Month: November 2018

Authored by Wolf Richter via WolfStreet.com,

The hail of two-notch downgrades doesn’t help.

Wolf here: Shares of General Electric [GE] are down over 3% this beautiful Friday morning, trading at $9.20. If they close at this level, they would mark a new nine-year closing low. Shares are down 52% year-to-date:

The lowest close since the 1990s was $6.66 on March 5, 2009, during the Financial Crisis. I remember well: The next morning, then CEO Jeff Immelt was on CNBC, which was owned by NBC, which was owned by GE at the time. And Inmelt was hyping GE’s shares on GE’s TV station that gave him a huge slot of time to do so, and the share price, displayed prominently onscreen, ticked up with every word he spoke.

Immelt was also on the Board of Directors of the New York Fed, which at that time was implementing the Fed’s alphabet-soup of bailout programs for banks, industrial companies with financial divisions, money market funds, foreign central banks (dollar swap lines), and the like. This included a bailout package for GE in form of short-term loans, without which GE might have had trouble making payroll because credit had frozen up and GE had been dependent on borrowing in the corporate paper market to meet its needs, and suddenly it couldn’t. Immelt was involved in those bailout decisions and knew what GE would get, but didn’t mention anything on CNBC.

Now Immelt is gone from GE (resigned in 2017 “earlier than expected”), and he is gone from the New York Fed (resigned in 2011 “due to increased demands on this time”), and CNBC no longer belongs to GE, and the new CEO is trying furiously to keep the whole charade form spiraling totally out of control hoping to be able to dodge the question: “When fill GE file for bankruptcy?”

Below are some of the things that GE is doing to avoid that fate.

By Leonard Hyman and Bill Tilles for WOLF STREET:

General Electric — at one time the world’s most formidable manufacturing company and now one of the world’s most mismanaged conglomerates — suffered more financial indignities this week: Its bond ratings got hit with back-to-back two-notch downgrades: Today by Fitch Ratings, from A to BBB+ due to the “deterioration at GE Power”; and earlier this week by Moody’s, from A2 to BAA1. This follows a similar move by Standard & Poor’s earlier in October.

The rating agencies also downgraded the company’s commercial paper (CP) program, a form of short-term borrowing. Moody’s cut GE’s CP ratings from P-1 to P-2. The new, lower CP ratings effectively prevents GE from further issuance of CP. However, GE still retains access to other, higher cost bank financed short term funding vehicles. But still, not a good look.

Also this week, GE virtually eliminated its quarterly dividend, slashing it from 12 cents to a penny. A belated Halloween themed headline could read, “Boston Slasher Strikes Again.” A year earlier GE’s board voted to cut its dividend from 24 cents to 12 cents.

In our view the previous dividend reduction was better anticipated than the most recent one. Why the hurried need for a cut last week? Probably for cash conservation reasons. GE badly needs the $3.9 billion in cash saved per year to meet financial needs such as $5 billion required for an underfunded pension fund and $3 billion to shore up the capitalization of GE’s finance arm (or what remains of it).

GE also requires considerable cash to retire existing debt. One of GE’s stated financial goals is to improve ratios of debt-to-EBITDA (earnings before interest, taxes, depreciation and amortization) to 2.5 times by 2020. In the present climate, we might refer to this as virtue signaling. Except here GE’s principal goal is to keep its respectable, investment-grade bond ratings.

The debt burden that GE’s management is presently struggling with stems from a strategy of borrowing heavily for M&A over the past decade. The biggest (and probably worst) was its purchase of French electrical equipment manufacturer Alstom in 2015 in which GE outbid arch rival Siemens. GE paid top dollar just as the market for electrical equipment began a sharp slide. This acquisition was recently written down by $22 billion reflecting the rather subdued prospects for the global power generation. Talk about a winner’s curse.

In order to raise cash and simplify its business, GE has arranged the sale of GE Transportation (locomotives, electric motors and propulsions systems for mining equipment, etc.), plans to dispose of its Baker Hughes oil services business, and intends to spin off (while retaining control) its profitable health services division.

The power division will be split into two businesses: gas turbines and everything else. This last strategic endeavor is probably the one that rankles the most insofar as it’s about two decades too late. A true house that Edison built would have pitted the fossil vs renewables organizations and let the markets sort it out.

How did GE get into the present mess and how did it manage to miss the turning point in a business it used to dominate? Despite recent disparaging comments regarding Harvard’s case studies, we believe this is something business school professors might want to examine. But it is history. For those in the power business, buyers and users of the equipment, what is the message?

First, the manufacture of gas turbines for electric power generation has become an oligopoly. Three suppliers dominate the market: Mitsubishi Hitachi (in clear lead), Siemens, and lastly GE.  Oligopolists almost by definition tend to abide one another, meaning that they do not engage in anything resembling robust competition. But with an uncertain business outlook, they may be reluctant to invest more money into their businesses. One almost immediate effect is a reduction in spending on research and development which creates a sort of feedback loop which eventually weakens product positioning against new technology.

The manufacturers may argue that the business will bottom out, that a turnaround will take place. And that revenues from servicing existing equipment will provide a steady stream of business anyway. We do not disagree with these prognostications. Renewables will not provide every new kilowatt of capacity, and gas turbines will be needed anyway to back up renewables.

But we also need to be aware that longer term the competition for gas turbines will come not from renewables but from storage devices such as batteries. In terms of capital allocation, we would wager that there is far more money chasing power storage technologies than there is chasing investment in gas turbine technology.

GE, under its new management and new CEO, Lawrence Culp, may resurrect itself as a well-run manufacturing conglomerate after paying down debt obligations and shoring up its pension obligations. The aviation and health groups (even after disposition of some shares) are large and profitable. And Baker-Hughes, despite its indefinite status, might still surprise to the upside depending on global energy prices.

However, Power, despite its worldwide decline, is still GE’s largest business. New management may succeed in growing the gas turbine business (or maybe better managing its slow decline). But to us the dividend cut symbolizes GE’s fading role in a business that it literally created. By Leonard Hyman and Bill Tilles for WOLF STREET

The financial Crisis was a decade ago. But its consequences still haunt us. Read… I Was Asked: “How & When Will the Next Financial Crisis Happen?”  
 

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One interesting outcome to the Saudis brazenly murdering journalist Jamal Khashoggi is that world leaders and the determined allies of Saudi Arabia have dropped all pretense of finesse when discussing the matter, such as when President Trump told Fox News last month that while Khashoggi’s death was tragic and should be investigated, the prospect of blocking arms sales to the kingdom is “very tough pill to swallow for our country” because American jobs are on the line. 

Another world leader who’s been blunt on ensuring his relationship with the Saudis weather the storm of media and international outrage is Israeli Prime Minister Benjamin Netanyahu, who argued in public statements this week that while the killing of the Saudi journalist at the Saudi consulate in Istanbul was “horrendous,” stability in Saudi Arabia is vital to global security.

Netanyahu spoke at the Craiova Forum — a summit in Bulgaria —  alongside the president of Serbia and the prime ministers of Bulgaria, Greece, and Romania.

Netanyahu’s frank assessment of the Khashoggi affair were as follows, according to Haaretz: 

What happened in the Istanbul consulate was horrendous, and it should be duly dealt with. Yet at the same time I say that it is very important for the stability of the world, of the region and of the world, that Saudi Arabia remains stable.

The Israeli prime minister further stressed that “the larger problem is Iran.” He explained that blocking Iranian “terrorism” is imperative for the security of Europe, and specifically mentioned Israel helping thwart recent “terrorist attacks” in Paris and Copenhagen, which he claimed had Iranian intelligence’s backing and planning. 

“Blocking Iran is uppermost in our agenda for security” Netanyahu said during the summit. 

New Iran sanctions are a time to celebrate for a few delusional parties – Trump, MBS, Netanyahu, their cheerleaders in Washington and hardliners in Tehran. For 80 million Iranians, it will unleash poverty and misery: https://t.co/vXueFMKkN2

— Ryan Costello (@RN_Costello) November 2, 2018

According to Middle East Eye it constituted the first time Israeli officials have taken a public stance on the issue, and the silence has been deafening: 

For the past month, while governments and media outlet around the world sounded a drumbeat of shock and dismay over the murder of Saudi journalist Jamal Khashoggi, all that could be heard on the subject from Israel was the sound of crickets. Israeli columnist Ben Caspit said his country’s leadership was avoiding the subject “like the plague”.

It appears no Israeli politician wants to say anything for fear of offending that country’s latest Arab bromantic partner, Crown Prince Mohammed bin Salman. Bin Salman, according to many analysts, would have had to have ordered the murder of a figure as prominent as Khashoggi.

But this week’s Netanyahu comments are hugely significant in that Israel has now gone public in sticking by MbS.

This follows statements last month that hinted at the issue without expressly naming the Saudis or Khashoggi, when Netanyahu opened an October 15 parliamentary session at the Knesset by addressing his familiar theme of “Iranian expansion” in Syria, lamenting some of the public heat and attention had been taken off Tehran for a time due to the Saudi issue: “We must act against the Iranian regime in Syria,” Netanyahu said. 

This is Israel essentially continuing to tell the West to “keep your eye on the ball” regards Iran. Likely Western leaders’ attention is already beginning to shift back to Iran as crippling U.S. sanctions are set to snap back on November 5. 

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Authored by EconomicPrism’s MN Gordon, annotated by Acting-Man’s Pater Tenebrarum,

Schemes and Shams

Man’s willful determination to resist the natural order are in vain.  Still, he pushes onward, always grasping for the big breakthrough. The allure of something for nothing is too enticing to pass up.

From the “displays of disbelief, revealing touching old-fashioned notions” file… [PT]

Systems of elaborate folly have been erected with the most impossible of promises.  That prosperity can be attained without labor.  That benefits can be paid without taxes.  That cheap credit can make everyone rich.

Central to these promises are the central government and central planning authorities.  They take your money and, in return, they make you a dependent.  They promise you a secure retirement, and free drugs, while running a scheme that’s well beyond anything Charles Ponzi ever dreamed of.

According to the government’s statistics, the economy has never been better.  By the official numbers, we’re living in a magical world of full employment, 2.3 percent price inflation, and the second-longest growth period in the post-World War II era.  Agreeable reports like these are broadcast each month without question.

Still, we have some reservations.  How come, with the nirvana of full employment, 62 percent of all U.S. jobs don’t pay enough to support a middle class life?  An economy with full employment should be an employee’s market; one where employees can name their price.

Surely, workers would select a middle class life if they could.  But they can’t… because full employment is a sham.

Left: Charles Ponzi back in his heyday. Right: the almost free lunch, a.k.a. the no free lunch theorem ATM [PT]

An $8 Trillion Purge

This week brought forth new evidence that we are living in a world of epic disorder.  A world that is so full of shams it is often unclear what is real and what is deception. Yet, what is lucidly clear is that the scope and scale of the ultimate quietus is so immense, one can hardly fathom its completion.

In the meantime, madness and folly prevail with acute enthusiasm.  The stock market, a crude barometer of fear and greed, is currently registering great uncertainty.  The mood vacillates from one extreme to the next with wild abandon.

The Standard & Wobble Index recently decided to lurch into the wrong direction with what was widely considered unseemly alacrity. [PT]

Last month, the S&P 500 dropped 215 points, or roughly 7.3 percent.  This marked its worst month since February 2009.  But that was nothing…

Goldman’s VIP Basket plummeted 11.5 percent in October.  And FANG stocks – the digital economy’s best of the best – crashed 21 percent.  All in all, global equity markets purged $8 trillion in shareholder wealth.

The U.S. economy, if you go by the government’s numbers, appears to be healthy and growing. The latest Commerce Department report showed third quarter gross domestic product increased at a 3.5 percent annualized rate. On the surface, everything looks fabulous. But just a scratch below the surface, a different picture is revealed.

Economic growth is reportedly the strongest since the GFC of 2008/2009 – and yet, the federal deficit somehow manages to grow anyway. Some of this is due to the temporary short-fall from tax cuts that should be made up over time by improving growth rates, but there are also other factors, such as soaring debt service costs as short term interest rates rise and the recent  increase in government spending. It is not quite clear why implementing more “fiscal stimulus” was actually held to be a good idea at this juncture, but there it is. [PT]

The fiscal year 2018 deficit came in at $779 billion, an increase of 17 percent from 2017.  The fiscal year 2019 deficit is projected to top $1 trillion. With deficit spending at these levels, GDP growth is more representative of the rate the government is going broke than real increases in economic productivity.

In other words, like the stock market, the economy’s growth days are numbered…

Pushing Past the Breaking Point

No doubt, the upcoming tests facing the economy will be observable in aggregate numbers and statistics.  How much GDP contracts, or how high unemployment rises, are loosely quantifiable. They can be calculated and charted, though we wouldn’t place much credence in them.

The real tests facing the economy are less measurable. They cannot be counted up and expressed as percentages.  Nor can they be charted over time.  But that doesn’t mean these tests are any less observable than a calculated statistic.

Apparently even the poor, dear, self-sacrificing servants of We the Sheeple are practically starving these days. If this continues, there may soon be a revolution in Congress. Get those pitchforks and torches out, ye valiant heroes of the Volk! [PT]

To be clear, the tests facing the economy have little to do with markets and everything to do with central government.  Over the last 30 years, as the Fed and the Treasury colluded to rig the financial system in earnest, wealth has become ever more concentrated in fewer and fewer insider hands. The effect over this latest period of expansion has been a disparity of such magnitude few can ignore it.

What’s with the long faces? Unfortunately only very few people are aware of what the root cause of growing wealth inequality actually is (not even all members of the agency largely responsible for it realize it is the fault of the policies their institution imposes – decades of statist propaganda combined with a shoddy economics education saw to that). Unfortunately this means that the “solutions” that will eventually be offered are likely to create an even worse situation. [PT]

This trend will be further intensified by the forthcoming depression. What’s more, bitterness and contempt for wealthy insiders is already much higher than it was during prior business cycles.  Without question, this bitterness and contempt will increase to a fever pitch when this business cycle turns down.

Discontent throughout the broad population will take a financial crash and an economic collapse, and transform it into a complete societal breakdown.  Then the central government will fail the test of its making.

But, alas, the discord will provide the perfect cover for a much larger central authority.  They will offer promises to fix things while delivering a much wider range of wealth inequality. They won’t stop. They will push it to the breaking point… and then they will push it some more.

Unequal persons sharing a settee. [PT]

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Update: 2 dead after a weather-related building collapse at Amazon in Baltimore 

2 dead after weather-related building collapse at Amazon in Baltimore County. https://t.co/Q3APIJktoF pic.twitter.com/iCoxg0OUHF

— FOX Baltimore (@FOXBaltimore) November 3, 2018

* * *

At least one Amazon worker is dead, and another was unaccounted for late Friday night when a massive wall collapsed at an Amazon warehouse in Baltimore, the city’s fire department spokesman said.

Chief Roman Clark told reporters a 50-foot wall collapsed at the Amazon Fulfillment Center in Southeast Baltimore in the overnight hours as a wicked storm swept across the Chesapeake Bay.

Firefighters found the deceased worker under rubble and transported to a hospital, where the person was pronounced dead, Clark said.

He said a second person was unaccounted for.

According to The Baltimore Sun, footage of the scene showed a badly damaged facility, damaged delivery trucks, and debris everywhere. On a nearby highway, on the north side of the Ft. McHenry tunnel, a tractor-trailer overturned because of wind.

It is unclear if the Amazon warehouse collapse is related to a severe weather event that hit the city last night, but Clark said the area was getting pounded with strong winds and rain at the same time.

Luis Rosa, a meteorologist with the National Weather Service (NWS), told The Baltimore Sun a government weather team would be surveying the area on Saturday to assess the damage.

Brandon McBride, an Amazon employee who was working in the building, described to NBC Baltimore a chaotic and frightening scene:

“I was standing inside the building and me and one of the facilities dudes were talking, and I went to the left side of the building and he went to the right, and all of a sudden, we just heard these loud noises. The power shut off. It was just crazy inside,” McBride said. “It just sounded like bombs were dropping everywhere. The whole side (of the building) was just dropping.”

“There was stuff falling everywhere, you could see the walls were caving in,” McBride said. “Rain was pouring everywhere; all the packages were soaked. It’s unreal.”

Breaking: One dead, one missing after Amazon fulfillment center partially collapses due to strong storms in Baltimore, Maryland. (Via @johnstempinNPR) pic.twitter.com/38VKWRcirx

— Jeffrey Porter (@JeffreyPorterPM) November 3, 2018

Amazon spokeswoman Rachael Lighty emailed a statement to NBC Baltimore that said: “Severe weather damaged one of our facilities in Baltimore City. The safety of our employees and contractors is our top priority and we have safely evacuated the building. We are working with emergency responders to assess the damage and we are thankful for their quick response this evening. Our thoughts go out to all families impacted by this evening’s severe weather.”

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Authored by Judith Bergman via The Gatestone Institute,

Britain’s Independent Reviewer of Terrorism Legislation, Max Hill, recently recommended:

“…the Police should consider and reflect upon the community impact of a large-scale [terror] investigation, centering as it did on particular areas of Manchester with a large Muslim population… Good community policing, as well as good counter-terrorism policing, demands that real efforts are made to work within and with local communities, where many blameless residents will have been inconvenienced if not traumatised by the regular appearance of Police search and arrest teams on their street or in their home. I would like to see the outcome of Police reflections on this aspect…” [Emphasis added]

Hill’s recommendation was published in his recent report on how the UK handles its counter-terrorism efforts. In the report, Hill examines police investigations of the major 2017 terrorist attacks; his recommendation was connected to the investigation into the terrorist attack in Manchester in May 2017, in which Salman Abedi murdered 22 people and injured 139, half of them children, at an Ariana Grande pop concert at the Manchester Arena.

The police, in other words, should consider making it a priority to work in a way so that their investigations of the murder and maiming of all these people will not “inconvenience” the community in which the suicide bomber lived.

Hill based his recommendation on talks he had previously had with various Muslim organizations across the UK about the impact of counter-terror legislation on their lives and the aftermath of the terrorist attacks in London and Manchester in 2017.

The talks with the Muslim organizations were recorded in the report, “Community Roundtables: A report on the aftermath of the terrorist attacks in London and Manchester” published by Forward Thinking’s “Building Bridges” Program. This program, which “empowers grassroots communities,” facilitates dialogue between UK Muslim communities and grassroots organizations, British authorities (local government, parliamentarians, policymakers), and the national media.

The “Community Roundtables” report described a meeting with representatives of the Libyan-Muslim community in Manchester — from which Abedi emerged:

“Throughout the meeting, almost all participants articulated a profound sense of anger and frustration at the consequences of extensive police raids within the community and a perceived lack of support to deal with these consequences, including the fear of being ostracised and targeted by wider society… Individuals — particularly children and teenagers — who have been directly affected were said to have been left traumatised and humiliated, creating a sense of alienation that it was warned could have profoundly damaging consequences for the UK unless urgently addressed… Specific concerns were raised about the potential for a rise in Islamophobic attacks in the current context and it was hoped that the authorities would take such a threat seriously and offer increased support to communities.”

No one, however, seems to be holding roundtable talks with non-Muslim communities across the UK to address their legitimate fears and concerns about religiously-motivated terrorism on their lives.

According to the National Society for the Prevention of Cruelty to Children (NSPCC) a leading UK children’s charity, more than 300 counselling sessions were held by the organization with children after the terrorist attack at the Manchester Arena — apparently four times as many sessions as usual. In addition, the organization received hundreds of calls from children after the Manchester attack. An 11-year-old who called the helpline said: “I constantly feel anxious… I am really worried that they will get someone in my family. I haven’t been sleeping because it is all I can think about.” Another caller, a 14-year-old girl, said: “I’m always on the edge when I leave the house and am always looking over my shoulder.”

The number of children and young people seeking help from mental health services also rose after the Manchester attack, according to the Royal College of Psychiatrists (RCP). Hospitals across the Manchester region saw an estimated 10% increase in children seeking psychological help, which received hundreds more patients from June to July compared with previous months.

“Dr Louise Theodosiou, a consultant child and adolescent psychiatrist at Royal Manchester children’s hospital and a member of the RCP, described the increase as significant and said the terror attack had a ‘profound impact on the way the children view their city.’

“Just a small fraction of those treated had been at the concert; the majority of patients had felt increased anxiety after watching the events on the news. Anxiety and insomnia were the most common complaints, with children worrying about going out or being on public transport after the attacks.”

A similar trend had been seen in London after the terrorist attacks there.

In March, an independent review, the purpose of which was to examine the quality of the emergency response to the Manchester bombing, found that many respondents did not know where to turn for support after the attack. Some suffered post-traumatic stress disorder, flashbacks, trauma and anxiety causing them to lose jobs and drop out of the educational system.

It is mystifying that the victims of terror had nowhere to turn: it has been more than a decade since the first mass terrorist attack in the UK, in 2005 on London’s transit system, where 56 people were killed and 700 wounded. Since then, Britain has only seen the terror threat continue.

Perhaps the main reason that terror victims had nowhere to turn is that even after years of living with Islamic terrorism, British authorities and public services still appear to be more concerned with dealing with perceived “Islamophobia” than with the real, devastating consequences of terrorism.

If you do not even dare to link terrorism to its source, then surely neither can you prepare for it. You cannot even speak about the gravely detrimental effects that Islamic terrorism has on the well-being of children and others in general society, because Islamic terrorism is (officially) not even supposed to exist.

It is only in such a society — where everything has been turned on its head, where the authorities cannot tell who are the victims and who are the people who may feel as if they are victims if someone asks them some questions — that a terrorist investigation can be considered “an inconvenience.”

As the saying goes about children in a playground: “It all started when he hit me back.”

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EU, NATO, and Schengen, oh my!

Amidst imminent Brexit and potential changes within NATO, you might be wondering how these organizations fit into the big picture of Europe’s member states. As Visual Capitalist’s Jenny Scribani notes, Europe has members in at least four major treaty groups, each of which governs a different aspect of the region’s infrastructure.

Courtesy of: Visual Capitalist

Let’s break down each group:

EUROPEAN UNION (EU)

The European Union is primarily a political organization. It promotes economic, social, and political cooperation among its member states, encompassing more than 510 million citizens. The last nation to join was Croatia in 2013, while the United Kingdom will be the first to officially withdraw on March 29, 2019.

The EU is governed according to a supranational parliamentary system, with representatives elected by member states. The union maintains common policies on trade, agriculture, and regional development. It also enacts legislation on justice and home affairs, ensuring the free movement of people, goods, services, and capital within its borders.

The EU was awarded the Nobel Peace Prize in 2017 for its contribution to the “advancement of peace and reconciliation, democracy, and human rights in Europe.”

NORTH ATLANTIC TREATY ORGANIZATION (NATO)

NATO is a military alliance between the United States, Canada, Turkey, and 26 other European countries.

Established in 1949 as a response to post-WW2 Soviet aggression, NATO exists for the collective defense and security of the group. Members share few laws and regulations, but an attack on one constitutes an attack on all, and member states are obligated to act in defense of one another.

Iceland remains the only member without armed forces. Their strategic geographic location earned them a spot as a founding member of NATO, but they have no standing army and joined on the condition they would never need to establish one.

EUROZONE

The Eurozone is a monetary union of 19 EU nations which have adopted the Euro as their common currency.

Established in 1999 to control inflation, the Eurozone is managed by a board of central banks, but members share no fiscal policies. The remaining EU members are obliged to adopt the Euro at some point in the future, except for the UK and Denmark, who are exempt and permitted to retain a unique currency.

The Euro is also used in a number of non-EU states. Andorra, Monaco, San Marino, and Vatican City obtained formal agreements to issue and use their own Euro coins. Kosovo and Montenegro also adopted the Euro, but without formal permission, meaning they cannot legally issue currency.

SCHENGEN

This grouping of 26 European states abolished passports and other types of border control at their mutual borders in 1995. For travel purposes, Schengen states function as a single country with a common visa policy.

This visa doesn’t cover residency or work permits, but allows tourists and visitors to obtain a single visa for the entire area, making border restrictions virtually non-existent. While travellers face stringent controls when entering or leaving the Schengen zones, visa holders can pass between Schengen countries without a passport or ID.

Monaco, San Marino, and Vatican City are not formally part of Schengen, but maintain open borders within the Schengen area.

The map of Europe’s member states has changed constantly over thousands of years. As political shakeups continue and the United Kingdom prepares for their exit from the EU, it might be interesting to see how different this map looks a few years from now.

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Via The Strategic Culture Foundation,

There were several takeaways from the recent Quadrilateral Summit in Istanbul on finding a peaceful settlement to the war in Syria. Russian President Vladimir Putin convened with his counterparts from Turkey, Germany and France for a two-day summit last weekend in a convivial and constructive atmosphere.

The four powers signed a communique emphasizing the sovereignty and territorial integrity of Syria. It was Putin who underscored the inviolability of the Syrian government of President Assad as the internationally recognized authority in the Arab country. The communique also endorsed the right of the Syrian nation to self-determination over the future political settlement, free from external interference.

These principles have been stated before in a previous UN Security Council Resolution 2254. But it seems more than ever that the sovereignty of Syria has been widely accepted. Recall that not too long ago, Turkey and France were calling for President Assad to stand down. That demand is no longer tenable, at least as far as the four powers attending the Istanbul summit are concerned.

The upholding of Syrian self-determination bears the stamp of Russia’s long-held position. The acceptance of this position by Turkey, Germany and France is testimony to the key role Russia has established in ending the nearly eight-year war in Syria and now creating the framework for a peace settlement in the war-torn country. This framework has been made possible after Russia’s principled military intervention nearly three years ago, which prevented Syria from being destroyed by Western-backed insurgents.

Ironically, the US and Britain have been pursuing a policy of trying to isolate and delegitimize Russia in international relations. Evidently from the Quadrilateral Summit in Istanbul, Moscow is far from isolated. It is perhaps the linchpin power for the reconstruction of Syria. Furthermore, Russia has emerged as having newfound leadership on the international stage owing to its laudable contribution in salvaging Syria from a foreign-sponsored war to destroy that nation.

Another important takeaway from the Istanbul gathering was that Washington and London were not invited to attend. That speaks to the diminished role these two powers have previously claimed in international politics. Their absence also speaks to the tacit recognition that the US and Britain have played a destructive part in fomenting the war in Syria. Turkey and France have also blood on their hands from likewise sponsoring regime change. But at least, it seems, the latter two have come significantly some way to accepting that the illicit objective of regime change is now a dead-end.

It remains to be seen if the Istanbul communique can be translated into substantive results in terms of Syria’s reconstruction. Both Germany and France appeared at this stage to not commit to providing financial aid. Berlin and Paris appeared to with-hold specific aid, perhaps as a way to maintain some kind of leverage over shaping a final political settlement. That contradicts the principle of recognizing Syrian self-determination. Nevertheless, if millions of Syrian refugees are to return to their country – a paramount issue for the European Union – then the EU must do much more in financing Syria’s reconstruction.

Another glaring contradiction in the communique is that the territorial integrity of Syria is being violated by the US and Turkey. Both have troops occupying swathes of Syrian territory in what is an egregious breach of international law. For a comprehensive peace settlement, all foreign powers present in Syria without a legal mandate must be withdrawn from the country.

While the US was excluded from the Quadrilateral Summit, Washington still exerts a baleful obstacle to peace.

Days after the Istanbul conference, the US envoy to Syria, James Jeffrey, made provocative statements that do not bode well. He gloated in the fact that the US has some 2,000 troops in the country, and the State Department official warned that Washington would not permit a normalization of Syria by giving up occupied territory.

Jeffrey told media in Brussels.

“We are not going to put it [Syria] back together, and we are going to do everything we can, and that’s a lot, to ensure that nobody else does.”

It was a staggering admission of criminality by the US diplomat. It flies in the face of UN resolutions and the Istanbul communique endorsing Syria’s sovereignty and territorial integrity.

However, the threat of further destabilizing Syria by Washington illustrates that US objectives are in direct conflict with those of its European allies.

Germany, France and the rest of Europe need a peaceful reconstruction of Syria if they are to mitigate the refugee crisis that has destabilized the EU. A major political challenge to German Chancellor Angela Merkel from within her own country stems from the refugee crisis that the Syrian war has generated. The US policy of interminable interference in Syria is deeply incompatible with Europe’s interests for restoring peace to the Mediterranean and Middle East region.

Russia has helped decisively to win the war in Syria. But to win the peace, other powers must play a constructive role. Moscow has also decisively led the way to finding a peaceful settlement, from its diplomacy in previous summits in Astana and Sochi.

Far from being isolated or delegitimized, Russia has demonstrated an admirable leadership with regard to Syria. It is the US and Britain that are seen to be woefully isolated, and still pushing a destructive policy.

The Istanbul summit was a vindication of Russian policy. The coming together of Turkey, Germany and France with Russia is further vindication. What these four powers must do is insist on Washington abiding by international law and respecting Syria’s sovereignty. By getting illegal American forces out of Syria that would also go towards solving Turkey’s concerns over US-backed Kurdish separatists occupying territory in northeast Syria.

Washington is the one that is isolated over Syria, not Russia. The Europeans and Turkey are right to recognize Russia as a viable partner with regard to Syria’s future and their own security. By contrast, Washington as currently positioned, and for the foreseeable future, has nothing to offer except a dead-end.

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Authored by Sean Malone via The Foundation for Economic Education,

When mass media displays such a clear bias, then the people who are on the losing end of that bias are not going to be happy…

In the last few months, we’ve seen numerous acts of politically motivated or targeted violence. Some of these cases have been plastered all over the news for days or weeks. Some others have been met with deafening silence. And which is which hasn’t exactly been random.

There is clear bias in the reporting of political violence and I believe this has had some serious consequences for people’s ability to trust the media and bridge a divided culture.

To understand why, we need to look at what’s actually happened recently, so while what follows is far from a complete list of all the politically-motivated violence, it encompasses many of the most recent and highest-profile examples:

What You’ve Probably Heard

• October 2018: Trump-supporting lunatic Cesar Sayoc, Jr. attempted (but completely failed to) to deliver (non-functional) bombs to over a dozen Democratic leaders including Obama, Clinton, Maxine Waters, and Eric Holder among others. As we learn more about this story, it becomes increasingly clear that Sayoc has a long history of threats and violence going back to at least the mid-90s.

• October 2018: Anti-semite Robert Bowers shot and killed 11 people and injured 6 others at a synagogue in Pittsburgh, and although he seems to have been anti-Trump, the Anti-Defamation League (ADL) has already blamed Trump for creating the environment that encouraged Bowers’ actions.

• October 2018: Another man with a substantial history of mental illness and violence, Gregory Bush, entered a Kroger grocery store in Jefferstown, Kentucky and essentially executed a 67-year old  man named Maurice Stallard with a handgun for no apparent reason, after which he exited the store and shot and killed another woman, Vickie Lee Jones (67) before he was challenged by another shopper who drew a legally concealed weapon and shot back at him. Bush apparently attempted to enter a church nearby before he went to the Kroger, presumably with the intent to kill. Although there is currently no motive known, many people assume Bush was motivated by racism because he is white while his two victims were black and one witness recounts hearing him say “Don’t shoot me and I won’t shoot you. Whites don’t kill whites,” to the man who confronted him. 

• October 2018: Envelopes testing positive for Ricin (an incredibly dangerous poison for which 22 micrograms/kilogram of body weight constitutes a lethal dosage) were sent to Secretary of Defense, Gen. James Mattis.

• April 2018: Self-described “Incel” Alek Minassian drove a van into a crowd in Toronto and killed 10 people. Incels are considered “right-wing” although “Involuntary Celibacy” is mainly a reaction to feminism and has no inherent connection to right/left politics.

And of course, all this is in the context of the awful Charlottesville Riot from last year, where in…

• August 2017: Neo-Nazi James Fields killed Heather Heyer and injured 19 others with his car at the Charlottesville “Unite the Right” rally after he drove through a crowd of protesters. What you probably don’t know is that his trial is set for November, and he was recently assaulted in prison.

Also, while this isn’t actually a known example of political violence, you’ll certainly recall:

• October 2017: Stephen Paddock opens fire on a crowd of country music fans in Las Vegas from his room on the 32nd floor of the Mandalay Bay Hotel, killing 58 people and causing injury to 851 others either directly or via the resulting panic. This was the deadliest mass shooting in US history, and yet no motive is known, little information has been released to the public, and the press coverage died out relatively quickly.

I’m including the Las Vegas shooting in this list because it sparked another national gun control debate, this time over whether or not it should be legal to own bump stocks.

You’ll probably also have heard about a number of cases of street violence involving the “Proud Boys”, and perhaps you might have recently learned that Facebook shut down that group’s main page.

And you’ll have probably heard of various racist/anti-Semitic threats and acts of vandalism against Jewish community centers, churches, and other political targets, which are often assumed to be a product of Trump’s rhetoric.

What You Probably Haven’t Heard

• October 2018: Ricin envelopes were not just sent to James Mattis, but also to President Trump, along with Senator Ted Cruz and Chief of Naval Operations Admiral John Richardson. The FBI arrested a suspect in Utah, William Clyde Allen, believed to have sent all the packages in a coordinated effort. Allen confessed to sending all four letters, but we also learned that—similar to the inoperable bombs allegedly sent by Cesar Sayoc, Jr.—none seemed to contain actual Ricin, but rather castor seed from which Ricin is made.

• October 2018: In Las Vegas, a Democratic activist working for American Bridge 21st Century named Wilfred Michael Stark assaulted Kristin Davidson, campaign manager for Nevada’s Republican gubernatorial candidate, Adam Laxalt. Stark had previously been arrested for similar activity at a GOP rally in Virginia.

• October 2018: In Minnesota, Republican state-representative Sarah Anderson was chased and punched by a man ripping up GOP campaign signs, and two days earlier, Republican candidate Shane Mekeland suffered a concussion after being punched in the back of the head while having dinner at a local restaurant.

• October 2018: The Republican Party Headquarters in Manhattan, New York was vandalized with spray-paint, smashed windows, and a threatening notethat read: “Our attack is merely a beginning. We are not passive, we are not civil, and we will not apologize.”

• October 2018: Jackson Cosko, an intern working for Democratic Senator Sheila Jackson Lee was charged by the United States Capitol Police with “doxxing” Republican Senators Mike Lee, Orrin Hatch, and Lindsey Graham. While doxxing itself isn’t violence, it has frequently led to serious harassment and violence as people have access to personal information such as the home addresses, phone numbers, and email address of the victims.

• October 2018: Florida man, Jame Royal Patrick, Jr., was arrested for making death threats to people who supported Brett Kavanaugh’s nomination to the Supreme Court.

• October 2018: Shots were fired at the Republican party campaign office in Daytona Florida, breaking the windows. Fortunately, no one was in the office.

• October 2018: A hairdresser Jordan Hunt starts an argument with a female pro-life demonstrator in Ontario, and after a few minutes of conversation roundhouse-kicks her in the face on camera.

• September 2018: GOP campaign offices in Laramie, Wyoming, were set on fire by arsonists. The same thing happened in Hillsborough, North Carolina, back in 2016, so this is nothing especially new.

• September 2018: In San Francisco, a man named Farzad Fazeli attempted to stab Republican campaign worker Rudy Peters with a switchblade while he was working at an election booth at a Castro Valley town festival.

• July 2018: Martin Astrof was arrested for threatening to kill GOP campaign staffers and President Trump.

• July 2018: Someone vandalized the Lincoln, Nebraska (my hometown) GOP headquarters by smashing its windows with a brick and spray-painting “ABOLISH ICE” on the sidewalk.

• August 2017: Missouri lawmaker, Maria Chappelle-Nadal, said on social media that she hoped President Trump would be assassinated. She later was formally censured by the Missouri State Senate.

And of course, I’d hope you remember…

• October 2017: In Alexandria, Virginia, James T. Hodgkinson (a Bernie Sanders fanatic angry with the results of the 2016) died with a list of Republican targets in his pocket in a shootout with police after he shot four people: lobbyist Matt Mika, legislative aid Zack Barth, Capitol Police officer Crystal Griner, and Republican Congressman Steve Scalise who nearly died. The shooting took place at a baseball diamond where several Republican Senators and Congressmen were practicing for the annual Congressional Baseball Game for Charity.

Another thing you might not realize is that many of the skirmishes involving the Proud Boys group were actually caused by Antifa and Democratic Socialists of America activists—though you’d hardly know it from the way most reporters frame these events—and Antifa social media pages have not been shut down.

Comparing media coverage between Antifa and conservative groups is, I believe, particularly instructive.

Almost a year ago, YouTube commentator Matt Christiansen called attention to the differences in a video he made about Dartmouth professor, Mark Bray (talk at UC Berkeley).

Bray is the author of Antifa: The Anti-Fascist Handbook. 

Christiansen points out that although most news media routinely and uncritically report the claim that nearly all examples of modern political violence are instigated by groups like the Proud Boys, alt-right ideologues, or actual neo-Nazi and white supremacist groups like the KKK, there have been numerous examples of Antifa violence which have not had anything whatsoever to do with protesting “fascists” or any kind of right-wing activity at all. For example, the recent takeover of multiple streets in downtown Portland, Oregon, or any of numerous examples of Antifa members attacking journalists.

What’s more, over the past 4-5 years there have been dozens of examples of left-wing protesters using violence to shut down mainstream conservative (or simply non-progressive) speakers like Charles Murray, Ayaan Hirsi Ali, Ben Shapiro, Dave Rubin, Milo Yiannopoulos and others.

Yet no organized conservative group attempted to prevent Mark Bray from speaking.

His talk—which explicitly defended Antifa’s use of violence in the face of right-wing speech on the basis that allowing such speech could lead to fascism—was not silenced anywhere in the United States. Meanwhile, many people who have never called for or defended any kind of violence have been subject to aggressive “no platforming” protests which have included substantial property damage, death threats, and physical assaults.

Somehow the supposed “fascists” are generally allowing other perspectives to be heard while the “anti-fascists” are not only attempting to violently silence the most abhorrent voices but also thoughtful academics, journalists, and non-political commuters.

We rarely hear this discussed in major media, and Antifa is frequently presented as not only well-intended, but actually heroic.

It’s fairly clear that this is tremendously one-sided.

So, Why Am I Talking about This?

I’m mainly talking about this because the way this stuff is reported drives me insane, and it affects us all in really important ways. Mass media essentially determines which of these examples of politically-motivated violence are important and worth talking about, and which are not.

If the news that gets reported doesn’t bother to tell readers and viewers about angry left-wing lunatics who assault Republican campaign workers, set fire to GOP offices, or shoot Republican congressmen, and if reporters and pundits don’t care to spend much time writing about a series of threatening letters testing positive for ricin poison or threats of and/or the actual attempted murder of Republicans over their political views, then the people who consume news will not know about those kinds of things.

And of course, this would be fine if reporters and pundits did the same thing whenever a right-wing lunatic did something insane. But that’s not what happens.

Most of the mainstream media (arguably with the support of all of the major social networks and even Google) devote tremendous attention to every instance of right-wing violence while utterly ignoring comparable cases coming from left-wing perpetrators. As a result, it’s difficult for the average person to know what’s actually happening in the world, and they end up with a completely one-sided understanding of the current state of political violence.

We can see what people are hearing and talking about illustrated clearly by looking at Google Trends, and as you can see below, vastly more people heard about Cesar Sayoc and the pipe-bomb scare than they did William Clyde Allen’s ricin letters – although, again, both were targeted towards major political figures and both should have been treated as deadly assassination attempts until the ineffectiveness was confirmed.

This bias also makes it easy for political partisans to split themselves into bubbles that each have entirely different sets of facts.

Liberals/Progressives will hear of every instance of someone who could even remotely be considered “right-wing” doing anything wrong yet remain entirely isolated from the slightest hint that people who share their ideology have ever done anything wrong at all. Conservatives are in a slightly better position—in that it’s nearly impossible to avoid hearing about right-wing political violence—but the more social media dominates people’s information streams, the easier it is for them to similarly wall themselves off from information that makes them uncomfortable.

Point is, there are legitimate reasons for everyone to be seriously concerned with the quality of reporting that we normally see with respect to this kind of activity.

Part of being well-informed is being able to put things into context and gain a meaningful perspective, and that can only happen when you have all the information, not just half of it as we so often get.

Only getting half the story makes it easy to blame your political opponents for everything that’s going wrong in the world, but it’s also a mistake. If Trump—for example—is to blame for people like Cesar Sayoc, Jr.’s failed bombing spree, is Bernie Sanders to blame for James Hodgkinson? Is Maxine Waters responsible for Farzad Fazeli? Is Hillary Clinton, Tim Kaine, or Eric Holder the cause of arson and vandalism in Wyoming?

If you think that Trump’s rhetoric is causing right-wing violence, surely it stands to reason that the similarly heated rhetoric coming from the other side is to blame for the left-wing variants of these kinds of crimes?

Of course, if you only ever saw one side or the other, it would be extremely easy to think that the only people who are out there doing terrible things are your political opponents, and from there you can concoct a grand theory as to why based on how evil the other party is without much challenge when another possibility is simply that it’s the individual criminal who is responsible for their own actions.

There’s another problem here, as well.

Vanishing Trust

When mass media displays such a clear bias—and please make no mistake, whether fully intentional or not, that’s exactly what this is—then the people who are on the losing end of that bias are not going to be happy. And since they’re actually justified in their complaints, it’s very easy for them to convince people who have less skin in the game that media isn’t trustworthy as well.

All this does is push people further to the extremes, which makes it easier for the biggest lunatics to find reasons to believe even crazier conspiracy theories and find reinforcement for their belief that violence is the appropriate response.

I want this to stop, and while there’s no magic bullet, I don’t think that can happen until the reporting on these kinds of subjects gets a lot better and more people are more fully-informed about everything that is going on in our world—not just the parts that confirm partisan biases.

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