New Evidence Reveals Comey Drafted Statement Exonerating Hillary Before Key Witness Interviews

A new letter from Senators Chuck Grassley and Lindsey Graham reveal testimony from new witnesses suggesting that former FBI Director James Comey had already started drafting documentation exonerating Hillary Clinton long before interviewing key witnesses, including Hillary herself. 

According to the letter, which is based on testimony from James Rybicki, Comey’s Chief of Staff, and Trisha Anderson, the Principal Deputy General Counsel of National Security and Cyberlaw, Comey began drafting a statement to announce the conclusion of the Hillary investigation in April or May 2016, well before he had interviewed up to 17 key witnesses. 

Meanwhile, as if that weren’t bad enough, the Comey statement was also drafted before immunity deals were struck with Cheryl Mills and Heather Samuelson who seemingly ran point, along with Platte River Networks, to destroy Hillary’s emails after a Congressional subpoena had been issued mandating their preservation.

Here is a summary from the Grassley/Graham letter:

Transcripts reviewed by the Senate Judiciary Committee reveal that former FBI Director James Comey began drafting an exoneration statement in the Clinton email investigation before the FBI had interviewed key witnesses.  Chairman Chuck Grassley and Senator Lindsey Graham, chairman of the Judiciary Subcommittee on Crime and Terrorism, requested all records relating to the drafting of the statement as the committee continues to review the circumstances surrounding Comey’s removal from the Bureau.


“Conclusion first, fact-gathering second—that’s no way to run an investigation.  The FBI should be held to a higher standard than that, especially in a matter of such great public interest and controversy,” the senators wrote in a letter today to the FBI.


Last fall, following allegations from Democrats in Congress, the Office of Special Counsel (OSC) began investigating whether Comey’s actions in the Clinton email investigation violated the Hatch Act, which prohibits government employees from using their official position to influence an election.  In the course of that investigation, OSC interviewed two FBI officials close to Comey: James Rybicki, Comey’s Chief of Staff, and Trisha Anderson, the Principal Deputy General Counsel of National Security and Cyberlaw.  OSC provided transcripts of those interviews at Grassley’s request after it closed the investigation due to Comey’s termination.


Both transcripts are heavily redacted without explanation. However, they indicate that Comey began drafting a statement to announce the conclusion of the Clinton email investigation in April or May of 2016, before the FBI interviewed up to 17 key witnesses including former Secretary Clinton and several of her closest aides.  The draft statement also came before the Department entered into immunity agreements with Cheryl Mills and Heather Samuelson where the Department agreed to a very limited review of Secretary Clinton’s emails and to destroy their laptops after review.


And here is a key excerpt from Ms. Anderson’s testimony:

Q:  So moving along to the first public statement on the case or Director Comey’s first statement the July 5, 2016 statement.  When did you first learn that Director Comey was planning to make some kind of public statement about the outcome of the Clinton email investigation?


A:  The idea, I’m not entirely sure exactly when the idea of the public statement um first emerged.  Um it was, I just, I can’t put a precise timeframe on it um but [redaction].  And then I believe it was in early May of 2016 that the Director himself wrote a draft of that statement …


Q:  So when you found out in early May that there was, that the Director had written a draft of what the statement might look like, how did you learn about that?


A:  [Redacted] gave me a hard copy of it…


Q:  So what happened next with respect to the draft?


A:  I don’t know for sure um, I don’t know. There were many iterations, at some point there were many iterations of the draft that circulated…

Meanwhile, as a reminder of the timing, if Comey was already drafting a statement clearing Clinton of any wrongdoing in April then it came before any of the following interviews….keep in mind that many people on this list were also granted immunity deals…apparently after Comey had already made up his mind that nothing happened.

1.      May 3, 2016 – Paul Combetta
2.      May 12, 2016 – Sean Misko
3.      May 17, 2016 – Unnamed CIA employee
4.      May 19, 2016 – Unnamed CIA employee
5.      May 24, 2016 – Heather Samuelson
6.      May 26, 2016 – Marcel Lehel (aka Guccifer)
7.      May 28, 2016 – Cheryl Mills
8.      June 3, 2016 – Charlie Wisecarver
9.      June 10, 2016 – John Bentel
10.  June 15, 2016 – Lewis Lukens
11.  June 21, 2016 – Justin Cooper
12.  June 21, 2016 – Unnamed State Dept. Employee
13.  June 21, 2016 – Bryan Pagliano
14.  June 21, 2016 – Purcell Lee
15.  June 23, 2016 – Monica Hanley
16.  June 29, 2016 – Hannah Richert
17.  July 2, 2016 – Hillary Clinton

And here’s some more background from the letter:

Mr. Comey’s final statement acknowledged “there is evidence of potential violations of the statutes regarding the handling of classified information” but nonetheless cleared Secretary Clinton because he claimed there was no intent or obstruction of justice. Yet, evidence of destruction of emails known to be under subpoena by the House of Representatives, and subject to congressional preservation requests, was obtained in interviews around the time that Mr. Comey began drafting his exoneration statement.[8]  Moreover, the Justice Department entered into highly unusual immunity agreements with Cheryl Mills and Heather Samuelson in June 2016—after Mr. Comey began drafting his exoneration statement—to review Clinton email archives on their laptops.[9]


The immunity agreements limited the FBI’s ability to review Clinton email archives from Platte River Networks that were created after June 1, 2014, and before February 1, 2015, and which had been sent or received from Secretary Clinton’s four email addresses during her tenure as Secretary of State.[10]  These limitations prevented the FBI from reviewing records surrounding a March 2015 conference call that Paul Combetta, an employee of Platte River Networks, had with David Kendall and Ms. Mills, the attorneys for Secretary Clinton.[11]  After having been initially untruthful and then receiving his own immunity agreement, Mr. Combetta admitted in his third FBI interview, in May 2016, that after a March 2015 conference call with Secretary Clinton’s attorneys, he used BleachBit to destroy any remaining copies of Clinton’s emails.[12]


The limitations in the immunity agreements with Ms. Mills and Ms. Samuelson also kept the FBI from looking at emails after Secretary Clinton left office—the period in which communications regarding destruction or concealment of federal records would have most likely taken place.[13]  And finally, the agreements provided that the Department would destroy any records which it retrieved that were not turned over to the investigative team and would destroy the laptops.[14]  Despite public claims by the FBI that the laptops were not in fact destroyed, the purpose of that promise to destroy them has not been explained.[15]  However, Judiciary Committee staff reviewed the immunity agreements as part of their oversight work, so there is no question that the terms of the agreement called for the Department to destroy evidence that had not been fully and completely reviewed.[16]

But, we’re sure this is just another attempt to “criminalize behavior that is normal.”

Here is the full letter:

via Tyler Durden

Breadth, Bonds, Bills, & Bear Funds Signal Trouble Ahead For Stocks

The 'resilience' of stock markets is proclaimed as self-reflectingly positive, as they surge higher, enthusiastically embracing debt ceiling anxiety, nuclear armageddon, and biblical floods. However, below the surface all is very much not rosy

As Bloomberg reports, this is a warning for stock traders entranced by a market that remains resilient to surprises. Even though the S&P 500 is less than 1 percent away from a record set this month, the best move is to wait out more selling, according to Strategas Research Partners.

Breadth has deteriorated as the benchmark gauge has been mostly listless. Only about 48 percent of stocks in the S&P 500 are currently trading above their 50-day moving averages, near the fewest of the year and down from 74 percent last month, data compiled by Bloomberg show.

And longer-term trends are just as bad with only 65% of S&P members above their 200-day average…

“Tepid momentum is often consistent with below average returns in the short-run,” Strategas analysts led by Chris Verrone wrote in a research note Tuesday.

*  *  *

Bonds are not buying the bounce in stocks at all.

Treasury yields are at 2017 lows (despite strong GDP and strong ADP?) signaling a total lack of belief in the global growth vision being sold to the world's equity investors.

*  *  *

Treasury Bills are signaling massive concerns over debt ceiling discussions.

The pre-debt-ceiling bills are massively bid…


Sending debt ceiling anxiety premiums to record highs.,..

As S&P analysts warn, if this hits, it will be catastrophic.

*  *  *

And finally, Bear Fund Assets have collapsed to record lows…

The squeeze ammunition is running very low for the next leg higher in stocks.

*  *  *

Bloomberg concludes, that caution is the buzzword at Raymond James & Associates, which is advising clients to be patient and pick their entry points carefully amid thinner markets and gold prices that look poised to break through a “longer-term downtrend,” according to Andrew Adams, a strategist at the firm.

We continue to exercise patience in the near term, as most of the indicators we follow are still weak-to-neutral and not really flashing that ‘attractive opening’ that we look for,” St. Petersburg, Florida-based Adams wrote in a note Tuesday morning.

With the dollar sitting near the lowest level in 2.5 years and the outlook for government funding murky, some traders say it may be the time to take the chips off the table.

“Perhaps take a percentage of your portfolio and put it in cash,” said Stephen Carl, principal and head equity trader at Williams Capital Group LP in New York. “You don’t go broke taking profits.”

via Tyler Durden

California Judge Dismisses Pimping Charges Kamala Harris Brought (Twice) Against Backpage Executives

The California Superior Court of Sacramento County has granted a motion to dismiss state pimping charges against Backpage CEO Carl Ferrer and controlling shareholders Michael Lacey and James Larkin.

But the men are still being prosecuted on money laundering charges, for profiting from online classified-ads authorities allege to facilitate prostitution.

The charges were brought in December by former California Attorney General (AG) Kamala Harris, now a U.S. senator, after the first case Harris brought against Backpage was rejected. Rather than appeal, Harris amended the charges slightly and filed them in another court.

Judge Lawrence G. Brown notes in an August 23 decision that Backpage leaders are now “being charged with, essentially, either investing money into [an] underlying criminal scheme, or conducting transaction with profits from the scheme.” To make their case, state prosecutors (now under the leadership of AG Xavier Becerra) will have to show specific Backpage profits came solely from underlying criminal activity—in the case, the alleged facilitation of prostitution and sex trafficking.

“Regardless of whether [California prosecutors] will succeed in meeting their burden of proof, the theory and the charges under which they are proceeding appear to be valid under California law and adequately pled such that any defect does not bar prosecution,” Brown wrote, acknowledging the state’s criminal complaint was “not a model of clarity.”

The court will let the money-laundering case against Ferrer, Lacey, and Larkin proceed except as it pertains to pimping. The judge granted a motion to dismiss the 11 pimping charges against Ferrer and conspiracy to commit pimping charge against all three men.

State Prosecutors Make Backpage’s Case for Them

State prosecutors had argued that Backpage executives derived an income from prostitution—i.e., pimping—by accepting money for online “Escort” advertisements that resulted in prostitution occurring. Backpage ownership argued it accepted payment for legitimate services—i.e., running a publishing platform—and is not liable for any criminal activity that may have resulted from Escort ads (a null section as of January 2017).

With regard to the pimping charges, “the relevant question…is whether, and to what extent, Defendants’ activity entitles them to protection of their First Amendment rights through the immunity provision” of the federal Communications Decency Act (CDA), Brown notes.

“Providing a forum for online publishing is a recognized legal purpose that is generally provided immunity under the CDA,” he points out. “This immunity has been extended by the courts to apply to functions traditionally associated with publishing decisions, such as accepting payment for services and editing.”

State prosecutors suggested it was not the forum but the content of the advertisement that was objectionable. “Yet, to hold [Backpage] responsible for the content of the advertisement would require holding a publisher liable as if he was the speaker of the content,” Brown notes. “Contrary to the [state’s] claim, doing so directly triggers, not defeats, the immunity provision of the CDA.”

The state also argued (using the same arguments that failed the last time) that Backpage’s actions went beyond publishing into content creation, which would mean CDA immunity could be revoked. But “in light of the People’s acknowledgment that Backpage’s edits would not change the user’s intent, there can be no material contribution to the offensive content,” writes Brown.

“Indeed, such actions generally fall within the scope of protected editorial functions,” the decision continues.

Even if the edits or posting rules allow advertisers to use coded language, this is insufficient to render the website operator a content provider. The crucial distinction is between engaging in actions (traditional to publishers) that are necessary to the display of unwelcome and actionable content, and responsibility for what makes the displayed content illegal or actionable. … Here, it is the third-party who is responsible for the illegal content of the advertisement.

Considering Case History

In dismissing the pimping charges against Backpage executives, Judge Brown brings up several interesting historical cases related to the definition of pimping which are instructive to this case. In the first, from 1913, a California court held that “a legitimate defense to pimping is that a prostitute supplied defendant money for any purpose other than being supported or maintained by the prostitution” (People v. Reitzke).

In 2006, a California court held that a “natural reading of the pimping statute does not apply to an individual who provides a legitimate professional service to a prostitute even if paid with proceeds earned from prostitution,” as in such a case “the service provider derives support from his own services” (Allen v. Stratton).

And in the 2011 case People v. Grant, a state appellate court said it was important in pimping cases to distinguish between money derived directly from prostitution and money paid by a sex worker for goods or services rendered. “The statutory prohibition [on deriving support from someone else selling sexual services] does not preclude a person from accepting a known prostitute’s funds gained from the prostitute’s lawful activities or for purposes other than the [alleged pimp’s] support and maintenance.”

Credit Company “Trickery”?

The money laundering case against Backpage hangs on the state’s assertion that Backpage created additional websites ( and for the purpose of tricking payment processors and credit card companies into doing business with them. Backpage alleges that these websites, which syndicated Backpage content, were merely meant to draw more traffic to

Most of the major credit-card companies were accepted on, meaning these companies already agreed, explicitly, to do business with the website’s parent company, Backpage LLC. They only dropped out when threatened—illegally—by Illinois Sheriff Tom Dart. It’s odd, to say the least, to suggest that Backpage executives would have needed “trickery” to get merchant accounts with these companies considering none of the payment processors or credit-card companies made any such complaint.

“Essentially, either Defendants did—or did not—materially represent to credit payment processors in a scheme to fraudulently obtain money from banks,” writes Brown. “If Defendants did so, this may form the basis for a money laundering charge.”

Will Congress Act—and Why?

As in previous cases, Backpage’s immunity is predicated on Section 230 of the CDA, which is currently under fire from a group of U.S. senators (including Harris). The judge refers several times to the fact that Congress could make changes to the CDA. As such, “this ruling has potentially important consequences for the pending bills to amend Section 230,” blogs law professor Eric Goldman.

Brown notes “a growing desire to hold online media accountable for their role in disseminating information leading to condemnable acts by third parties.” As evidence, he points to a case “seeking to hold Facebook liable for allowing Hamas to use its platform to encourage terrorist attacks” and one “seeking to hold Twitter liable for providing ISIS an account to use for spreading extremist propaganda.”

Since Facebook, Twitter, and Backpage all currently enjoy protection under Section 230, however, they are immune to such prosecutors.

“This immunity was provided by Congress,” Brown states, and it can only be modified by Congress, “regardless of where Backpage floats on the tide of public opinion.”

Lawmakers haven’t said much about other sites in their discussions of the need to change Section 230. “Much of the rhetoric about the bills has specifically targeted and called out Backpage–and only Backpage,” notes Goldman.

A key assumption for the bills is that Backpage needs to be crushed and existing law isn’t getting the job done because of Section 230. As this ruling shows, existing law may in fact be sufficient to crush Backpage irrespective of Section 230. As a result, there is no need–and certainly no urgency–to rush through amendments to Section 230, with potentially major consequences for the entire Internet, while courts are still resolving the matter. (Indeed, that would be true even without this ruling because of the pending grand jury investigation into Backpage in Phoenix that may use the SAVE Act, the anti-Backpage law Congress just enacted in 2015).

However, it’s possible that, despite the anti-Backpage rhetoric, the advocates supporting the pending bills aren’t really targeting just Backpage but have larger objectives to undermine or eviscerate Section 230.

Goldman said he “expects this ruling will expose the advocates’ true agendas.”

from Hit & Run

There’s Literally A ‘Token’ Called “Fuck” That’s Up 370% In The Last 24 Hours

Authored by Simon Black via,

I vividly remember having a conversation several years ago with a woman about her real estate investments in the United States.

It must have been around 2005 or 2006… the peak of the property bubble.

She was a psychologist from somewhere in the midwest, telling me about how she was flipping off-plan condominiums in Florida.

Basically she would put money down to secure a condo unit in a building before it broke ground, then sell her contract to someone else at a higher price when the building was closer to completion.

I remember as she told me this story she was practically cackling at how quickly and easily she was doubling and tripling her money, and at one point said, “It is just soooo easy for me.”

Those words stuck.

I remember thinking, “Investing isn’t supposed to be easy. There’s supposed to be risk and hard work involved.”

But she wasn’t alone. Legions of amateur investors were piling into the market doing exactly the same thing.

Everyone seemed to be flipping condos. And everyone seemed to be making money.

It didn’t add up.

I remember one investor explaining to me how he would flip his condo contract to someone else when the building was 30% complete. Then that buyer would flip the contract to another investor when the building was 60% complete. Then another sale when the building was 80% complete, etc.

“But who is the person at the end of the line?” I asked. “Someone has to eventually live in all of these condos and be willing to pay the highest price.”


“Oh there will ALWAYS be plenty of people who will live here,” he told me.

To these investors it was a foregone conclusion that required zero analysis: there will always be buyers, no matter how high the price gets.

One of the marks of a good investor is learning from his/her mistakes; when an investment performs poorly, a good investor will try to figure out WHY, and incorporate those lessons into future decisions.

But a GREAT investor will learn from his/her successes.

This is rare. Perhaps it’s part of our human nature. When we succeed, we automatically conclude that we’re really smart.

We seldom examine what really happened. Did we get lucky? Were we riding the wave of a giant bubble? Or, perhaps our analysis was spot-on and we nailed it.

It’s hard to say for sure without some serious self-reflection.

But again, it’s in our nature to presume that we’re brilliant.

And that may be one of the most dangerous things of all… because our infatuation with our own brilliance causes us to do irrational things.

Instead of thinking, “Whew, I got really lucky, I’d better take some money off the table before this market crashes,” we think, “I’m so smart… now I’m going to double down and make even more money.”

It’s like gamblers at the craps table– people delude themselves into believing that they’re on a ‘hot streak’ and ‘can’t lose’, so they keep increasing their bets instead of cashing in their chips.

Eventually the luck runs out… and the money vanishes quickly.

I’m telling you all of this because I see the same thing right now in the “ICO” market.

If you haven’t heard of ICOs, it stands for Initial Coin Offering. It’s a combination of venture capital and cryptofinance.

Traditionally, startup companies have raised the money they’ve needed from angel investors and VC funds.

These days, companies are raising money by selling digital ‘tokens’ to investors, most of whom typically pay in Bitcoin, Ether, or some other cryptocurrency.

Tokens often represent shares in the startup company, just in the same way that Apple stock represents shares in Apple.

And, just like shares of Apple, investors can buy and sell their tokens in the market.

There are countless startup companies now issuing tokens. And, just like the price of the cryptocurrencies themselves, many ICOs have soared in price.

There’s a token issued by Stratis, for example, that is up 101,168% since its ICO last summer. The NXT token is up 672,989%.

Those are not type-o’s.

There’s another token that’s actually called “Fuck” which is up 370% in the last 24 hours.

The returns are absurd… especially considering the assets are priced in Ether or Bitcoin, which have also soared to all-time highs.

So on top of a 1,000% return in Bitcoin, ICO investors have also made a 100,000% return in the token.

But I’m hearing exactly the same cackling that I heard from the real estate bubble days more than a decade ago.

– It’s soooo easy to make money in ICOs.
– It’s a foregone conclusion that the tokens will go up in value.

Sorry, but it just doesn’t compute.

If the tokens represent ownership in a business, then the only thing that matters is whether or not the underlying business performs well.

Does the company have a compelling long-term strategic plan?

More importantly– are the managers successfully implementing the plan and achieving milestones?

Is the company on a path to financial sustainability?

Nobody seems to be paying attention to these details. They just buy tokens with the expectation that the price will rise.

And even if a business performs well, it’s ridiculous to think hat a startup company can be worth 100,000% more in a year. Or nearly 700,000% more in a couple of years.

To put these numbers in context, Peter Thiel invested $500,000 in Facebook back in 2004 as the company’s first big investor. In 2012 he sold most of it for $1 billion.

That’s a return of 200,000% in eight years… pretty tame by ICO standards.

Investing isn’t supposed to be easy, especially when speculating in startup companies. There’s supposed to be risk. Serious analysis. And lots of losers.

It’s not to say that there aren’t any good businesses issuing tokens. But it’s pretty clear this trend is a massive bubble.


via Tyler Durden

Los Angeles Changes ‘Columbus Day’ To ‘Indigenous Peoples Day’

Trump was obliterated by the mainstream media a few weeks back when he spoke out against decisions to dismantle confederate statues all around the country.  While he was branded a racist for his comments, his point was that the logical conclusion of the Left’s crusade was the complete destruction of over 500 years worth of history since the Europeans first arrived in the ‘New World’.

As it turns, it looks increasingly like Trump was absolutely right.  As just the latest example of the wave of insanity sweeping the nation, the Los Angeles Times points out today that the city of Los Angeles has officially decided to scrap Columbus Day and instead replace it with “Indigenous People Day”… you know, because it’s just about time that everyone stop celebrating the “state-sponsored celebration of genocide of indigenous peoples.”

The Los Angeles City Council voted Wednesday to eliminate Columbus Day from the city calendar, siding with activists who view the explorer as a symbol of genocide for native peoples in North America and elsewhere.


Over the objections of Italian American civic groups, the council made the second Monday in October a day in L.A. to commemorate “indigenous, aboriginal and native people.” It replaces a holiday that served as a touchstone for Italian Americans, marking the arrival of Christopher Columbus in the Caribbean.


Italian Americans voiced anguish over the proposal, telling council members it would erase a portion of their heritage. Some said they supported the creation of Indigenous Peoples Day as long as it is held on a different date.



Of course, when logic attempted to enter the discussion and suggest that “Indigenous Peoples Day” could just be celebrated on some other day it was quickly shot down because “to make us celebrate on any other day would be a further injustice.”

“On behalf of the Italian community, we want to celebrate with you,” said Ann Potenza, president of Federated Italo-Americans of Southern California, speaking in a room packed with Native American activists. “We just don’t want it to be at the expense of Columbus Day.”


That idea was unacceptable to Chrissie Castro, vice chairwoman of the Los Angeles City-County Native American Indian Commission. She argued that city lawmakers needed to “dismantle a state-sponsored celebration of genocide of indigenous peoples.”


“To make us celebrate on any other day would be a further injustice,” Castro said.

Meanwhile, Councilman Joe Buscaino, a first-generation Italian American raised in San Pedro, was the only person on the LA city council who publicly aired his ‘racist’ view that “all of our individual cultures matter.”  He was quickly overruled by a 14-1 vote.

Councilman Joe Buscaino, a first-generation Italian American raised in San Pedro, had sought to replace Columbus Day with a different name, one that celebrates “all of the diverse cultures in the city.” Buscaino said many had forgotten the prejudice faced by Italian Americans in the United States — and asked his colleagues not to “cure one offense with another.”


“All of our individual cultures matter,” said Buscaino, who represents neighborhoods from Watts to San Pedro.


The council replaced Columbus Day with Indigenous Peoples Day on a 14-1 vote, with Buscaino opposed. The move followed a fractious hearing, with Italian Americans and Native Americans cheering and jeering at different moments.

Perhaps these moronic members of LA’s city council should go one step further and be the first to start the process of officially returning American lands to indigenous people…we hear that Germany is particularly welcoming to migrants.

via Tyler Durden

Japan’s Second Largest Bank Plans To “Plow” 100 Billion Yen In Stocks

It used to be that just the BOJ (via ETFs) and the largest Japanese pension fund, the GPIF (the largest in the world), had an implicit green light to allocate funds (in the case of the former, created out of thin air) to equities. That is no longer the case: according to Bloomberg, Japan’s second largest commercial bank, Japan Post Bank Co., has decided to follow in the footsteps of its giant peers, and plans to “plow” an 100 billion yen ($904 million) directly buying stocks “when it finds the right opportunities.”

Unable to generate required returns through conventional means such as lending, Japan’s second-largest bank by deposits, which currently invests in equities only through passive investments in funds, plans on becoming a giant prop-trading hedge fund and aims to boost active stock holdings to several hundred billion yen in the next five to 10 years, said Katsunori Sago, executive vice president at the Tokyo-based company.

In addition to stocks, the bank is also looking to buy “more higher-yielding overseas bonds”, (although in a time when junk bonds have near record low yields, one wonders just what the bank envisions) and alternative assets as it seeks to boost growth “in an environment where returns are being depressed by the central bank’s policies of negative interest rates and yield-curve control.” The allocation change is a huge departure for the lender which hold about 2 trillion yen in stocks, however all these are non-discretionary, through passive trust investments.

Speaking to Bloomberg, Sago said that “It’s not right to only rely on passive investment for our stock holdings. At the same time, making the whole 2 trillion yen portfolio active would end up being passive anyway, so we need both passive and active portfolios to gain an edge from the active investment.”

Currently the bank, which was partially privatized in a $12 billion initial public offering, oversees 207.5 trillion yen of assets as of June 30. Of this total, 66.9 trillion yen was in local government bonds, 55.3 trillion yen in cash and 51.3 trillion yen in overseas securities, which include debt and investment trusts. Soon, there will be an “equities” pie in the chart below.

Not surprisingly, yet another Goldman connection emerges: the bank’s EVP Sato was was formerly vice chairman at Goldman Sachs Japan, before joining Japan Post in 2015. He told Bloomberg that the bank has already set up a new structure enabling it to directly invest in stocks. The company will incorporate environmental, social and governance principles into the process for selecting equities for its active portfolio, he said. In other words, it will pretend to be discriminating in buying; what it will do in reality, is buy every triple digit PE “growth” stock it can find.

Japan Post Bank’s foreign bond portfolio has a bigger weighting in the U.S. than in Europe, though it does have holdings in Germany, France and the U.K., Sago said. The company has recently cut some positions that were underperforming or had negative returns. He said he expects holdings of Japanese government bonds to fall as it plans to avoid reinvesting funds from maturing securities.

Not satisfied with taking unlimited downside risk, the bank also wants to buy more junk:

“There is also scope to review the proportion between investment grade and high yield, with the aim of increasing high-yield allocations mostly overseas, when the timing is right,” Sago said. “We have investments in junk bonds and high-yield bonds. If we see merit in light of our risk-return profile, we will invest regardless of the rating outlook.”

Finally, instead of just becoming a hedge fund, the “bank” will also be a fund of funds:

Sago said one area of growth is in what the company calls alternative assets, which include investments in private equity and hedge funds. Japan Post Bank is aiming to boost holdings of these products to about 5 or 6 trillion yen in the next five to 10 years, from the current 700 billion yen. The amount has already risen from 60 billion yen last September.


“Alternative assets are a major focus where investment needs to continue to be the strongest,” Sago said. “We are aiming to build a solid alternative portfolio both in quality and quantity.”

And while the above may be bad news for depositors who will fund this prop-trading expansion, it’s good news for traders: Japan Post Bank plans to add about 20 more front-office staff within the next 12 months in addition to its current total of about 140, Sago said. The new hires will mainly focus on alternative assets, he said.

“There won’t be a market environment for a while where we can reinvest all of the money we get from maturing bonds,” he said. “There are not enough attractive investment destinations of this size.”

In other words, now that central banks may be tapering their direct purchases, it’s time for the commercial banks to step in and do their patriotic duty of keeping stock markets afloat.

via Tyler Durden

FDA Lies About Vaping While the CDC Inches Toward the Truth

Between 2011 and 2016, according to survey data from the U.S. Centers for Disease Control and Prevention, cigarette smoking by teenagers fell by half, cigar smoking fell by a third, pipe smoking fell by two-thirds, and smokeless tobacco use fell by a quarter. Yet according to the Food and Drug Administration, there were “no significant declines in overall high school tobacco use” during that period. How is that possible?

Let me answer that riddle by posing another one. If you call an e-cigarette a tobacco product, and the incidence of past-month vaping among high school students more than sextupled from 2011 to 2016, how does that affect the trend in overall tobacco use? The answer is that it does not affect the trend in overall tobacco use at all, because calling an e-cigarette a tobacco product does not make it a tobacco product.

Yet that is what FDA does, partly for regulatory reasons. E-cigarette fluid often contains nicotine derived from tobacco, which supposedly transforms a tobacco-free product into a tobacco product, giving the FDA authority to regulate it. The FDA maintains that pretense even when reporting what is happening in the real world. The result, as Boston University public health professor Michael Siegel notes on his tobacco policy blog, is an alternative reality where dramatic declines in adolescent tobacco consumption never happened. The CDC plays the same game, falsely claiming “current use of any tobacco product did not change significantly” among high school students from 2011 to 2016.

This blatant misrepresentation magnifies a problem (underage tobacco use) that the FDA and the CDC are charged with addressing, making their work seem more urgent and more worthy of funding. It also conflates e-cigarettes, a noncombustible, tobacco-free alternative to conventional cigarettes, with products that are far more dangerous, obscuring the enormous harm-reducing potential of this innovation. By lumping e-cigarettes in with tobacco products, the FDA and CDC may hope to scare kids away from them. But the message to current smokers—that they might as well keep puffing away, since all these nicotine sources are essentially the same—is potentially deadly.

A new CDC webpage about e-cigarettes gives some ground on that score, conceding that “e-cigarettes have the potential to benefit adult smokers who are not pregnant if used as a complete substitute for regular cigarettes and other smoked tobacco products.” But by insisting that e-cigarettes be a “complete substitute,” the CDC dismisses the health benefits of smoking less, even if the number of cigarettes per day does not fall to zero.

“Dual use is not an effective way to safeguard your health,” the CDC says. “Because smoking even a few cigarettes a day can be dangerous, quitting smoking completely is very important to protect your health.” This slippery formulation deliberately obscures the fact that smoking a few cigarettes a day is less dangerous than smoking a pack or two a day. If e-cigarettes help smokers make that change, they are reducing tobacco-related harm.

The CDC’s discussion of how the health hazards of vaping compare to those of smoking is similarly misleading. “Are e-cigarettes less harmful than regular cigarettes?” it asks. “Yes—but that doesn’t mean e-cigarettes are safe. E-cigarette aerosol generally contains fewer toxic chemicals than the deadly mix of 7,000 chemicals in smoke from regular cigarettes. However, e-cigarette aerosol is not harmless. It can contain harmful and potentially harmful substances, including nicotine, heavy metals like lead, volatile organic compounds, and cancer-causing agents.”

Sadly, it counts as an improvement that the CDC is willing to explicitly say e-cigarettes are less harmful than regular cigarettes instead of dodging the question entirely. But you would not guess from its gloss that vaping is something like 95 percent safer than smoking, that potentially harmful substances in e-cigarette aerosol are typically present only in trace amounts, or that smokers who switch to vaping see big reductions in blood levels of toxins and carcinogens—at least as big as the reductions seen in smokers who switch to FDA-approved “nicotice replacement therapy” such as gum and patches.

The CDC now grudgingly accepts that smokers who switch to vaping are better off, but it still worries that nonsmokers will take up vaping. To deter them, the CDC inflates the risk posed by e-cigarettes, which also deters smokers from switching, even though that decision could save their lives. The only way out of this conundrum is one the CDC never seems to consider: Instead of slanting information in the hope of manipulating people’s behavior, why not tell them the truth and let them make their own decisions?

from Hit & Run

What the Alt-Right Gets Wrong: New at Reason

Some news outlets have claimed that there’s a troubling “pipeline” from libertarianism to the most revolting corners of the alt-right movement.

Their evidence is that white supremacist Christopher Cantwell, the star of a Vice documentary about the racist, tiki torch-wielding Charlottesville mob, was once a figure in the libertarian Free State project, and alt-right icon and white nationalist Richard Spencer himself was once a Ron Paul supporter and self-identified as a libertarian.

Anyone who claims to care about individual liberty should reject the overt racism in Charlottesville, the broadly defined alt-right and the watered down “alt-lite” variants represented by provocateurs like Milo Yiannopoulous and YouTube personalities Stefan Molyneux and Laura Southern, as well as the right-wing nationalism pushed by recently fired White House strategist Steve Bannon.

These expressions of right wing populism are the anti-thesis of libertarianism and they collapse under their own logic.

The alt right claims to be the savior of Western Civilization, which apparently is on the brink of collapse because Muslims and Mexicans are invading our society.

Members of the alt-right often point to the sizable influx of immigrants to Europe in the wake of destabilizing Middle Eastern wars. But America isn’t Europe, which is one problem with this framing of “the West” as some sort of monolith.

Here’s a straighforward look at immigrants as a percentage of the U.S. population:

Yes, there’s an upswing since around the end of the Vietnam War, but really it’s a return to the historical average.

And what was going on in the late nineteenth and early twentieth century as immigrants flooded in? The Second Industrial Revolution! Cars! Steel! Electricity! Telecommunication! And America’s rise as a global economic superpower.

Want to Make America Great Again? Maybe free-flowing immigration combined with with an open marketplace is the winning formula.

But let’s get back to those “Western values.”

America’s founders’ based their ideas on Enlightenment values such as individual property rights and free trade, as articulated by philosophers like John Locke and Adam Smith. Who did they build their ideas in opposition to? Mercantilists, protectionists, or what we today we’d call “economic nationalists.”

Post Charlottesville, Trump’s recently fired chief strategist Steve Bannon told a reporter that white ethno-nationalists are “losers” and “clowns,” and then he made a case for closing the U.S. off to the rest of the world.

President Trump is right when he claims that free trade isn’t always a two-way street. But as nobel prize winning economist Milton Friedman explained, “Any individual country, on average, benefits from free trade.”

Don’t believe him? Recent polling finds that the majority of economists agree that free trade is a net benefit, and empirical studies show a correlation between fewer trade barriers and higher per capita GDP.

One study compared countries that opened up trade and cut tariffs to ones that didn’t,finding that citizens in the freer trade countries saw their incomes increase by an average of 20 percent more than in closed economies. Through international trade, middle-income consumers have seen their purchasing power grow by close to 30 percent, and low-income consumers benefit roughly twice as much.

And Trump’s fans can cheer when he pressures companies to locate their manufacturing plants in America, but these success stories unravel with closer scrutiny.

Just like the progressive left, the alt right wants to empower the federal government, just as long as the right people are in power doling out benefits to their favorite constituencies.

This is why you’ll hear alt right leaders speaking favorably of single-payer healthcare. Before he was ejected from the White House, Steve Bannon attempted to talk Trump into boosting income taxes to fund his nationalist agenda. Some right-wing populists have even advocated using the power of the state to force private tech companies to be run like quasi-governmental public utilities.

The right may be in for the same sort of harsh lesson as the left about what happens when you opportunistically increase the power of a government you’re certain to lose hold of one day.

So why does a philosophy so at odds with its core values attract any defectors from the libertarian movement? What’s most appealing are the alt-right’s opposition to foreign wars, its nominal defense to free speech, and a valid-sounding critique of PC excess. After all, Milo Yiannopoulis made a name for himself as a provocateur on campus.

But the truth is that the alt-right’s commitment to free speech runs about an inch deep.

Many have engaged in similar behaviors as the politically correct progressives they decry, forming online mobs and boycotts to encourage private entities to fire commentators like Kathy Griffin and Reza Aslan for political speech deemed offensive. And they’ve shut down modernized stagings of Shakespeare’s Julius Caesar for the offense of depicting the assassination of a Trump-like character. They’ve cheered a sitting president’s threats to sue publications that criticize him and his willingness to shut out journalists whose coverage he doesn’t like.

You can fight for free speech and oppose political correctness without subscribing to this flawed ideology. Libertarians have your back on that. As do many traditional conservatives and some liberals, like Jonathan Rauch, the Brookings Insitution scholar who literally wrote the book on the topic in 1995.

The alt-right’s “America First” nationalism engenders a skepticism of foreign military intervention that’s sorely lacking in Washington, DC. And this is what’s most compelling about the alt-right and the political realignment it’s forced, with former conservative hawks like Ann Coulter calling out Trump for troop surges in the Middle East.

But even this anti-interventionism is soft ground because, if you delve into the mind of a figure like Steve Bannon, you’ll uncover a nightmare vision of a world already engaged in global, civilizational warfare. And the alt-right’s focus on nationalism and racial and ethnic identity doesn’t bode well for a more peaceful future if the 20th century is any guide.

The alt-right ultimately amounts to a backwards-looking movement, and that’s what’s most concerning.

It’s telling that their beloved slogan, “Make America Great Again” both harkens back to a mythical time that never existed and was ripped off from Ronald Reagan.

The alt-right is about recapturing a nonexistent past through vague but misleading appeals to Western values.

Libertarians are the true defenders of the Enlightenment and present a forward-looking vision that centers on the power of individuals to create their own experiences, make their own choices, and foster a more peaceful world.

If that’s not for you, stick with the alt-right or its spin-offs. Just know what you’re signing up for.

Produced by Zach Weissmueller. Graphics by Brett Raney. Music by Kai Engel.

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from Hit & Run

‘Experts’ Fear Trump Will Talk to Kim Jong Un, New York Times Reports

President Trump fired off a tweet bemoaning the “extortion money” the U.S. has been paying North Korea over the last two decades. “Talking is not the answer!” the president huffed.

Not really, Defense Secretary James Mattis and other members of the administration clarified immediately. Secretary of State Rex Tillerson has previously signaled the answer to the North Korea crisis is conversational.

Still, Trump’s tweet “revealed a paradox in how Asia experts view the crisis,” The New York Times reported. Some fear Trump commencing a “risky, unpredictable dialogue” with Kim Jong Un more than him starting a war.

“What the North Koreans are angling for is to bring the danger and tension to a crescendo, and then to pivot to a peace proposal,” Daniel Russel, the previous assistant secretary of state for East Asian affairs, told The Times. “All of this is focused on pressuring the U.S. to enter direct talks with Kim on his terms. That is the big trap.”

A trap, The Times noted, President Clinton almost fell into in the 1990s. But the prospect of direct talks shouldn’t be seen that way.

“I suspect that in the end, the president might fall back on his event-planning background,” Michael Green, an Asia advisor for President George W. Bush, told The Times. “This is not a Miss Universe pageant or a pro wrestling match, so that might stop Trump in his tracks.”

American foreign policy may not have been conducted by a WWE Hall of Famer before, but that doesn’t mean wrestling-like tropes haven’t been used before. After all, Bush called North Korea, Iran, and Iraq an “axis of evil” in his 2002 State of the Union address.

That description, the subsequent invasion of Iraq, and the deterioration of relations with Iran in the Bush era offer few incentives for North Korea other than to press ahead with its current program for deterring regime change.

Six-party talks—North Korea, South Korea, the U.S., China, Japan, and Russia—collapsed in 2006 over North Korean satellite launches, which served much the same purpose as its test missile launches.

It should come as no surprise that a military build-up across East Asia and a perceived lack of interest in resuming negotiations produced more and more North Korean missile tests.

President Obama’s “Asia pivot,” a sanitized term for a China containment policy, meanwhile, predictably led to a more confrontational stance from China.

The Times cites the death of American citizen Otto Wermbier, who was imprisoned by the North Korean regime, and the broader political climate, as impediments to such talks.

But there are more fundamental stumbling blocks, primarily that there is not all that much for the U.S. to discuss with North Korea outside of the reality that multilateral negotiations are the best path forward for the region.

Despite deteriorating U.S.-Russia relations, the region, like the world, is a far less divided place today than it has been at any time since the establishment of the Democratic People’s Republic of Korea.

Trump has tried to cultivate a relationship with Japan Prime Minister Shinzo Abe as well as China President Xi Jinping.

Multilateral negotiations are the most promising path to resolving the North Korean crisis. If bilateral talks can lead to multilateral negotiations, they would be a success. The Times nevertheless conceded such two-way talks remained “a far-fetched notion.”

Any talks will be, on a basic level, unpredictable. There are no easy solutions to the crisis. Talking them through, however, whether two-way, six-way or some other way, decreases the chance of a pre-emptive or reactive war.

from Hit & Run

Martin Armstrong Warns Of War In September: “We Must Be On Guard…”

Authored by Mac Slavo via,

You may have thought that tensions with North Korea were abating following Kim Jong Un’s missile test stand-down earlier this month.

But as we and others outside of the mainstream media propaganda machine warned, absolutely nothing has been resolved between the United States and the rogue nation.

The only proof you need is the fact that Kim just recently launched a missile directly over Japan and is now threatening a new nuclear weapons test to take place some time in the next two weeks.

As noted earlier today, both sides are preparing for the next level of escalation at this very moment, with President Trump continuing to shift military assets into the region. Moreover, Russia has been deploying troops to the Baltic states for “military exercises,” but from a strategic standpoint one can only conclude they are massing troops just in case hostilities break out.

According to cyclical forecaster Martin Armstrong, who has accurately predicted global crisis scenarios since the 1970’s, September may well be the month that propels the world into its next great conflict:

Our models seem to be right on target for the escalation of military threats from North Korea. We gave our two targets for the opening of  this window for a conflict on our war model with North Korea  to watch were August 12/13, 2017 and September 11/12, 2017. We must be on guard for this is the prime period where a confrontation could emerge.



We expect tensions to rise into the next target September 11/12th.



Armstrong’s cyclical war model forecasts echo a similar sentiment from Brandon Smith of, who himself has been quite accurate with his predictions about everything from political election results to Federal Reserve policy decisions. In a recent analysis, while everyone was ignoring the continuing North Korean threat, Smith warned that conflict seems inevitable:

The mainstream media has instead been going out of its way to downplay any chance that the current inflamed rhetoric on both sides of the Pacific is anything other than bluster that will end with a whimper rather than bomb blasts. This is one of the reasons why I think war is imminent; the media is a notorious contrarian indicator. Whatever they predict is usually the opposite of what comes true (just look at Brexit and the election of Donald Trump, for starters).  Another generalization that is a sure bet is that the mainstream media usually lies, or at the very least, they are mostly wrong.


That said, if we are to believe the latest polls, unfortunately, one thing is clear: The American people, on both sides of the political spectrum, are becoming more galvanized around supporting a potential conflict with North Korea. For the establishment, war is a winning sell, at least for now.

His full assessment, Korean War Part II: Why It’s Probably Going To Happen, is worthy of a read as it explains the many facets behind why war appears to be inevitable.

One of those facets, as noted by Zero Hedge on Tuesday, is that both China and Russia now appear to have given up on a peaceful resolution on the peninsula:

Russian Deputy Foreign Minister Ryabkov told reporters that while we can expect new sanctions pressure on the DPRK after the last launch, such pressure is exhausted..

“Judging by how colleges from the US and other countries acted in similar situations, the US allies – of course, we can expect new steps towards strengthening the sanctions regime,” he said.


“But it will not solve the problems, it is already obvious that the resource of sanctions pressure on the DPRK has been exhausted.”


“It is no longer possible to adopt resolutions in the UN Security Council that do not contain a clear indication that there can not be a military solution to the problem, but only a political one. A provision that would rule out additional unilateral sanctions beyond those that are collectively taken by the UN Security Council, “the Russian diplomat continued.

Either way, it appears Russia and China are pushing back to Trump to ‘do something’.

In short, the Russians and Chinese have now put the ball in President Trump’s court.

Martin Armstrong’s forecast, coupled with a flurry of missile tests, nuclear tests, combative rhetoric, and military deployments to the region, suggest that war – complete with a nuclear exchange – may be much closer than we think.

via Tyler Durden