Month: April 2021

Authored by Aaron Maté via TheGrayZone.com,

Kash Patel, a former Russiagate investigator on the House Intel Committee and senior White House official, says US intelligence leaders blocked the release of documents that expose more malpractice and critical evidentiary holes in their claims of sweeping “Russian interference.” Patel also singles out the FBI’s “outrageous” reliance on Crowdstrike, and the burying of testimony that the firm had no concrete evidence.

As a senior House Intel investigator and Trump administration official, Kash Patel helped unearth critical misconduct by the intelligence officials who carried out the Trump-Russia probe.

In his first extended interview since leaving government, Patel tells Aaron Maté that still-classified documents expose more malpractice, as well as major evidentiary holes in the pivotal — and largely unquestioned — claims of a sweeping Russian interference campaign to elect Trump in 2016.

According to Patel, the release of these critical documents was “continuously impeded.”

“I think there were people at the heads of certain intelligence agencies who did not want their tradecraft called out, even though it was during a former administration, because it doesn’t look good on the agency itself,” Patel says.

Among the tradecraft that Patel criticizes is the hastily produced and highly consequential “Intelligence Community Assessment” of January 2017, as well as the FBI’s reliance on Crowdstrike — the DNC contractor that generated the Russian hacking allegations despite later admitting, behind closed doors, that it lacked concrete evidence.

Patel also discusses other aspects of his time in the Trump White House: a secret mission to Syria; Trump’s record on foreign wars; and the January 6th riot at the Capitol.

Guest: Kash Patel. Former senior government official in the Trump administration, where he served as senior director for counterterrorism at the National Security Council, and chief of staff to the acting Secretary of Defense. Previously, Patel served as a top investigator on the GOP-led House Intelligence Committee, where he was instrumental in exposing US intelligence misconduct in the Trump-Russia investigation. Also served as a national security official in the Obama-era Justice Department and Pentagon.

Read more:

Aaron Maté’s July 2019 report on the flaws in Mueller’s claims of sweeping Russian interference: “CrowdstrikeOut”

HPSCI March 2018 report: “Report on Russian Active Measures”

Aaron Maté on Crowdstrike’s secret admission of no “concrete evidence” in Russian hacking claims:

“Bombshell: Crowdstrike admits ‘no evidence’ Russia stole emails from DNC server”

“Hidden Over 2 Years: Dem Cyber-Firm’s Sworn Testimony It Had No Proof of Russian Hack of DNC”

VIDEO

TRANSCRIPT

 AARON MATÉ: Welcome to Pushback. I’m Aaron Maté.

Joining me is Kash Patel. He is a former senior official in the Trump administration who served in several top roles, including as the Deputy Assistant to the President, the Senior Director for Counterterrorism at the National Security Council, the chief of staff to the Acting Secretary of Defense, and previously he served as a top aide on the House Intelligence Committee when it was chaired by Republican Devin Nunes, where he was instrumental in exposing US intelligence conduct behind the Trump-Russia investigation.

Kash Patel, welcome to Pushback.

KASH PATEL: Aaron, thanks so much for having me. Really appreciate you doing this. Let’s have some fun.

AARON MATÉ: I appreciate the opportunity. You had a front row seat to several major stories of the Trump era. I want to start with Russiagate because that’s where I first heard of you. You helped expose the conduct of intelligence officials who carried out the investigation, including the instrumental role of the Steele dossier and the surveillance warrant on Carter Page, the former Trump campaign volunteer. And I want to get your response to actually how the media portrayed you, because when you were discussed in media accounts in several outlets, it seemed like it was a requirement to describe you as someone who was working to discredit the Trump-Russia investigation. I want to just get your response to that, how you saw your role behind the scenes, and your overall thoughts on the Trump-Russia investigation itself.

KASH PATEL: Well, thanks for allowing me the opportunity to speak about it like that. I don’t think anybody has ever really asked me to do that, so I really appreciate it.

So, I went on as a senior staffer for the House Intel Committee and not in Devin’s personal office. And long and short of it was, I didn’t really want to go over to The Hill, but Devin had said, ‘Hey, somebody with your background as a public defender and a national security prosecutor and knows how to investigate and take depositions, we sort of need someone to run this investigation.’ At the time neither of us thought it would get much coverage. We were just, like, we’ll do the investigation, we’ll make a report and we’ll put it up in Congress for the records, and that’ll be that. But I guess we were both really wrong on that one.

As the investigation unfolded, and the agreement I made with Devin, I said, ‘Okay, I don’t really want to go to The Hill, but I’ll do the job on one basis: accountability and disclosure. Everything we find—I don’t care if it’s good or bad or whatever from your political perspective—we put it out so the American public can just read it themselves.’ And he agreed to that right away. So, I said, ‘Okay, then we’re up and running.’ But then the media came in and, I think the first portrayal of me in the media, because my name as a staffer was leaked, which is generally verboten, unheard of, but was leaked, and they called me a genocidal dictator in that article—Torquemada—and I thought that was—I don’t know how to even describe that—but I felt really upset that my family name was being portrayed as someone who had killed thousands of people during the Spanish Inquisition.

AARON MATÉ: Huh, huh.

KASH PATEL: That was the first big, breaking news story. I don’t know if it was big; it was just the one that put my name out there, which I also was not expecting any of the media to be on me personally, as a staffer. That was a little surprising.

AARON MATÉ: And what were you actually doing behind the scenes, then, that you think would have elicited this attack on you?

KASH PATEL: Well, running types of investigations are hard enough when you’re a public defender with limited resources. So, I analogize going over to Congress and running an investigation in a similar fashion. When I was at DOJ [Department of Justice], you have all the resources in the world and it’s really cool, but Congress has limited capabilities. We had a limited budget and limited authorities, so I sort of went back to my public defender role and I said, ‘Okay, look, the first thing we got to do is line up key witnesses that we’re going to eventually interview. But before that we have to acquire all the relevant documents from the government agencies so that we can ask these witnesses about them and know what we’re doing before we get into the room.’ So, it was a document acquisition first step, and then, a sort of parallel track, lining up witnesses that we would ultimately interview, and I think we interviewed maybe 70 under oath, ballpark.

AARON MATÉ: And do you remember what revelation it was that made you first realize that there was some serious malfeasance going on behind the scenes, when it comes to the conduct of the intelligence officials who ran the Trump-Russia probe?

KASH PATEL: Well, it’s a combination of things, if you’ll allow me.

So, as a terrorism prosecutor at main Justice, I had personally worked on FISA applications myself, for a number of prosecutions successfully, and having done that work, I know how labor-intensive and detailed it is, and how much disclosure requirements you have to present to the FISA court, but also to the federal judge overseeing the case, ultimately, itself. So, I think the first time I read the Steele dossier was maybe a month or so after it came out, and it just seemed pretty sensational. And what I told folks was, ‘Look, the purpose of a FISA application is to go up on someone and surveil them who you think is basically working for another country against America.’ And Carter Page was the crux of that dossier, and I said, ‘This is really easy to prove or disprove.’ The big thing that made Carter Page in the dossier a quote-unquote “agent” of a foreign power was his meetings with high-level Russian officials and then bartering, as the dossier put it, for a 19-percent stake in the biggest gas company in Russia if he would help them, the Russians, trade once the Trump administration got in. Now, I told the members on House Intel if that were true, he’s definitely an agent of a foreign power. That’s the crux of the matter, so that’s where we started.

AARON MATÉ: And when you found out that the FBI was citing the Steele dossier in its surveillance applications to spy on Carter Page and listing Christopher Steele as quote “Source #1” and “credible,” what was your response, and how did you try to go about getting that out to the public?

KASH PATEL: Well, it was just sort of a Search Warrant 101, okay? So, we found out who the source is, let’s look at the source documents and the credibility of the source; that’s just basic Investigative 101. Getting those documents was another story. That was a whole different challenge that DOJ thwarted for a long time, but, ultimately, we were successful.

I think the big breakthrough was a combination of things that happened over the course of obviously many months, and we’ll condense it here. But once I found out that the Steele dossier itself was used in the FISA application, it was a huge red flag, because I was, like, this is not how we do FISA applications. And, also, this information is incredibly salacious, and some of it was just so easily disproved, such as the hotel room that they said the salacious engagement with Trump and others had occurred. Well, if you do some Investigative 101, that hotel doesn’t exist with that room in Moscow, period. And you would think an investigator like Christopher Steele, a human guy spy for the British government for so many years with Russian expertise, would get that little fact right.

The other thing was they had placed at the time Trump’s lawyer on a trip in Prague. I think it was Prague. And I said, ‘This is really easy. We just get the toll records for travel and see if the guy was ever in the Czech Republic or not.’ Turns out, he never left America during that time period. So, these credibility issues started to arise, and I said, ‘If we’re having problems with these easily disprovable facts, what about the heart of the matter?’ And that’s what we turned to next, with trying to get the documents and the sourcing of the whole Steele dossier.

AARON MATÉ: And the public became aware that it was the Clinton campaign and the DNC that was paying for the Steele dossier, in late 2017. When did you find this out?

KASH PATEL:  Was it late 2017? Yeah, your timeline’s probably right. So, what we had to do was, through our investigations and our team, we were able to piece together the sort of players involved in this whole Steele dossier thing. And the Fusion GPS came out. The individual at DOJ, Bruce Ohr, came out; then we tied that to his wife’s work, Nellie Ohr, who we were sort of shocked to see involved in all this. So, these things we started really getting going on our investigative techniques and started to unveil the facts. And, ultimately, I told Devin one thing. I said, ‘Look, when you’re a prosecutor, you follow the money.’ Terrorism Financing Cases 101. This is really easy stuff, so I said, ‘Hey, let’s follow the money.’ But the difficulty was, I wasn’t in federal court. I wasn’t a DOJ prosecutor; I was at Congress with limited powers. So, I told Devin, I said, ‘Okay, give me one bank subpoena for this bank and let’s see what’s behind the curtain, and if I’m wrong we’ll just stop the investigation.’ And luckily, we got that bank subpoena, but that ultimately took us to federal court because Fusion challenged the validity of the subpoena, and now we obviously know why.

AARON MATÉ: So, I think by now the collusion allegation has been pretty much debunked. Few people actually still hold on to it except the most diehard adherents to Russiagate.

But I have a lot of questions about the other aspect of this, which is this allegation of a sweeping and systematic Russian interference campaign which has not been undermined nearly to the extent that the collusion aspect has. And the obvious question for me, even without looking at all the evidence, is that given that collusion was essentially a scam, what else about this was a scam as well? So, you looked at the intelligence used to advance these allegations of Russian meddling. Was it convincing to you?

KASH PATEL:  That the Russians were interfering with the presidential election or that they were doing so for the behest of one candidate over another?

AARON MATÉ: Let’s start with that they were conducting a sweeping, comprehensive interference campaign to install Trump in the White House.

KASH PATEL:  I would say the evidence did not bear that out. Now, it’s the Russians, they’re always interfering in our cybersecurity infrastructure, in our intelligence apparatus, and they will always look to get a leg up in our election cycle. So, were they involved in interfering? Sure. It’s what they do to us, period. Anyone who says otherwise has never really been in the game and understands how it works, or it’s just really making stuff up. I didn’t see this systematic, sweeping level of infiltration to pick one candidate over the other. We didn’t find that kind of hard evidence. We did find them meddling in a lot of places, of course.

AARON MATÉ: So, when it comes to the question of Russia interfering to specifically install Trump, that was an area where your report, the March 2018 HPSCI [House Permanent Select Committee on Intelligence] report took issue with some of the intelligence communities’ findings, when the US government, in the last days of the Obama administration, put out this Intelligence Community Assessment [ICA] in January 2017, which said that Vladimir Putin ordered this campaign of interference to install Trump. Your committee identified what it called “significant intelligence tradecraft failings.” Can you give us a sense of what those failings were?

KASH PATEL: Sure. Unfortunately, one of the documents we tried to get out during the Trump administration was that document you’re referring to.

So, the ICA was this investigation put together in a span of two to three weeks, led by John Brennan, and in two to three weeks you can’t have a comprehensive investigation of anything in terms of interference and cyber security matters. But they put it together, so we went and looked at it and looked at the underlying evidence and cables and talked to the people who did it.

We, on House Intel on the Republican side, actually put out a report, a highly classified report on the tradecraft used to make the Obama-era ICA that was made public. We wanted that underlying report made public, but we were continuously impeded in our efforts to do so by members of the Intelligence Community themselves, with the same singular epithets that ‘you’re going to harm sources and methods.’ And that was what was thrown in my face the entire time, when we were talking about Christopher Steele before he was Christopher Steele, and all the underlying methods.

And I just highlight that because we didn’t lose a single source, we didn’t lose a single relationship, and no one died by the public disclosures we made, because we did it in a systematic and professional fashion. And that’s what part of the media said would be impossible to do, but we did it, and we wanted to do it for our ICA. But that was, unfortunately, the one report which speaks directly to the issue you’re asking about, that’s still sitting in a safe, classified, and unfortunately, the American public—unless Biden acts—won’t see it.

AARON MATÉ: President Trump, though, had said that he was going to order a full declassification. Did he ever signal that he wanted that particular document released?

KASH PATEL: I don’t know if he personally singled it [out]. I know it was included in a list of documents that Congress was seeking, or some members of Congress were seeking, to have declassified. And I know that list made its way to the White House, and I also know that, I think, on the one of the last days he did declassify a bunch of material, but I still have not seen that.

AARON MATÉ: Right. That was a so-called binder of documents that have not come out yet. Who are some of the key officials who blocked the release of this material?

KASH PATEL: I think it was…look, when you’re calling out the FBI and DOJ, like, one person is calling them out to say, ‘You guys screwed up one of the biggest consequential investigations of this era,’ I think it’s right for them to take your word with caution. So, it was more of an institutional pushback, and then, ultimately, when you were able to peel back the layers and show Christopher Wray and show Rod Rosenstein that these documents in fact existed and then asked them to produce them, they would start to see the shortcomings of the FISA application and the investigative process and the Steele sourcing at the FBI.

And so, it was a repetitive process, one that even led Rod Rosenstein to threaten to investigate me because he got so annoyed at me for whatever reason, and I’m not really sure what he would investigate me or Congress on, but he made that threat, and that was widely reported.

It was just unfortunate to see the Deputy Attorney General who, at that point, was basically the Attorney General because Jeff Sessions was aside [recused] on all matters. We were having private internal discussions, and I just said, ‘Why don’t you just go get me these Bruce Ohr 302s [FBI interview reports], and if they don’t exist and they don’t say what I’m saying they’re saying, then you can say, “Hey, Kash, you’re totally wrong.”’ Well, it turned out that the Bruce Ohr 302s did exist and it took me a long time, but America finally saw 75 percent of them unredacted.

AARON MATÉ: And Bruce Ohr, for those who don’t know, is a former Department of Justice official who, even after the FBI terminated Christopher Steele as a source, he continued to act as essentially a liaison between Steele and the FBI.

KASH PATEL: Yeah.

AARON MATÉ: Let me ask you about this core assessment in the Intelligence Community Assessment of January 2017 as we discussed—that Putin ordered this campaign specifically to install Trump. It’s been reported that the main source for that judgment was this supposed mole inside the Kremlin who worked for the CIA, and that this mole, after some media reports actually was … he left Russia and came to the US and he was outed as living outside of Virginia. It’s been said that he had high-level access inside the Kremlin. Based on what you’ve seen, are the reports about the mole and his supposed high level of visibility into the Kremlin, are they credible?

KASH PATEL: So, unfortunately, I’m sort of in a bind on this one still, with all the classified information I looked at and the declassifications we’ve requested but have not yet been granted. So, through your great public reporting and investigative work, a lot of people have continued on, and I think rightly so, to get to the bottom of this. But until the ICA product that we created and some of the other documents are finally revealed, if I start talking about them, then I’m probably going to get the FBI knocking at my door, and I don’t really want that right now—or ever.

AARON MATÉ: Fair enough. Alright, I’m going to try one more angle of this, then, which I realize falls into similar territory, but I think it’s worth mentioning because some of it has been also made public.

CrowdStrike is the private security firm contracted by the DNC that generated the core allegation at the heart of all this: that Russia had hacked the DNC and stolen emails. Then, almost three years later, we get last year this declassification of a transcript from Shawn Henry, the CEO of CrowdStrike, testifying to your committee in December 2017. And he said that actually CrowdStrike had no evidence that these supposed Russian hackers actually took any data off of the server. So, essentially CrowdStrike had no evidence that Russian hackers had stolen the emails that CrowdStrike in public was accusing them of stealing.

CrowdStrike’s reports were used for the FBI’s investigation, and the FBI also relied on CrowdStrike’s forensics in terms of investigating and looking into the DNC server. What can you tell us about CrowdStrike’s credibility? Do you think that they relayed credible and accurate information?

KASH PATEL: I think CrowdStrike, as a private company contracted by the DNC, basically did the job that they were hired to do, but that doesn’t necessarily mean they served the American public well. They weren’t hired by the American public; they were hired specifically by a private company to look at their servers.

Where the FBI got it wrong—and James Comey admitted this—is that they, the FBI, who are the experts in looking at servers and exploiting this information so that the Intelligence Community can digest it and understand what happened, did not have access to the DNC servers in their entirety. The FBI only received—and for some outrageous reason agreed to having CrowdStrike be the referee as to what the FBI could and could not exploit and could and could not look at. Now, Shawn Henry, being a former FBI agent under James Comey, knew that, and I believe totally took advantage of the situation to the unfortunate shortcomings of the American public, and we were only able to have the FBI look at a piece of the cyber security hardware infrastructure for the DNC rather than all of it, which is what the FBI always does.

So, that was one of the most frustrating things to me, that the FBI, one, permitted that, and two, never went back and got the server so they could look at it. But I do think Shawn Henry testified that day accurately, that CrowdStrike didn’t have any information to support those claims that you were talking about.

AARON MATÉ: Which then leads me to question the claim itself, because it was CrowdStrike that generated it, and I think it’s a scandal that instead of us hearing back in December 2017 that the firm that generated this allegation didn’t have the concrete evidence for it. We had to wait nearly three years to find that out after so much had unfolded and so much hysterical fearmongering about Russian interference had happened.

KASH PATEL: Yeah, I think you’re totally right. And look, we wanted those depositions and those things out and declassified immediately after we took them, and we were thwarted in that ability, too, to do that. If you recall, we had sent all 60, whatever, transcripts to the DNI under then-DNI Coats just to do a quick classification check, and the Office of Director of National Intelligence under Dan Coats never processed or advanced those deposition transcripts until actually Rick Grenell and I got to the DNI and completed the work.

AARON MATÉ: But, by the time Grenell was in there, you had Adam Schiff now heading your committee—and I imagine he was not very receptive to releasing those transcripts.

KASH PATEL: Exactly. And that’s a great fact that you point out: Congress had switched majority/minority positions then, and the power to release the transcripts, even after we returned them, rested with the new chairman Adam Schiff, who, whatever your politics are, didn’t want some of these transcripts to come out. And that was just extremely frustrating because the whole purpose, as I said in the beginning, was accountability and release for the American public, and everybody should have been able to read every single page of those transcripts.

AARON MATÉ: Since we’re on the topic of Schiff, let me ask you quickly, when you see Congress reprimanding Marjorie Taylor Greene for pushing QAnon conspiracy theories, you witnessed Adam Schiff pushing Russiagate conspiracy theories, reading even the Steele dossier into the Congressional Record, including those Carter Page insane allegations that you mentioned before, about Carter Page being offered a stake in the Russian state gas company.

Adam Schiff: Carter Page, back from Moscow, also attends the convention. According to Steele, it was Manafort who chose Page to serve as a go-between for the Trump campaign and Russian interests.

AARON MATÉ: What are your thoughts on that, seeing Greene reprimanded for pushing conspiracy theories, but not Adam Schiff?

KASH PATEL: I think it’s a perfect example of why the American people have such little confidence in Congress’s abilities to do much of anything these days. It’s so infiltrated with partisan politics that people don’t know what to believe, and that’s why the only thing that I wanted to do there was to, instead of me writing stuff that I found, why not just let everybody read it, the way I found it, with a few protections here and there for some certain national security measures? But those are minimal redactions, and I asked that of everybody across the board, whether it was against people in President Trump’s universe or people at the DNC, or whatever. I said, ‘You guys have agreed to testify. We found documents pertaining to your work here. Everybody should read it.’ And that was just an argument that Congress wouldn’t let me win.

AARON MATÉ: I want to ask you something else about your March 2018 HPSCI report. There’s a very interesting line to me. You’re talking about the judgments that were inside that January 2017 Intelligence Community Assessment, the one that was put out in the last days of the Obama administration.

The report says the judgments, quote, “were mostly well reasoned, consistent with observed Russian actions, properly documented, and—particularly on the cyber intrusion sections—employed appropriate caveats on sources and identified assumptions.”

That line stood out to me because it suggests to me that when it comes to this core allegation of Russian cyber intrusions, that the evidence was not overwhelming, that there were caveats and identified assumptions. Am I right to infer from that, that when it comes to the attribution of Russian cyber meddling, that there were some qualifiers here and that the evidence was not overwhelmingly concrete?

KASH PATEL: Without speaking to the underlying intelligence, I think you’re absolutely on the right path to infer those things, because you smartly picked up on the verbiage that the IC uses a lot of times to qualify its reporting, but especially reporting of that volume done at that speed. And that’s the reason we undertook to investigate the ICA, too, as a piece of the Russia investigation, because we felt that report put out to the American public deserves scrutiny, the same scrutiny that the FISA application process received, and we created a whole separate report for it. And I really hope one of these days that report becomes public, because I think you’ll find a lot of things in that report that are facts that cannot be disputed by the IC, and that would lend a lot of credence to the things that you’re saying now.

AARON MATÉ: So, why do you think Trump didn’t let this get out? Because he had the authority to.

KASH PATEL: I don’t know if I would characterize it as whether or not President Trump let this out or not. I think there were people within the IC, at the heads of certain intelligence agencies, who did not want their tradecraft called out, even though it was during a former administration, because it doesn’t look good on the agency itself.

And again, that’s not castigating an entire agency. We’re not disparaging the entire FBI because of Peter Strzok and his crew of miscreants, where the same thing goes for the Intelligence Community. Just because I think John Brennan had four or five folks work on the ICA, if I remember correctly, if they did some shoddy tradecraft, the American public has a right to know about it in an investigation involving the presidential election.

And there were just the same barriers you run into. When we tried to declass just the Nunes memo itself, it’s institutional pushback, and then singular pushback at high levels because they didn’t want those disclosures to happen on their watch.

AARON MATÉ: Another question on this front: Guccifer 2.0 was this internet persona who the US Intelligence Community later said was actually a front for Russian intelligence, and the FBI and Robert Mueller strongly suggested in their indictment of Russian intelligence officers that it was Guccifer 2.0 that provided the stolen Democratic Party emails to WikiLeaks. Fast forward, though, to Mueller’s final report, and he includes a caveat that actually he has no idea how these emails made their way to WikiLeaks and actually they could have been transferred in person by hand. Do you have any sense of the sourcing behind this claim about Guccifer 2.0 being a front for Russian intelligence, and is it also something that we should be looking at with skepticism?

KASH PATEL: I think it’s something you should definitely be looking at with skepticism. It’s not something that we had time to focus on when we were doing the Russiagate investigation. It wasn’t one of the things that we were able to encapsulate within our sort of guidelines for purposes of investigation, and it sort of came up later. And by that point the handoff to Mueller had already happened, and so there was that cutoff date as to what we could and couldn’t look at. And once Mueller was announced, there was that spring cutoff timeline of the date of his March-April appointment; nothing past that that he was looking at was anything we could look at. But that doesn’t mean you guys can’t or shouldn’t.

AARON MATÉ: Well, speaking of which Mueller, very strangely, I think, chose not to interview Julian Assange, who was at the heart of all this because he released the stolen emails. Was there ever any discussion on your committee about interviewing Julian Assange?

KASH PATEL: I think there was. But remember, you have Robert Mueller whose special counsel is under the authorities of the Department of Justice and FBI. Big Government versus Congress and a Congressional investigator and his committee. To do those things and to make those asks is a very different request than coming from the Executive Branch of the United States government, and that’s the problem we ran into a lot of times. The FBI and the DOJ can ask and subpoena you guys and work with the heads of foreign governments to do so, but Congress’s ability to do that is much more limited.

AARON MATÉ: If you could release just a handful of documents, just say two documents that you think would give the public a better window into the real story here, what would they be?

 

KASH PATEL: The ICA report that HPSCI did, on the ICA itself. That, for sure, has been at the top of my list for far too long. And the other thing I would say, twofold: one, the entire subject portion of the last Carter Page FISA, and two, in conjunction with that I would release the underlying source verification reporting basically that they used to prop up that FISA. And then the American public can see what a bunch of malarkey it was that they were relying on. And not only that. It’s okay to make a mistake in a search warrant or pleading because that work you’re doing is so hard, but to intentionally make it is just something the American public needs to know about and read for themselves and make their own determination as to why their government allowed this to happen, knowingly.

 

AARON MATÉ: I want to move on to other aspects of your time in government. It was reported last year that you took part in a secret mission to Syria to try to broker the release of Austin Tice, the US journalist who has been held hostage there. It’s unclear what his status is, whether he’s even still alive. Let me just actually ask you that, do you think Austin Tice is still alive?

KASH PATEL: Hostage rescues are one of the most difficult and probably most rewarding parts of the job, when I was running counterterrorism for President Trump. You get to know the family so well that you just learn not to publicly comment on those matters about their loved ones because it’s just too painful, whatever the answer is. And I reserve my comments on those matters for Mr. and Mrs. Tice, in any efforts we made to get Austin.

AARON MATÉ: Can you tell us anything about your discussions with Syrian officials, what they were asking from you, their level of openness to having talks with the US government?

KASH PATEL: Sure. I mean, look, that didn’t happen overnight. One of President Trump’s priorities was, go get American hostages home, and I think we got over 50, 53-ish hostage/detainees back from 20-some countries, maybe. Maybe a little less.

But Austin Tice had been missing for going on eight years, and we had made no headway, really, on it, so we made it a priority. We started working with our counterparts in the region, and then that trip was almost 18 months in the making, and we finally were able to land a meeting in Damascus. Because I told them, I said, ‘I’ll come see you. You send someone who can represent President Assad directly because I can represent President Trump directly on this matter, and let’s go sit down.’ And they said, ‘Okay, come to Damascus.’

And I don’t know if they thought we would show up or not. But we did, and we were very clear. We said, ‘Look, I understand I’m not getting Austin home on this trip, but I would like a proof of life. What would you like in return for that?’ We had very frank conversations, and they said, ‘We want x amount of movement for the United States military and troop stuff,’ and this and that. I said, ‘Look, all of that’s on the table. We can discuss all those things. I need a proof of life.’ And they said they would take it back to Assad, at which they did. I know they did that. And then, I think, shortly thereafter I switched over to the Department of Defense and tried to continue that mission. But that one was one I just, unfortunately, didn’t succeed on.

AARON MATÉ: President Trump on the campaign in 2016, he was critical of US interventions abroad. He criticized the war on Libya, he criticized the dirty war in Syria, but his record in office did not do anything to reverse all this. And I think actually one could argue that he escalated it. What do you make for the gap between what he was saying on the campaign trail and then what he did in office?

KASH PATEL: I probably disagree with that because we did end three wars, three and a half, and that was what he campaigned on and we…

AARON MATÉ: Where? Which wars?

KASH PATEL: Well, we’re down to zero in Somalia, we’re down to less than 2,500 in Iraq. I won’t discuss the troop numbers in Syria, but it’s the lowest we’ve ever been, and we should hit zero in Afghanistan by 1 May unless the administration alters that trajectory. So, to move that amount of manning from decades of in-country fighting, we did that pretty expeditiously, and that’s something I think I’m pretty proud of, that we ended or drew to a near end so many theaters of war. Not all of them, unfortunately, but a lot of them.

AARON MATÉ: In Somalia, though, haven’t US troops just basically moved next door?

KASH PATEL: Well, yeah. Sort of. Without discussing exact troop locations, we’re no longer in Somalia with a big troop presence, and we are always going to counter terrorism in any form. And al-Shabaab, being one of al-Qaeda’s biggest affiliates, based solely out of Somalia. We, of course, are going to lend help to our forces in Kenya, which is one of our biggest partners in East Africa.

So, if you talk about moving troops from Syria to Iraq versus moving troops from Somalia to wherever, you move them to where you have more reliability, are closer to the actual fight, and your capabilities to counter the terrorist threat is greater, not less. And that’s the line of effort that we took to execute in places like Iraq, Syria, Somalia, and East Africa.

AARON MATÉ: What about the Saudi war on Yemen? Obama greenlit that war. It caused a humanitarian catastrophe—some call it a genocide. There was the ongoing risk of famine, a cholera outbreak. Why did Trump escalate US support for that?

KASH PATEL: I don’t know. The Saudi piece has never been my forte, so I’d just be speculating if I was speaking to that.

AARON MATÉ: Was there talk of ending it?

KASH PATEL: The Saudi component or the Yemeni component? Sorry.

AARON MATÉ: The support for the Saudi war on Yemen.

KASH PATEL: There was always talk of decreasing our support to any theaters of war. The problem with the Yemeni portion of it is, as you know, the Houthis are in Yemen, so that’s Iran’s proxy, and it’s one of al-Qaeda’s bigger branches, too, that bases out of Yemen, that poses a threat to American interests. So that was the balance that they had to strike with that conflict, and it’s a tough one. There are three different governments running around in Yemen. There’s two different…three different foreign terrorist organizations. Well, two now that Biden removed one as the label as a terrorist, and that conflict’s going to go on. It’s one, I do think, we need to monitor because Iran is involved, and they simply don’t like us.

AARON MATÉ: All right, we’re going to have to debate Yemen another time, because I have a much different view.

But let me ask you, finally, what did you make first of Trump’s claims that this election was stolen, and were people advising him that what he was saying was not grounded in fact?

KASH PATEL: I’m not going to speak to what people were advising him on about that, because the election stuff was never my job. My job was to head his counterterrorism program, run his DNI, and then, ultimately, help run his Defense Department. So, I stayed out of all that stuff. That never came to me.

AARON MATÉ: And what do you think explains what happened on January 6th? Do you think that…I mean, who deserves blame here for what happened?

KASH PATEL: That’s not for me to cast. Unfortunately, people died, Americans died, policemen died, which is just one of the greatest tragedies you can have. The Capitol was broken into, which is just a symbol of our democracy.

AARON MATÉ: But what about claims or allegations or suspicion that the Pentagon slowed a response? They did not answer the calls for the National Guard quick enough, and that even that this was deliberate. I mean, that is the suspicion of many people, that there was a deliberate attempt to let that mob happen on the part of even White House officials, possibly even President Trump.

KASH PATEL: I mean, that’s an extended conversation for another day. But I will politely say that that is totally, factually false. Having assisted Secretary [Christopher] Miller running the Defense Department, we put out a very public timeline for our response. We basically quelled the situation at the Capitol so that the United States Senate could go back and certify the presidential election. From the time the incident began, in less than five hours they were voting to certify the presidential election again. We—and the Capitol Police admitted this—went to the Capitol Police beforehand and said ‘Hey, do you need any help?’ They said, ‘No.’ And we, the Department of Defense, cannot lawfully send in the National Guard unless there is a specific request made by the mayor and/or a federal agency, and none were made.

Once they were made—and a caveat to that is Secretary Miller and I had gone to President Trump days before January 6th, and he had authorized 10,000 National Guardsmen throughout the country in case there was any unrest, so he had already authorized the action. The governors and the mayors still had to ask for it, and once they did in the DC area, just to give you an anecdotal example, we activated from a cold start the fastest augmentation and mobilization of uniformed military troops in the DC area since World War II, and we put 24,000 boots on the ground in less than 48 hours. I don’t know who’s saying we slow-rolled anything, because these are Guardsmen, they’re not active-duty military, and we have to pull them out of their daily lives, train them up, get them up and then deploy them, and employ them. And I think we did that. And I think the record will show with extreme alacrity that we’re very responsive because of the severity of the situation.

AARON MATÉ: Kash Patel, former senior official in the Trump administration, thank you very much.

KASH PATEL: Thanks, Aaron. I appreciate it. I had fun.

Elon Musk is taking his Boring Company circus on the road to Adelanto, California. 

Adelanto is a town of 37,000 where the mayor, Gabriel Reyes, works part time and the city manager, Jessie Flores, is the full time chief executive of the city, according to a recent Bloomberg report. 

The county supervisor mentioned to Flores recently that Musk’s Boring Company was looking for a place to practice digging tunnels, so Flores reached out. “Steve, we’re the ones you’re looking for. When can we meet?,” Flores texted Boring’s President Steve Davis. Flores suggested meeting at SpaceX’s headquarters, which was about 2 hours away from Adelanto. 

While the city has “no money or political capital”, it did have plenty of dirt, open space and lax views on regulation. 

“I inherited a very unstable and mismanaged city, and poorly led. If you want to quote me on that, that would be great,” Flores said. He took over as city manager in 2018. The city is projecting a $4.72 million deficit for 2021 and 33% of its residents live below the poverty line. It doesn’t have its own police department, after it was disbanded in 2001 after a corruption probe. 

Permits can get same-day turnaround in the city, Flores said. “They understand that it’s economic development and job creation that stimulate the economy, not government bureaucracy,” he continued.

Drone manufacturer General Atomics and prefabricated construction manufacturer Clark Pacific also have footprints in Adelanto. The city also houses a U.S. Immigration and Customs Enforcement detention center run by the Geo Group. 

Flores said of the controversial decision to place a detention center in Adelanto: “They stimulate the economy. There’s guards that are employed. They have families. They have obligations.” 

The Boring Company got its first permits to dig back in 2017 in Hawthorne, who has gotten “fed up” with Musk. Upon arriving at SpaceX, Flores and his team got a tour of the facilities and a ride in a test tunnel. Musk’s team expressed to Flores that they were tired of getting blamed for kicking up dust when they dug. “We have plenty of dirt,” Flores responded. “We wouldn’t be able to tell if it’s your dirt.” 

Boring sought out a half-mile long property and Adelanto offered up “a 20-acre plot zoned for manufacturing on the eastern fringes of town, just off U.S. Route 395.” The land was also prime-time in terms of lack of red tape, Bloomberg wrote:

That the land had previously hosted the Adelanto Grand Prix, an annual motocross event, which was canceled last year because of Covid-19, meant extra good news for Boring. The property is considered previously disturbed, which meant less environmental red tape. Another bonus: Joshua trees, a protected species in California and common elsewhere in town, are largely absent from the site, which meant Boring wouldn’t have to go through the costly and time-consuming process of hiring an arborist to dig up and replant them. Boring and the seller, a limited partnership in Orange County, Calif., quickly agreed on a price of $495,000.

When Bloomberg tried to accompany Flores to The Boring Company for a visit, he was told that the facilities “couldn’t accommodate guests that week”. The foreman on site told Bloomberg he winds up chasing five or six people a day away. As for what the company is doing at the site? “It involves experimenting with tunnel techniques, including digging the initial portion of a tunnel at an angle, rather than digging a hole and then dropping the boring machine down to the level of the tunnel,” the report says.

Many of the workers live three hours away in Las Vegas, though local businesses are seeing pops in businesses as workers spend money for meals and other necessities in town. 

Flores is fine with all of it. “We’ll take a gigafactory, and any other factory he wants to build in our city. Let’s go back to the industrial modern revolution, right? Where we’re building robotics, artificial intelligence.”

It’s often said that with every crisis comes great opportunity.

While such catastrophes do create upheaval and uncertainty in financial markets, Visual Capitalis’s Aran Ali details below that they can also lead to new opportunities for investors, as asset classes react to different environments.

Since the World Health Organization (WHO) declared COVID-19 to be a pandemic on March 11, 2020, the performance of vaccine stocks have been varied—but with some notable winners that notched triple or quadruple digit returns.

Here’s how much a $1,000 investment would be worth as of March 31, 2021, if you had put money into each vaccine stock at the start of the pandemic:

The Business of Vaccines

The returns on vaccine stocks have varied greatly. They are staggering in the case of Novavax and Moderna, but also seem quite underwhelming, when considering the likes of Sanofi, AstraZeneca, and Pfizer.

One factor for the discrepancy in stock price performance is the revenue potential from vaccine sales relative to the rest of the existing business, as vaccine sales will have a much greater impact on the fundamentals of smaller companies.

For example, before the pandemic, Novavax had revenues of just $18.7 million—this meant that capturing any portion of global vaccine sales would create massive value for shareholders. On the flipside, vaccine sales are much less likely to impact the fundamentals of Sanofi’s business, since the company already is generating $40.5 billion in revenue.

To put it into perspective, analysts are expecting total sales from COVID-19 vaccines to be around $100 billion, with $40 billion in post-tax profits.

Vaccine Stocks vs the S&P 500

Even in a booming and valuable industry, it’s difficult to identify the long-term leaders. For example, in the mobile phone market, there was a time where the likes of Motorola, Nokia, and Blackberry appeared untouchable, but eventually lost out.

Similarly, with the limited information available at the start of the pandemic, few, if any, could have separated the winners and losers from this group with accuracy.

In the past year, the S&P 500 grew 44.9%—meaning that only three of the seven vaccine stocks have seen their share prices outperform the market.

Nobody said helping solve a global pandemic guarantees a pay off.

Via The Mises Institute,

Now that the Biden administration has settled in, it is time to reassess American policy towards Russia, China and the wider Asian scene. Is it going to be a continuation of the Trump administration’s policies, or is there something new going on? Given the continued tenure of staffers at the Pentagon from before the Trump presidency, it seems unlikely there will be much in the way of détente: it is game-on for the cold war to continue.

Before delving into geopolitics, we must be careful to define a neutral position from which to observe developments. You cannot be objective in these matters if you justify an uninvited invasion of a foreign territory to take out a proclaimed public enemy, as America did with Osama Bin Laden and then condemn Russia for attempting to murder an ex-KGB officer living in Salisbury, or for that matter the dismembering of a journalist in the Saudi Embassy in Turkey. You must be aware that it is an established part of what Kipling called The Great Game, and always has been.

Acts of this type are the product of states and their agents acting above any laws and are therefore permitted to ignore them. We must dismiss from our minds the concept that there are good and bad guys—when it comes to foreign operations, they all behave the same way. We must dismiss nationalistic justifications. Nor can we believe propaganda from any state when it comes to geopolitics, and particularly in a cold war. Know that our news is carefully managed for us. As far as possible we must work from facts and use reasoned deduction.

We are now equipped to ask an important question: the US status quo, with its dollar hegemony is seen by the new Biden administration as an unchallengeable right, and its position as the world’s hegemon is vital for … what? The benefit of the world, or the benefit of the US at the world’s expense? To answer this, we must consider it from the point of view of the US military and intelligence complex.

The problem facing us is that the Pentagon became fully institutionalized in managing America’s external security following the second world war. When the Soviets extended their sphere of influence into the three great undeveloped continents, Asia, Africa and South America, there was a case for defending capitalism and freedom—or at least freedom in an American sense by keeping minor nations on side. This was done by fair means and often foul for expediency’s sake.

But the fall of the Berlin Wall and the death of Mao Zedong made the American military and intelligence functions largely superfluous, other than matters more directly related to national defense. But it is in the nature of government departments and their private sector contractors to do everything in their power to retain both influence and budgets, and the argument that new threats will arise is always hard for politicians to resist. And what do the statists in a government department do when they have secured their survival? Their retention of power without real purpose descends into alternative military objectives. And from the first Bush president, they were all firmly on-message.

President Trump was the first president for some time not to start military engagements abroad. His attempts to wind down foreign operations were strongly resisted by defence and intelligence services. And his efforts to obtain a détente with North Korea were met with disdain—even horror at Langley.

Whatever the truth in these matters, it is highly unlikely that the power conferred by the ability to initiate unchallengeable cover-ups, information management, subversion of foreign states and secret intelligence operations is not abused. The proliferation and traction of conspiracy theories, attributed in their origin to Russian cyber-attacks and disinformation, is a consequence of one’s own government continually bending the truth to the point where large sections of the population begin to believe it is its own government’s propaganda.

This brings us to the change in administration. As a senator, Biden had interests in foreign affairs dating back to the late 1970s and was on the Senate Foreign Relations Committee from 1997 and subsequently became its chairman. As such a long-standing politician in this field it is almost certain that the Pentagon establishment regards Biden as a safe pair of hands; in other words, a president who is likely to support Langley’s role in setting geopolitical and defence priorities. Surely, for them this is a welcome change from the off-message President Trump.

Policies to Contain the Russian Threat

Despite the Navalny affair, Putin is still unchallengeable as Russian leader, having emerged from the post-Soviet turmoil where chaos and organised crime were the order of the day. No western leader has had such a tough political background and Putin is a survivor, a strongman firmly in control. This matters for America and NATO with respect to policies in Ukraine, the Caucasus, Syria, Iran and Turkey. Any attempt by America to complete unfinished business in Ukraine (a triparty scrap involving Russia, Germany/EU and the US over the Nord Stream pipelines depriving Ukraine of transition revenues is already brewing) is likely to lead to confrontations with Russia on the ground. And Russia signed a military cooperation pact with Iran in 2015. Like a cat with a mouse, Putin is playing with Turkey, interested in laying pipelines to southern Europe, and getting it to drift out of NATO. Russia’s interest in Syria is to keep it out of America’s sphere of influence, which with Turkey’s help it has managed to do.

For some time, military analysts have been telling us that we are now in a cyber war with Russia, accusing it of interfering in elections and promoting conspiracy theories—the US presidential election last November being the most recent assertion. As with all these allegations there is no proof offered, just statements from government sources which have a track record of being economical with the truth. Whatever the truth may be, cyber wars are closely intertwined with propaganda.

Attacks on Russia since the millennium have been by disrupting dollar payments, and less importantly, by sanctioning individuals close to Putin. The monetary threat was originally justified by Russia’s invasion of Ukraine in 2014, leading to the collapse of the rouble and a hike in interest rates. The new cold war had taken a financial turn. Russia’s response was to reduce the economy’s dependence on dollars as much as possible, with the central bank selling dollar reserves and adding gold in their place. It also set up a new payments system to reduce its dependence on the SWIFT interbank payments system.

Russia has survived all financial attacks and is now better insulated against them for the future. One-nil to the Russians. But the cost has been hidden, with western investment restricted to being mainly from the EU (particularly directed at the oil and gas industries). With the nation being fundamentally a kleptocracy, economic progress is severely constrained. Furthermore, with Russia being the world’s largest energy exporter, the west’s policy of decarbonisation is a medium to long term threat, leading to the demise of Russia’s USP. For these and other reasons Russia has turned to China as both a partner and an economic protector. In return, Russia is resource-rich, an energy provider, and therefore of great value to China.

Russia’s history of assassinating leading dissidents on foreign soil has been its greatest mistake. It took years after the Litvinenko assassination for diplomatic relations with the UK to be fully restored. The deaths of several Russian oligarchs in recent years on British soil were thought to be the actions of organised crime and not attributed to the Russian state. But the clumsy assassination attempt on Sergei Skripal in Salisbury by GRU officers three years ago is unlikely to lead to a rapprochement anytime soon.

The Russian and Chinese Geopolitical Partnership

One of the first persons to identify the geopolitical importance of Russia’s resources was Halford Mackinder in a paper for the Royal Geographical Society in 1904. He later developed it into his Heartland theory. Mackinder argued that control of the Heartland, which stretched from the Volga to the Yangtze, would control the “World-Island”, which was his term for all Europe, Asia and Africa. Over a century later, Mackinder’s theory resonates with the two leading nations behind the Shanghai Cooperation Organisation (SCO).

The underlying point is that North and South America, Britain, Japan and Australasia in the final analysis are peripheral and less important than Mackinder’s World-Island. There was a time when British and then American primacy outweighed its importance, but this may no longer be true. If Mackinder’s vision is valid about the overriding importance of undeveloped resources, Russia is positioned to become with China the most powerful national partnership on earth.

The SCO is the greatest challenge yet mounted to American economic power and technological supremacy. And Russia and China are clearly determined to ditch the dollar. We don’t yet know what will replace it. However, the fact that the Russian central bank and nearly all the other central banks and governments in the SCO have been increasing their gold reserves for some time could be an important clue as to how the representatives of three billion Euro-Asians—almost half the world’s population—see the future of trans-Asian money.

In terms of GDP per capita the United States is a long way ahead of the field. But it is also the most indebted at the national level. The difference with the SCO is at the purchasing power parity level, making market prices of secondary importance. While prices regionally vary considerably the costs of goods in the SCO are as an average considerably less than in the US and EU, so that on a PPP basis the SCO’s GDP is significantly greater than that of the US or the EU.

The inclusion of the EU in Figure 1 is a post-Brexit nod to the fact that the EU can no longer be automatically regarded as being in the US sphere of influence. The commercial ties to the SCO, with both energy reliance from Russia and silk road rail terminals in various EU states are clearly the trade future for the EU. The EU is advanced in its plans to bring national forces under its combined flag, which by giving them an EU identity can only loosen NATO ties with America. While not an active threat to America’s power, one can envisage the EU sitting on the fence in an intensifying cold war.

The SCO started life in 2001 as a security partnership between Russia and China, incorporating the ‘stans to the east of the Caspian Sea. Born out an earlier organisation, the Shanghai Five Group, it was set up to combat terrorism, separatism and extremism. It is still a platform for joint military exercises, but none have taken place since 2007 and it has morphed into a loose economic partnership instead.

Since the founding Shanghai Five, the SCO now includes India and Pakistan. Observer status includes Afghanistan, Belarus, Iran and Mongolia. These nations can attend SCO conferences, but their participation is very limited. Dialogue partners include Armenia, Azerbaijan, Cambodia, Nepal, Sri Lanka and Turkey. These nations can participate actively in SCO conferences, and this status is seen as a preliminary to full membership. Egypt and Syria have applied for observer status and Israel, Iraq and Saudi Arabia have applied to be dialog partners. Apart from South East Asian nations, which are dominated by a Chinese diaspora anyway, SCO members and their influence covers almost all of Halford Mackinder’s World Island, with the exception of the European Union.

This is the reality that faces American hegemony; there are twenty-one nations across Asia in a non-American alliance, or on the cusp of joining it. All the other European and Asian nations are within the SCO’s sphere of influence through trade, even if not politically affiliated. It is getting more difficult to define the nations definitely in the US pocket, other than its five-eyes partners (Canada, the UK, Australia and New Zealand). This simple fact places severe limitations on US action against China, and to a lesser extent Russia.

It is an exaggeration to suggest that an attack on one member state is an attack on them all. Their cooperation is fundamentally economic rather than military; except, as stated above, the SCO’s original function remains to eliminate terrorism, separatism and extremism. Indeed, India and Pakistan are at loggerheads over Kashmir, and China and India have border disputes in the Himalayas. But attempts, by, say, the US to prize India away from the SCO is bound to generate wider issues, and perhaps a response, from the other members.

The Biden presidency faces significant challenges in the ongoing cold war and America is unlikely to retain its hegemonic status. During Trump’s presidency, attempts to curtail China’s trade and technological development did not succeed, and has only emboldened both China and Russia to stand firm and as much as possible to do without America and its dollar.

Their senior advisors are, or should be, acutely aware of the debt and inflation traps facing the US and also the EU. Following the Fed’s policies of accelerated monetary expansion announced last March, China increased her purchases of commodities and raw materials, in effect signalling she prefers them to dollar liquidity. As a policy, it is likely to be extended further, given China’s existing stockpile of dollars and dollar-denominated debt. Her dilemma is not just the fragile state of the US economy, but that of the EU which on any dispassionate analysis is a state failing economically and politically as well. China will not want to be blamed for triggering a series of events which will get everyone reaching out for their forgotten copy of Hayek’s The Road to Serfdom.

As events take their course, the risk of a dollar collapse and a matching crisis in the euro, though for different reasons, increases. For Mackinder’s heartland theory to be proved and for the Russian and Chinese partnership to be in control of it, a mega-crisis facing the profligate money-printers must happen. All history and a priori economic theory confirm it will happen. The SCO’s Plan B will be a continuance of Plan A, hatched out of the Shanghai Five Group, making the World Island a self-contained unit not dependent on the peripherals—principally, the five eyes. For money, they must give up western ways with unbacked state currencies. Between them they have enough state-owned declared and undeclared gold to back the yuan, and the rouble. Give these two currencies free convertibility into gold, and they will be accepted everywhere, so their old cold war enemies can trade their way back to prosperity. The US has, or says it has, enough gold to put a failing dollar back on a gold standard, but for it to be credible it must radically cut spending, its geopolitical ambitions, and return its budget into balance. With luck, that is how the new cold war ends.

A rustic log cabin in one of the Bay Area’s most expensive neighborhoods has been listed for nearly $600k. 

The 992 sqft log cabin from the 1890s is in considerable disrepair but hidden between Oakland hills and Piedmont’s 94611 ZIP code. The average home value in the area is more than $1.5 million. 

A Zillow description of the log cabin describes it as a “rustic log cabin (in considerable disrepair) built in about 1890.” It does sit on 25,000 sqft of land. 

“It’s a cool property, but not in great shape,” listing agent Nick Flageollet told local news KRON4. “The terrain is sliding out from under the foundation.”

Flageollet said, “It’s very unique. I don’t know if I’ve seen anything like this or even this old in this area.”

Besides calling it a “rustic log cabin,” more or less it’s an uninhabitable shack that is listed for double the US median home price. 

For someone with a knack for renovations, perhaps a millennial with woodworking skills from the metro area could find this property not just affordable (for the area) but very appealing due to its location in suburbia.  

When it comes to price/sqft, the shack comes out to around $580, higher than averages in Washington DC and Los Angeles, California. 

This year, housing prices have been so absurd that Case-Shiller, US home prices in 20 major cities are up a shocking 11.10% year-over-year.

This is the fastest YoY rise since March 2014.

Away from the 20 major cities, prices are rising even faster, up 11.22% – the fastest YoY price appreciation since Feb 2006…

Who would ever have thought that an uninhabitable shack would be listed for double the price of the average US home? But nothing is surprising in the Bay Area while the Federal Reserve continues to prime real estate markets. 

Authored by Paul Joseph Watson via Summit News,

Yet another disgusting video has emerged of children being paraded around during a late night drag queen show in L.A. as they are encouraged to take cash tips from members of the crowd.

The woman filming the video expresses her revulsion at the scene, commenting, “Why in the hell do these people got these fucking little-bitty ass kids at this fucking drag show?”

“It is 11:40 at night – these people have children in a fucking drag show in L.A.” she adds.

The video then shows two young blonde girls being made by a drag queen to perform poses to music as they collect money from the attendees.

“Look at this shit! They’re fucking throwing money at these little girls, got ’em picking up fucking money off the floor like they’re fucking strippers and shit,” remarks the woman.

#WakeTheFuckUpAmerica pic.twitter.com/EeRvDOHJDu

— ✨LINDSAY✨ (@DistortedLinds) April 18, 2021

Respondents to the video were similarly repulsed.

“I can’t fathom what kind of woke ass stupid parent lets their little girls parade suggestively in front of a room full of horny sauced-up freaks while they get bills thrown at them like strippers,” one remarked.

“11.40pm. People giving money to children. This is insane,” added another.

This is by no means the only instance of children being exposed to sexualized drag queen shows in late night clubs.

In 2019, so-called ‘drag queen kid’ Desmond is Amazing performed on stage at a gay club in New York while patrons tossed money at the then 12-year-old boy.

A video posted to Tik Tok in February last year showed a drag queen dancing suggestively in front of a girl no older than 6 as adults in the room applauded and cheered.

The following month, we also highlighted how a school in Brooklyn reportedly handed out stickers to 4-year-old children during a ‘drag queen story time’ event that said “drag queen in training.”

This occurred in the same month that video emerged of a drag queen in the UK teaching toddlers how to twerk.

Drag queen Kitty Demure previously slammed ‘woke’ parents for exposing their kids to drag queen culture.

“I have absolutely no idea why you would want that to influence your child, would you want a stripper or a porn star to influence your child?” he asked.

*  *  *

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At the same time the corporate world was suffering from implementing new burdensome Covid restrictions, dealing with shutting down in-person office sites, and generally trying to quell the panic of a government induced recession brought on by its pandemic response, CEO pay was soaring.

During 2020, as millions lost their jobs, median pay for CEO of more than 300 of the biggest U.S. public companies hit $13.7 million, up from $12.8 million the year prior, according to a new Wall Street Journal report. Of the 322 CEOs that the Journal analyzed, pay rose for 206 of them, with the median raise coming in at about 15%. 

The rise was helped along by the bounce in the stock market and modified pay structures for dealing with the response to the pandemic. Shareholders have spoke out at companies like Starbucks and Walgreens Boots Alliance, voting against pay arrangements at the companies’ annual general meetings.

TransDigm also saw 57% of its shares voted against the company’s proposed pay program, which allowed options to vest when they normally otherwise wouldn’t be allowed to be exercised.

“TransDigm’s executive compensation plans, along with the board’s decision to vest certain options in 2020, are designed to incentivize leaders to act like business owners and align their interests with shareholders over the long term,” the company’s IR rep said.

Even companies that felt the brunt of the pandemic the worst saw their CEO pay rise. For example, Norwegian Cruise Lines posted a $4 billion loss last year and its revenue fell 80% – but its CEO’s pay doubled to $36.4 million, thanks to resigning a contract extension with the company. 

The company said: “We believe these changes were in the best interests of the company and secured Mr. Del Rio’s continued invaluable expertise. Our management team took quick, decisive action to reduce costs, conserve cash, raise capital.”

At food service company Aramark, CEO John Zillmer saw his 2020 pay come in at $27.1 million versus $11 million in the year prior. The company’s board “bumped executives’ annual incentive payments up to 40% of initial targets instead of the 10% that pay-program formulas would have dictated,” the report notes.

Aramark claims the changes were to retain executives and recognize the “extraordinary circumstances” of the pandemic. 

Shaun Bisman, a pay and corporate-governance consultant at Compensation Advisory Partners in New York, told the Journal: “I don’t think we’ve ever seen anything like this before in terms of the number of changes we’ve seen in incentive plans.”

However, not all companies followed suit. CEOs of Exxon, Omnicom Group Inc. and Intel all took less in pay in 2020 than they did in 2019, the report noted. Those companies generated total returns of between -15% and -36% during 2020.

Authored by Daniel Lacalle,

The United States: Hardly A Recovery

There is an overly optimistic consensus view about the speed and strength of the United States’ recovery that is contradicted by facts. It is true that the United States recovery is stronger than the European or Japanese one, but the macro data shows that the euphoric messages about aggregate GDP growth are wildly exaggerated.

Of course, Gross Domestic Product is going to rise fast, with estimates of 6% for 2021. It would be alarming if it did not after a massive chain of stimuli of more than 12% of GDP in fiscal spending and $7 trillion in Federal Reserve balance sheet expansion. This is a combined stimulus that is almost three times larger than the 2008 crisis one, according to McKinsey. The question is, what is the quality of this recovery?

The answer is: extremely poor. The United States real growth excluding the increase in debt will continue to be exceedingly small. No one can talk about a strong recovery when industry capacity utilization is at 74%, massively below the level of 80% at which it was before the pandemic. Furthermore, labor force participation rate stands at 61.5%, significantly below the pre-covid level and stalling after bouncing to 62% in September. Unemployment may be at 6%, but it is still almost twice as large as it was before the pandemic. Continuing jobless claims remain above 3.7 million in April.  Weekly jobless claims remain above 500,000 and the total number of people claiming benefits in all programs — state and federal combined — for the week ending March 27 decreased by 1.2 million to 16.9 million.

These figures must be put in the context of the unprecedented spending spree and the monetary stimulus. Yes, the recovery is better than the Eurozone’s thanks to a fast and efficient vaccination rollout and the dynamism of the United States business fabric, but the figures show that a relevant amount of the subsequent stimulus plans have simply perpetuated overcapacity, kept zombie firms that had financial issues before covid-19 alive and bloated the government structural deficit and mandatory spending.

Would the United States economy had recovered as fast as it has without the deficit-spending stimulus plans? Maybe. I believe so because the entire recovery, both in markets and the economy, has been driven by the vaccine news and the process of inoculation. Most of the programs that have been implemented have had a small impact compared to the re-opening of the hospitality sector and the vaccinations. The entire economic crisis came from the lockdowns and the virus and the entire recovery is the re-opening and the vaccinations.

My main concern is that this monster deficit and debt program has been set as the minimum for the next crisis. No one has analysed if the spending plans have been effective. In fact, in the eurozone no one seems to be concerned about the fact that countries that have spent between 20 to 30% of GDP in stimulus plans are now in stagnation. The mainstream message seems to be that if the spending plans have not worked it is because they were not large enough. Very few seem to be discussing the waste in public funding when the number one drivers of the recovery are the vaccine roll-out and the re-opening of the services sector.

It seems that governments want to convince us that they have saved the world when the reality is that the misguided lockdowns were the cause of the economic debacle and lifting them is the main cause of the recovery. In the process, trillions have been squandered. It is dangerous to accept that government spending no matter how much and what for is the only solution and even more dangerous to believe that the shape of the recovery is only a function of the size of the stimulus package. The problem was the virus and the government-imposed lockdowns, the solution is the vaccine and the re-opening.  The problem was caused by government’s lack of prevention and excess of interventionism and the solution is not more intervention.

A couple of days ago, Morgan Stanley warned that China’s new digital renminbi – the first “central bank digital currency” (or CBDC) – could cement its status as the next reserve currency. But as government and Wall Street continue their embrace of virtual currencies that, some say, threaten to blow up the industry status quo and eliminate the need for banks, corporations are also striving to create the stablecoin of the future, challenging governments’ long-held monopoly on money.

Years after Facebook’s Mark Zuckerberg first declared his intention to launch a transnational stablecoin via Facebook’s “Libra” project that would, he hoped, enable cross-border payments on Facebook’s platform, the Facebook-backed digital-currency project Diem is reportedly planning to launch its first stablecoin in 2021 as a small-scale pilot, according to an anonymously sourced report from CNBC.

But Libra, which involved a convoluted plan to launch a stablecoin backed by a potpourri of fiat currencies, was quickly scaled back after Facebook’s talk about creating a new international financial system to supplant the dollar apparently rattled too many feathers. What was left was later spun off as Diem, a re-branding that has given life to a scaled-back vision of corporate stablecoin dominance. However, When it finally arrives, Diem won’t come with the same fanfare and controversy of the original idea envisioned by the social media giant nearly two years ago.

The person, who preferred to remain anonymous as the details haven’t yet been made public, said this pilot will be small in scale, focusing largely on transactions between individual consumers. There may also be an option for users to buy goods and purchases, the person added. However, there is no confirmed date for the launch and timing could therefore change.

“It’s really drifted off the radar in a way that’s quite striking,” Michael Casey, chief content officer of the cryptocurrency publication CoinDesk and a former financial journalist, told CNBC.

Facebook won’t play an official role in the launch, which instead will be overseen by the Diem Association, the Switzerland-based nonprofit which oversees diem’s development.

In comments to CNBC, financial journalist Michael Casey said he was surprised at how under-the-radar the diem project has become. It’s almost as if the international community has forgotten about it, he said. “It really drifted off the radar in a way that’s quite striking,” said Casey, the chief content officer of the cryptocurrency publication CoinDesk who was one of the first reporters at a major American newspaper (the Wall Street Journal) to cover the rise of crypto.

The soft reaction to Diem is also surprising considering how much of a backlash its predecessor created. “It was such a stunning challenge to the international order, in that the backlash was just really powerful,” Casey said.

Diem has lost several senior executives over the past year, as well as the backing of powerful corporations like Mastercard and Visa, among many others. But in the wake of its rebranding, Diem is reportedly in talks with Swiss financial regulators to secure a payment license, a crucial step that would place the organization further along the path toward getting its digital currency project off the ground.

Of course, more “government sponsored” competitors are in the works: in addition to the eRMB, the ECB recently concluded a public consultation on a digital euro and will make a decision this summer, and the Boston Fed is set to release its initial research in the fall.

With stablecoins seen as a more practical alternative to bitcoin and ether, we will be closely watching the rollout of stablecoins as a space where corporations might win an early victory in the battle to use crypto technology to seize the money-making monopoly from government – and from the people.

To sum up, why should readers be skeptical of Facebook’s Diem? Well, Tom Luongo once described it as a “Trojan Rabbit” that could quietly help Zuck seize the ability to print money, and launch “the Central Bank of Facebook.”

Submitted by Nicholas Colas of Datatrek Research

After a highly unusual several-month lag, the US Bureau of Labor Statistics has finally updated its state and local labor market statistics, so we will dedicate today’s Data section to these numbers.

The central message here is that US unemployment trends are very location-specific, something the national data obviously fails to capture. By looking at state- and city-level data we can more accurately assess both how far the domestic labor market has recovered and what factors will drive unemployment/labor force participation trends from here.

Two points on this topic:

#1: The current difference in unemployment rates across US states are very large (March 2021 data here).

• 12 states are already back to essentially full employment (2 – 4 percent unemployment): Nebraska, South Dakota, Utah, Vermont, New Hampshire, Idaho, Iowa, Kansas, Alabama, Montana, Wisconsin and Indiana.

• 19 states have unemployment between 4 – 6 percent (note: March national joblessness was 6.0 percent): Minnesota, Missouri, Oklahoma, Arkansas, North Dakota, Georgia, Florida, Ohio, Maine, Kentucky, Tennessee, Michigan, South Carolina, Virginia, North Carolina, Wyoming, Washington, West Virginia and Oregon.

• 8 states have unemployment rates between 6.1 and 7.0 percent, or close to the national level: Maryland, Mississippi, Colorado, Delaware, Alaska, Arizona, Massachusetts and Texas.

That leaves 11 states with noticeably higher unemployment rates (over 7 percent), and several are in the most populous areas of the country:

• California (12 pct of US population): 8.3 percent unemployment

• New York (6 pct): 8.5 percent unemployment

• Illinois (4 pct): 7.1 percent unemployment

• Pennsylvania (4 pct): 7.3 percent unemployment

• New Jersey (3 pct): 7.7 percent unemployment

• Smaller states with +7 percent unemployment: Rhode Island, Louisiana, Nevada, Connecticut, New Mexico, and Hawaii.

Takeaway: US unemployment is clustered in a handful of states (CA, NY, IL, PA, and NJ), with much of the rest of the country already approaching, near, or at full employment.

#2: American big city joblessness is a large part of the country’s overall unemployment challenge, as these 2 points show:

First, consider February/March’s national unemployment rates as compared to America’s 10 largest cities in the same months:

• March 2021 national unemployment: 6.0 percent

• February 2021 national unemployment: 6.2 percent

Versus:

• New York City unemployment Rate: 11.2 pct (March)

• Los Angeles: 10.9 pct (March)

• Chicago: 7.7 pct (March)

• Houston: 8.4 pct (Feb data, latest available)

• Phoenix: 6.7 pct (Feb data)

• Philadelphia: 11.2 pct (Feb data)

• San Antonio: 6.8 pct (Feb data)

• San Diego: 6.9 pct (March)

• Dallas: 6.9 pct (Feb data)

• Austin: 5.6 pct (Feb data)

What this shows: average top-10 big American city unemployment (Feb/March 2021) is 8.2 percent, much higher than the national 6.0 – 6.2 percent rate.

Second, let’s zoom in on New York and Los Angeles and see how their unemployment situations both differ from and inform the US experience as a whole:

• First, keep in mind that the US labor force (people employed or looking for work) shrank from February 2020 to March 2021 by 3.8 million people (down 2.3 percent). This highlights the problem of declining labor force participation that Fed Chair Powell regularly mentions.
  NYC has not seen the same drop in workforce size. The labor force here has declined by only 9,186 people (-0.2 percent).
  Los Angeles is much more in line with the national decline in labor force size, down 115,124 from February 2020 (-2.2 percent)

• Add up unemployment in New York City (462,131) and Los Angeles (551,124) and you get 1,013,255 jobless workers, or 10 percent of the US total. These 2 cities only make up 3.7 percent of the US population.

Takeaway: the Pandemic Recession hit large American cities harder than the rest of the country due to their leverage to in-person commercial activities like business travel/tourism as well as the shift to work-from-home. It will be some time before they fully recover.

Final thought: every recession hits regional/local economies differently, but the current dichotomies are exceptional. Even now, the pandemic uniquely challenges urban areas while more suburban/rural regions are in much, much better shape. Monetary and fiscal policy do not, of course, differentiate between New York City or Los Angeles and the 31 states where unemployment is markedly lower than those cities. American policymakers make decisions based on national data, and fair enough – it is one country. But if one is predisposed to worrying about inflationary pressures as a result of over-stimulation, the data we’ve presented today is certainly one way to justify those concerns.