“It’s Real, It’s Coming, It’s A Matter Of Time” – US General Warns Of Hypersonic Attack

Air Force Lt. Gen. Samuel Greaves, director of the Missile Defense Agency (MDA), said he has the full support of Undersecretary of Defense for Research and Engineering Michael Griffin to advance the development of space-based sensors that would defend the nation from hypersonic attacks by America’s adversaries.

The Pentagon believes funding will be in place next year to begin the constellation of missile-surveillance satellites amid new warnings of hypersonic weapons being tested and deployed Russia and China.

“The hypersonic threat is real, it is not imagination,” Lt. Gen. Greaves explained Tuesday at the Capitol Hill Club, emphasizing that defending against hypersonic missile attacks has become a top priority for the agency. But he forewarned the audience at the elitist, members-only club in Washington, D.C., that the Pentagon has a poor track record developing satellite constellations and should not deploy new systems unless a considerable amount of testing has been completed.

Lt. Gen. Sam Greaves, director of the Missile Defense Agency, testifies at a Senate Appropriations defense subcommittee hearing. (Source: YouTube)

“We will prove the technology before we jump into a major program,” said Greaves.

“We will not repeat AEHF, SBIRS, GPS 3, OCX,” he said, referring to a list of Air Force satellite programs that have cost taxpayers billions of dollars and were years behind schedule.

“We all know what happens when we overpromise and we underdeliver,” Greaves said.

Greaves said the Pentagon wants to construct a sensor layer in space for missile defense, which right now, that is at the top of MDA’s priorities. While there is an urgency to deploy the system because of Russia’s hypersonic threat, he noted that defense agencies should not rush — to make sure all the bases are covered.

“To go fast sometimes you need to go slow early on,” he said. “This is the slow part, doing the requirements, the architecture studies, the modeling and simulation, so by the time you make your decision, industry is ready to ramp up.”

On the modern battlefield, the “vantage point of space” is critical to track hypersonic missiles that Russia and China are developing and currently testing, Greaves insisted. He said the Air Force already has the Space Based Infrared (SBIRS) satellites that detect missile launches from geostationary Earth orbit, which could be blended with a larger constellation of surveillance satellites to track “birth to death” of a hypersonic missile.

“That’s our vision for space sensors,” Greaves said. “Griffin agrees with me. We believe the hypersonic threat is real, it’s not imagination.” The United States in only a few years will have to be prepared, he said. “Space will be a big part of that.”

“Those who have access to the information know that … the capability to deploy hypersonic weapons has been done. It’s real, it’s coming, it’s a matter of time,” Greaves added.

If funding is approved, Greaves said the space-based sensor layer for missile defense could be deployed by 2025. The Pentagon has given the MDA extraordinary authorities to quickly advance defense systems to shield the nation from hypersonic attacks.

Greaves comments come after Air Force Gen. John Hyten, commander of U.S. Strategic Command, recently warned the Senate Armed Services Committee that the U.S. is extremely vulnerable to future attack via hypersonic weapons.

Hyten said we are falling behind in the technological know-how to defend the homeland from the threat, as Russia and China advance their hypersonic technologies.

Russia will be capable of fielding a hypersonic glide vehicle, a weapon that no country can defend against, by 2020, which would mean the U.S. would have a gap in hypersonic defense systems for at least a few years.

Hyten suggested the U.S. is powerless against hypersonic weapon threats and has to rely on deterrence against these so-called weapons.

What is that deterrence you might ask?

“So our response would be our deterrent force which would be the triad and the nuclear capabilities that we have to respond to such a threat,” Hyten warned.

In other words, if Russia or China launches a hypersonic missile attack on the U.S., the Pentagon will respond with nuclear war.

While Russia and China are many years ahead of the U.S. when it comes to hypersonic weapon development, the world has finally figured out the Achilles’ heel of the West.

From U.S. Air Force generals to Pentagon officials, they are mostly singing the same tune: the threat of hypersonic attacks from Russia and China are concerning.

The race to the bottom started many years ago for Washington, as their decades of failed wars in the Middle East has left a massive vulnerability gap in missile defense systems to protect the homeland against hypersonic threats, which could be exploited once Russia or China launches a production run of the weapons.

Moreover, not to frighten anyone, but Russia recently launched a “series production” of its latest hypersonic missile — indicating that inevitable is coming.

We must prepare for the possible endgame that Russia and China understand the defense gap that exists today, but in the next 5 to 8 years could be plugged via the unprecedented military spending unleashed by the Trump administration. As some say — strike while the iron is hot…

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Riot Breaks Out In Portland As Antifa Activists Clash With Conservative Marchers

Members of Antifa clashed with members of the conservative group Patriot Prayer Saturday evening in Portland, Ore., forcing police to declare that a riot was taking place as officers fired paintballs filled with tear gas into the crowd, according to the Oregonian.

Scuffles broke out shortly after 6 pm local time as Antifa protesters pelted marchers from the conservative  group with eggs, water bottles and firecrackers as the marchers spilled out into downtown Portland for their legally permitted march in support of a conservative Republican candidate for the U.S. Senate. The march followed an afternoon rally at Terry Schrunk Federal Plaza, Reuters reported.

Patriot

Trump

Officers seized weapons like utility knives, clubs and chemical sprays from Antifa protesters as they gathered nearby for their counter-rally.

Portland police eventually made four arrests during the demonstrations – though they said none of them were related to the day’s events. Four others had to be taken to the hospital after being struck by projectiles.

Antifa

Patriot

Rally

The hostilities started escalating around 4 pm local time, as busloads of Patriot Prayer protesters arrived at Terry Schrunk Federal Plaza, while members of Antifa gathered for a counter-demonstration at Chapman Square, directly across the street.

There were roughly 150 Patriot Prayer protesters while the Antifa protesters numbered at least twice that. Still, the dueling protests were a fraction of an earlier march in support of immigrant families separated at the border, part of a wave of marches that unfolded in cities across the US. Nearly 5,000 people attended that event.

Patriot

Proud

Patriot Prayer founder Joey Gibson, the organizer of the rally, said during a  rally that he wanted to “bring light into a city that’s full of darkness”. He bashed Portland Mayor Ted Wheeler and Oregon Gov. Kate Brown. Gibson is one of 13 candidates running for the GOP nomination to face off against Democratic Washington Senator Maria Cantwell.

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White House, Saudi Arabia Pour Cold Water On Trump’s “Saudi Deal”

On Saturday morning, president Trump triumphantly tweeted that following a phone call with the Saudi King, OPEC’s largest producer had conceded and in defiance of the OPEC agreement reached just last week, had agreed to pump as much as 2 million barrels of oil extra in an attempt to lower prices:

“Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference … Prices to high! He has agreed!”

However, subsequent remarks by both the White House and Saudi Arabia via Reuters curbed Trump’s enthusiasm. In a statement issued by the White House late on Saturday, it said that the White House said that the Saudi king had promised President Donald Trump that he can raise oil production if needed and the country has 2 million barrels per day of spare capacity.

“King Salman affirmed that the Kingdom maintains a two million barrel per day spare capacity, which it will prudently use if and when necessary to ensure market balance.”

No guarantees, no promises, just a vague reference to what many believe is peak, or even beyond, Saudi oil production.

As a reminder, Trump’s comments came just one week after Saudi Arabia along with the rest of OPEC nations including Russia had agreed on June 22 to boost production by a combined 700,000 to 1 million barrels a day, so any 2 million bpd-increase would be at least double market expectations, prompting a furious backlash from the likes of Iran. According to a Bloomberg report last week, Saudi Arabia would shoulder the bulk of this excess production, boosting output by a little under 1mmb/d to a record high 10.8mmb/d from the current 10mmb/d pace.

Separately, a source familiar with Saudi Arabia’s production plans told Reuters earlier in the week of the kingdom’s intention to increase output by 200,000 bpd this month.

Both a far cry from the 12 million barrels in Saudi production envisioned by Trump’s tweet, which is urgently need to keep oil prices from surging at a time when the Trump administration is cracking down on Iran oil exports and demanding US allies cut their Iranian oil purchases to zero by November 4.

Meanwhile, Reuters reports that Saudi state media also downplayed Trump’s rhetoric, and reported that “during the call the Saudi king and Trump emphasized the need to preserve oil market stability and efforts of oil-producing countries to compensate for any potential shortage.”More importantly, the Saudi statement did not mention any intention by Saudi Arabia to raise production by 2 million bpd.

To be sure, there is speculation whether Saudi Arabia can even produce as much daily output as Trump suggested: while the kingdom has a maximum sustainable capacity of 12 million bpd, it has never tested that level of production.

We will be in uncharted territory. While Saudi Arabia has the capacity in theory, it takes time and money to bring these barrels online, up to one year,” said Amrita Sen of consultancy Energy Aspects.

Furthermore, if Saudi Arabia complies with Trump’s demand it would not only provoke a harsh rebuke from the rest of OPEC which unlike Trump, is naturally far more interested in higher rather than oil prices, but could threaten the collapse of OPEC as nations defy the “agreement” reached between the US and Saudi Arabia.

As we reported yesterday, Iran’s Supreme Leader Ayatollah Ali Khamenei was furious, not only at Trump’s behind the scenes negotiations but also of trying to turn Iranians against their government.

“They bring to bear economic pressure to separate the nation from the system … but six U.S. presidents before him tried this and had to give up,” Khamenei was quoted as saying on Saturday by his website Khamenei.ir, referring to Trump.

Separately, Iran’s OPEC governor, Hossein Kazempour Ardebili, accused the United States and Saudi Arabia of trying to push up oil prices and said both countries are acting against the foundation of OPEC.

“If this happens, (it) means Trump is asking Saudi Arabia to walk (away) from OPEC,” he told Reuters.

“The market will go up to $100 I am sure as Saudi Arabia said they will plan an increase for July. … This was managed between the two to rob the pocket of rest of the world,” he said.

Iran’s anger is understandable: not only is the nation about to lose substantial market share to Saudi Arabia, but should Trump pull off another deal, the price of oil would drop, further deteriorating the already moribund economic situation in Iran whose currency has lost up to 40% of its value in just the past month, when Trump pulled out of the nuclear deal.

Iran’s collapsing economy is already leading to sporadic anti-government protests according to media reports. And should Trump succeed in convincing Saudi Arabia to boost oil production to 12mmb/d, the fallout for Iran would be even more dire. Which, of course, is precisely the goal of Trump and while Saudi Arabia is hardly a friend of Iran, it will likely be concerned that by acting to punish Iran it could threaten the future existing of the oil cartel. Some energy reporters have already jokingly said that they are expecting an emergency OPEC meeting before September.

There is a potential drawback to Trump’s strategy: should OPEC splinter (and even if it doesn’t) it put much more strategic leverage in the hands of Vladimir Putin, who with Saudi Arabia pumping at capacity will suddenly become a marginal price setter for the world, especially with shale infrastructure sorely lacking amid a shortage of pipelines  to bring Permian oil to the market for the foreseeable future, and forcing deep discounts for Permian output.

Therefore, the big strategic problem emerging for Trump is that between Saudi Arabia and Russia pumping at near capacity, it puts the US at the mercy not only of Riyadh but also of, drumroll, Moscow which – in light of the imminent release of the Mueller report – is the last place the president would like to find himself. After all, should Russia decide to slash production indefinitely by one, two million barrels or more, it would bring stark memories of the 1973 oil embargo, and send the price of gas in the US soaring, potentially crushing Republican chances ahead of the midterms.

Meanwhile, as we noted yesterday, the bigger irony behind all this is that it is Trump’s own crackdown against Iran, and his renewed sanctions against Tehran’s oil production that is the main culprit for the recent spike in oil and gas prices (an outcome we previewed back in late 2016 in “Will Trump Send The Price Of Oil Soaring?”).

And it is the realization that surging gas prices threaten to undo the positive impact of Trump’s fiscal stimulus and tax cuts and cripple the US economy as consumers are forced to spend more money on gas and less on discretionary purchases, as explained previously, that has spooked the president forcing him to demand increasingly more “favors” from Saudi Arabia.

As a result, Brent topped $80 a barrel on May 17, the highest level since November 2014, while WTI has climbed even faster in recent days. It closed Friday at $79.44: $80 Brent has also emerged as a “red line” for Trump, around which the president starts lashing out at OPEC and Saudi Arabia on twitter and elsewhere.

Finally, if oil prices were to drop as Trump desires, it would also drag energy stocks lower – which have emerged as one of the very few resilient sectors propping up the market – and slam the market, at which point Trump may start demanding Saudi Arabia cut production once again….

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When the Supreme Court Blessed the Imperial Presidency: New at Reason

In February 2018, Solicitor General Noel Francisco, an appointee of President Donald Trump, argued in support of Trump’s 2017 executive order banning immigrants from certain largely majority-Muslim countries. The president enjoys “broad authority” to act in this area, the government insisted in its brief to the U.S. Supreme Court, “when he deems it in the Nation’s interest.” Among the legal authorities Francisco cited in support of this argument was a 1936 ruling on presidential power known as United States v. Curtiss-Wright Export Corporation.

The same ruling has come up under both of Trump’s immediate predecessors as well. In 2007, for example, Solicitor General Paul Clement, an appointee of President George W. Bush, cited Curtiss-Wright while urging the U.S. Supreme Court to deny the writ of habeas corpus to enemy combatants held at the U.S naval base at Guantanamo Bay, Cuba. Three years later, Neal Katyal, the acting solicitor general under President Barack Obama, cited it in a brief to the Supreme Court claiming that the “sovereign” power to “expel or exclude aliens” is “largely immune from judicial control.”

It’s safe to assume that when the White House wants a free hand to operate in the name of foreign affairs, Curtiss-Wright will be invoked. In many ways, the ruling and its author are at the heart of the American presidency’s most sweeping claims to unilateral authority, writes Damon Root.

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“2018 Is Looking Increasingly Like 2015”: Why JPMorgan Expects Evne More Pain From China

With the yield curve flattening, Emerging Markets sliding, China’s currency tumbling almost as fast as its equity markets, and the global economy once again on the skid, comparisons between 2018 and 2015 are becoming increasingly louder. Indeed, with the Chinese renminbi losing 3.5% against the dollar over the past two weeks alone, and a sharp 5.5% since the middle of April when the PBOC first cut its Required Reserve Ratio,  indicating a new easing phase has begun, this has been a steeper depreciation in the Yuan than the surprising August 2015 devaluation.

This in turn reinforced expectations that Chinese authorities are more willing to let their currency weaken to prevent the trade-weighted exchange rate, which has been trending upwards over the past year, from rising too much.

Compounding China’s paradox, the stealth devaluation comes at a time when Beijing had been forced into a tighter stance earlier in the year with rate hikes in lockstep with the Fed, an accelerating deleveraging process, regulatory tightening and a tacit acceptance of a stronger CNY in order to avoid provocations on the trade front.

Furthermore, as Goldman FX strategists wrote over the weekend , the calculus shifted with the crystallisation of some of the trade war risks, coupled with an acute deceleration in the Chinese economy, leaving Chinese policymakers unable to rely on a positive external trade impulse to offset domestic tightening and have already taken steps to respond to the weaker credit and money data and soft activity prints such as fixed asset investment. As a result, tates moved lower, there has been media chatter suggesting an increase in bank credit quotas, and the PBOC enacted another cut in the reserve requirement ratio last weekend, the second for the year sparking further devaluation concerns.

Meanwhile, as China devalued sharply against the USD, it has also been devaluing against its three broader trade-weighted baskets (launched by the China Foreign Exchange Trade System, or CFETS, in late 2015 in an attempt by the PBOC to discourage investors from exclusively focusing on yuan’s fluctuations against the dollar) if by less. As JPMorgan shows in the chart below, the CFETS indices lost around 2.0% over the past two weeks, lagging the 3.5% depreciation of the yuan against the dollar. But as JPM’s Nikolaos Panigirtzoglou contends, “despite the depreciation over the past two weeks, the pressure on Chinese policy makers to let the Chinese renminbi decline further against the dollar remains given how elevated the CFETS trade-weighted indices are still.”

And, suggesting more downside is to come for the CNY, “this depreciation pressure would increase if trade tensions with the US escalate and the dollar rises further from here.”

* * *

However, it is not only currency depreciation that is the similarity with 2015 when it comes to Chinese financial markets: according to JPM, the big Chinese stock market correction, which recently sent the Shanghai Composite into a bear market, is another similarity.

JPMorgan explains:

The Chinese equity market is down 13% YTD and is one of the worst-performing markets in the world. During 2015, we had another big correction in Chinese equities as they lost 40% in the summer of 2015. Similar to this year, currency depreciation pressures exacerbated the sell-off at the time.

However, as Panigirtzoglou notes, there was an important difference: during 2015, the equity market collapse was largely driven by retail investor deleveraging, and as we discussed at the time, this was represented by the collapse in margin debt balances, a proxy for domestic retail investor flows.

The JPM chart below shows China’s margin transactions, i.e. leverage borrowed to buy or sell shares as percentage of the free float of the Shanghai Stock Exchange: “they had fallen sharply during the second half of 2015 after topping at 18% in July of that year. But they stabilized at around 10% of the free float of the Shanghai Stock Exchange since then and are little changed this year.”

To JPM the lack of retail margin liquidation suggests that institutional rather than retail investors are more likely to have been responsible for this year’s rout in Chinese equities. More from Panigirtzoglou:

This is consistent with our position proxy for Chinese equities based on CSI 300 index futures shown in Figure 4. This position proxy is based on cumulative daily absolute changes in open interest multiplied by the sign of the CSI 300 futures price change every day. It points to significant reduction in net long positions by futures investors YTD.

What JPM says is “striking” about the above chart is that if indeed institutions are selling, they have only just begun:

the decline in this position indicator so far this year has been rather small compared to the position buildup of 2016/2017.

In other words, “the open interest in Chinese equity futures is far from signaling capitulation.

Which brings us to JPMorgan’s conclusion: if indeed both the Yuan and stocks are set to continue declining on concerns of escalating trade wars, coupled with margin limit positions being hit on institutional stock loans, it is possible that another global risk-off wave could be unleashed with China now set to become the epicenter of the next Emerging Market turmoil:

In all, the combination of Chinese equity market declines and currency depreciation pressures revive memories of 2015, and this combination has the potential to unsettle risky markets. Especially if a hawkish Fed or an escalation of trade tensions put further upward pressure on the dollar.

It is the combination of these market risks emanating from China that “make 2018 look even more like 2015.

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Another Pre-Summit Dividend – No Sanctions On Nordstream 2

Authored by Tom Luongo,

I hate to say “I told you so,” but, “I told you so.”  There will be no sanctions on the Nordstream 2 pipeline.  The reason is because sanctions won’t stop the project at this point.

Sputnik is reporting that the U.S. has told the German Economic Ministry there will be no sanctions on Russian pipeline projects.

If true then this is an indication that we just about reached the peak of Trump’s full-court press on the economic health of the planet through financial control.   I’ve been steadfast in my position that sanctions are not only an act of war but also, ultimately, have limits.

And once those limits are reached all that is left is the face-saving.  And since the first rule of being a politician is never back down no major policy can be reversed without a means to save face.

Look at the situation Angela Merkel is facing in Germany. 

She can’t cave on Nordstream 2 because she will look like a weak U.S. quisling (which she is). 

She can’t reverse sanctions on Russia over Crimea because there has been no movement towards implementing the Minsk II accord.   

And she can’t back down over her immigration policy because it would betray the people who put her in power — the Soros Set.

Trump has used this to pressure her ruthlessly on trade issues and NATO funding.

As for Trump, he’s not said much directly about Nordstream 2.  Members of his administration have, especially State Department Spokesperson Heather Nauert.   They are the ones who would have to eat crow over Nordstream 2, not Trump.

Trump has made it clear he doesn’t like the project but I think that’s more about his desire to bring Germany low rather than stifle Russia.  The worry is that Germany, through Nordstream 2 and no more supply coming from Ukraine, would then control eastern European politics by having control of their gas supplies.

This, I believe, is now the main focus for Poland in their fight to retain some semblance of sovereignty from the EU.  This is why Poland continues to overpay for Qatari and U.S. LNG as well as invest in a new pipeline from Norway.

But, that said, Trump knows that Europe’s future gas market is big enough to ensure, if indirectly, a market for U.S. LNG.  So, Russia’s dominance in Europe is not something he can compete with in the long run.

Implications

This statement by Germany has a number of potential implications. It may be nothing more than an attempt to undermine Trump’s position before his July 16th summit with Putin.

But, I don’t think so.  With Sweden issuing the last necessary permit for the construction of Nordstream 2 there is little way to stop the pipeline from being built.  Most of the pipe has been produced along with the infrastructure.  All that’s left is the actual putting the pieces together.

I think this is another pre-summit diplomatic offering by Trump ahead of his meeting with Putin.  The other was cutting the Al-Qaeda-linked groups free in Dara’a while the Russians and Syrian Arab Army retake the territory up to the Golan Heights.

It may also signify that Trump was never serious about stopping Nordstream 2 while other factions within the Administration were.  Remember, the biggest question in geopolitics today is just how much control does Donald Trump actually have over the policies of his administration?

We know he has virtually no control over the statements made by various officials who constantly run their mouths to back him into corners or undermine his negotiating position.

So, at the end of the day the First Rule of Trump applies, react to what he does not what he says.  Speech is a negotiating tactic for him.  And right now, he has not moved further on sanctions to stop Nordstream 2. With his long-desired summit with Putin now on the table it makes zero sense to throw down the gauntlet over it now.

Remember, also, that one of the outstanding issues between the U.S., Germany and Russia is gas transit through Ukraine starting in 2020.  The current agreement between Gazprom and Naftogaz ends next year and a new contract between them is not a done deal given the hostility of the Poroshenko regime.

The U.S. has tried to gain leverage over Gazprom to scuttle Nordstream 2 for three years now and all of those attempts have failed.  Gazprom has settled its anti-trust dispute with the EU, won legal challenges created by Ukraine and overcome political hurdles created by Poland.

Putin and Merkel met twice recently and discussed the future of gas transit through Ukraine among other things.  If Trump is willing to give up stopping Nordstream 2 then it may be that there is a new deal for Ukraine’s future in the works which ensures multiple gas supply routes for eastern Europe going forward.

The last piece to this puzzle is that the massive Grogingen gas field which has been the Netherlands’ greatest asset is drying up faster than expected.  Those volumes will have to be replaced placing even greater importance on Nordstream 2.

*  *  *

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Is One Man About To Collapse German Politics As We Know It?

Authored by Jorg Luyken via The Local,

On Sunday the Christian Social Union (CSU) are set to meet to vote on whether to back Horst Seehofer in his plan to turn asylum seekers back at the German border. If Seehofer follows through, the move will have incalculable consequences for German politics.

What is the problem?

Germany’s conservative parties are a little like two crime families who work together as long as one stays off the other’s turf. This has worked out pretty well over several decades as the CSU have sat in power in Munich, while the CDU dominated politics on the federal level.

There were unwritten rules to their collaboration though. Whereas the mafia (at least in the films) drew a line at bringing drugs into the country, the unspoken code of German conservative politics was: no immigrants (or at least, not too many).

When Angela Merkel decided not to close the borders as thousands of refugees crossed the border in 2015 she broke this rule. Ever since then the ageing boss of the CSU, Horst Seehofer, has been seething. Throw into the mix a hot-headed upstart who is challenging Seehofer’s grip on power in the CSU and you not only have the ingredients for a ropy Hollywood movie, but also for real-life German politics.

Now Interior Minister, Seehofer has loudly declared that Germany has been too soft in applying EU law on asylum seekers. He was set to publish an “asylum masterplan” a little over two weeks ago, which would have given him the power to stop migrants coming into the country.

But Merkel bluntly rejected the proposal.

Ever since then conservative politics in Germany has been in a state of meltdown. Seehofer claims he can’t understand why Merkel rejects what he describes as a technicality, while Seehofer has been accused of putting Bavaria’s interests above those of Germany and Europe.

And with state elections coming up in Bavaria in the autumn, there is every reason to believe that Seehofer and the young upstart Marcus Söder aren’t thinking about much else other than what goes on inside their own territory. 

The upshot of the controversy was that Seehofer gave Merkel two weeks to find a deal on migrants with other EU countries, otherwise he would shut the border whether she liked it or not.

If he goes ahead, decades of peace between the conservative clans will come to an end. Seehofer will force Merkel to fire him and their Bundestag alliance will be over. A pitched battle for power will commence in the build up to Bavaria’s autumn elections. Things could get very messy.

Time is up

Seehofer’s deadline is up this Monday. On Sunday, the most important members of the CSU will come together in Munich to discuss what steps they’ll take next.

In the meantime, Merkel has been wringing every last inch of guile out of her political neckerchief in an attempt to get European deals signed that stave off the threat of a rebellion from down south.

The first success was announced early on Friday morning when she managed to secure a surprise agreement between the 28 EU member states on migration.

The states agreed to set up closed migrant centres, which would be hosted on a voluntary basis. People rejected for asylum would “be returned” from these centres, while genuine refugees would be taken in by states on a voluntary basis.

But the agreement was thin on the ground on details on the crunch issue for Seehofer, so-called “secondary migration”, a phrase which refers to migrants moving around within the EU. The agreement only contains the vague statement that “member states should call on all necessary internal lawful and administrative processes in order to prevent such movements, and should collaborate closely on this issue.”

Then later in the day Merkel could announce bilateral deals with Spain and Greece, committing them to taking migrants who German border police detain at the border. The big one, Italy, remained elusive, though. Most asylum seekers who reach Europe come through Italy – and Merkel has been unable to get Rome to commit to a bilateral deal.

So will Seehofer pull the trigger?

One fundamental reason why the CSU have been so agitated is that another organization has been aggressively muscling in on their patch. The Alternative for Germany (AfD) have managed to be more populist, more anti-immigrant and more reactionary than the Bavarians – and in doing so have stolen a whole heap of business from Seehofer and his gang.

Polling shows that the AfD are on course to win 14 percent of the vote in Bayern, a result which will drag the all-mighty CSU down to their worst score since the 1950s. The days of absolute power will be over.

So the temptation is clearly there: pull the trigger and show the Bavarian beer halls that you don’t take orders from Berlin.

If only it were that simple, though. Were Seehofer to close the border to migrants, thus pulling down the government and ending the alliance with the CDU, Merkel’s party would swiftly move onto his patch.

And polling shows that many Bavarians are secretly crying out for freedom from the yoke of one-party rule.

A poll released on Friday by Forsa showed that 54 percent of Bavarians who voted CSU at the last election would swap to the CDU if they had the choice. That poll suggested that the CDU would win 33 percent of the vote in a Bavarian state election.

Meanwhile well over a third of Bavarians told Forsa that the CSU are the single biggest problem in their state, above the number who said refugees are Bavaria’s biggest headache.

Meanwhile a powerful alliance of business leaders has closed rank behind the Chancellor.

The country’s four most influential industry associations on Friday released a common statement which denounced Seehofer in no uncertain terms.

“What we need now is a stable and resolute government that works together with its European partners constructively and calmly,” the statement read. “The German economy is convinced that acting only out of national interest will do more harm than good.”

So will Seehofer close the border and risk an all out battle for power in Bavaria? Only he knows that – and on Friday he was staying silent. A spokesperson said that he was refusing to comment on the EU migration summit. He would wait instead to speak to Merkel in person.

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D.C.’s ‘Families Belong Together’ March More About Midterms Than Migrants

It was a day of of mixed emotions and mixed messages at D.C.’s Families Belong Together demonstration, one of several hundred rallies held around the country today to protest the Trump administration’s practice of separating immigrant families detained at the U.S.-Mexico border.

Thousands of demonstrators poured into Lafayette Park, right outside the White House, to chant, sing, and listen to a slate of speakers organized by a coalition of labor groups, civil liberties organizations, and progressive campaign outfits.

Most were clearly shocked and horrified by the separation of families at the border. For some, the issue had a personal resonance. Dina Potter, for example, tells Reason she immigrated to America with her mother from Guatemala when she was just 12 years old.

“I could easily have been one of the DACA kids,” says Potter, who suggests the roots of our current immigration woes can be found in U.S. interventions that have destabilized her home country. “I could easily be one of those folks who just showed up at the border seeking asylum. They come here seeking a safer way of life, and to have their children ripped from their arms is unconscionable.”

Most attendees, however, seemed to think the problems they were protesting began and ended with Trump.

“We need to get this administration out. We need to abolish ICE. We need to go back to the immigration policies we had before,” said Jane Ellis, a recent immigrant from the U.K. who received her citizenship on June 12.

Alongside the official “Keep Family Together” posters and homemade “Abolish ICE” placards were pride flags, pro-choice signs, and a ton of “Trump = Nazi” posters.

Many demonstrators wore March for Our Lives shirts, Fight for $15 tees, and paraphernalia bearing the slogan “Nasty Woman.” Union swag was everywhere, as were Black Lives Matter shirts and signs. Other protestors waved AFL-CIO placards saying “Solidarity Forever!”

A block north of the rally was a man selling political buttons from an “Anti-Trump bandwagon” cart. He said his “Mueller Time” buttons done up in Miller Lite font were selling the best, followed by those bearing a picture of Trump surrounded by bricks with the inscription “Better to Build This Wall.”

Elsewhere, demonstrators’ attitudes were almost festive.

Scores of college-aged attendees showed up carrying both protest signs and iced coffees, chatting happily and snapping group photos. Hundreds of people took a break from listening to speeches about the specter of white nationalism to dance around a fire truck that was shooting its hoses in the air. Naturally, there was a drum circle.

This mix of rage about family separations, standard progressive rallying cries, and pure entertainment was replicated onstage. One speaker, a child of illegal immigrants, spoke of how her community lived in fear of law enforcement every day. Another speaker condemned Trump for pitting workers against each other as he took away their food stamps and dismantled their health care. One Protestant clergywoman spent several minutes accusing the current Supreme Court of racism. Musical acts performed in between speakers. One man led the audience in singing a lullaby.

Few immigration-policy specifics crept into the pronouncements. That the family separations needed to stop was clear. Everything else was a bit of a blur. Almost without fail, the speakers urged the assembled crowd to show up to the polls in November, with repeated, enthusiastic chants of “vote them out! Vote them out!”

Driving turnout in November was clearly a primary goal of the rally organizers. Their website asks attendees to “RSVP” for the rallies by giving their name, email, and zip code (all useful data points to have with a midterm election on the horizon).

At one point a speaker asked attendees to let Congress know how they feel by texting “families” to a number they flashed up on electronic screens. How this would let Congress know much of anything was beyond me, but it’s a great way to harvest phone numbers.

I’m not suggesting the organizers were insincere. Everyone who spoke with Reason expressed a desire for more open, liberal immigration policies. But the consensus seemed that this could be achieved solely by booting Republicans out of office.

There was almost no recognition of the role the Obama administration played in building the border-enforcement apparatus or in deporting record numbers of immigrants, nor any disappointment or irritation for Democrats who failed to prioritize immigration reform when they controlled Congress and the White House.

This inability to hold their own side accountable will no doubt leave many of today’s demonstrators disappointed when and if power changes hands again.

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In San Francisco, Families Making $117,000 Qualify For Low-Income Housing

Shortly after officials revealed that San Francisco had become the first US city to mandate a $15 minimum wage in accordance with a law passed in 2014 – and just in the nick of time, too. Because home prices in San Francisco have risen so rapidly that Business Insider reported Saturday that applicants for affordable hoping qualify for affordable housing in the city must earn less than 117,400  a year qualify for low-income housing in San Francisco and a few neighboring counties, according to a new report from the Department of Housing and Urban Development. To help put this in context, that number is just shy of the city’s median income of $118,400.

SF

Here’s more from BI:

To qualify for low-income housing in San Francisco County or the nearby San Mateo and Marin counties, a four-person household can make as much as $117,400 a year. The same goes for a one-person household raking in $82,200 a year.

That’s the conclusion of a new report from the Department of Housing and Urban Development, which just released the 2018 thresholds for affordable housing across the US…the San Francisco metro area’s threshold is just below the area’s median family income of $118,400.

Housing costs in San Francisco have been increasing at a ludicrous rate: According to the S&P/Case-Shiller Home price index, which covers not just the city and county, but also includes four other Bay Area counties: Alameda, Contra Costa, Marin, and San Mateo, prices in the region increased by a YOY 10% as of April. However, others argue that the increase in home prices has been even more extreme For example, Paragon Real Estate Group reported in April that prices in San Francisco had skyrocketed by an astounding 24% YOY, more than double the Case-Shiller estimate. This staggering jump has left the median home price in the city at an astonishing $1.6 million.

Of course, the new figures from the city’s Department of Housing are hardly surprising: As BI reports, over the past several years, the Bay Area has been grappling with an affordable-housing crisis that has been exacerbated by the tech boom and a concomittant shortage of housing stock. Several Bay Area tech giants (like Alphabet, for example) situated their headquarters in areas without much nearby housing.

And as we pointed out back in April, this is what a housing boom looks like…

Boom

…which in turn pushed the median home sales price above $1.6 million…

SF

…which is well above the national average.

Boom

Even the city’s “poor” neighborhoods have seen a huge boost in prices on a neighborhood-by-neighborhood basis. In the table below, the median house prices range from $960,000 in Bayview, one of the more troubled neighborhoods, to over $5 million in Pacific Heights, one of the city’s wealthiest neighborhoods.

Pacific

Unfortunately for the city’s beleaguered residents, SF’s “robust” affordable housing lottery isn’t nearly enough to serve anywhere close to the numbers who could use the help. With this in mind, some Bay Area cities are considering alternatives, like a sizable “head tax” on employers. In Cupertino and Mountain View, the city councils have proposed a $150-a-year per-employee “head tax” that would replenish a fund dedicated to building more affordable housing.

SF is also considering a head tax. And while tech companies (like Amazon in Seattle) have threatened to move or abandon planned expansions over similar measures, at this rate, the city’s residents would also benefit from this outcome: Because pushing out the tech talent that have been probably the largest contributors to the housing-price boom, the city might slowly but surely send prices lower… along with tax revenues and all local economic growth.

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Paul Craig Roberts: Two Views Of The Putin-Trump Summit

Authored by Paul Craig Roberts,

The meeting that the Deep State strived to make impossible with fabricated “Russiagate” assertions and an orchestrated “investigation” by Mueller has now been set in place by no less than Deep State neocon operative John Bolton. Patrick Lang explains how this came about.

 

 

Many see benefits from the Putin/Trump meeting.

Putin himself sees benefits in the meeting as does Trump. Putin sees hope of improving relations between the two governments. Of course, the “strained relations” are entirely due to Washington, which has demonized both Russia and Putin with false accusations and hostile acts such as illegal sanctions. It was miscalculation for Washington to expect Russia to give up its Black Sea naval base to Washington’s coup in Ukraine.

What can an agreement be based on? Bolton’s position has been opposed to making any agreement with Russia or cooperating with Russia in any way. From the neoconservative standpoint, Russia is in the way of US world hegemony. As the neoconservative foreign policy doctrine states, it is a principle US goal to prevent the rise of any country that could serve as a check on American unilateralism. Russia is a challenge to the American World Order because Russia stands in the way of the American unipolar world.

A successful summit will require Trump to reject this neoconservative doctrine. If Trump can pull this off with Bolton sitting by him, Trump’s critics will look very silly.

Do Bolton and the Deep State have a way of baking failure into the summit that will ensure the continuation of Russia’s enemy status, thereby sustaining the enormous budget and power of the US military/security complex? Is Trump a superman who can overcome this powerful vested interest about which President Eisenhower warned Americans in 1961? How much stronger is this complex more than half a century later after being nourished by decades of Cold War and War on Terror?

Assad and no doubt Iran are convinced that negotiations with Washington are a waste of time. Assad has concluded that:

…the problem with US presidents is that they are hostage to lobbyists. They can tell you what you want to hear, but they do the opposite. That’s the problem, and it’s getting worse and worse. Trump is a stark example. That’s why when talking to the Americans, discussing something with them does not settle anything. There will not be any results. It’s a simple waste of time.”

Assad’s view has the evidence on its side.

One of Trump’s first actions was to unilaterally pull out of the multi-nation Iran nuclear agreement. There is no evidence that supports the hopeful Russian view.

It would be an interesting exercise to list all the agreements Washington has made over the course of US history and to calculate the percentage that Washington kept. If Putin doesn’t want to be taken for a ride, he should contemplate the words of Chief Joseph of the Nez Perce summing up his negotiations with Washington: “I have heard talk and talk, but nothing is done. I am tired of talk that comes to nothing. It makes my heart sick when I remember all the good words and broken promises.”

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