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Authored by Caitlin Johnstone via Medium.com,

A new Politico/Morning Consult poll has found that there is much more support for ongoing military occupations among Democrats surveyed than Republicans.

To the question “As you may know, President Trump ordered an immediate withdrawal of more than 2,000 U.S. troops from Syria. Based on what you know, do you support or oppose President Trump’s decision?”, 29 percent of Democrats responded either “Somewhat support” or “Strongly support”, while 50 percent responded either “Somewhat oppose” or “Strongly oppose”. Republicans asked the same question responded with 73 percent either somewhat or strongly supporting and only 17 percent either somewhat or strongly opposing.

Those surveyed were also asked the question “As you may know, President Trump ordered the start of a reduction of U.S. military presence in Afghanistan, with about half of the approximately 14,000 U.S. troops there set to begin returning home in the near future. Based on what you know, do you support or oppose President Trump’s decision?” Forty percent of Democrats responded as either “Somewhat support” or “strongly support”, with 41 percent either somewhat or strongly opposing. Seventy-six percent of Republicans, in contrast, responded as either somewhat or strongly supporting Trump’s decision, while only 15 percent oppose it to any extent.

These results will be truly shocking and astonishing to anyone who has been in a coma since the Bush administration. For anyone who has been paying attention since then, however, especially for the last two years, this shouldn’t come as much of a surprise.

Depressing that 30%+ fewer Democrats than Republicans support withdrawal from Syria and Afghanistan. (See thread). A clear byproduct of two years of Clockwork Orange-style indoctrination by MSNBC’s wall to wall lineup of spooks & neocons selling war thru partisan identity. https://t.co/K1yevED6lH

— Max Blumenthal (@MaxBlumenthal) January 10, 2019

This didn’t happen by itself, and it didn’t happen by accident. American liberals didn’t just spontaneously start thinking endless military occupations of sovereign nations is a great idea yesterday, nor have they always been so unquestioningly supportive of the agendas of the US war machine. No, Democrats support the unconscionable bloodbaths that their government is inflicting around the world because they have been deliberately, methodically paced into that belief structure by an intensive mass media propaganda campaign.

The anti-war Democrat, after Barack Obama was elected on a pro-peace platform in 2008, went into an eight-year hibernation during which they gaslit themselves into ignoring or forgiving their president’s expansion of George W Bush’s wars, aided by a corporate media which marginalized, justified, and often outright ignored Obama’s horrifying military expansionism. Then in 2016 they were forced to gaslight themselves even further to justify their support for a fiendishly hawkish candidate who spearheaded the destruction of Libya, who facilitated the Iraq invasion, who was shockingly hawkish toward Russia, and who cited Henry Kissinger as a personal role model for foreign policy. I recall many online debates with Clinton fans in the lead up to the 2016 election who found themselves arguing that the Iraq invasion wasn’t that bad in order to justify their position.

After Clinton managed to botch the most winnable election of all time, mainstream liberal America was plunged into a panic that has been fueled at every turn by the plutocratic mass media, which have seized upon unthinking cultish anti-Trumpism to advance the cause of US military interventionism even further with campaigns like the sanctification of John McCain and the rehabilitation of George W Bush.

Trump is constantly attacked as being too soft on Moscow despite having already dangerously escalated a new cold war against Russia which some experts are saying is more dangerous than the one the world miraculously survived. Trump’s occasional positive impulses, like the agenda to withdraw US troops from Syria and Afghanistan, are painted as weakness and foolishness by the intelligence veterans who now comprise so much of corporate liberal media punditry. And their audience laps it up because by now mainstream liberals have been trained to have far more interest in opposing Trump than in opposing war.

And how sick is that? Obviously Trump has advanced a lot of toxic agendas which need to be ferociously opposed, but how warped does your mind have to be to make a religion out of that opposition which is so all-consuming that it eclipses even the natural impulse to avoid inflicting death and destruction upon your fellow man? How viciously has the psyche of American liberals been brutalized with mass media psyops to drive them into this psychotic, twisted reality tunnel?

There was one group in the aforementioned survey which was not nearly as affected by the propaganda as armchair liberals. To the statement “The U.S. has been engaged in too many military conflicts in places such as Syria, Iraq and Afghanistan for too long, and should prioritize getting Americans out of harm’s way,” military households responded 54 percent that this statement aligns with their view. Turns out when it’s your own family’s blood and limbs on the line, people are a lot less willing to commit to endless violence.

Sixty percent of Republicans agreed with this statement, while only 41 percent of Democrats did.

Could these statistics have something to do with the fact that younger veterans are statistically much more likely to be Republicans than Democrats? Is it possible that a major reason Trump beat Hillary Clinton, and a major reason Republicans are now far less bloodthirsty than Democrats, is because mothers, fathers, sisters and brothers are tired of flag-draped coffins being shipped home containing bodies which were ripped apart for no legitimate reason in senseless military entanglements on the other side of the world? Seems likely. And it also seems likely that the mass media propaganda machine is having a harder time steering people toward war once they’ve personally tasted its true cost.

*  *  *

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via RSS http://bit.ly/2RGmWaB Tyler Durden

For equity market bulls, Friday’s CPI data couldn’t have been more of a gift if the report came wrapped up with a bow. Falling neatly in line with the market’s expectations, headline core inflation downshifted to 1.9%, the weakest reading since August 2017. Even more importantly, relenting price pressures sent one of the most widely watched inflation gauges back below the Fed’s 2% Maginot Line, handing the “data dependent” central bank more justification to put off hiking rates until H2.

But as is often the case with US data – particularly measures of inflation which chronically under-represent the true level of inflation in the economy, as we have explained in the past – the devil is in the details. And Friday’s print was no exception.

To wit: While headline inflation slipped, the subindex for full-service food and snacks – which represents the costs of dining at full-service restaurants – climbed 0.5%, its largest month-over-month increase since 2011.

So why the reason for the divergence?

Particularly considering that the cost of food – which, as we understand it, is the primary product sold at restaurants – remains below its levels from the beginning of 2018.

 

While it’s tempting to attribute this to accelerating wage growth or minimum wage hikes, the increase occurred in December; a wave of minimum wage hikes across the US aren’t slated to take effect until next month. And while jobs data have recently reflected a pickup in average wages, restaurant workers mostly rely on tips to get by.

Bloomberg hinted at the incongruity, describing the increase in full-service restaurant prices as a “another headwind for Americans.” In fact, given the many warning signs about consumption in the second half of 2018, including trade-related headwinds and the blow to the “wealth effect” in stocks, it’s almost as if something about this number doesn’t quite add up…

Rising restaurant costs are another headwind for Americans. Even though low gas prices and high consumer confidence suggest a strong environment, market volatility at the end of the year, disappointing holiday sales, headwinds from trade and the U.S. government’s partial shutdown are starting to put some buyers on alert. If questions about global growth continue to persist, restaurant sales could fall victim to an economic slowdown, with consumers opting to save money by eating at home.

…that is, unless it’s really a breadcrumb suggesting that the true rate of inflation in the US economy is actually much higher than the official data would suggest. Of course, if that were true, then it could create serious headaches for investors and participants in the real economy – because not only would the Fed be pressed to accelerate rate hikes, but it would also presumably trigger a damaging repricing in Treasury yields that could ignite a replay of the “Shocktober” market rout.

In light of this, we’d like to highlight once again a report published back in 2017 by Devonshire Research Group which analyzed what its authors described as chronic underreporting of US inflation data. Back then, Devonshire suggested that the true rate of inflation could be as much as three times higher than the official rate. They listed a number of reasons why this might be true, starting with the notion that outdated inflation gauges like the CPI had ceased serving as a “financial tool” to be utilized by investors, and had instead become a “policy tool” used by central bankers to justify their hyper-accomodative monetary policy.

Here’s a summary of Devonshire’s summary conclusions:

• US official CPI calculation is governed, and possibly distorted, by numerous and complex technical decisions

• Inflation reporting is less a measure of purchasing power (and therefore a financial tool), and  increasingly a process of affecting macro-economic policies (and therefore a policy lever)

• Real gross domestic product (GDP) measures, yield curves, and treasury issued inflation protected securities (e.g. TIPS), government and union / minimum wages all rely on official US inflation indices that are subject to these distortions

• Most financial, wealth management models rely on a price stability assumption and default to 3% inflation input – what would happen to these models if the true value was closer to 7-11%?

• If we re-compute a purchasing power CPI, de-sensationalize contrarian reporting, and remain disinterested with modern economic policies, we arrive at a 7-9% practical CPI rate over the past decade

• This has profound implications on reported vs. actual standard of living, and might explain the rapid appreciation of American consumer debt, potential reduction in perceived vs. reported quality of life, not to mention unexpected political trends

• Post-1990 inflation of 7-9%, not 3% would also suggest near “bubble-like” conditions exist across many consumer sectors

* * *

For anybody who doubts the CPI’s importance as a policy-setting tool, consider the following comments made Thursday (a day before the latest CPI print) by Fed Vice Chairman Richard Clarida, who hinted that the recent “slowing” in inflation had lessened the pressure on the Fed to raise interest rates (according to the median projections in the central bank’s latest “dot plot”, Fed policymakers anticipated in December that the central bank would hike rates only two times next year, down from three previously, while expectations for the long-run terminal rate declined to 2.8%, from 3%).

Clarida said in a speech on Thursday that “inflation has surprised to the downside recently, and it is not yet clear that inflation has moved back” to the central bank’s goal on a sustainable basis.

Despite the various sub-indexes published to give investors a more comprehensive breakdown of where pricing pressures are showing up in the economy, the methods used to boil all of this down into a headline number – which is often all anybody looks at – remain surprisingly opaque.

Which means the data are much more prone to manipulation than many might understand.

via RSS http://bit.ly/2VPYmD5 Tyler Durden

Last March, we told readers that they need to “sit down” for what we are about to show: a chart showing the indexed “analog” performance of the S&P since the election of presidents JFK and Donald Trump. What the chart showed, is that as of March 15, 2018 the “analog” was only three bps apart on Day 338 after election day, or just a one S&P500 point difference.

Commenting on the chart above, we said that it was “now make or break time for the analog”, adding that “if it is a true tracker, the S&P500 should rollover hard” soon.

In retrospect it took a little longer, but the S&P indeed resumed tracked the “JFK” analog almost tick for tick, to the point where Goldman chief equity strategist David Kostin overnight pointed out the uncanny resemblance of the (indexed) S&P under Trump vs under JFK.

What the chart below shows is that the current near-bear market is virtually identical to the “Kennedy Slide” of 1962, which like now, was driven by policy concerns and culminated with the Cuban missile crisis  and bottomed on October 23, 1962 when the Soviets stood down and a potential hot (very hot) war was averted.

If indeed we are reliving some bizarro JFK world, the chart above suggests that there is further downside to the S&P, which will drop as low as 2,300 before stabilizing and eventually rebounding. Goldman – which is bullish on the market in 2019 – shows this analog as an example of what happens to the market following a fast drawdown, whether the one seen in 1962 or late 2018, namely that most such sharp drops tend to be followed by just as sharp rebounds.

Goldman’s Kostin then makes the case that virtually all prior sharp bear market drawdowns have been buying opportunities…

… with one big footnote: the drawdown has to take place without a broader economic recession, as otherwise the average S&P performance (during recession bear markets) continues to slide some 18 months after the market’s peak, in the current case, the S&P’s all time high hit on Sept 20, 2018.

The question, then, is whether the current bear market is taking place in a recession, one which at least for now has not been observed in the economic data, or it is just a technical drop in the market, one which is expected to normalize relatively fast.

For its part, Goldman remains convinced that stocks are poised for substantial gains in 2019. As shown below, Kostin has a “base case’ price target of 3,000 for the S&P at the end of the year, however he also lays out an Upside Case, in which the S&P rises 28% from Friday’s close to 3,300 as “US economic growth reaccelerates”, and a Downside Case, where the S&P drops a further 11% to 2,300 as “US growth slows ahead of a 2020 recession.”

Finally, Goldman makes one more key point: even though we are very late in the current cycle, something which nobody contends, equity returns at the end of a bull market tend to be strongest which means that all those professional money managers who go to cash now stand to lose the most from the “last push” higher in markets observed historically just before the market peaks one last time and he rug is pulled out from under it.

via RSS http://bit.ly/2Foi2cf Tyler Durden

Hawaiian Democratic Congresswoman Tulsi Gabbard’s just announced 2020 presidential bid has unleashed fury from both the right and the left, but more so from within her own party, and especially from corners long focused on regime change in Syria and who generally lobby for a more muscular “boots on the ground” foreign policy from Ukraine to Syria to Afghanistan. Some pundits have already gone so far as to say “keep an eye on her finances,” suggesting illegal foreign campaign funding through Damascus or Moscow. 

Both neocons and liberal interventionists alike have united to slam the anti-war progressive as “Assad’s mouthpiece in Washington” and an “Assad apologist” and of course there’s the customary “Putin puppet” slur — the latter because as journalist Michael Tracey puts it, she “hasn’t been sufficiently Russiagate-crazy for Democrats”.

The former charge was regularly sounded after her early 2017 trip to Damascus to meet privately with Syrian President Bashar al-Assad in a diplomatic gesture to personally investigate the West’s regime change efforts and its consequences for the Syrian people. The move was slammed by fellow Congressional Democrats, who raised questions over possible violation of the Logan Act. 

Funny enough as a mixed race far-left congresswoman (of American Samoan descent), Hindu, and US Army reserve officer one would think she would be lionized by the left given her “impeccable identity-politics bona fides”. But her unforgivable sin? She’s long made it a central goal of her political career to “end America’s interventionist wars of regime change that have cost our nation trillions of dollars and thousands of lives,” for which she’s introduced Syria-related resolutions in Congress toward that end. 

She’s also accused Washington’s covert regime change efforts as fueling the rise of ISIS and playing “the protective big brother of al-Qaeda and other jihadists” — a charge repeated just two days after the last nation-wide 9/11 remembrance from the house floor.  

Considering that Congresswoman Gabbard herself is an Iraq war veteran and current Army reserve officer who served in the aftermath of 9/11, it’s all the more powerful and rare that a sitting Congress member would make such forceful comments exposing the hypocrisy and contradictions of US policy.

She’s identified the primary impetus for her 2020 candidacy as follows:

There is one main issue that is central to the rest, and that is the issue of war and peace.

No doubt, this alone will send the beltway zero skin-in-the-game armchair hawks and theorists into foaming at the mouth rants of Gabbard “endangering our national security” should she ever get anywhere close to clinching the Democratic nomination. 

The neocon smear machine has already revved into high gear – something consistent on both sides of the aisle:

“Assad’s ‘mouthpiece’ in Washington” —RNC welcomes Tulsi Gabbard to the presidential race with a moniker that many liberals probably agree with as well pic.twitter.com/WJJrP1aJv1

— Marc Caputo (@MarcACaputo) January 12, 2019

Tired of Putin? Vote Assad 2020!!!!!!! https://t.co/aMMF71wz69

— Noah Shachtman (@NoahShachtman) January 11, 2019

Tulsi Gabbard’s disturbing and singular denialism of Assad’s role in the brutal butchering of his own people, obliging a meeting with him and spreading his propaganda should be disqualifying. pic.twitter.com/EI3UiEvLuu

— S.E. Cupp (@secupp) January 12, 2019

Having personally experienced the ravages of one regime change war and its lasting consequences for both common Iraqis and the American people, she’s emerged as a “Ron Paul of the Left” of sorts (strictly speaking on foreign policy that is).

And like Paul before, she could emerge in 2020 as a rare voice spotlighting Washington’s addiction to regime change and “endless wars” abroad, and the military-industrial complex’s fueling America’s “global policeman” mentality, and its blindly obedient cheerleaders in the mainstream media. This will at the very least make the foreign policy debate during the next election — usually a mere single point of view establishment echo chamber — more interesting. 

In the meantime, what does the virulent hatred of Gabbard’s anti-war stance reveal? As Nassim Taleb summarized: The “left” is just as owned by weapon makers as the “right”.

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Authored by John Rubino via DollarCollapse.com,

With the election of Donald Trump, the US right let its id off the leash. Now pretty much everything conservatives have thought but not said is finding its way to Facebook, Twitter, and the evening news.

So it’s no surprise that the left, wildly envious of conservatives’ newfound rhetorical freedom, have decided that what’s good for the misogynist pig is great for the crazed socialist. From today’s Wall Street Journal:

Democrats Contend With the ‘Anger Translator’

Nancy Pelosi will have a hard time keeping the ultraprogressives in her caucus quiet.

The White House Correspondents’ Dinner in 2015 included an ingenious skit featuring President Obama and the comedian Keegan-Michael Key. As Mr. Obama stood at a lectern offering vapid pleasantries about White House press coverage, his “anger translator,” portrayed by Mr. Key, lurked behind him acting out what the president was really thinking.

Today, Democrats keep their “anger translators” in-house, among the progressive members of the 116th Congress sworn in last week. Already we’ve heard Rep. Rashida Tlaib, the freshman Democrat from Michigan, announce with an obscenity that her caucus is dead-set on impeaching President Trump. Next came Rep. Alexandria Ocasio-Cortez of New York, laying out the new House majority’s ambitious agenda—universal health care, free college tuition, a Green New Deal to combat climate change—in an interview with Anderson Cooper that aired Sunday on “60 Minutes.”

There have been some halfhearted attempts by Democratic leaders to distance themselves from Ms. Tlaib’s remarks and Ms. Ocasio-Cortez’s plans, but the reality is that both women are expressing views that fall well within the party mainstream. Dutifully, they’re trying to mollify the “resistance” while Democratic leaders appeal to more-moderate and independent voters.

Sure, Speaker Nancy Pelosi has insisted that Democrats are focused on health care and infrastructure, and not on running the president out of the Oval Office. She even spurned a request from Ms. Ocasio-Cortez to establish a House committee tasked specifically with advancing the freshman lawmaker’s green agenda. But these disagreements are over tactics, not objectives. The speaker and the freshmen remain united in their desire, among other things, to impose single-payer health care, increase environmental regulations and, yes, impeach Mr. Trump. There’s little difference between Alexandria Ocasio-Cortez’s progressive cri de coeur and the campaign platforms of Sen. Elizabeth Warren and other Democratic presidential wannabes.

It was Ms. Ocasio-Cortez’s response Sunday to a question about marginal income-tax rates that received the most attention. When Mr. Cooper asked her if she had a specific tax rate in mind, the congresswoman replied: “You look at our tax rates back in the ’60s, and when you have a progressive tax rate system . . . sometimes you see tax rates as high as 60 or 70%.”

The Wall Street Journal reporter continues for several more paragraphs pedantically explaining why lower tax rates actually generate more revenue for government – thus completely missing the point, which is that we’re finally going to see what both ends of the political spectrum really think.

For, well, forever, the major political parties have calculated that they’ll hold their rock solid 35% of the electorate no matter what, and to win they need to capture moderates numbering an additional 15.1%. So the relatively small cadre in each party who wanted to speak their minds even if it cost elections were muzzled by the somewhat larger group who wanted to win more than they wanted to tell their “truth.” The result was a (in retrospect) quaintly civil politics, with code words like “law and order” and “justice” serving to disguise the racist (in the first case) and collectivist (in the second) policies being sold to the unsuspecting middle with a knowing wink to the base.

Those days are over. It’s now okay to call immigrants “bad hombres” and “rapists,” and also to refer to the head of the Republican party as a “motherfucker” and propose a 70% marginal tax rate on the evil rich. The gloves are off. The dogs have slipped the leash. The verbal stage of the coming civil war has begun.

Why now? Well, it’s at least an interesting coincidence that the political system is spinning out of control at a time when the government’s official debt has doubled in two consecutive administrations and is now accelerating from there. And at a time when interest rates have been cut to levels that make it impossible for small savers to generate much of anything on their savings. And at a time when “jobs growth” has come to mean people taking on second and third minimum wage part-time “gigs” — and still not being able to support their families.

Sound money advocates might blame Richard Nixon’s 1971 decision to take the world off the gold standard and thus usher in history’s greatest debt binge. And they’d be right. Tech-skeptics might point to social media’s amplification of the darkest impulses of previously isolated crazies. They’re also right. Liberals might see increasing corporate control of banking and media alienating and confusing the masses. Right. And conservatives might see the ever-expanding welfare/entitlements state crushing the old civic society in which people instead of bureaucrats looked out for each other. True. All true.

Add these and a few other negative feedback loops together, and you get a societal breakdown that’s being reflected on big screens and small. The coming election will be unique in terms of invective (though probably not in terms of feasible policy ideas). What now looks like 20 or so mostly far-left Democrats will spend their primary being rewarded by their base for creatively insulting Trump, who will gleefully come back with “thoughts” on would-be opponents’ looks and sanity. Fun times!

And this is just the third or so inning of a game that will get a lot uglier before we come to our senses.

via RSS http://bit.ly/2VNQH8z Tyler Durden

Steve Elms of Aisling Capital made a huge score on one of the biggest deals of his career: Eli Lilly’s purchase of Loxo Oncology, Inc. 

Elms is chairman of the board of Loxo and his investment firm, Aisling Capital, is one of the company’s largest shareholders. Aisling’s stake in the company is worth about $480 million when valued at the $235 per share deal price. Some of those shares were purchased in the company’s earliest funding rounds for a fraction of the price, after Elms started attending the J.P. Morgan Healthcare Conference decades ago.

His response to the buyout was measured for a guy that just made hundreds of millions of dollars:

“We’re very pleased with the outcome. It really demonstrates that being a patient-focused company like Loxo can lead to very attractive shareholder benefits.”

As a Bloomberg article notes, Elms has been attending the J.P. Morgan Healthcare Conference for so long, he was going before it was even J.P. Morgan’s conference. And like Elms, the J.P. Morgan Healthcare Conference has evolved in more ways than one. What used to be a small intimate gathering has now turned into a healthcare industry free-for-all. Hotels book up months in advance and rooms sometimes sell for more than five times what they normally would, per night.

Biotech continues to evolve at a rapid pace, ensuring that the J.P. Morgan healthcare conference is going to continue to garner interest. Not only that, but the money that comes with this type of rapidly evolving industry is also enticing. Some treatments bring in hundreds of thousands of dollars per year per patient and it likely isn’t far off until that number moves into the seven figures.

This is what makes smaller biotech firms obvious buyouts at large premiums, like Eli Lilly‘s purchase of Loxo at a 68% premium. In fact, this premium looks conservative when compared to the buyout of Juno Therapeutics by Celgene, which happened last year at a premium of 91%.

That deal came as a result of not only of trying to add to the company’s pipeline, but also as Celgene tried to appease its investors. The news that Celgene itself was going to be acquired just days ago set the tone for what is likely to become a blistering merger and acquisition pace in the biotech space in 2019.

Elms said the same thing, telling Bloomberg that he thinks the acquisition of Loxo will continue to fuel mergers and acquisitions. He notes that not all companies in the space are going to be bought out for massive premiums, however. His concerns lie with companies that have tapped the public markets recently and are already running low on capital.

He is forecasting a “big shake out on the horizon” for these types of companies in 2019.

He concluded:

 “Biotech is still a very treacherous investment. When you listen to the science, everything sounds fantastic. You really have to do a lot of work to try to divine at the end of the day which drugs are going to get approved.”

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Authored by James George Jatras via The Strategic Culture Foundation,

It’s a new year and the American cold civil war has shifted to its next phase with the Petrograd Soviet (formerly the Smolny Institute for Noble Maidens), a/k/a Speaker Nancy Pelosi’s Democrat-controlled House of Representatives ensconced at one end of Pennsylvania Avenue. Pelosi leads the revolutionary “second pivot” and rival center of authority to the embattled Provisional Government headed by President Donald Trump, headquartered 16 blocks to the northwest.

As of this writing Trump is fighting for his political life. If he loses the Mexican standoff over the government shutdown and his border wall, he’s essentially finished. At this juncture, it looks as though he is prepared to declare a state of emergency and use Pentagon or FEMA funds to order the emplacement of a barrier as a military construction project. This is something for which he has the clearest black-and-white statutory authority under 10 US Code § 2802.

Nonetheless, if he goes that route, any such effort will be gummed up in the courts, just like his use of his plenary authority under 18 US Code 1182(f) to exclude “any aliens or … any class of aliens” whose entry into the US would in his judgment “be detrimental to the interests of the United States” – the germ of his campaign’s promised “Muslim ban” – was wimped down into supposedly “extreme vetting” of aliens from a handful of countries without much indication of what the “vetting” is supposed to filter. It’s likely such litigation would delay the wall or prevent its being built at all.

As of now, Trump states his preference to let the Democrats stew. After all, those immediately inconvenienced, such as federal workers and beneficiaries of some federal programs, are primarily Democrat constituencies. Let’s see how many more hysterical bleeding hearts like Cher pressure Pelosi to throw in the towel: “NANCY YOU ARE A HERO LET HIM HAVE HIS FKNG MONEY‼.”

In any case, as even Senator Lindsay Graham recognizes, if Trump loses this battle – one he should have fought a year and a half ago – “it’s probably the end of his presidency.” If Trump wins, or more properly he avoids losing, he only lives to fight another day.

And, fight he must, despite his defenders’ truthful and entirely irrelevant bleating that there was no Russian “collusion.” Notwithstanding Democrats’ tap-dancing during the 2018 campaign on whether or not they would seek to impeach Trump, right out of the box articles of impeachment were filed within days of the House’s changing hands. Trump’s disgraced lawyer and “fixer” Michael Cohen will testify before the House Government Oversight Committee in February. While the weight of opinion suggests that Grand Inquisitor Robert Mueller will wrap up his auto-da-fé in a few months if not weeks, that would seem to be throwing away a powerful synergy with a House that is just beginning to gear up for multiple investigations into every aspect of Trump’s private and professional life, as well as his kids’. Add to that New York State Attorney General Letitia James on the warpath against Trump and “anyone” associated with him. Given Trump’s years in the sharp-elbowed world of high-end New York real estate and numerous business enterprises, as well as the Trump Foundation, there’s no limit to the number of regulatory, tax, and other violations the putsch plotters will construe as federal and state crimes, the latter of which can’t be pardoned by the President.

In short, it’s now a question not if Trump will be impeached but when and on what accusations. Adding fuel to the Democrats’ determination to bring him down before he’s up for reelection is the fear that if Trump survives until then he might well win, something no other Republican is likely to be able to do given the GOP’s tin ear to working class concerns, especially in the Rust Belt states that were Trump’s margin of victory. If Trump is successfully removed before 2020, whomever the Democrats nominate will beat Mike Pence or any other Republican nominee in a romp. After that, especially if Trump’s wall hasn’t gotten built, a sufficient number of imported new voters, many of them illegal, will ensure a permanent Democratic lock hold on power.

When Trump is impeached there may not be enough GOP votes in the Senate to remove him – as things stand now. But never underestimate Republicans’ propensity to cut and run when the going gets tough. It is suggested that any Republican who votes against Trump would seal his own political fate. Don’t be so sure. Those not up for reelection until 2022 and 2024 (like Utah’s newly elected Senator Mitt Romney, who didn’t even wait to be sworn in to volunteer for the role of Brutus) will feel insulated. Besides, when the crunch comes establishment Republicans fear a harsh word from the Washington Post and New York Times editorial pages more than they do their own voters.

This is not to say that after impeachment Trump will be removed, just that it is well within the realm of possibility. But if it does happen, then what?

One anti-Trumper (who prides himself on “poking Trump’s meth-addled, under-educated fans with a pointy stick.” No elite contempt for the Deplorables there!) ponders whether there would be –

‘…a civil war if Trump is driven from office — e.g., conviction after impeachment, resignation, 25th Amendment -that depends on what happens after, and there is no denying there is a chance of it, but it is highly unlikely. Many — possibly a great many — would believe they were wronged by this outcome, but how many would take up arms, and start shooting? Very few, if any at all. Trump would leave, Pence would become President, and Pence would be given credit for calming and healing the nation.

‘There would be no civil war.

But what happens after? Suppose Trump is put on trial for criminal charges, and then convicted? Or suppose he is pardoned or let off the hook, and then begins a sore-loser populist campaign all over the country, complaining that the Presidency was “stolen” by the “deep state” and that Hillary and “fake news” are responsible? That is when we should reopen the question of civil war.’

Of course if Trump is forced out, it would be precisely a stolen election – in effect, a regime change operation of the sort the same US-UK Deep State has staged in so many other countries – abetted by the lying, fake news (no need for sarcasm quotes) worthy of the former USSR and the Democratic establishment, with the collusion of a substantial element of the GOP.

But the improbable suggestion of Trump’s leading a post-White House rebellion one raises a valid point: if Trump were removed, either politically or physically, what – or who – would be the Deplorables’ rallying point? What or who would constitute the second pivot in what would then aspire to leadership in a new revolutionary situation?

The answer is not obvious. Those threatening various degrees of violent or even “gruesome” responses if the ongoing, anti-constitutional soft coup were to succeed never seem to address the question of what, exactly, the revolt would intend to achieve. Reinstate Trump, assuming that’s even possible? If not him, who – Ivanka? Where and how would pathologically law-abiding middle class Americans, many of them older and in questionable health, vent their rage? March on Washington – and do what when they got there? Torch the local post office?

Sure, devotees of the Second Amendment own more private weapons, so Trump supporters are better armed. But that may change as the violent Left gears up its own paramilitary capabilities secure in the knowledge that authorities turn a blind eye to their violence while regarding even non-violent civic nationalism as subversive.

Unlike the circumstance when the Constitution was adopted and private firearms were as good or better than military ones, there is no comparison today in delivery of devastating, deadly force. Trump himself seems to anticipate that the military would come out on his side:

‘“These people, like the Antifa — they better hope that the opposition to Antifa decides not to mobilize,” Trump said recently. “Because if you look, the other side, it’s the military. It’s the police. It’s a lot of very strong, a lot of very tough people. Tougher than them. And smarter than them … Potentially much more violent. And Antifa’s going to be in big trouble.” […]

‘Some on far-right social media sites are all excited about what they’re calling “Civil War 2.0.” As documented by Dave Neiwert, there are various “Proud Boys” and “Patriots” living a fantasy version of Hank Williams Jr.’s “Country Boys Can Survive” almost entirely online.

‘“If they succeed in impeaching President Trump, then we will back President Trump,” one Georgia militiaman told reporters. “With a use of force if need be.”’

Well, maybe. In a conflict that would look nothing like America’s organized and relatively polite War Between the States (1861-1865) and more like the brutal communal conflicts in Yugoslavia (1991-1995), Spain (1936-1939), or Russia (1917-1922) estimates vary widely on how the military would divide. The same can be said for police forces, some of them heavily militarized.

Or perhaps the historic American nation, whose last-chance champion Trump was elected to be, would give up without a fight and submit to a tyranny that would, eventually, result in some even more fundamental societal collapse.

Americans like to imagine ourselves as rough-hewn, freedom-loving, don’t-tread-on-me rebels. But after decades of corruption and conditioning by politicians, judges, bureaucrats, educators, entertainers, media, advertising, pharmaceuticals, processed foods, etc., today’s Americans may well be among the most docile people on earth.

Maybe that’s how America ends: not with a bang but a whimper. Let’s hope we don’t have occasion to find out.

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Following National Security Advisor John Bolton’s humiliating trip to Turkey this week wherein he was snubbed by President Erdogan for seeking “new conditions” on Trump’s Syria pullout, Bolton has signaled the US could work with Russia to ensure the enduring protection US-backed Kurds once American forces exit. 

Bolton said during an interview with the Hugh Hewitt radio show on Friday that the US remains open to dialogue with Russia over how best to protect the Kurds amidst the troops draw down, which appears to finally be underway in its early phase. “The Kurds are in a very difficult position, and the President [Donald Trump], as he spoke with President Erdogan, thinks that we, they were loyal to us, and we must make sure that they’re not harmed,” Bolton told the Hugh Hewitt radio show. “We’d talk to the Russians about it, too, if need be.”

Referencing the Dec. 14th call that appears the catalyst for Trump’s full US troop draw down in Syria, Bolton described that Trump elicited a guarantee from Erdogan to not attack those particular Kurdish militias that have assisted the US in the anti-ISIS campaign. Bolton explained that Erdogan agreed; however, it could come down to definitions and labels as the Kurdish core of the US-armed and trained Syrian Democratic Forces (SDF) — the YPG — is officially designated by Turkey a terrorist extension of the outlawed PKK. 

Though Bolton brushed off a question related to the humiliating snub by Erdogan, dismissing it as “political” and a bit of domestic grandstanding prior to the upcoming March 31st nationwide elections, he did answer the following million dollar question: as Turkey has again declared readiness for an impending attack on Syrian Kurdish enclaves east of the Euphrates, where American troops are still stationed, how will the US respond if Erdogan gives the order while US forces are still present? 

Bolton answered, “It’s exactly this concern that American service members not be put in jeopardy, especially by a NATO ally, that was principally on President Trump’s mind,” and affirmed that American officials while in Ankara this week made it clear to their counterparts that “the Turks should not take any military action that’s not fully coordinated through military to military channels with us.” Military to military coordination has continued, according to Bolton, even as US-Turkish diplomatic tensions have been severely strained. 

Interestingly Bolton’s words came the same day that Secretary of State Mike Pompeo, speaking from the Middle East, told FOX that the Syrian government is here to stay and that future political negotiations would necessarily involve Assad.

In what constitutes the most significant acknowledgement of Washington’s complete turnaround on Assad to date, FOX described:

Pompeo’s predecessor, Rex Tillerson, said in October 2017, that Syrian President Bashar al Assad had no role in Syria’s political future, but when asked whether that is still the U.S. position, Pompeo today said the Assad regime will be part of those conversations.

“We want to make sure all the options are open as that political discourse begins,” Pompeo said. “We are very hopeful that we will get the bad actors in the region, the Russians and the Iranians, to come to the table, along with the regime and all the other stakeholders in there to come to the table and have conversations about what a post-civil-war political structure might look like in Syria.”

So given that on the same day Bolton opened the possibility of coordination with Russia regarding the Kurds, and Bolton broached the rehabilitation of Assad regarding the rebuilding of Syria, it appears the White House could be ready to give a quiet nod to higher level talks between Assad and the Kurds, with Russian backing – despite current protestations to the contrary based on the official US position that no such rapprochement should take place.    

As we said previously, the reality on the ground that that Kurds are headed towards making a deal with Assad which would provide Syrian Army protection to Kurdish enclaves in the face of the invading Turks — a local solution, fast taking shape, which will occur with or without the blessing of the United States. 

However, Erdogan could race to slaughter Kurdish fighters in towns along the border before this reunion with Damascus takes full shape. 

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Authored by Ryan McMaken via The Mises Institute,

The Transportation Security Administration, a federal agency, is facing a no-show problem with employees, as paychecks are put on hold during the partial government shutdown. This is reportedly leading to longer lines and security problems at airports nationwide.  According to CNN ,

Hundreds of Transportation Security Administration officers, who are required to work without paychecks through the partial government shutdown, have called out from work this week from at least four major airports…

TSA spokespeople, meanwhile, insist everything is completely normal although absenteeism has “increased by 200% to 300%,” according to Marketwatch.

Not everyone was as sanguine about the situation as government officials.

One frequent traveler complained “The lines were exceptionally longer than normal, especially for a peak departure time frame of 8 a.m. to 12:30 p.m.”

Given that the feds admit more employees are skipping work, it’s hard to believe that everything’s humming along normally – unless workers are lowering security standards to get more people through the line quickly.

But, that, of course, is something the feds insist they would never, ever do.

In any case, the whole affair reminds us of just one of the many pitfalls that come with federalizing airport security and making it all part of one giant, nationwide federal bureaucracy.

TSA screeners are federal employees, and their salaries are paid out of a federal budget — of now more than 7 billion dollars. In fiscal year 2018 , more than four billion of the TSA’s 7.5 billion budget came from government appropriations, with the rest coming from fees on passengers and the industry. Since 2017, the Trump Administration has proposed to increasing fees ” to cover 75% rather than 40% of the Transportation Security Administration’s costs.”

But even if the Trump Administration were to get its wish, the TSA would still remain a federal agency with federal employees, and a substantial of its budget would still come from federal appropriations.

In other words, the next time there’s a government shutdown, we’d be looking, yet again, at a situation in which the entire nationwide system of airports would be affected because a tiny number of politicians in DC couldn’t agree on a nationwide budget.

It doesn’t have to be this way. Nor were things this way prior to the federalization of airport security in the wake of the 9/11 terrorist attacks.

Thanks to the George W. Bush Administration, airport security was federalized only two months after 9/11, with Bush proudly declaring at the time: “For the first time, airport security will become a direct, federal responsibility.” There were federal regulations in place dictating how security was conducted, of course, but the employees and the funding were largely decentralized in how they were distributed and used.

As a result, a federal shutdown under a system like this does not mean that the employees won’t get paid or that “non-essential” personnel are simply sent home.

The TSA Doesn’t Keep Us Safe

In response, supporters of the status quo are likely to respond that the TSA “keeps us safe” and only a federalized version of airport security can work.

Unfortunately, for them, there is no evidence to support this position.

First of all, that there has been no serious and successful terrorist hijacking since 9/11 does not prove the effectiveness of the TSA. After all, the creation of the TSA is just one change since 9/11.

Indeed, 9/11-style hijackings were obsolete by the afternoon of September 11, 2001. Their success rested largely on the fact that the airline industry and FAA regulators adhered to a policy of compliance when it came to hijackers. As a report from Stratfor notes:

Before 9/11, aircraft crews were trained not to resist hijackers but to comply with their instructions in an effort to calm the situation and land the plane. Once the aircraft was on the ground, hijackers would then either surrender or be killed by an aircraft entry team. The Federal Aviation Administration never dreamed that terrorists would commandeer an aircraft with the intent to use it as a weapon. Aware of this, the 9/11 attackers simply had to pretend to be typical hijackers to gain the crews’ cooperation and take control of the aircrafts.

A compliance policy will never be used again:

But the advantage Mohammed [Atta] gained by shifting the hijacking paradigm was short-lived, as evidenced by the events that unfolded that morning aboard the fourth aircraft: United Airlines Flight 93.

The attackers who targeted the plane did not account for the fact that its passengers and crew were able to use their cellphones to talk to people on the ground. When they learned what had happened to the three other aircraft, they revolted and forced the hijackers to crash the plane before it could be used to target the U.S. Capitol.

In other words, a major reason that there haven’t been any 9/11-type hijackings since 9/11 is that terrorists know people will react in a completely different way to a potential hijacking.

In the case of Flight 93, the hijackers only got as far as they did because the crew and passengers initially complied. Once the truth was learned, the situation changed dramatically. Now that 9/11 is common knowledge, not even initial compliance could be expected from terrorists. 

Other factors include the placement of air marshals on some planes, and better security for cockpits.

The maintenance of an an enormous corps of federally employed TSA employees has nothing to do with any of these factors.

And then there is the research which shows that the TSA has a 95-percent failure rate in detecting efforts by terrorists to place weapons on commercial flights. Dylan Matthews wrote at Vox in 2016:

The TSA is hard to evaluate largely because it’s attempting to solve a non-problem. Despite some very notable cases, airplane hijackings and bombings are quite rare. There aren’t that many attempts, and there are even fewer successes. That makes it hard to judge if the TSA is working properly — if no one tries to do a liquid-based attack, then we don’t know if the 3-ounce liquid rule prevents such attacks.

So Homeland Security officials looking to evaluate the agency had a clever idea: They pretended to be terrorists, and tried to smuggle guns and bombs onto planes 70 different times. And 67 of those times, the Red Team succeeded. Their weapons and bombs were not confiscated, despite the TSA’s lengthy screening process. That’s a success rate of more than 95 percent.

Defenders of the TSA — much like defenders of the CIA and other “security” organizations — claim that the TSA surely succeeds in stopping terrorists quite often. Those successes, however, are secret and we can’t know about them.

This sort of faith-based trust in government might be convincing for some, but it ought to strike most people capable of critical thinking as nonsensical.

The fact remains — if we exclude the hypothetical “secret files of amazing successes” maintained by government agencies — there is no empirical evidence that the TSA prevents terrorism, and even in theory, we can easily point to other factors that are much more important in the prevention of another 9/11.

On the other hand, the federalization of airport security does create a situation in which national politics can easily create a system-wide failure in airport security that would not be possible in a system without the centralization of the TSA system.

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Authored by Chris Martenson via Peak Prosperity,

Faster consumption + no strategy = diminished prospects

Here in the opening month of 2019, as the US consumes itself with hot debate over a border wall, far more important topics are being ignored completely.

Take US energy policy. In the US press and political circles, there’s nothing but crickets sounding when it comes to serious analysis or any sort of sustainable long-term plan.

Once you understand the role of energy in everything, you can begin to appreciate why there’s simply nothing more important to get right.

Energy is at the root of everything. If you have sufficient energy, anything is possible. But without it, everything grinds to a halt.

For several decades now the US has been getting its energy policy very badly wrong.  It’s so short-sighted, and rely so heavily on techno-optimism, that it barely deserves to be called a ‘policy’ at all. 

Which is why we predict that in the not-too-distant future, this failure to plan will attack like a hungry wolfpack to bite down hard on the US economy’s hamstrings and drag it to the ground.

Shale Oil Snafu

America’s energy policy blunders are nowhere more obvious than in the shale oil space, where it’s finally dawning on folks that these wells are going to produce a lot less than advertised.

Vindicating our own reports — which drew from the excellent work of Art Berman, David Hughes and Enno Peters’ excellent website — the WSJ finally ran the numbers and discovered that shale wells are not producing nearly as much oil as the operators had claimed they were going to produce:

Fracking’s Secret Problem—Oil Wells Aren’t Producing as Much as Forecast

Jan 2, 2019

Thousands of shale wells drilled in the last five years are pumping less oil and gas than their owners forecast to investors, raising questions about the strength and profitability of the fracking boom that turned the U.S. into an oil superpower.

(Source)

The main conclusion of this analysis is that US shale producers have overstated their well output by 10% collectively. And as much as 50% for certain individual companies.

These numbers are easy to collect and analyze. While it’s a great thing to finally have the WSJ show up here, many years later than the independent analysts cited above, they still didn’t get close to the actual truth.

In actuality, the shale plays are going to produce roughly half of what is currently claimed by shale operators.  Instead of a -10% collective hit to production, we should be ready for something closer to -50%.

Not only does that “raise questions” about the role of the U.S. as an oil superpower, it ought to raise alarm bells about its entire energy strategy. 

A Quick Lesson On Strategy

To take a minor detour, I spent several years of my life as a corporate strategy consultant.  These efforts involve teams of people, complex processes, and loads of work.  But if you strip away all of the complex nonsense, a strategy is quite simple.

A strategy is nothing more than thoroughly addressing both parts of this question: Where are you going, and how are you going to get there?

Or put another way: What’s your vision and what are your resources? 

This is true whether you’re a major international corporation, a nation, or an individual.  If you know where you’re going and how you’ll get there – congratulations! – you have a strategy.

Because it’s easy to dream up more “vision”, the vital part of having a strategy is being sure that your vision is both grand but achievable given your resources.

The US has been blessed with abundant oil and natural gas resources.  What it lacks is any sort of a vision about where we’d like to be when those wind down and eventually run out.

Will the US resemble a 3,000 mile wide version of Detroit, full of decay and misery? Or can it engineer an intelligently-planned and executed transition to a complex network of clean and sustainable energy sources, full of hope?

It’s really not an overstatement to say that the US is currently operating without an energy strategy. The vision, such as it is, seems to rest on the idea that sufficient oil will always be found and produced to meet its needs. End of story.

No, It Won’t

While I have a lot of admiration for the technology, the expertise and the diligence of the people working in the oil sector, I have even more respect for geology.

The US began its love affair with oil by going after the conventional reservoirs that sat atop ancient marine shale basins where 400 million years’ worth of ancient sunlight was stored in the form of deposited plankton and algae.

Those conventional reservoirs eventually were all found and tapped. Everyone in the oil space agrees that the biggest of them have all been discovered and there are very few conventional finds left. 

What the shale “revolution” (or “retirement party” as Art Berman more accurately calls it), did was to drill straight into the source rocks themselves. Which require much more energy and cost to coax oil from.

What’s left after the source rocks?  Nothing, that’s what.  There are no “pre-source” rocks to drill into next. 

We’re scraping away at the literal bottom of the geologic barrel, pretending as if that were all perfectly normal and sustainable. It’s neither.

Yes, the shale oil and natural gas extracted by fracking is going to be used. That much is a given. But on what? To continue to allow SUVs and light trucks to continue to be the most popular vehicles sold to US consumers?  

Or to continue to flare off (i.e. burn) excess natural gas from these wells that you can clearly see the wastage from space?

Additionally, fracking has led to shortages of fresh water and sand, as well as pipeline bottlenecks. All of which speak to the blind haste and urgency of the shale business. 

As poor as the economics are for the shale drillers, which have collectively spent some $260 billion more than they have taken in from their operations, things are even worse than commonly understood. As the public is on the hook for billions of dollars worth of road and bridge damage caused by fracking trucks.

In Texas, the road damage might be as much as twice the amount brought in by taxing the oil operation revenues.  So billions of public subsidies go typically uncounted in the overall costs of fracking for shale oil and gas.

In short, shale extraction efforts are being conducted at such a furious pace and with such an absence of strategic planning that even an illegal warehouse rave seems well-organized by comparison:

Meanwhile the US press continues to cheerlead the efforts to rip the oil and gas out of the ground as fast as possible. As if there were some national emergency where there just isn’t time to do things right.

What’s the emergency, we wonder?  What’s so urgently important that we feel the need to cut corners and simply burn our natural gas, a non-reneweable fossil resource, as a waste product into the night sky?

The emergency, we suspect, is that those involved in financing the shale companies don’t want people pausing long enough to ask the right questions, which the WSJ finally did.

Conclusion

Look, I consume oil and gas. I drive a car and I heat my house in the winter.  So I’m not even remotely saying that the shale plays should be summarily abandoned.

What I am saying is that we’re blindly proceeding without any sort of national strategy in place, using up extremely valuable and non-renewable energy resources at a blistering pace.

Should our oil be taken out of the ground so quickly that exporting it to other nations is the only opportunity to ‘get rid of it?’

Maybe. Or maybe not. 

First we’d have to know how much there is (i.e., the resources) and where we hope to be when it runs out (the vision).  If there’s enough to fund both our future visions and export some, too, then OK, go ahead and export it.

The problem, as you know, is that the US has no clear vision for where it would like to be in 20 or 30 years.

If the future is going to be mostly electrified, then there are huge energy expenditures to be made in alternative electricity production and storage, build-out of electric vehicles and mass transit systems, and a complete overhaul of the agricultural system.

I would propose that the energy cost (not the dollar cost) of all that activity is largely unknown. Which means that the US is running the risk of wasting this last bonanza from the shale revolution on frivolous pursuits. 

If the WSJ analysis is right (and they did not consult with any of the experts I trust on the matter) then there’s around 10% less oil in the shale plays than we thought.  Not great, but survivable.

If the analyses I trust are more accurate, then there’s closer to only 50% of what we thought was there. This is a big problem for a nation without any sort of a plan, especially one that has used the shale output to convince itself that oil abundance is always going to be a part of the landscape.

Beyond the significance of not having an energy strategy, there’s the more immediate predicament of how a nation up to its armpits in debt, and sinking rapidly, is going to fare when the great output boom stops and then heads into reverse.

High levels of debt and rising energy costs are a terrible combination. 

We’re placing that collision within the next three years.  Are you prepared for that?

As things stand, the US will blunder into that new era completely unprepared, as one might expect for a nation in decline.

In Part 2: A Bust For The Ages, we dive much further into the path and scope of the coming shale yield shortfall, and detail just how devastating it will be for both government, industry and individuals alike given the massive dependency on current assumptions.

If future output disappoints even by a little, the cascade of ripple effects across the economy as that becomes understood will be extremely painful. But the math clearly shows volumes will disappoint by a lot — so get ready for a bust for the ages.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access).

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