Eclipsegate Is Back: Treasury Inspector General Opens Probe Into Mnuchin’s Use Of Government Plane

Ever since President Trump moved into the White House there has been only one redeeming thing to emerge from the Deep State’s relentless pursuit of something, anything, that could bring down his administration…namely, their recent obsession with this woman, Scottish actress and wife of Treasury Secretary Steve Mnuchin, Louise Linton.

Linton

 

For those who glossed over this particular storyline, Linton sparked an ‘international crisis’ just a couple of weeks ago when she made the mistake of responding to a social media troll on Instragram who took issue with Linton posting pictures of herself disembarking from a private, taxpayer-funded, private plane.  Here was Linton’s snarky retort:

“Cute! Aw!!! Did you think this was a personal trip?! Adorable! Do you think the US govt paid for our honeymoon or personal travel?! Lololol. Have you given more to the economy than me and my husband? Either as an individual earner in taxes OR in self sacrifice to your country? I’m pretty sure we paid more taxes toward our day ‘trip’ than you did. Pretty sure the amount we sacrifice per year is a lot more than you’d be willing to sacrifice if the choice was yours. You’re adorably out of touch. Thanks for the passive aggressive nasty comment. Your kids look very cute. Your life looks cute. I know you’re mad but deep down you’re really nice and so am I. Sending me passive aggressive Instagram comments isn’t going to make life feel better. Maybe a nice message [sic], one filled with wisdom and hunanity [sic] would get more traction. Have a pleasant evening. Go chill out and watch the new game of thrones. It’s fab!”

 

Not surprisingly, the message provided all the ammunition the Left needed to open a whole new front in their war against the Trump admin.  And, to our complete shock, within hours an ‘independent’ watchdog group called Citizens for Ethics and Responsibility filed a FOIA request for all of Steve Mnuchin’s travel records based on allegations that he may have inappropriately utilized a government plane just to get a closer look at the eclipse. 

 

Now, you may have thought the whole scandal was put to rest when the Washington Post reported that Mnuchin and his wife viewed the eclipse from the roof of Fort Knox, where they were attending official meetings along with Senate leader Mitch McConnell, and not from the comfort of a government plane…

It turns out that Mnuchin did view the eclipse while he was in Kentucky, and from an extraordinary place: Just outside the path of totality, from the roof of the nation’s fabled Fort Knox, atop nearly $200 billion in American gold.

 

But Treasury officials said Thursday that the trip was planned explicitly around “official government travel,” rejecting the idea that the Fort Knox visit and the appearance at a luncheon for the local chamber of commerce were mere cover. They said the luncheon appearance had been planned for early August but was delayed when McConnell postponed the Senate’s recess, an account confirmed by a spokeswoman for the Louisville chamber, Alison Brotzge-Elder.

…something that could have been easily verified with a quick peak at Mitch McConnell’s Facebook page (notice the glasses in McConnell’s hand)…

But if you thought the Deep State would give up that easily then you drastically underestimate their resolve to get to the bottom of ‘Eclipsegate2017’…it’s not as if this is some minor issue like Hillary’s missing emails.

All of which brings us to the present and today’s announcement from the Treasury Department’s inspector general that an all new inquiry has now been opened to, once again, investigate precisely where Steve Mnuchin was standing during the eclipse last month.  Per The Hill:

“We are reviewing the circumstances of the Secretary’s August 21 flight … to determine whether all applicable travel, ethics, and appropriation laws and policies were observed,” counsel Rich Delmar said in a statement to The Washington Post on Thursday.

 

“When our review is complete, we will advise the appropriate officials, in accordance with the Inspector General Act and established procedures,” Delmar continued.

Of course, we suspect it’s only a matter of time until this very serious matter is transferred to Special Counsel Mueller who should probably start his investigation here: Linton’s Maxim photoshoot.

Finally, since we know this is the only reason you clicked on this post anyway…here you go.  Happy Friday.

Linton

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Vaccines, Peter Thiel and the Fine Art of the Journalistic Hatchet Job

VaccineRidvanArdaDreamstime“Peter Thiel Funds ‘Unethical’ Offshore Herpes Vaccine Trial,” blared a headline over at the DailyBeast. The single problem is that it’s false.

The story is illustrated with a photoshop of venture capitalist Peter Thiel holding a menacing syringe. Even more damning, the editors added, “The Trump adviser is part of a group of wealthy businessmen spending millions to test the vaccine on people—while evading Food and Drug Administration regulations.” Which is also false.

The DailyBeast article was published on August 27. The headline for the biotech news site genomeweb’s summary of the story reads, “A Libertarian Vaccine?

The headline and the story appear to be an instance of never letting facts get in the way. Unwary readers encountering the artfully constructed article would likely be led to conclude that a cabal of greedy libertarian venture capitalists had experimented on desperate people without their consent.

The problem that the startup in the story, Rational Vaccines, is taking on is huge. In the United States, more than 23 million people—about one in seven people ages 14 to 49 —have genital herpes. As many as three million suffer herpes outbreaks four to 24 times per year. Those who suffer frequent outbreaks experience open sores, considerable pain, frequent headaches, and the infection sometimes results in blindness and life-threatening bouts of meningitis. Chronic sufferers experience stigma and social isolation.

The vaccine trial referred to in the story took place more than a year ago. Thiel Capital actually invested on August 23. So what gives?

What actually happened is that in 2015 and 2016 Southern Illinois University viral immunologist William Halford set up a trial of his attenuated herpes simplex 2 (HSV-2) vaccine. He inoculated 20 volunteers from the U.S. and U.K. at a site on the Caribbean island country of Nevis and St. Kitts.

Rational Vaccines reported in an October, 2016 press release participants had, on average, experienced a 3-fold reduction in their herpes symptom-days per month relative to their experience taking standard treatment antiviral drugs.

Halford submitted his results to a peer-reviewed journal that initially rejected his paper and asked for further data. Halford had years earlier contracted a rare form of cancer and died in June at age 48.

Halford had been researching herpes viruses for more than two decades. Eventually he came to question the medical consensus that vaccines should be developed using viral protein subunits. Previous virus vaccines including polio, measles, rubella, and chickenpox had been created using live-attenuated viruses. Such vaccines used weakened versions of viruses that could not cause disease to prime the immune system protect against natural strains. By the 1980s, many vaccine researchers concluded that using proteins derived from disease-causing viruses was safer.

However, Halford’s research convinced him an HSV subunit vaccine would be relatively ineffective because HSV genomes are much more complicated than simpler human papillomavirus and hepatitis B viruses. Attempts to develop HSV subunit vaccines have so far not borne fruit.

In lab mice his live-attenuated vaccine elicited 10 to 100 times greater protection against genital herpes than a subunit vaccine did, Halford reported. To check its safety, Halford injected himself with his own vaccine. Rational Vaccines is developing both a therapeutic vaccine for people who are already infected and a prophylactic vaccine to protect the rest of from becoming infected.

Halford and Augustin Fernandez III, CEO investor in Rational Vaccines approached Thiel Capital and other possible venture investors in April 2017, after the preliminary results of the initial trial were in. Fernandez says he never spoke with Thiel, but met with Jason Camm, chief medical officer of Thiel Capital. In an interview, Fernandez confirmed that Thiel Capital did not formally invest in the current $7 million round of financing until August 23.

Then all hell broke loose.

As usual with clinical trials, Rational Vaccines paid the travel expenses for the 20 trial participants who were already infected with the virus. I talked with trial participant Richard Mancuso, a 48-year-old New Jersey truck driver, about his experience. Mancuso told me he suffered painful herpes outbreaks two to three times per month since he had been infected 25 years ago. After the course of three inoculations during the trial, his outbreaks declined until he no longer had any.

When I asked about his informed consent, Mancuso said, “Halford sat me down for a three hour interview to see if I qualified. He explained to me that the vaccine was experimental, that it might not work, and that there were some risks involved.”

Mancuso was interviewed for the DailyBeast article and he was shocked by the story’s conclusions. Incensed by what he regards as the bias and unfairness, Mancuso has posted a heartfelt YouTube video aimed directly at the reporter. “You didn’t even mention the fact that I gave informed consent and so did everyone else who signed off on the trial. They all gave signed consent,” he says. “They were informed of the risks; they are informed of everything. You didn’t put that into the article.” Mancuso adds, “All you did was just attack and make it sound like it was just a money-grab between Trump and Thiel.”

In fact, the article does not put too fine a point on its real motivations:

Defying U.S. safety protections for human trials, an American university and a group of wealthy libertarians, including a prominent Donald Trump supporter, are backing the offshore testing of an experimental herpes vaccine. …

The push behind the vaccine is as much political as medical. President Trump has vowed to speed up the FDA’s approval of some medicines. FDA Commissioner Scott Gottlieb, who had deep financial ties to the pharmaceutical industry, slammed the FDA before his confirmation for over-prioritizing consumer protection to the detriment of medical innovations.

Sounds like a money-grab conspiracy, doesn’t it?

In an October 2016 article in the local newspaper, the State Journal-Register, Halford made it clear he was anxious to jumpstart his vaccine with a trial abroad to avoid excessive regulation. Avoiding excessive bureaucracy to some is endangering patients to others. The DailyBeast article quotes Jonathan Zenilman, the chief of the Infectious Diseases Division at Johns Hopkins Bayview Medical Center, who said, “What they’re doing is patently unethical. There’s a reason why researchers rely on these protections. People can die.”

The DailyBeast also notes that Zenilman cited research in the late 1940s in which the U.S. government deliberately infected study participants in Guatemala with sexually transmitted diseases without their consent. I am no bioethicist, but trying to cure people of sexually transmitted diseases with their informed consent somehow seems like a different case.

Of course, there are medical charlatans who do take advantage of desperate people, but the DailyBeast failed to make the case that Halford and Rational Vaccines are engaged in any such thing. The main complaint is that Halford did not submit his vaccine trial to an institutional review board (IRB) for review. Although he thinks Halford was wrong to conduct his trial without IRB supervision, former Obama administration FDA commissioner Robert Califf does in the article concede, “It may be legal to be doing it without oversight.”

What happens now? CEO Fernandez vows to go forward. Halford’s SIU colleague immunologist Edward Gershburg has agreed to work as the company’s chief technology officer. Fernandez says that aim of the company has always been to eventually obtain FDA approval of the vaccines. Now backed with $7 million in seed capital, Fernandez says that the company intends to launch new trials that will adhere to all of the bureaucratic niceties.

Halford and Rational Vaccines were open and transparent about what they were doing and all of this information was available year ago. So why the hullabaloo now? Agenda-driven politics. Let’s hope that the DailyBeast article does not end up delaying the badly needed FDA drug approval reforms and the development of effective treatments that could prevent and alleviate the suffering of millions.

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Is The CIA Writing Legislation For The U.S. Congress?

Authored by Mike Krieger via Liberty Blitzkrieg blog,

Today I want to highlight a troubling bill moving through Congress that seems inspired by a thuggish, authoritarian speech given earlier this year by CIA head Mike Pompeo.

I found that speech so disturbing at the time, I wrote an entire piece taking it apart. Below is an excerpt from that talk which is relevant to this piece:

WikiLeaks walks like a hostile intelligence service and talks like a hostile intelligence service. It has encouraged its followers to find jobs at CIA in order to obtain intelligence. It directed Chelsea Manning in her theft of specific secret information. And it overwhelmingly focuses on the United States, while seeking support from anti-democratic countries and organizations.

 

It is time to call out WikiLeaks for what it really is – a non-state hostile intelligence service often abetted by state actors like Russia. In January of this year, our Intelligence Community determined that Russian military intelligence—the GRU—had used WikiLeaks to release data of US victims that the GRU had obtained through cyber operations against the Democratic National Committee. And the report also found that Russia’s primary propaganda outlet, RT, has actively collaborated with WikiLeaks.

Pompeo said that in April. Fast forward a few months, and let’s take a look at what the U.S. Senate is up to.

From The Daily Beast:

If the Senate intelligence committee gets its way, America’s spy agencies will have to release a flood of information about Russian threats to the U.S.—the kind of threats that Donald Trump may not want made public.

 

The committee also wants Congress to declare WikiLeaks a “non-state hostile intelligence service,” which would open Julian Assange and the pro-transparency organization – which most of the U.S. government considers a handmaiden of Russian intelligence – to new levels of surveillance.

 

On Friday, the committee quietly published its annual intelligence authorization, a bill that blesses the next year’s worth of intelligence operations. The bill passed the committee late last month on a 14-1 vote, with Democrat Ron Wyden of Oregon as the lone dissenter, owing to what he calls the “legal, constitutional and policy implications” that the WikiLeaks provision may entail…

 

The bill would establish a “sense of Congress” that WikiLeaks and its leadership “resemble a non-state hostile intelligence service often abetted by state actors and should be treated as such a service by the United States.” The language echoes almost exactly CIA director Mike Pompeo’s scathing April speech calling WikiLeaks a “non-state hostile intelligence service often abetted by state actors like Russia,” a departure from the “I love WikiLeaks” rhetoric from then-candidate Trump.

 

The move, Eoyang assessed, would open WikiLeaks up to even more extensive surveillance.

 

“It would allow the intelligence community to collect against them the same way they collect against al-Qaeda,” Eoyang said. “If you think you’re helping WikiLeaks to aid a transparency organization, the US government fundamentally disagrees with you and you could find yourself on other end of NSA scrutiny.”

 

Wyden has criticized WikiLeaks before, including a May statement that “Trump actively encouraged Russians and WikiLeaks to attack our democracy.” WikiLeaks denies the accusation. But Wyden voted against the bill out of concern for the implications of the WikiLeaks provision.

 

“My concern is that the use of the novel phrase ‘non-state hostile intelligence service’ may have legal, constitutional, and policy implications, particularly should it be applied to journalists inquiring about secrets,” Wyden said in a quote to the Daily Beast he later released in a statement. 

 

“The language in the bill suggesting that the U.S. government has some unstated course of action against ‘non-state hostile intelligence services’ is equally troubling.  The damage done by WikiLeaks to the United States is clear.  But with any new challenge to our country, Congress ought not react in a manner that could have negative consequences, unforeseen or not, for our constitutional principles.  The introduction of vague, undefined new categories of enemies constitutes such an ill-considered reaction.”

See what happened there.

The head of the CIA makes a dubious claim in order to launch what amounts to a backdoor attack against the press. Then, just a few months later, Congress begins pushing a bill which uses the exact same language as Pompeo. This episode once again demonstrates what a joke our so-called “representative” democracy is in practice. If the public wants something, it’ll never happen, but if spies or corporate titans need something done, Congress does not skip a beat.

Also of significance, was the near unanimous support from within the Senate Intelligence Committee, with only Ron Wyden voicing dissent.

This is noteworthy because Sen. Wyden was one of the few people who vocally warned about unconstitutional surveillance before Snowden dropped his bombshell.

He was also the one who exposed James Clapper lying about domestic spying while he was Director of National Intelligence:

As I’ve been warning incessantly, the war on free speech and freedom of the press is escalating. We must be more vigilant than ever.

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No, Flooding in Houston Was Not Caused By a Lack of Zoning Laws

U.S. Marine Corps Assualt Amphibian Vehicles move through Hurricane Harvey flooded areas to north of Beaumont, TexasWhat caused the devastating floods in Houston?

A simpleton might answer that it was the massive hurricane that dumped 50-plus inches of water on the city is the span of a few days. Which is why the mainstream media do not hire simpletons. According to them it was the city’s almost criminal lack of zoning.

“The real villains in Harvey flood: urban sprawl and the politicians who allowed it,” reads a Guardian headline. “Houston is Drowning—In Its Freedom From Regulation” says Newsweek. Outlets like the Washington Post have pointed the finger at Houston’s “wild west growth”, spurred by a lack of comprehensive urban planning, as a reason for the severity of the recent floods.

The claim being made is the absence of zoning—making Houston unique among major American cities—has allowed developers to pave over with impermeable concrete otherwise absorptive prairie and wetlands, thus preventing them from soaking up storm water exacerbating flooding.

The idea’s surface plausibility falls apart in the specifics.

According to one estimate, Houston’s paving over of wetlands cost it the ability to absorb four billion gallons of water. Hurricane Harvey dumped 19 trillion gallons of water on the city.

The “development kills” crowd has also failed to take into account the very creation of Houston and its long and colorful history of being underwater. “Downtown Houston has suffered a major flood on average about once a decade as far back as records extend in the 1830s,” said Phil Magnus, an economic historian and Houston native in a recent blog post.

In 1935, when Houston was sprawl-free, the Buffalo Bayou—the main waterway through the downtown—rose some 54 feet during a flood. The bayourose 40 feet during the worst of Harvey.

Houston’s landscape, not its land use policies are responsible for this persistent flooding, Magnus says. The city is incredibly flat, with only small streams and bayous to drain away storm water. That topography is spectacularly ill-equipped to drain the sudden deluges of hurricane rain.

The flat, rural, prairie around Interstate 10 in far west Houston, which saw some of the worst flooding, has very little development, Magnus says.

And even if one were to accept that sprawling development makes flooding considerably worse, there is no reason to assume zoning would improve it, Ray Lehmann, of the R Street Institute, says.

“The way that zoning has been used in most places is to deter density,” Lehmann tells Reason. While Houston is the only major city to not have zoning regulation “most of the country looks like Houston, and, much like Houston, has sprawl.”

When compared to other major U.S. cities, Houston actually has more permeable land, not less.

Only 39 percent of the city’s land is taken up by impervious surface coverings according to U.S. Forest Service data. That’s compares to 41 percent in New Orleans, 54 percent in Los Angeles, and 61 percent in New York City—all cities with traditional zoning regulations.

Houston’s lack of zoning—far from causing damage to the city—may also help it rebuild faster than other cities seriously damaged by storms.

“I think it will actually be a more dynamic rebuilding which you wouldn’t see in places that have a more traditional zoning code,” says Vanessa Brown Calder, an urban policy analyst with the Cato Institute, tells Reason. “There is just a lot more ability to move and make changes given what they’ve learned from the damage associated with the storm.”

Contrast that with New Orleans after Hurricane Katrina, she says, where rigid zoning codes prevented damaged developments in flooded parts of the city to be rebuilt elsewhere.

While the media spin their groundless narratives of the destructive power of zoning, the people of Houston will be rebuilding, safe in the knowledge they won’t be told how to do it by some zoning-or editorial-board.

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Out-Of-Towners Whine About “The Militarization Of The Hamptons”

The town of Southampton, with its 55,000 year-round residents and vaunted reputation as a summertime playground for wealthy New Yorkers, now has its very own counterterrorism squad. And unsurprisingly, it’s making the out-of-towners nervous.

At least that’s what Joe Nocera, a former New York Times columnist who now writes for Bloomberg View, suggested in a recent column. Apparently, the image of police carrying automatic weapons roaming around the Bridgehampton Chamber Music Festival is just too gauche for Nocera’s wealthy friends to stomach.

According to Nocera, the squad was first sighted in April, when cops wearing bulletproof vests and carrying fully loaded AR-15s showed up at the Bridgehampton Half Marathon, where they spent most of their time patrolling around the finish line.

But their presence at the BCMF left an impression on one of Nocera’s friends.

“A few weeks ago, the Bridgehampton Chamber Music Festival held one of its occasional outdoor concerts at a nearby Long Island winery. It was well attended – 400 concertgoers came to sip wine and listen to the music of Bach and Django Reinhardt – but that wasn’t a surprise: Now in its 34th year, the music festival is one of the mainstays of the Hamptons summer season.

 

Here’s what was surprising, according to my friend and former New York Times colleague Susan Lehman, who was there: “Driving in,” she emailed me the other day, “it was impossible not to notice two figures with the word POLICE emblazoned in white on their spruce black costumes, and very noticeable automatic weapons in their hands.” She added that while the musicians were on stage, “two armed guards milled around in the open space in the front of the tent where the concert was being held.” Afterward, when someone inquired about the presence of these heavily armed police, he was told that the Southampton police department required the extra protection.”

Regardless of whether the terorr squad's presence is justified (as one resident informs Nocera, the town of Southampton has never suffered a terrorist attack), listening to rich white people complain about there being too many police is deliciously ironic.

“But why? It’s not as if Southampton has ever suffered a terrorist attack. Indeed, Southampton’s police chief, Steven Skrynecki, has repeatedly told the local media that there hasn’t been so much as a hint of a threat. But with so many events attracting wealthy celebrities – and with terrorist incidents on the rise in many Western countries – he felt that it was necessary to increase security.

 

Many of the people at Southampton events are symbols of American affluence and success and capitalism,’ Skrynecki told me. ‘At the same time, there is an abundance of freedom of expression and morals and dress. The attendees’ beliefs might be contrary to the known ideology of terrorist groups.’ He also mentioned the possibility that someone on the “ultra right” could try to commit an act of terrorism at a fundraiser attended by wealthy liberals.”

At one point, Nocera comes tantalizingly close to a breakthrough…

“We know that there will be terror attacks; that’s the world we live in. We just don’t know when or where. And the notion that there is a higher likelihood of an attack on a chamber music concert or a family fair than, say, an overcrowded Hamptons train depot on Labor Day weekend (which the police don’t patrol) seems a stretch, to say the least.”

…before blaming the town's chief of police of spreading "militarization fever."

“There’s another, more plausible reason Southampton has a 15-person counterterrorism squad. Skrynecki, it would seem, has caught militarization fever, a disease that too many of his fellow police chiefs have also come down with. It is disease that will soon spread further, now that President Donald Trump has agreed to give local police forces renewed access to surplus military equipment, something Barack Obama’s administration had restricted after the clashes between police and protesters in Ferguson, Missouri. Police officers are being transformed into soldiers.”

Nocera’s column wouldn’t be complete without an exegesis on the post-9/11 militarization of American police departments, a trend that will no doubt continue now that president Trump has lifted a ban on surplus military equipment being repurposed by local PDS.

“The militarization of local police forces, of course, is a trend that began after the Sept. 11 attacks, when many departments added “fighting terror” to their mission statements, and when the federal government began to make money available to local police to buy military-style equipment, including automatic weapons, night vision goggles and other paraphernalia. As the security expert Bruce Schneier points out, “when they get this stuff, they want to trot it out. So now it is being used.” Counterterrorism is as good an excuse as any.

 

There are certainly places where police are justified in having officers hold highly visible AR-15s – Fifth Avenue in New York City, in front of Trump Tower, is a pretty good example. In his previous post, as police chief of Nassau County, Skrynecki oversaw the huge security effort at last year’s presidential debate at Hofstra University. In the Hamptons, a visiting cabinet secretary like Wilbur Ross or Steven Mnuchin probably needs to have extra layers of visible security.

 

But the experts I spoke to thought that most of the time, such measures were counterproductive. It meant that the 15 members of the Southampton counterterrorism unit weren’t doing more productive policing. With both their hands needing to be on the gun, it was far more cumbersome to respond to less extreme situations that might arise. Most real terrorism prevention takes place before “the moment of contact” — when the intelligence community scopes out a planned attack and stops it before it begins. There were, after all, Capitol police guarding the congressional baseball game in June, but they couldn’t prevent James Hodgkinson from nearly killing House Majority Whip Steve Scalise. You could even make the case that the presence of the Southampton police at high-end galas increases the likelihood of an attack by drawing attention to the events.”

Shame on the Southampton PD for having the audacity to force wealthy gala attendees to acknowledge the unfortunate reality that terrorism represents in the dangerous modern world in which we all live. Does he have any idea how this might impact home prices?

Luckily, anyone who’s been “triggered” by the terror squad this summer has at least one alternative: Maybe next year, they can vacation in Easthampton – one town over. Their police department doesn’t have a terrorism unit.

At least, not yet.   
 

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Weekend Reading: Harvey & The Broken Window Fallacy

Authored by Lance Roberts via RealInvestmentAdvice.com,

As the waters recede from “Hurricane Harvey,” the rebuilding efforts begin. It will take quite some time before Houston fully recovers from the tragedy, but recover we will. Hopefully, lessons were learned by a city government that has avoided dealing with the drainage and flooding problems for far too long. Despite hundreds of millions of dollars extracted from the citizenry of Houston via a “rain tax,” the money was absorbed by the profligate spending of repeated feckless Mayors who chose to spend on “bike trails,” “green energy.” and other liberal agendas rather than resolving a critical issue that has plagued Houston for years.

We’ll see. But I won’t hold my breath as Houston continues to follow the shining examples of other fiscally responsible governments like Chicago, Detroit, and others. [sarcasm alert]

But that is a story for another day.

Currently, the mainstream story is the “economic boost” which will come from the recovery process. This is the essence of the Broken Window Fallacy.” 

“A window is destroyed, therefore the window has to be replaced which leads to economic activity throughout the economy.

 

However, the fallacy of the ‘broken window’ narrative is that economic activity is only changed and not increased. The dollars used to pay for the window can no longer be used for their original intended purpose.

 

There is no free lunch.”

To put a finer point on it:

She is right. Obviously, nuking cities to create economic growth is just plain silly.

However, in the short-term, there will be thousands of temporary jobs created, supplies used, services needed and wages paid which will provide a temporary economic boost. Unfortunately, what is not being accounted for is the offsetting of lost wages, business incomes, and other costs for the individuals and businesses that have been devastated and displaced by this tragedy.

From a market perspective, hurricanes have little impact in reality. In 2005, the U.S. was rocked by three hurricanes over a three month period. The market dipped but recovered shortly thereafter as the event was quickly absorbed by market participants. There was also a quick spat of economic growth which quickly faded over the next several quarters.

In 2008, “Hurricane Ike” made landfall at the same moment that Lehman was forced into bankruptcy. However, what was not known by market participates at that time, because the NBER had not declared it, was the U.S. was already in a deep recession. It only got worse following the event.

“Hurricane Sandy”, much like “Katrina,” “Wilma,” and “Ike,” also provided a 2-quarter boost to economic output which quickly faded as the temporary inputs came to an end. The market blinked, but then continued its advance.

The difference between the outcomes of “Ike” and the other storms was really dependent on the overall cycle of the market. “Ike” occurred with market and economic sentiment already turning negative. That is not the case with “Hurricane Harvey” as overall market and economic sentiment remains very robust, even exuberant.

Over the next couple of quarters, market participants will have their attitudes bolstered by better than expected economic numbers. Such will also give President Trump some cover despite the lack of legislative agenda moving forward. However, it is the trend of the economic growth rates that must be paid attention to. Despite hopes of a never ending “bull market” supported by ongoing “emergency measures” from Central Banks globally, the reality is we are very late in the current economic cycle.

Just like in 2008, it was well after the fact, when the economic data was negatively revised, the recession became clearly evident. Given the deterioration is credit, the rise in delinquencies and plunge in savings rates, the economic back drop is likely far weaker than headlines currently suggest.

While Harvey may extend the current cycle for a little while longer, I would not get overly complacent with highly aggressive allocation models. Like I said, there is no free lunch.

Here is what I am reading this weekend.


Politics/Fed/Economy


Markets


Research / Interesting Reads


“Never forget, things change.” – Lowell Miller

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Trump Will Announce DACA Decision Tuesday, Hurricane Harvey Second-Most Expensive U.S. Disaster, and Kid Rock Accused of Electioneering Violations: P.M. Links

  • TrumpTrump will make a decision on DACA by Tuesday. Many immigration activists are concerned he will end the deferred deportation of immigrants brought illegally to the United States by their parents.
  • Kid Rock is accused of violating federal election laws for teasing his run for the U.S. Senate.
  • Hurricane Harvey is likely to be second costliest disaster in U.S. history, trailing only Hurricane Katrina.
  • Special Counsel Robert Mueller reportedly has a draft letter explaining Trump’s rationale for firing former F.B.I director James Comey.

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Firefighters Scramble After Smoke Pours From Russian Consulate Chimney In San Francisco

With evicted Russian diplomats scrambling to collect their baggage and vacate the San Francisco consulate in hours ahead of the September 2 deadline, the AP reports that “acrid, black smoke” was seen pouring from a chimney at the Russian consulate on Friday.

However, instead of sabotage, it appears the Russians were engaged in some last minute creative document “redaction.”

Firefighters who arrived at the scene were turned away by consulate officials who emerged from inside the building. An Associated Press reporter heard people who came from inside the building tell firefighters that there was no problem and that consulate staff were burning “unidentified items in a fireplace.

Mindy Talamadge, a spokeswoman from the San Francisco Fire Department, said the department received a call about the smoke and sent a crew to investigate but determined the smoke was coming from the chimney.

They had a fire going in their fireplace,” she said. Since it is about 100 degrees in San Francisco today, the fire was hardly stoked for heating purposes.

Talmadge said she did not know what they were burning on a day when normally cool San Francisco temperatures had already climbed to 95 degrees by noon. “It was not unintentional. They were burning something in their fireplace,” she said.

As reported yesterday, the consulate’s workers are rushing to shut Russia’s oldest consulate in the U.S. Thursday’s order for Russia to vacate the consulate and an official diplomatic residence in San Francisco — home to a longstanding community of Russian emigres and technology workers — escalated an already tense diplomatic standoff between Washington and Moscow. The deadline for the consulate to close is Saturday.

It remains to be determined if the NYT or the WaPo will report some time around 7pm on Friday, citing unnamed NSA/CIA/Deep State sources, that among the items burned were Donald Trump’s official KGB recruiting papers, videotapes of the president enjoying golden showers from Russian hookers and, of course, a first lien on the US granted to Vladimir Putin.

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Floods, Nukes, & Pitiful Payrolls Spark Best Week For Stocks In 2017

Flood Schmud, Missiles Schmissiles, Jobs Schmobs…

 

Gold gained the most after today's dismal jobs data…

 

After a crazy run the last few days into month-end, Nasdaq slipped notably lower after the pitiful payrolls print… All major indices closed lower post payrolls

 

Stocks gained on the day though, thanks to overnight pumping, with Trannies tumbling into the close to leave small caps best on the day. Nasdaq record high close…

 

And despite Hurricane Harvey, North Korean Missiles, and Dismal Jobs, stocks soared on the week…

A crazy week:

  • Nasdaq +2.75% – best week since Dec 2016
  • S&P +1.5% – best week in 4 months
  • Trannies +2.8% – best week in 3 months
  • Gold +2.6% – best week since April 2016

FANGs and Biotechs led Nasdaq…

 

VIX was down for the 3rd week in a row…VIX was crushed back to a 10 handle.

 

Treasury yields were up across the board today.. on weak jobs data? but ended the week mixed (30Y higher in yield, belly lower)…

NOTE – the yield curve (2s10s) was flatter for the 5th week in a row.

But it was the shortest-end of the curve that was most troubled as the debt ceiling panic really started to build…

 

FX markets were a little wild today as Payrolls and ECB jawboning sent EURUSD swinging wildly…

 

The Dollar Index rose on the week (best week in the last 4)

 

Yuan was the strongest against the greenback on the week and JPY weakest…

 

Bitcoin surged over 12% this week (up7 weeks in a row) to a new record high…

 

But Bitcoin Inv Trust tumbled 21% following Andrew Left's appearance on CNBC…

 

WTI sank on the week (fifth weekly drop in a row)… RBOB gasoline futures spiked over 14% on the week (roll-adjusted) – the biggest week since Hurricane Irene in July 2011…

 

Having survived a flash crash effort Wednesday night, precious metals surged back to close the week on their highs…

 

And equity investors have another excuse to BTFD – equity dividend yields are higher than bond yields once again…

 

But Gold remains 2017's big winner…

via http://ift.tt/2gq4rm4 Tyler Durden

Trump To Announce “Dreamer” Decision On Tuesday

After telling the press earlier on Friday that he would make his decission on whether to end the Obama-era Deferred Action for Childhood Arrivals (DACA), or “Dreamer” program this weekend, or Monday at the latest, moments ago the White House announced that the decision would be revealed on Tuesday instead. 

“We are in the process of finalizing that decision and those details, and we are actually going to make that announcement on Tuesday of next week,” the White House press secretary said on Friday afternoon. “The president’s priorities on immigration are to create a system that encourages legal immigration and benefits our economy and American workers. The president has been very clear, he loves people and he wants to make sure this decision is done correctly.”

As discussed yesterday, the White House has been grappling with the future of the Obama-era program that extends temporary deportation relief to certain undocumented immigrants who applied for work permits with the federal government.  Having promised during his presidential campaign to take a hard line on illegal immigration, so far the president has failed to move against the program, fearing a popular backlash.

A Fox News report on Thursday stated that Trump would announce the program’s end but would allow so-called “dreamers” currently in the program to stay in the U.S. until their work permits expire – which, for some, could be as long as two years. The White House promptly denied the Fox report.

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