Why Bubbles Are Like Porn

Authored by Anthony Saunders via Confounded Interest blog,

Supreme Court Justice Potter Steward said in 1964 in the Jacobellis v. Ohio case, 

“I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description [hard-core pornography]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that.”

Asset bubbles too are difficult to define, but I know it when I see it.

Take Robert Shiller’s P/E Ratio measure for stocks. There was a Roaring ’20s bubble which burst in 1929 (Black Tuesday), there was the infamous Dot.com bubble. On March 10, 2000, the NASDAQ Composite peaked at 5,132.52, but fell 78% in the following 30 months.

Now we are seemingly in yet another stock market bubble and almost at the P/E Ratio level of the Roaring ’20s bubble (but not near the dizzying heights of the Dot.com bubble … yet).

Stocks do seem awfully “frothy.” But what about home prices? The Case-Shiller 20 composite home price index has grown 43.6% since February 2012.  While home prices are not growing as fast as they did during the home price bubble of the last decade, they are going at a rate that is twice as fast as earnings (wage) growth.

These certainly look like asset bubbles. If it looks like a bubble and acts like a bubble, it probably is a bubble.

“Shhh. Don’t say the word “bubble!”

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Eric Peters: If Rates Ever Rise Above 3.5% “It Would Spark Massive Defaults”

Earlier today in his weekly note, One River CIO Eric Peters explained that in their attempt to overturn the natural order of the global economic “ecosystem”, what central banks have done is “stunning, unprecedented… and arrogant”, and as a result it is only a matter of time before another “peak instability” moment emerges as “it stands to reason that our volatility-selling machine will break one day. We saw a glimpse of this in 2008-09.”

And yet, as Peters concedes in a follow up note, those same central bankers don’t have any other option but to kick the can because as the CIO notes, any attempt to break the current ultra-low rate regime would “spark massive defaults.”

Incidentally, those are the same defaults that should have happened during the “near systemic reset” of 2008/2009 but the Fed, in all its wisdom, decided to kick the can at the cost of trillions in global excess liquidity, and while it bought itself some time – in the process unleashing a global deflation wave thanks to zombie companies that should not exist yet do, and every day try to undercut each other on pricing – nearly ten years later it has discovered that it has no way out, for one simple reason: there is now too accumulated debt.

Here is Peters “modelling” out why the Fed is stuck with no way out:

When debt expands constantly relative to GDP, there’s a limit to how high interest rates can rise without causing massive defaults,” said the Model. “There’s nothing inherently wrong with defaults, they can cleanse a system, but a rise in US defaults from today’s 2.5% to 6.0% would boost unemployment by 3%.


America’s economy is leveraged to the financial system, which includes non-capitalized liabilities; entitlements, pensions, healthcare. “US total debt/GDP is 300%, but if you include these non-capitalized liabilities, it’s more like 800%.”



“These non-capitalized liabilities rise as both interest rates and economic growth decline,” continued the same Model.


“Low growth produces less income, and low rates supply less investment returns on pensions. Which means companies need to set aside more money to pay the liabilities.” It’s a slow-moving economic death spiral.


“The Neo-Fisher Model posits that we can escape this trap by increasing interest rates. Which will raise investment returns, while simultaneously lifting growth. Fisher’s Model may be right, but it will never be tested in reality.”


In reality the world operates on monthly payments,” explained the same Model. “So if we tested the Fisher Model by raising interest rates meaningfully, we’d spark massive defaults.” Unemployment would jump dramatically.


“Our central banking and political reaction function ensures that each rise in unemployment is followed by monetary stimulus.” In the 30yrs since Greenspan became Fed Chairman, borrowers have learned this lesson and responded by leveraging up.


“And that’s why US interest rates will never rise sustainably above 3.5%.”


* * *

As a bonus, here is Peters on the several consensus themes in the market right now, and why it may be time to fade at least one of them:

“I have no ideas and no positions,” said the portfolio manager. “So I wrote down the things that everyone else believes,” he continued.

  • “Developed world economies are slowing;
  • Trump agenda has stalled;
  • US equities are too expensive;
  • Interest rates are artificially low and must rise;
  • Central banks are out of ammo;
  • China is racing toward disaster;
  • China can and will maintain stability through its autumn party congress;
  • Europe can’t continue down its current path;
  • Brexit is bad for the UK;
  • The EU has the upper hand in the Brexit negotiations.


“I sat back and considered the arguments people use to justify these views,” continued the same portfolio manager. “Sometimes things are clearer when you have nothing on,” he said, the ink drying. “It appears we’ve hit peak skepticism on Trump. He may fail completely, but people’s certainty seems misplaced. It’s priced.” He dropped his pen.


“And I know this sounds crazy, but of all the things that people believe, the two that are supported by the weakest arguments are that rates are artificially low and equities are too expensive.”

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Lender Loan Crash: Nearly Every Major Regional Bank Missed Lending Estimate

Authored by Mike Shedlock via MishTalk.com,

In addition to a miserable performance in the auto sector and a very poor GDP report, the Trump Era Brings Rare Drop in Loans at America’s Regional Banks.

Bank stocks have climbed since Donald Trump was elected president as investors bet his pro-growth agenda and rising interest rates would help lenders generate huge profits. But this month, executives at some of the country’s largest regional banks said customers, especially corporations and small businesses, are instead waiting for details on the new administration’s proposals and results before seeking financing for expansion.


Total loans at the 15 largest U.S. regional banks declined by about $10 billion to $1.73 trillion in the first quarter, compared with the previous three-month period, the first such drop in four years, according to data compiled by Bloomberg. All but two of those banks missed analysts’ estimates for total loans, as a slump in commercial and industrial lending sapped growth.


“The optimism and the willingness is there, but it has not yet translated into actions or behaviors,” Beth Mooney, chief executive officer of KeyCorp, said of the Cleveland-based bank’s small and middle-market business clients. “We did not see ‘flip the switch’ sort of behavior that led to loan demand or making different capital decisions or investment decisions.”

Nonsensical Statement of the Day

The optimism and the willingness is there, but it has not yet translated into actions or behaviors,” said Beth Mooney, chief executive officer of KeyCorp.

Excuse me for pointing out the obvious, but if willingness was present, there would have been more loans.

Mainstream media and most economists are banking on consumer confidence sentiment, regional manufacturing sentiment, ISM sentiment, and now small business loan sentiment.

Sentiment Indicators

It’s time to throw the sentiment idea in the ash can where it belongs.

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And The Worst-Performing Currency Since Trump’s Election Is…

Putting aside the hyperinflationary collapse of Venezuela’s black market Bolivar, the Mexican Peso continues to languish since Donald Trump was elected President in Nov 2016 as trade wars and border wall discussion weigh the currency down.

As Bloomberg notes, the Mexican peso’s more than 15% rally since Donald Trump took his oath of office and softened his trade talk hasn’t been enough to repair the battering it took after the election. The currency is still down around 4% since the vote, lagging peers that are also sensitive to trade with the U.S.: the Canadian dollar, the Chinese yuan and the Korean won. Lingering uneasiness about Trump’s trade policies should continue to haunt the peso, as was seen in this week’s wide swings after the president made opposing comments about Nafta.


But, on the other hand, amid economic stumbles and nuclear armageddon on its doorstep, the Korean Won (and KOSPI) is outperforming

As it seems World War III threats is good for South Korean stocks??!!

via http://ift.tt/2qm3QG6 Tyler Durden

Why “Disgusting” Rome Sends Trains Filled With Trash To Austria

Authored by Bethany Bell via BBC.com,

Rome has been struggling to cope with a rubbish crisis and Austria has spare capacity at a waste-to-energy plant near Vienna.

So a deal has been struck. The Italians are paying Austrian company EVN to dispose of up to 70,000 tonnes of Roman household refuse this year.

The waste is transported by train through northern Italy, over the Alps and ends up at the EVN thermal waste utilisation plant at Zwentendorf on the Danube.

Up to three trains a week arrive at the Zwentendorf plant. Each carries airtight containers loaded with around 700 tonnes of Roman household waste.

The refuse is incinerated and converted into hot flue gas, which generates steam. The steam is delivered to a neighbouring power station, where it is converted into electricity, which is used to power 170,000 houses in the province of Lower Austria.

It may seem counter-intuitive to carry rubbish over 1,000km (620 miles) before disposing of it, but it is part of efforts in the European Union to make cities reduce the amount of waste that goes into landfills.

"It is not crazy," insists Gernot Alfons, head of the EVN thermal waste plant. For him it is an environmentally friendly solution and the rubbish trains are key.


"The other alternative would be to put this rubbish into landfill, which creates a lot of methane emissions that create a lot of impact in terms of CO2 emissions.


"It is much better to transport this waste to a plant which has a high energy efficiency like ours."

So what has gone wrong with Rome's waste disposal?

Even in elegant districts like Prati, near the Vatican, it is not hard to see that the city has a rubbish problem.

Overflowing communal bins for both household waste and recycling are a common sight, and a lot of Romans are very unhappy.

"I think it is outrageous," Claudia Grassi, a resident of Rome told me. "The beautiful town of Rome is being insulted. It is like a beautiful woman that has been wounded again and again."

Antonio La Spina, professor of sociology and public policy at Rome's LUISS University, says the city produces more waste than it can cope with.

"One factor is the remarkable amount of waste that is produced per capita in Rome. Another is that the share of (separated) waste is increasing.

"That's a good thing in general, but not if the authorities aren't ready to deal with it all – which they aren't.

"Another problem is the fact that the landfills are full – and some are already a big environmental problem, and need to be closed."

Rome's landfill sites are so full, he says, that the authorities have not only had to look beyond the region, but beyond Italy, to dispose of their waste.

Where there's muck, there's brass

But it is not just the lack of space. The rubbish problem is also political.

Waste disposal and other public services in Rome have been plagued by more than mismanagement.

In 2014, an investigation known as Mafia Capitale laid bare corruption and tainted bidding in city services, including rubbish collection.

Rome's new Mayor Virginia Raggi, from the populist Five Star Movement, came to power last year promising to clean up the city.

But she ran into trouble almost immediately.

The person she appointed as the city's rubbish tsar, Paola Muraro, was forced to resign after it emerged she was under investigation for alleged wrongdoing during her 12-year stint as a consultant to Rome's rubbish collection agency, AMA.

Ms Muraro has denied allegations of impropriety. But Mayor Raggi is under pressure.

In Campo de' Fiori, one of Rome's most attractive markets, rubbish piles up on the cobblestones almost every afternoon, amid the flower and vegetable stalls.

Rubbish collectors eventually arrive to clean it up, but Vladimir, who works at a local restaurant on the square, shakes his head.

"It is disgusting here for two or three hours a day, until they clear it up. Tourists who come here are in shock. In the centre of a European capital, this is not normal."

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The Tragedy This Weekend At The “Coachella For The Super Rich”

Please visit full archives at The Entry Points:


There is a sad story today at Bloomberg about the “tragedy” (yes tragedy according to the writer) which befell a group of “moneyed millenials” (SJWs) over the weekend. When young SJWs are not pampered, and coddled, and treated like royalty, the rest of us should feel nothing but sorrow for their plight. Because they live such demanding, high-pressure, work-intensive lives. Protesting, rioting, and shouting over the speeches and appearances by conservative speakers, is an exhausting life for these youngsters – so they need time to kickback and chillax. This past weekend was supposed to provide this and be a fun-filled experience, but it was a “disaster” instead. Here’s what happened at this “nightmare”:
The same young “moneyed millenials” who have been lecturing and berating the rest of us about our “CO2-intensive lifestyles”, decided it was perfectly fine for them to fly to the Bahamas for the weekend: “Fyre Festival chartered planes from Swift Air to fly from Miami to Great Exuma Island.” It was billed as a “Coachella for the super rich”. And ticket holders thought it would be a: “weekend in paradise, but it  turned into a nightmare when a super exclusive music festival in the Bahamas became a disorganized mess, stranding attendees who in some cases paid tens of thousands of dollars. Hyped by glossy ads featuring such supermodels as Kendall Jenner and Emily Ratajkowski, the Fyre Festival promised the culture experience of the decade in a tropical wonderland of yachts, villas, and gourmet cuisine. Ticket prices went into five figures for special VIP treatment, though general admission packages were available starting at $1,200.” But it was not anything like what they had dreamed it would be. Their luxury accommodations were disaster relief tents. And their gourmet cuisine did not even take into consideration animal welfare, nor the environment: “For dinner, they were served bread, cold cuts, cheese slices, and a side salad in a styrofoam box.” The event was put together by two “moneyed millenials”,  Ja Rule and Billy McFarland, but things went a bit awry: “The event was organized by rapper Ja Rule and entrepreneur Billy McFarland, who is also the founder and chief executive officer of Magnises, a social club for “elite” millennials. According to a report by Business Insider, some members of that enterprise claimed last-minute trip cancellations, scheduling failures, and unwanted charges on their cards. McFarland didn’t immediately return a call and text seeking comment.”
The two geniuses who organized the event were even reprimanded by the Bahamian government: “The event’s implosion was so calamitous it prompted a Bahamian government agency to issue a statement on the matter. ‘We are extremely disappointed in the way the events unfolded yesterday with the Fyre Festival. We offer a heartfelt apology to all who traveled to our country for this event,’ the Ministry of Tourism said Friday.” 
But after the “calamity” which befell the moneyed millenials over the weekend, they decided they wanted their money back: “According to Dylan Caccamesi, who paid about $1,200 to attend, organizers asked those seeking refunds to write their names, email addresses, and phone numbers on pieces of computer paper. He signed the paper in the hope that it would help guarantee a refund. ‘I’m not sure what the intent was,’ the 22-year-old from New Jersey said in a phone interview from the Bahamas. ‘We still have to get a hold of them.’ Caccamesi said an email was also sent by the festival promising a refund, citing unforeseen circumstances, but detailed information has yet to be provided.” As to be expected of course, and what else is new, the “moneyed lawyers” had to butt in on the “tragic” circumstances: “It sounds like a clear breach of contract case, said Randall Kessler, an attorney in Georgia. ‘They didn’t deliver what they promised.” Maybe there’s a case here for Gloria Alred, as there certainly must have been some sexism involved in this “tragedy” also. 

And “like” is apparently still in, as young Dylan summed it up for us: “I haven’t been on a vacation in a while. I was like, ‘I’ll be living luxurious.’ It was supposed to be good for, like, high-class youth. A higher-expectations festival.” Well obviously young Dylan did not “like” what happened, but as any youngster knows, there’s always alcohol to make it all better: “We have no idea what’s going on. We’re just sitting on the beach getting wasted.”

via http://ift.tt/2oVcTf6 Trader Scott

Two-Thirds Of Americans Think The Democratic Party Has Lost Touch With The Nation

If you listen to mainstream media for more than 30 seconds, you would think President Trump is in a world of his own as the entire nation turns its back on him. However, that would be 'fake' news as WaPo reports, in fact, the Democratic Party is viewed as more out of touch than either Trump or the party’s political opponents.

Despite the media's coverage of every protest, judicial objection, and politician bad-mouthing, Democratic Party favorability continues to slide

And as The Washington Post's most recent poll shows, two-thirds of Americans think the Democrats are out of touch – including nearly half of Democrats themselves.


It’s worth highlighting that last point. While the political opposition generally views Trump or either party as about equally out of touch – with about 80 to 90 percent saying so – the Democratic Party is viewed as far more out of touch by Democrats than Trump or the GOP are by Republicans.

It’s clear that the Democratic Party is cognizant, to some extent, of the discontent at the grass roots. When Tom Perez, the newly elected leader of the party, headed out on a listening tour this month, he brought along a special guest: Sanders.

And finally, to sum things up here is Nancy Pelosi explaining how little she listens as she proclaims The Democrats stand for what Americans really want (and confuses Trump with Bush)…

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The Relentless Push Towards War

Authored by Chris Martenson via PeakProsperity.com,

The only real constant to be found in both European and US politics is war.  A steady feature of both regions for the past 20+ years has been small, lucrative conflicts waged against countries unable to effectively defend themselves. 

It doesn’t seem to matter who’s in office in the US = Republican/Democrat, conservative/liberal – there’s a war machine constantly running. My concern is that there's a building risk that one day that war machine is going to bust apart. And when it does, the long relative peace that the US and Europe have enjoyed (even as they’ve visited a lot of death and destruction elsewhere) will be shattered.

As I’ve written extensively in the past, as was the case with Russia last fall, this push to war includes a series of carefully-crafted talking points being endlessly repeated over the print and airwaves.  It’s an ever-present condition of living in our manufactured reality, where what we are told to care about is beamed at us around the clock  in a rather tediously but emotionally-manipulative way on the “news.”

For a short historical review, recall that it wasn’t that long ago that we were asked to be in a near state of panic about:

  • Ebola
  • Iran’s nuclear capabilities
  • Libya’s terrible strongman (who turned out to be way better than the thugs who replaced him)
  • Terrorists
  • Russia

How many of those are now ‘front and center' in your concerns?  Probably none.  Today's big ‘bogeyman’ is North Korea.  Have you wondered why?

The news about North Korea is at a fever pitch.  Again, we have to ask, why now?

Trump says 'major, major' conflict with North Korea possible, but seeks diplomacy

Apr 28, 2017


The Trump administration on Wednesday declared North Korea "an urgent national security threat and top foreign policy priority." It said it was focusing on economic and diplomatic pressure, including Chinese cooperation in containing its defiant neighbor and ally, and remained open to negotiations.


U.S. President Donald Trump said on Thursday a major conflict with North Korea is possible in the standoff over its nuclear and missile programs, but he would prefer a diplomatic outcome to the dispute.


"There is a chance that we could end up having a major, major conflict with North Korea. Absolutely," Trump told Reuters in an Oval Office interview ahead of his 100th day in office on Saturday.


Nonetheless, Trump said he wanted to peacefully resolve a crisis that has bedeviled multiple U.S. presidents, a path that he and his administration are emphasizing by preparing a variety of new economic sanctions while not taking the military option off the table.

"We'd love to solve things diplomatically but it's very difficult," he said.


In other highlights of the 42-minute interview, Trump was cool to speaking again with Taiwan's president after an earlier telephone call with her angered China.


He also said he wants South Korea to pay the cost of the U.S. THAAD anti-missile defense system, which he estimated at $1 billion, and intends to renegotiate or terminate a U.S. free trade pact with South Korea because of a deep trade deficit with Seoul.


U.S. officials said military strikes remained an option but played down the prospect, though the administration has sent an aircraft carrier and a nuclear-powered submarine to the region in a show of force.


Any direct U.S. military action would run the risk of massive North Korean retaliation and huge casualties in Japan and South Korea and among U.S. forces in both countries.


Okay, let’s parse all that out:

  • There are no direct negotiations between the US and North Korea
  • Trump is talking tough
  • Kim Jong Un is insane
  • Trump wants South Korea to pay for a $1 billion US piece of hardware
  • Trump wants to renegotiate or terminate the trade pact with South Korea
  • If things ‘go hot’, a lot of casualties are expected
  • Both China and North Korea are very alarmed by the THAAD anti-missile system the US has installed in South Korea
  • The US is maneuvering military assets into the region, including an aircraft carrier and sub, among other displays of suggested force

Let’s see here…what could possibly go wrong?

How about everything?

Here’s some more on the THAAD anti-missile defense system, which wasn't well received by the locals in South Korea who, for some reason, have no interest in being dragged into a war with their immediate and heavily-militarized neighbors by a careless US administration:

US sets up missile defense in S. Korea as North shows power

Apr 26, 2017


SEOUL, South Korea (AP) — In a defiant bit of timing, South Korea announced Wednesday that key parts of a contentious U.S. missile defense system had been installed a day after rival North Korea showed off its military power.


The South's trumpeting of progress on setting up the Terminal High-Altitude Area Defense system, or THAAD, comes as high-powered U.S. military assets converge on the Korean Peninsula and as a combative North Korea signals possible nuclear and missile testing.


About 8,000 police officers were mobilized, and the main road leading up to the site in the country's southeast was blocked earlier Wednesday, Yonhap reported. About 200 residents and protesters rallied against THAAD in front of a local community center, some hurling plastic water bottles.


North Korea conducted live-fire artillery drills on Tuesday, the 85th anniversary of the founding of its million-person strong Korean People's Army. On the same day, a U.S. guided-missile submarine docked in South Korea. And the USS Carl Vinson aircraft carrier is also headed toward the peninsula for a joint exercise with South Korea.


The moves to set up THAAD within this year have angered not only North Korea, but also China, the country that the Trump administration hopes to work with to rid the North of nuclear weapons. China, which has grown increasingly frustrated with its ally Pyongyang, and Russia see the system's powerful radars as a security threat.


I consider having to deploy 8,000 police officers to deter possible protestors as a strong sign of just how unpopular a move it is for the THAAD system to be installed.  North Korea is rattling its sabers, the US is moving assets in, China is both alarmed and trying to be helpful at the same time, probably preferring to let a sleeping dog lie.

This is an incredibly volatile moment, especially considering that Kim Jong Un has been anything but rational his entire life. So, again, we have to ask: Why now? Why has beating North Korea into submission become such a sudden national priority?

Before address that, it bears repeating that most of what passes for “news” in the West is actually well-crafted talking points put out by self-interested people who have discovered a fantastic way to remain in power and accumulate wealth. Read more about this in our prior report:  We Are Being Played.

Well, that's true at least as long as we consent to follow along and dutifully remain ignorant of these tricks of persuasion by propaganda. There’s really no good excuse for being fooled, except mental laziness.  The tricks of this trade are neither subtle nor difficult to spot.

Meanwhile, the actual things that are deteriorating alarmingly are not even talked about — ever — in the main news outfits.  Alarming species extinction rates, the loss of phytoplankton in the oceans, the loss of terrestrial soil fertility into oceanic dead zones, and the largest wealth gap in all of history created on purpose by central banks — very real crises like this are nearly completely ignored.

These are all very dangerous to our future, but they aren't talked about because doing so won't sell more weapons. Nor will it advance any political careers, or goose banking profits next quarter.

So for a system that demands continuous conflict in order to function, to manufacture a new war you need a good sales agent, and none are so closely tied to that racket than the New York Times.  Here they are recently using the same dumb tricks that worked the last time, and the time before that…and so on:

NYT’s ‘Impossible to Verify’ North Korea Nuke Claim Spreads Unchecked by Media

Apr 26, 2017


Buoyed by a total of 18 speculative verb forms—five “mays,” eight “woulds” and five “coulds”—New York Times reporters David E. Sanger and William J. Broad (4/24/17) painted a dire picture of a Trump administration forced to react to the growing and impending doom of North Korea nuclear weapons.


“As North Korea Speeds Its Nuclear Program, US Fears Time Will Run Out” opens by breathlessly establishing the stakes and the limited time for the US to “deal with” the North Korean nuclear “crisis”:


Behind the Trump administration’s sudden urgency in dealing with the North Korean nuclear crisis lies a stark calculus: A growing body of expert studies and classified intelligence reports that conclude the country is capable of producing a nuclear bomb every six or seven weeks.


That acceleration in pace—impossible to verify until experts get beyond the limited access to North Korean facilities that ended years ago—explains why President Trump and his aides fear they are running out of time.


The front-page summary was even more harrowing, with the editors asserting there’s “dwindling time” for “US action” to stop North Korea from assembling hundreds of nukes:


From the beginning, the Times frames any potential bombing by Trump as the product of a “stark calculus” coldly and objectively arrived at by a “growing body of expert[s].” The idea that elements within the US intelligence community may actually desire a war—or at least limited airstrikes—and thus may have an interest in presenting conflict as inevitable, is never addressed, much less accounted for.


The most spectacular claim—that North Korea is, at present, “capable of producing a nuclear bomb every six or seven weeks”—is backed up entirely by an anonymous blob of “expert studies and classified intelligence reports.” To add another red flag, Sanger and Broad qualify it in the very next sentence as a figure that is “impossible to verify.” Which is another way of saying it’s an unverified claim.


Unverifiable “evidence,” anonymous sources, and the broad appeal of “many experts.”  Sound familiar?  It should, it’s the exact same playbook used by the war machine to bomb and invade Iraq, Afghanistan, Syria, and, someday soon, Iran and Russia.

It brings to mind this quote by Arundhati Roy:

What I’m saying is that it’s the exact same trick used over and over again. Either the New York Times is the stupidest crew of reporters and editors ever with completely flat learning curves, or they are in on the racket.  More likely the latter than the former, I'm convinced.  The New York Times hasn't seen a war it couldn’t support (especially in the oil-rich Middle East).

Why Now?

So the big question is ‘why now?’  Why is North Korea suddenly such a concern?  They’ve been peskily doing what they do for a very long time; developing crude nuclear devices and lobbing test missiles into the sea.

If you happen to be the ocean around North Korea, you have to absorb a wayward rocket now and then. But there’s not much of a threat beyond that at the moment.

None of the articles I’ve read have given any credible insight into why North Korea is considered a clear and present danger to US interests at the moment. More than that, no analysis has been proffered to explain how any potential military action doesn’t just end in a bloodbath for the poor people of South and North Korea.

The conventional military capabilities of North Korea are pretty staggering if you live in Seoul South Korea, at least:

When it comes to soldiers based on the North Korean border, the US only has about 20,000 troops permanently stationed in South Korea, as well as about 8000 air force personnel and other special forces. There were also about 50,000 military personnel based in Japan.


Compare this to North Korea, which has 700,000 active soldiers, but a whopping 4.5 million reserves.


Prof Blaxland said North Korea had also massed about 20,000 rockets and missiles on the border with South Korea, and when you are playing a numbers game, technology doesn’t always win.


“There’s a saying ‘quantity has a quality all of its own’,” he said.


“North Korea has massed artillery and missile capability adjacent to the demilitarised zone, close to Seoul, which puts it in range of a population about the size of Australia — it’s pretty scary.”

(Source news.com.au)

As a reminder, Trump campaigned on a peace platform. So this sudden belligerence has to be coming form some heavy internal pressure; or he’s simply flip-flopped (or wasn’t honest) on a very important matter.

He’s done so much flip-flopping that this tweet struck me as funny:

Continuing with the mystery of Why now?, we note that the potential consequences of a kinectic conflict for South Korea are staggering. The simple fact is that, no matter how many jets and cruise missiles a carrier group launches, or what countermeasures South Korea and embedded US military bring to bear, there’s little chance of them wiping out anything but a very small percentage of North Korea’s conventional artillery and rocket capabilities.

Think of 500,000 rounds of artillery landing in a major, packed capitol city that has the population of Australia and you can begin to appreciate the scale of the catastrophe that could ensue:

Trump, who clearly and unequivocally campaigned on a peace platform, is now sending a “very powerful armada” to the coast of the DPRK.  Powerful as this armada might be, it can do absolutely nothing to prevent the DPRK artillery from smashing Seoul into smithereens.  You think that I am exaggerating?  Business Insider estimated in 2010 that it would take the DPRK 2 hours to completely obliterate Seoul. Why?  Because the DPRK has enough artillery pieces to fire 500,000 rounds of artillery on Seoul in the first hour of a conflict, that’s why.  Here we are talking about old fashioned, conventional, artillery pieces. Wikipedia says that the DPRK has 8,600 artillery pieces and 4,800 multiple rocket launcher systems.  Two days ago a Russian expert said that the real figure was just under 20,000 artillery pieces. Whatever the exact figure, suffice to say that it is “a lot”.


The DPRK also has some more modern but equally dangerous capabilities. Of special importance here are the roughly 200’000 North Korean special forces. Oh sure, these 200,000 are not US Green Beret or Russian Spetsnaz, but they are adequate for their task: to operate deep behind enemy lies and create chaos and destroy key objectives. You tell me – what can the USS Carl Vinson carrier strike group deploy against these well hidden and dispersed 10’000+ artillery pieces and 200,000 special forces? Exactly, nothing at all.


Clearly that’s a very unsettling prospect for South Korea. Just imagine a favorite major city of yours with a completely unstable leader within artillery range just to its immediate north.  It’s a frightening prospect.

Again, I cannot find a single credible reason for Why now?. And so, we have to simply speculate.

Possible reasons range from an itchy military industrial complex that is disappointed that it cannot seem to goad the US into war with Russia and North Korea just happened to be next on the list, to the idea that Trump is really seeking trade deal concessions from South Korea and is using the North Korean situation as leverage.

The latter is not out of the realm of the possible, with Trump having said he wants South Korea to pay for the THAAD system being installed and that he wants to renegotiate our balance of trade with them, too. 

Who says stuff like that at a time when war might break out?  Someone who doesn’t really appreciate the gravity of the situation, I'd suggest. I mean, if it’s a negotiating tactic, it’s one that could end up with a lot of people losing their lives and a ruined economy. If it’s a negotiating tactic stapled to a crisis, it’s still an odd thing.


Tensions with North Korea are about as tight as can be right now. And the wild card is the apparent instability of Kin Jong Un.  Who knows what he might do?

Any equally-perplexing mystery, which for now I'll have to file under “central banks control the markets” is why the KOSPI (South Korea's stock index) is up so much on the outbreak of these very serious tensions?

KOSPI index price chart

Either the central banks are propping it up here to keep the masses calm, or the central banks are to blame for pouring so much liquidity into world markets that even the risk of obliteration is insufficient cause for a stock market to go down. So take your pick: either it’s a controlled market or it’s a sign of just how outrageous the bubble mentality across the world has become.

One feature of bubbles is the inability to entertain the idea of an asset ever going down in price. So they go up; news and data be damned.

I just find it extremely strange that the South Korean stock index is powering higher through all of these tensions. It's very, very strange. Stocks are not supposed to like uncertainty. The post-French election stock buying spree was explained on that very basis: the French elections removed uncertainty and therefore stocks went up.

But now we're being forced to accept how stocks are going up as uncertainty increases.

Since it really makes no sense, other ‘reasons’ are being given. But it’s just too strange for the rational mind to believe them.  It’s just not normal; and therefore we don’t live in a normal world anymore. 

If a full shooting war breaks out with North Korea, there will be massive casualties on all sides.  To think that peace depends on Trump negotiating with Kim Jong Un is a particularly comic-book-worthy plot line. It seems absurd. But here we are. 

If you live in Seoul, you should consider getting out for a while. Take a vacation, or work remotely, and bring your family. Just for a while — maybe a couple of weeks. 

If you can’t do that, then be sure all of your loved ones know the rally points and basement shelters that apply.  Review your basic contingency plans and then hope that they won't be required. 

Remember, any outbreak of war is going to be a very bad thing for the globe at this particular moment in history.  Debt levels are stretched to the limit, GDP is weak, and it won’t take much to upset the economic and financial market apple carts. 

For everyone else, read our report How To Prepare For War that was prepared for the possibility of a war with Russia. 

It’s not a pleasant topic, nor one I like to keep raising. But there’s a crew in charge in DC that is intent on starting wars, and they are not about to stop now. I believe they span administrations and they are very influential.

I also happen to believe that they will eventually pick a fight we all regret very much. 

So be prepared.

via http://ift.tt/2oVe1zi Tyler Durden

Iranian TV CEO Assassinated In Istanbul

The founder and CEO of Iran’s satellite TV network Gem TV, Saeed Karimian, 45, who in 2016 was tried in absentia and sentenced to six years in prison by a Tehran court for “spreading propaganda against Iran”, was shot dead in Istanbul.

According to Dogan News, Karimian – identified by Hurriyet as a British national – and a Kuwaiti business partner were driving in Istanbul’s Maslak neighborhood after 8 p.m. (1.00 p.m. ET) on Saturday when their car was blocked by a jeep and shots were fired. Karimian died immediately after the gunmen – who were reportedly masked – opened fire on the vehicle. As Reuters adds, Karimian was found dead by emergency services arriving at the scene while his associate was taken to a hospital where he too passed away.

Two masked shooters got out of the jeep before opening fire, Hurriyet said. The jeep was later found abandoned and burned. Turkey’s Dogan news quoted the mayor of Istanbul’s Sariyer district as saying initial police findings suggested the shooting may have prompted by a financial disagreement involving Karimian.

In a statement on its Facebook page, GEM TV confirmed Karimian had died but without making clear the circumstances of the death.

GEM TV is known for entertainment satellite channels that dub foreign films and western programmes into Farsi for Iranians. It also produces movies and TV series. It has been criticized by Iran for showing programmes which go against Islamic values and has been accused the channel of spreading Western culture. As Reuters notes, “the satellite broadcaster’s programing has angered authorities, who view it as part of a cultural “soft war” waged by the West.

While satellite television is popular in Iran, owning a satellite dish is illegal the Guardian adds. Police and security forces occasionally smash dishes and seize receivers as authorities routinely denounce the western pop culture shown on satellite channels as decadent and un-Islamic.

Iranians use satellite dishes in order to watch foreign channels

Last year a Revolutionary Court in Tehran tried Karimian in absentia and sentenced him to six years in jail on charges of “acting against national security” and “propaganda against the state”.

Family members told the BBC’s Jiyar Gol that Mr Karimian had been threatened by the regime the past three months, and as a result was planning to leave Istanbul and move back to London. However, BBC sources have suggested the killing may be related to business and gangs.

Gem Group was initially established in London, but later expanded to Dubai. According to the group’s website, it has 17 Persian-language channels, plus one each in Kurdish, Azeri and Arabic. Iran’s semi-official Tasnim news agency, considered to be close to the country’s hardline paramilitary Revolutionary Guard, described GEM as an opposition network and said Karimian had been given a prison sentence for “propaganda”, without elaborating.

The assassination took place on the same day that Turkish president Erdogan – now with virtually unlimited executive powers following the recent constitutional referendum – blocked Wikipedia, banned TV dating shows, and purged another 4,000 state workers for their “affiliation” with the Turkish “shadow state” alleged controlled from rural Pennsylvania by the 76-year-old cleric Fethullah Gulen.

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

Don’t Know Shiloh from Shinola

Here’s a special post for any Californians out there who wonder where their tax dollars are going. Some of you may have heard about this freak, who was convicted of vicious, murderous crimes and yet successfully demanded the state provide him expensive gender reassignment surgery, otherwise he might kill himself from depression.

So, in a sensible world, a razor blade would have been quietly provided and the officials could wait until their ongoing expense had addressed itself. Instead, the state fell all over itself to get the surgery that this weirdo so obviously deserved. Of course, the description of this person’s crimes depends on the source. If you read a heavily left-leaning publication, you get this:

Convicted murderer Shiloh Quine, who is serving a life sentence for her role in a deadly 1980 incident in Los Angeles

Hmm. A “role” in an “incident“. Doesn’t sound so bad. But if you read a right-leaning publication, you get something that sounds a little closer to what actually happened:

He and an accomplice killed a man, Shahid Ali Baig, age 33 and a father of three, in 1980 while stealing his car during “a drug and alcohol-fueled rampage.” The victim’s daughter, Farida Baig, legally petitioned to have the surgery denied but was unsuccessful. She said “My dad begged for his life.”

Anyway, a prison psychologist recommended the surgery after Quine said it would bring “a drastic, internal completeness” to her life. What’s that? You don’t have drastic and internal completeness in your own life? Tough. You didn’t kill anyone, now, did you?

So the state wound up paying upwards of $100,000 to chop this murderer’s dick off and give him (umm…”her“) contentment. Would you like to see the result? Form a line. No shoving, please, gentlemen. Voila!

Rorrwwwwww. Amiright? She’s even got a porn-star-y “Heavenly” in her name. Hot!

Naturally, though, it couldn’t end there. The drastic and internal completeness didn’t last forever, and the legal battles (and bills) keep piling up as these mentally ill freakazoids keep demanding more. The latest ruling declares:

California prison officials must provide for free undergarments that flatten the chest of transgender inmates at women’s prisons and give transgender inmates at men’s prisons access to bracelets, earrings, hair brushes and hair clips.

You see, Shiloh complained that, and I quote, the resulting beard and mustache were making the transition to life as a woman more difficult, while she also was being denied her television and enough privacy to perform required intimate post-operative procedures.

I’ll leave it to your imagination as to what those intimate post-operative procedures were all about.

Not to be outdone, a legislator named – – and seriously, I am not making this up – – Representative Wiener – is now taking this battle to old folks’ homes:

The “LGBT Senior Long-Term Care Bill of Rights,” introduced by Scott Wiener, a state senator from San Francisco, would force nursing home workers to use a residents’ preferred pronoun and prohibit “transferring a resident within a facility or to another facility based on anti-LGBT attitudes of other residents.”

So next time your car slams into a bad pothole in the road or you see a homeless veteran in rags begging for money, take heart. The money is being used where it’s needed most: six-figure reassignment surgery, hairbrushes, and earrings.

Can we just go back to my razor idea?

via http://ift.tt/2pLDSPl Tim Knight from Slope of Hope