the FDA is loosening its noose a bit and permitting it to tell customers some genetic risk information for ten different conditions, including late-onset Alzheimer’s disease, Parkinson’s disease, celiac disease and hereditary thrombophilia (harmful blood clots). As an early customer, the company had already provided me with some genetic insights with regard to all of these health risks, plus about 140 others.

Here’s hoping that the Trump administration will roll back these unnecessary regulations and free up personal genome companies like 23andMe to provide Americans with access to their genetic information.

To find out what’s genetically wrong with me, click over to SNPedia where I have posted the results of my 23andMe genotype screening tests for all to see.

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According To The Media, All Victims of Terror Attacks Are Not Created Equal

Authored by Darius Shahtahmasebi via TheAntiMedia.org,

Many people who are conscious of the media’s biased coverage of terror attacks in different parts of the world usually frame the issue as one of outright racism. This is misguided, if not dishonest, given that social media erupted into a frenzy when the image of a drowned Syrian refugee went viral in 2015, suggesting people do occasionally care about dark-skinned people.

Therefore, it isn’t that people care more when civilians with a particular skin color die in tragic circumstances. The fact is that people care more when the media tells them to care more.

The recent attack in St. Petersburg is no exception. No major landmarks were lit up to show solidarity and sympathy with Russia for an attack that killed more civilians than the London attack two weeks prior. There was no Facebook flag change and no march of world leaders. In fact, the “world leaders” who expressed sympathy for this recent attack in Russia were largely foreign ministers — not heads of state.

The majority of newspapers had the story as a headline for the day. However, there was a noticeable difference: If the attack had been in London or Paris, the rest of the news items would have essentially been shut down for the day. In those instances, the reader would see the main headline regarding the attack and then a string of related stories all linked to the attack. None of the major news outlets reported the events in St. Petersburg this way. They all went straight to other news stories directly afterward.

Further, Fox News didn’t even have it as their top story. A New Zealand newspaper, the New Zealand Herald, had the story 19 stories down on its main page. Given New Zealand’s close ties and strong sympathy for attacks that occur in the U.K, U.S., and France, it is concerning that this sympathy is not extended to other countries around the world.

It’s one thing to compare an attack in London to one in Russia, but it’s something wholly different to compare these attacks to attacks that occur elsewhere in the Middle East. It is estimated that while the world was mourning the recent attack in London, over 200 civilians were likely killed by American airstrikes in Iraq.

The media conveniently spun the stories about America’s air war in Iraq to refrain from allocating blame and to frame it more as an accident as opposed to what it was: an act of terror of the worst kind imaginable.

In the days following the attack in St. Petersburg, there are very few newspapers talking about this event — and certainly not as a top story. Yet the death toll for this attack is approximately three times higher than that of London’s.

We are also left wondering why on earth Facebook felt the need to mark every Londoner safe after the events in the area of Westminster,  despite London being a city of over 8 million people that was subject to an attack that killed a mere five. London’s cyclists are killed at a higher rate.

It isn’t racism that drives our desire to care about certain events and atrocities. It’s the attention the media pays to a particular story. Right now, the media spin doctors are working in full force to prey on the public’s emotions after another chemical attack in Syria – but they only want you to care insofar as the attack can be pinned on the Syrian government. The media has paid little attention to the chemical weapons attacks committed by ISIS, or the fact that evidence suggested U.S.-backed rebels committed major sarin gas attacks in 2013.

This should serve as a reminder that when you find yourself caring about a particular event — as opposed to other events that happen daily across the globe — you might only be concerned because someone else told you to worry in order to serve a particular agenda.

In the case of Russia, the underlying reasons for the corporate media downplaying this attack should be obvious. They also aren’t holding back in suggesting that Russia is now experiencing blowback for its military ventures in the Middle East, though this same media rarely concedes that the U.S., U.K., and France have been experiencing similar blowback for their multiple military interventions across the globe.

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Kashkari Slams Dimon: “If Demand For Loans Is High, Why Are You Buying Back Your Stock?”

While Jamie Dimon made headlines with the warning that “something is wrong with America, to which he dedicated a substantial portion of his latest annual letter to shareholders, a less discussed declaration by the JPM CEO was that the too-big-to-fail problem, one which clearly impacts his own bank, JP Morgan, has been solved. It was this that Neel Kashkari took offense with, and in a post on Medium, today the Minneapolis Fed president who has long waged a crusade to warn Americans that US banks remain very risky, he said that Dimon’s claims about the too-big-to-fail banking problem being solved and banks being over-capitalized are “demonstrably false.” To wit:

At 46 pages, Mr. Dimon’s letter includes a lot of interesting commentary. In this essay, I am going to respond to two of his main points because I strongly disagree with them. First, Mr. Dimon asserts that “essentially, Too Big to Fail has been solved?—?taxpayers will not pay if a bank fails.” Second, Mr. Dimon asserts that “it is clear that the banks have too much capital.” Both of these assertions are demonstrably false.

Addressing the first part of Dimon’s argument, the “solution” of the too big to fail problem, Kashkari says that “Mr. Dimon repeatedly points to various regulatory schemes that all have the same unrealistic feature: In a crisis, bondholders will take losses rather than taxpayers. It sounds like an ideal solution. The problem is that it almost never actually works in real life.”

We learned from past financial crises, including the 2008 financial crisis, that nothing beats equity for absorbing losses. Equity holders have long taken losses in the United States and thus expect that outcome. Moreover, equity holders cannot run during a crisis. In contrast, debt holders of the most systemically important banks in the United States and around the world have repeatedly experienced bailouts and likely will expect such an outcome during the next financial crisis. Indeed, the most recent crisis showed that even some debt holders who had been explicitly told that they would take losses during a crisis got bailed out.

While we would disagree that equityholders expect losses, especially in light of policies enacted by the institution of which Mr. Kashkari is part of, we tend to agree in principle, especially with his next statement that “governments are reluctant to impose losses on creditors of a TBTF bank during a crisis because of the risk of contagion: Creditors at other TBTF banks may fear they will face similar losses and will then try to pull whatever funding they can, or at least refuse to reinvest when debt comes due. This is why, regardless of their promises during good times, governments do not want to impose losses on bondholders during a crisis. History has repeatedly shown this to be true and, while we can hope for the best, there is no credible reason to believe this won’t be true in the next crisis. Only true equity should be considered loss-absorbing in a crisis. The largest banks do not have enough equity today to protect taxpayers. Too big to fail is alive and well. Taxpayers are on the hook.”

What we found more amusing was Kashkari’s takedown of the second part of Dimon’s argument, namely that banks hold too much capital, where – again somewhat ironically – Kashkari mocks the very stress test that the Fed (Kashkari’s employer) has implemented to prove to the public how capitalized banks are:

To make his argument that banks have too much capital, Mr. Dimon points to losses estimated by the Federal Reserve’s stress test and compares them to banks’ combined equity and long-term debt. Again, Mr. Dimon unrealistically assumes that debt will absorb losses in a crisis. As explained above, that is extremely unlikely. In addition, stress tests are just hypothetical scenarios. By definition, regulators (and bankers) won’t see the next crisis coming, and it will almost certainly look different from past crises, or scenarios modeled in a stress test.

Regulators such as… the Fed.

However, the most amusing aspect of Kashkari’s takedown was the allegation that current rules are restraining bank lending despite growing loan demand. To this his response is rather witty:

Mr. Dimon argues that the current capital standards are restraining lending and impairing economic growth, yet he also points out that JPMorgan bought back $26 billion in stock over the past five years. If JPMorgan really had demand for additional loans from creditworthy borrowers, why did it turn those customers away and instead choose to buy back its stock?

Here he is spot on, as is his follow up:

The truth is that borrowing costs for homeowners and businesses are near record lows. If loans were scarce, borrowers would be competing for them, driving up costs. That isn’t happening. Nor do other indicators suggest a lack of loans. Bank credit has grown 23 percent over the past three years, about twice as much as nominal gross domestic product. Only 4 percent of small businesses surveyed by the National Federation of Independent Business report not having their credit needs met.

This matters because what Kashkari is effectively saying is that the reason behind the collapse in loan creation, which as we showed two weeks ago is crashing at the fastest pace since the financial crisis…

 

… is not lack of supply but lack of demand, which then throws the whole “recovery” narrative into the trash.

Kashkari ends on another gloomy note,repeating  his recent warning that the odds of a bailout in the future are at roughly 70%… a bailout which most likely will again be borne by taxpayers:

Capital is the best defense against bailouts. Although capital standards are higher than before the last crisis, they are not nearly high enough. The odds of a bailout in the next century are still nearly 70 percent. Large banks need to be able to withstand around a 20 percent loss on their assets to protect against taxpayer bailouts in a downturn like the Great Recession, according to a 2015 analysis by the Federal Reserve. Unfortunately, regulators have taken it easy on the large banks, which today have only about half of the equity they need.

End result: absolutely nothing will change as a result of this “stump speech” by Kashkari, who until recently was angling for a career in politics, and will likely revert to it after his stint at the Fed ends. As to bank capital: expect more buybacks, more dividends to shareholders, and – once the global tide of excess liquidity goes away  – more bailouts.

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Goldman Sachs and the Deep State Have Taken Over the Trump Administration

The writing is on the wall and the message is not good. Trump will likely expand the war in Syria and increase tensions with Russia. The American empire is likely to implode under Trump’s watch, as he once again betrays many of the people who voted for him.

Hillary or Trump, we’d be getting the same thing. We had no real choice, and empires don’t reform. Prepare for impact.

– From yesterday’s post: The Imperial War Machine Marches Forward Under Donald Trump

The takeover of the Trump administration by Goldman Sachs has been obvious for months now. The takeover by the deep state has taken a bit longer, hence the non-stop Russia hysteria, which was clearly intended to back him into a corner. If Trump takes military action against Syria, we’ll know for certain the deep state coup is complete.

Fortunately, some Trump supporters are starting to wake up, with former lead investigative reporter for Breitbart, Lee Stranahan, being one of them. Lee recently recored an extremely important video message, and I ask all of you to listen to it in full and share. He knocks the ball out of the park, and while I was never a Trump supporter because I felt he would act precisely like he’s acting, I applaud Trump voters willing to admit betrayal.

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Germany Willing to Fine U.S. Companies to Censor What People Say Online

Angela MerkelIf you were financially responsible—to the tune of millions of dollars—for the content that users of your online platform posted online, you might take a bit of a dim view of giving them a lot of leeway in what they had to say.

That is apparently what the government of Germany is hoping for. Germany does not share America’s broad view of free speech. Like several European countries, it has laws and criminal penalties for hate speech and a broader conception of what an incitement to violence is (America tends to require an actual discernable threat). As part of the European Union, Germans are also able to invoke the online “Right to Be Forgotten,” forcing online search engines to delete links to content about them that may be true, but is embarrassing or casts them in a bad light.

Germany’s now working to expand its authority to order online censorship by holding social media companies like Facebook and Twitter financially liable for user content that violates its restrictions on speech. And it’s not a slap on the wrist either. Chancellor Angela Merkel’s cabinet has approved possible fines of more than $50 million if social media companies don’t respond quickly enough to remove speech that violates their laws. They have 24 hours to remove content calling for criminal behavior and a week to remove other types of “illegal” speech.

Besides potentially resulting in social media companies censoring content by non-Germans posted outside of Germany, also puts these companies in the awkward position of having to determine what is and isn’t legal to say under German laws, as though they were part of the country’s judicial branch. They are uncomfortable at the idea, Reuters notes:

A spokesman for Facebook, which has 29 million active users in Germany – more than a third of the total population – said the company was working hard to remove illegal content, but expressed concern at the draft law.

“This legislation would force private companies rather than the courts to become the judges of what is illegal in Germany,” he said, adding that Facebook’s partner Arvato would employ up to 700 staff in Berlin for “content moderation” by year’s end.

A spokesman for Twitter declined to comment on the legislation, but said the company had made a number of changes in recent weeks, including adding new filtering options, putting limits on accounts it had identified as engaging in abusive behavior and stopping those users from creating new accounts.

Given the financial risks involved here, it would not and should not be surprising if speech considered legal even by German standards ends up getting censored. Why take the risk?

Before dismissing this all as just a German law-and-order quirk, note that there has been pressure across the European Union to force social media companies to engage in more overt censorship. German Justice Minister Heiko Maas said he wants to take this proposed law (it still needs to be approved by Germany’s parliament) and push it through all of the European Union.

And while America may have different attitudes and laws protecting free speech, it still nevertheless has problems with its own broadly written laws that authorize censorship. America’s federal laws designed to eliminate online piracy and copyright violations are frequently misused to censor online content that is actually constitutionally protected criticism.

Furthermore, while we also have regulation shielding online companies from criminal and civil liability over much of the content written or posted by users (not the company itself), even those regulations are threatened all in the name of “public safety.” As Elizabeth Nolan Brown has reported, activists who believe America has a sex trafficking problem want to compromise these regulations in order to hold web companies and social media platforms potentially responsible.

And finally, before assuming “it can’t happen here,” a New York state legislator is attempting to bring the European Union’s “right to be forgotten” rules of online censorship to the United States.

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