Category: zerohedge

The S&P closed on Friday at a new all time high, with hardly a concern in the world and nothing but blue skies ahead… and then just two tweets from Donald Trump shortly after noon on Sunday afternoon shattered the market’s idyllic picture, when the US president admitted that trade talks with China are not only not going “optimistically”, but have effectively collapsed and tariffs on Chinese imports would be hiked.

The result, discussed overnight, was a “sea of red” as risk assets and currencies across the globe collapsed, offset by a flight into safe assets including Treasuries and the US dollar. The MSCI world index fell half a percent.

Trump sharply escalated tensions between the world’s two largest economies with tweeted comments on Sunday that trade talks with China were proceeding “too slowly”, and that he would raise tariffs on $200 billion of Chinese goods to 25 percent on Friday from 10 percent. The tweets stirred up the near-record calm market mood arising from signs of improving economic growth in China and the United States, and from comments from Trump and other senior U.S. officials that trade talks were going well.

As risk reeled, the VIX headed for its biggest increase in 2019 (something we discussed as a distinct possibility on Sunday afternoon)…

… while futures on the S&P 500 index sank as much as 2.2 percent, tumbling back below 2,900 and approaching the 2,890 level where dealer gamma turns negative, and any continued selloff will only lead to further selling.

European stocks tumbled to a one-month low, suffering their biggest drop of the year…

… as German bond yields slipped back into negative territory. Germany’s DAX was down 1.8% while the Stoxx 600 tumbled 2% to  its lowest level since early April. Moves were slightly exaggerated, with Japanese markets still on holidays while London markets shut for a local holiday.  Losses in equities translated into gains for bonds with benchmark government bond yields in Germany retreating to a shade below zero and not far from a 2-1/2-year low of minus 0.09 percent hit in late March.

Even as Beijing tried to salvage some clam, when China’s foreign ministry said on Monday a delegation was still preparing to go to United States for trade talks, but was unable to confirm when amid signs that a delay is now being considered, the benchmark index in Shanghai crashed 5.6%, with the Shanghai Composite suffering its worst day since February 2016 and sliding back under 3,000 even after Chinese state-backed funds were said to have been active in an effort to limit the sell-off.

Kweichow Moutai Co. and China Life Insurance Co. were among the biggest drags. The S&P BSE Sensex Index dropped 0.9%, driven by Housing Development Finance Co. and HDFC Bank Ltd. The Straits Times Index retreated 3%, its biggest drop in about seven months

Chinese risk tumbled even though the PBOC announced just before 9:30am Monday morning (Beijing time) that the reserve requirements (RRR) for selected small banks will be lowered from May 15, 2019, a move expected to release liquidity of RMB 280 billion. While the PBOC may have already been working on introducing this measure in an effort to ease funding costs for small enterprises, the exact timing of the release may have been accelerated by heightened trade tensions with the US.

Elsewhere in Asia stocks sank, driven by financial and communication firms, even as markets in Japan, South Korea and Thailand remained closed.

Wall Street strategists, until last week worryfree and optimistic, “suddenly” but predictably turned apocalyptic:

• “The market was caught on the wrong foot as everyone expected talks were heading in the right direction and almost close to finishing,” said Daniel Lenz, a rates strategist at Commerzbank. “This was totally out of the blue and the reaction is that we have more risk aversion today.”
• “It’s making the outcomes more binary, with everybody focused on the Friday deadline — there doesn’t seem to be much leeway now to much go past that,” Joyce Chang, chair of global research at JPMorgan Chase & Co., said on Bloomberg Television. “It’s going to mean that investors will be very focused on the trade issues even beyond China,” with a review of U.S. auto-import tariffs still pending.
• “We have continued to warn that U.S.-China talks could still break down, and have ascribed a 30% probability to this risk scenario,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “If this latest exchange were to halt progress and create a series of escalating tariffs as we head into the U.S. election season, it could lead to further declines for global risk assets”
• “If we do see a breakdown in negotiations and the Chinese team doesn’t go to Washington then we will see some really significant downside corrections to the Aussie and kiwi, and a massive upturn in volatility,” said Nick Twidale, chief operating officer at Rakuten Securities Australia Pty in Sydney.

The latest episode in the trade war comes on the back of weeks of low market volatility across asset classes and a growing swathe of tepid but steady economic data with little negative surprises lulling investors into a sense of calm.

Adding to a complex global picture, North Korea carried out a weapons test that potentially included its first ballistic missile launch since 2017, challenging Trump’s bottom line in nuclear talks, while the US reportedly sailed two aircraft carriers to Iran to send a “clear message” that any attack on US interests or allies will be met with unrelenting force.

In FX, Bloomberg USD index is 0.3% higher, with most major pairs trading sideways in the European morning, with USD/CNH up 0.7%, after yuan earlier sank by the most since January 2016. The yen led gains among the Group-of-10 currencies amid renewed trade concerns, while emerging market currencies and commodity-linked currencies were the hardest hit with the Australian dollar falling half a percent against the greenback while the offshore yuan swooned nearly a percent.

In commodity markets, Trump’s tweets sparked a plunge in oil prices. WTI dropped as much as 3.1% to a more-than-five-week low, before bouncing to $60.69 per barrel – still off 1.3% on the day. Brent crude was 1.8% lower at $69.59 per barrel. Meanwhile, the selloff in risky assets burnished the lure of gold with spot gold up 0.25 percent to trade at $1,282.20 per ounce. Cryptos were largely unchanged.

Air Canada, AIG, and Qiagen are among companies reporting earnings.

Market Snapshot

• S&P 500 futures down 1.9% to 2,893.00
• STOXX Europe 600 down 1.4% to 384.90
• MXAP down 1% to 161.39
• MXAPJ down 1.8% to 531.42
• Nikkei down 0.2% to 22,258.73
• Topix down 0.2% to 1,617.93
• Hang Seng Index down 2.9% to 29,209.82
• Shanghai Composite down 5.6% to 2,906.46
• Sensex down 0.9% to 38,608.08
• Australia S&P/ASX 200 down 0.8% to 6,283.73
• Kospi down 0.7% to 2,196.32
• German 10Y yield fell 1.8 bps to 0.007%
• Euro down 0.09% to $1.1188
• Italian 10Y yield rose 0.9 bps to 2.19%
• Spanish 10Y yield fell 1.2 bps to 0.972%
• Brent futures down 1.5% to $69.79/bbl
• Gold spot up 0.3% to $1,283.07
• U.S. Dollar Index up 0.1% to 97.59

Top Overnight News

• Talks between the U.S. and China to resolve their year-long trade standoff appeared to have stalled after Trump’s threat to raise duties. China’s foreign ministry said officials were still planning to travel to the U.S. for the next round of talks, but didn’t confirm when amid signs that a delay was being considered
• Chinese state-backed funds were active in selected stocks on Monday, people familiar with the matter said, seeking to cushion the blow from a sudden escalation in trade tensions with the U.S. Among the funds’ targets were two large oil companies, the people familiar said
• Adding to the mix, North Korea carried out a live-fire military exercise Saturday that potentially included the country’s first ballistic missile launch since 2017, challenging Trump’s bottom line in nuclear talks
• The Turkish lira weakened past a key psychological level against the dollar as traders braced for the prospect of prolonged political turmoil and a global market rout piled pressure on emerging-market currencies
• Economic activity in the euro area showed signs of stabilization in April – both the composite and services Purchasing Managers’ Index for April were higher than the initial estimate which a separate report showed investor confidence in the region rose this month to its highest since November

Asia-Pac indices and US equity futures began the week with heavy losses as US-China trade tensions flared up after President Trump tweeted that the US will raise the 10% tariffs on USD 200bln of Chinese goods to 25% and suggested they will soon extend 25% tariffs to an additional USD 325bln of Chinese goods which are currently untaxed. Furthermore, China’s potential cancellation of this week’s trade discussions in Washington added to the pressure for equity futures and in turn wiped out all of Friday’s gains from the Goldilocks jobs report. ASX 200 (-0.8%) was negative with the index led lower by underperformance in tech and with the top-weighted financials sector also pressured amid losses in ‘Big 4’ bank Westpac after it reported a 24% drop in H1 statutory profit. Elsewhere, all components in the Hang Seng (-3.5%) were negative and the Shanghai Comp. (-5.2%) slumped heavily due to the renewed tariff threats which reportedly could shed 1.5% off China’s GDP growth, while a PBoC liquidity injection and targeted RRR cut for small and medium-sized banks, as well as mixed Caixin Services and Composite PMI data did little to brighten the sentiment in China. As a reminder, Japan and South Korea remained shut for Children’s Day.

US President Trump stated over the weekend that the US will raise the 10% tariffs on USD 200bln of Chinese goods to 25% beginning on Friday and suggested that USD 325bln of additional goods from China which remain untaxed, will be shortly at a rate of 25%, while he suggested the trade agreement with China is proceeding too slowly and firmly rejects efforts to renegotiate. Furthermore, there were also reports that President Trump was told by aides that significant hurdles remain to reaching a trade agreement with China and a source familiar with President Trump’s thoughts on tariffs said that China have been backing away from agreements the US negotiating team believed they had already made. (Newswires/Twitter/Axios) This follows comments from President Trump on Friday that the US is doing fine with China regarding talks and that progress towards a deal are going “pretty well”, while he added that a deal may happen in a couple of weeks although US will be fine if it doesn’t happen.

China is said to be mulling cancelling trade discussions this week following US President Trump’s tariff threats. It was also reported that some working level Chinese officials have postponed their flights to the US and may fly as late as May 8th which is the date of the negotiations and that Chinese Vice Premier Liu He is very unlikely to go to the US this week, However, reports later suggested that Vice Premier Liu could delay his trip by 3 days and shorten it to only 1 day for trade talks.

Subsequently, Chinese Foreign Ministry state that they hope the US can meet China halfway on trade talks the delegation is making preparations to go the US, and Ministry refrained to answer if Vice Premier He will partake in the delegation. Addeed that their Navy has instructed US ships to leave the South China Sea and refrain from such provocative acts.

Top Asian News

• Bharti Is Said to Kick Off IPO of $5 Billion Africa Arm in May
• Japan Set for Golden Week Hangover as Trade War Roils Markets
• Tencent-Backed DouYu Is Said to Delay Launch of $500m U.S. IPO
• Philippines Targets $500M From First Euro Bond Sale Since 2006

Major European Indices [Euro Stoxx 50 -2.0%] have begun the week with heavy losses in-line with their Asian counterparts and US equity futures as markets move back into risk-off mode following US President Trump tweeting that the US will raise tariffs on USD 200bln of Chinese goods from 10% to 25% and indicated that they will consider extending the scope of tariffs to include an additional USD 325bln of goods which are currently not taxed. However, subsequent comments from China’s Foreign Ministry, that they hope the US can meet China halfway on trade talks and that the delegation are preparing to go to the US, did generate a glimmer of positivity across markets. Although, it is still unclear if Vice Premier Liu He will feature in this delegation. Losses across European indices are broad based with no standout under/out performer, and a similar scene is present across sectors. Although, luxury names such as Christian Dior (-3.7%) and Kering (-3.0%) are heavily weighed on by the increased US-China trade tensions. Similarly, auto names are lower due to their supply chains being particularly vulnerable to trade tensions, Volkswagen (-3.5%) have been hit the hardest, with the Co’s CEO previously stating that import tariffs from the US on the EU could cost the Co. billions of euros each year. Other notable movers this morning include ThyssenKrupp (-4.2%) amidst reports that EU anti-trust regulators are likely to block the Co’s proposed merger with Tata Steel due to concerns over potential price increases and the impact on competition; the proposed merger would create Europe’s second largest steel producer and follows comments from Tata Steel’s European Works Council that they do not believe the merger is in the best interest of the Co’s workers. At the other end of the Stoxx 600, and today’s only notable mover in positive territory are Telenor (+4.0%) following reports that the Co. and Axiata have initiated discussions to merge their Asian operations with the Co. likely to own 56.5% of the merger.

Top European News

• Euro-Area Order Growth Signals Some Hope as Economy Stabilizes
• May Is Said to Draft New Customs Law for Brexit Deal With Corbyn
• Race to Replace Draghi Spurs ECB Calls for Fed-Style Rethink
• Costa Stakes Re-Election Claim as Portugal’s Biggest Fiscal Hawk

In FX, while the Usd holds above Friday’s post-NFP lows and the DXY pivots around 97.500, safe-haven positioning in wake of latest US-Chinese trade developments and a diplomatic spat between the 2 nations over naval vessels in the South China Sea has heightened demand for the Yen and Franc. Following Trump tweets threatening to imposes higher tariffs on Usd200 bn worth of Chinese goods this Friday with a further Usd325 bn possibly subject to increased levies, Usd/Jpy reversed through 111.00 and all the way down to circa 110.30, while stops are said to have been tripped in Eur/Chf on a break of 1.1370 pushing the cross towards 1.1350 and the 200 DMA (1.1345). However, some respite has tempered aversion as China’s Foreign Affairs Ministry says a delegation is still preparing to head to Washington this week and subsequently seen rebounds to around 110.70 and 1.1375 respectively.

• GBP/AUD/CAD/NZD/NOK/SEK – The main G10 underperformers and casualties of the broad risk off start to the new week, as Cable probes support ahead of 1.3100 amidst ongoing Brexit uncertainty and the UK public holiday, while the Aussie, Loonie and Kiwi are all trying to stabilise following declines to 0.6963, 1.3493 and 0.6601. Aud/Usd and Nzd/Usd are also maintaining a defensive stance in the run up to RBA and RBNZ policy meetings that are both expected to be ‘live’ in terms of easing prospects, while the deterioration in US-China relations has also undermined oil to the detriment of the Cad and Nok (latter down near 9.8000 vs the Eur). Back down under, hefty option expiry interest may provide support and resistance in Aud/Usd given 1.1 bn at the 0.6950 strike and 1 bn at 0.7000-15. Elsewhere, Eur/Sek is elevated around 10.7200 on the back of another soft Swedish PMI as the services headline dips, albeit still comfortably above the 50.0 threshold unlike manufacturing.
• EUR – Conversely, an upward revision to the final pan Eurozone services PMI despite mixed national surveys, slightly firmer than expected retail sales data and an encouraging Sentix Index have all helped the single currency contain losses within a 1.1200-1.1160 range vs the Dollar. Note also, decent option expiry interest could be keeping the headline pair rangebound as 1.6 bn runs off between 1.1150-60 vs 1.1 bn from 1.1185-1.1200.
• EM – Widespread losses vs the Greenback amidst the aforementioned generally sour sentiment, as Usd/Cnh rallies through 6.8000 at one stage vs the PBoC’s official 6.3744 Usd/Cny fix, while Usd/Zar tests offers ahead of 14.5000 in advance of Wednesday’s SA elections and Usd/Try peers over 6.0000 on the ongoing and well documented Turkish, plus CBRT concerns about (higher) PPI cost pressures exerting and increasingly stronger influence on CPI.

Brent (-1.0%) and WTI (-1.3%) have also succumbed to the general risk tone, although are currently trading within a relatively thin band with prices having recovered from overnight lows which were just a shade below USD 69/bbl and just above the USD 60/bbl levels respectively. Aside from the all-encompassing US-China story news flow for the complex has been somewhat thin, notably Saudi Aramco raised their OSP for all crude grades to all regions (ex-US) for June, with Arab Light’s price falling by USD 0.10/bbl for the US. Gold (+0.3%), along with other safe havens, has benefitted from the increased US-China tension and the resulting risk off sentiment, with the yellow metal now trading towards the middle of a USD 7/oz range which did see it reach USD 1287/oz. Copper, has suffered as the metals largest buyer China returned to market, after a 3-day Labour Day holiday last week, with China playing catchup and sentiment being impacted by updates regarding the potential increase or imposition of tariffs on China. Iron ore port holdings in China fell 1.8% to 133.6mln tons which is the lowest since October 2017. (Newswires)

US Event Calendar:

• Nothing major scheduled
• 9:30am: Fed’s Harker Speaks on the Economic Outlook

via ZeroHedge News http://bit.ly/2H3Qpou Tyler Durden

Just when US equity futures were finally starting to move higher after Dow futures had lingered around the -500 level for most of the morning, President Trump doubled-down on his antagonistic stance toward Beijing, tweeting that the US was done losing “500 billion dollars” a year in trade to China.

The message was clear: Trump isn’t backing down from his threats to hike tariffs and impose new ones, even after sending global markets into paroxysms with a series of tweets on Sunday.

The United States has been losing, for many years, 600 to 800 Billion Dollars a year on Trade. With China we lose 500 Billion Dollars. Sorry, we’re not going to be doing that anymore!

— Donald J. Trump (@realDonaldTrump) May 6, 2019

Trump latest tweet follows reports that Beijing was still planning to send a trade delegation to the US this week, but that Vice Premier Liu He, the official who has led the Beijing side during the now ten rounds of talks that have been held over the past year, might either delay a trip to Washington by a few days, or not go at all. 

It supports the view that, given the market’s robust performance since the start of the year, Trump feels he has the latitude to ratchet up  the pressure on Beijing, given the strength of the labor market and Q1 GDP.

Put another way:

if China was waiting to see if Trump would walk it back he’s not… https://t.co/uiBtjExGVt

— FxMacro (@fxmacro) May 6, 2019

via ZeroHedge News http://bit.ly/2vMfLkh Tyler Durden

Though the US military has repeatedly insisted that its ‘freedom of navigation’ operations in the South China Sea were totally disconnected to trade talks with China, the timing of the latest operation in which two American destroyers sailed within 12 nautical miles of some of the contested Spratly Islands, cast doubt on these claims.

Not long after President Trump sent global markets into turmoil after threatening via tweet to raise tariffs tariffs on $200 billion of Chinese goods, citing frustrations with thee lack of progress in trade talks, US guided-missile destroyers Preble and Chung Hoon traveled within 12 nautical miles of Gaven and Johnson Reefs in the Spratly Islands, infuriating Beijing at a particularly tense time for global markets.

According to Reuters, Seventh Fleet spokesman Commander Clay Doss said the “innocent passage” aimed “to challenge excessive maritime claims and preserve access to the waterways as governed by international law.”

In Beijing, Foreign Ministry Spokesman Geng Shuang, who also tried to reassure markets that the Chinese trade delegation might still travel to Washington for the 11th round of trade talks this week, blasted the US over its decision to carry out the ‘freeop’, Reuters reported.

“The relevant moves by the US ships infringed upon Chinese sovereignty, and damaged the peace, security and good order of the relevant seas. China is strongly dissatisfied with this and resolutely opposed to it,” Geng said.

“China urges the United States to stop such provocative actions,” he added, while threatening that China would continue to take the necessary steps to defend its sovereignty and security.

Military tensions between China and the US in the Pacific have flared as Beijing has carried out menacing military exercises in the Strait of Taiwan, while ratcheting up its rhetoric about reunifying the ‘wayward province’ with the rest of China, something the Taiwanese vehemently oppose.

China claims all of the South China Sea as its territory, and has for years been building out the small islands and reefs and converting them into what Steve Bannon once called ‘immovable air craft carriers.’ Brunei, Indonesia, Malaysia, the Philippines, Taiwan and Vietnam have made competing claims to some of the islands, and an international court ruled a few years ago in favor of the Philippines, though Beijing promptly ignored this ruling. Beijing has repeatedly defended its decision as vital for Chinese security.

But a DoD report released last week warned that Beijing’s efforts to militarize the South China Sea are part of a broader plan to wrest military dominance in the region away from the US. Beijing also criticized the US last month by warning that ‘freeops’ shouldn’t be used to infringe on the rights of other nations.

The latest provocation closely follows a major naval parade meant to mark 70 years since the founding of the Chinese Navy, to which the US only sent a low-level delegation.

Still, with trade tensions flaring and talks in danger of collapsing for the first time in five months, it’s difficult to believe that the timing of this latest freeop – which have, in the past, been totally ignored by markets – is just a coincidence.

via ZeroHedge News http://bit.ly/2PPzPf0 Tyler Durden

With Chinese stocks down a staggering 6% on Monday, Chinese state media scrambled to project an air of calm. Though his comments did little to quiet stormy markets, Chinese foreign ministry spokesman Geng Shuang told reporters Monday that a trade delegation is still “preparing to travel to the U.S. for trade talks” or what was – according to the US, at least – supposed to be the ‘final round’ of negotiations. However, he declined to say whether Vice Premier Liu He would join the delegation, Reuters reported. 

The Global Times, an English language mouthpiece for the Chinese government, affirmed that the delegation’s decision to stick with its travel plans following Trump’s threat to hike tariffs this week over frustrations with the grinding pace of talks (which, until last week, had, according to both sides, had been inching closer to a deal) should be seen as a “gesture of goodwill”).

I got the information that Chinese delegation may still go to the US. This should be seen as a good will from the Chinese side.

— Hu Xijin 胡锡进 (@HuXijin_GT) May 6, 2019

However, the South China Morning Post reported that Liu might delay his trip and leave Beijing on Thursday, three days later than previously scheduled, or possibly cancel the trip altogether.

In any case, Geng said during the press conference that China’s positions were “clear” and that they hoped to work toward a deal that would “benefit both sides”.

“There have been many times that the US side has threatened to increase tariffs,” Geng said when asked about Trump’s tweets on Sunday which threatened to impose punitive tariffs on US$200 billion of imports from China tariffs beginning on Friday. “China’s positions are clear and the US side is well aware of them.”

“[We have hoped] to make progress in our trade talks and [we] hope the US side can work together with us and move in the same direction so we can achieve a deal that can benefit both sides. Everyone in China and abroad is very concerned about the next round of talks, and we are also learning about the relevant changes. The Chinese delegation is preparing to go to the US for the negotiations.”

One analyst told SCMP that the Chinese are familiar with Trump’s tactics, and seemed to imply that China wouldn’t cancel the talks because that would allow Trump to blame them for the collapse.

“If China cancels the trip, Trump would blame China for the failure of the trade negotiations,” he said.

One possible response from China could be to send a smaller delegation to US, he said.

“After the intensive talks, China is familiar with the style of Trump and his administration. Trump’s flip-flop announcement is not a big surprise for China, but China should be prepared for the worse-than-worst scenario,” Lu Said.

But in the US, Dow futures were off more than 500 points, the USD/JPY was off 0.4% to its lowest level since late March, as China’s onshore yuan hurtled toward new lows of 7 to the dollar and oil tumbled 1.5% as the faltering trade talks revived fears about global growth.

Trump’s warning that he planned to move ahead with a planned tariff hike that had been suspended after Trump and President Xi fist agreed to pursue talks during a dinner in Buenos Aires, and then again at the end of February, followed a flurry of reports last week that the Chinese were demanding steep concessions from the US, which had caused talks to stall.

With the market’s four-month streak of steady gains suddenly shattered, all eyes will be on what Trump tweets next.

 

 

 

 

 

 

 

 

 

 

via ZeroHedge News http://bit.ly/2JjLCkz Tyler Durden

Authored by Michael Kern via Safehaven.com,

Just because cryptocurrency is having a bad time of it doesn’t mean crypto thieves aren’t thriving: On the contrary, they’ve managed to nab at least $1.2 billion in the first quarter of this year alone, according to CipherTracecybersecurity firm. That figure includes outright theft from crypto exchanges and complicated digital scams.

If you break it down, theft alone was $356 million for Q1 2019…the rest was fraud.

Even more specifically, exit scams in which crypto company founders steal everything accounted for $195 million in losses.

CiperTrace CEO Dave Jeans blames inadequate regulations and enforcement, noting that “insider issues such as fraud or theft have grown mostly due to operations outside of the U.S. where regulations are poor, or simply due to greed and mismanagement by young management teams at these cryptocurrency companies that are managing hundreds of millions or even billions of dollars”.

For last year, CipherTrace noted in its Q4 Anti-Money Laundering Report that $1.7 billion in “stolen and exit scammed crypto needs laundering”. That figure represented a 3.6-fold increase over 2017 thefts, even though token prices were lower.

The most high-profile exit scam went down in Canada, when an estimated 90,000+ investors on the largest crypto exchange, QuadrigaCX, were left high and dry after the CEO and owner, Gerald Cotten, passed away and took his passwords with him to the grave. Perhaps it wasn’t an outright scam, but it does speak to the crypto exit vacuum that investors have to deal with in this little-known and little-understood digital world. All told, these investors lost around $190 million in fiat and digital tokens that have since been rendered to the black hole.

It was a one-man show that took everyone down with it.

Last summer, Chinese police busted a group of hackers who had allegedly stolen around $87 million in cryptocurrencies in what was the highest-value crypt heist in China so far.

During that same period, South Korea-based Bithumb, the sixth-biggest exchange in the world, revealed that it had lost $30 million to hackers, leading to a temporary shut-down of its services.

And just last week, the New York Attorney General said that over $850 million in crypto had been “misplaced” by Bitfinex. Last Thursday, crypto markets lost a whopping $10 billion in a single hour after New York Attorney General Letitia James accused Bitfinex and Tether of rigging the market in order to hide an $850-million loss. James aid that Bitfinex used up to $700 million in stablecoin Tether’s cash reserves to cover up the losses.

And on the theft side of things, new techniques are popping up at breakneck speed, with crypto thieves using methods. One such method involves “SIM swapping”, a fraud that tricks a provider “into transferring a subscriber’s phone number to a SIM card controlled by someone else”, according to Reuters. And then it’s just a matter of emptying their wallet.

The wider picture, though, is that this is a major global–and even geopolitical problem because it’s the new heart and soul of money-laundering and terrorism financing. From CipherTrace’s perspective, then, it’s a gold mine as it flaunts its AML and ATL wares for the crypto world. With that in mind, CipherTrace is now expecting a whirlwind of new global regulations aimed to make crypto less amenable to the underworld.

via ZeroHedge News http://bit.ly/2vGSe4i Tyler Durden

As if to mark one year since President Trump formally withdrew from the JCPOA – better known as the “Iran Deal” – last May, the foreign ministers of the UK, France and Germany, as well as EU foreign policy head Federica Mogherini, on Saturday issued a statement condemning the White House’s decision, and vowing once again to abide by the terms of the deal.

The statement is the latest sign that Trump’s decision to reimpose sanctions on Iranian oil exports could set up the US for a showdown with its allies in Europe that could accelerate the de-dollarization of the global financial system, as Europe continues to work on an alternative payments system to the Treasury-dominated SWIFT network.

“We, the High Representative of the European Union and the Foreign Ministers of France, Germany and the United Kingdom, take note with regret and concern of the decision by the United States not to extend waivers with regards to trade in oil with Iran,” the European guarantors of the nuclear deal, called the Joint Comprehensive Plan of Action, Politico reports.

The US turned the screws on Iran last week by cancelling all of the waivers on Iranian crude exports it had issued after reimposing sanctions back in November – effectively leaving $1 billion in Iranian crude stranded outside a Chinese port – while also cancelling two of the seven waivers granted to businesses working with Iran’s civilian nuclear program.

Despite the US’s decision to brand Iran’s revolutionary guard as a “terrorist organization,” the Europeans continued to “encourage all countries” to make their “best efforts” to engage in legitimate trade with Iran.

It’s also possible that the Europeans’ statement was intended to calm global oil markets, as the US’s decision to crack down on remaining Iranian oil  exports, combined with the turmoil in Venezuela and Libya, could send oil prices higher (though the Trump administration has sought to offset this by recruiting Iran’s regional rivals to increase their output). The rising tensions between Iran and Saudi Arabia have prompted Iran to warn that the collapse of OPEC could be imminent (should that happen, it’s very likely that a new organization led by Saudi Arabia and Russia could emerge in its place).

And in any case, Iran has vowed to continue exporting its oil in defiance of the Americans’ wishes.

Read the full statement below:

We, the High Representative of the European Union and the Foreign Ministers of France, Germany and the United Kingdom, take note with regret and concern of the decision by the United States not to extend waivers with regards to trade in oil with Iran. We also note with concern the decision by the United States not to fully renew waivers for nuclear non-proliferation projects in the framework of the JCPoA (Joint Comprehensive Plan of Action).  

The lifting of nuclear-related sanctions is an essential part of the JCPoA – it aims at having a positive impact not only on trade and economic relations with Iran, but most importantly on the lives of the Iranian people. We deeply regret the re-imposition of sanctions by the United States following their withdrawal from the JCPoA.   

We remain deeply convinced that the JCPoA is key to increasing stability and security in the Middle East region.  

Together, we emphasise our continued commitment to the JCPoA, a crucial element of the global nuclear non-proliferation regime and essential for our national and shared European security.   

The JCPoA is working and delivering on its goal, as confirmed by the International Atomic Energy Agency (IAEA) in 14 reports.   

We note Iran’s continued compliance with the JCPoA, as repeatedly confirmed by the IAEA. We call upon Iran to continue implementing in full its commitments under the JCPoA as well as its obligations under the Treaty on the Non-Proliferation of Nuclear Weapons.

The remaining participants to the JCPoA are committed to working on the preservation and maintenance of financial channels and exports for Iran, together with third countries interested in supporting the JCPoA. We are determined to pursue efforts, together with other European partners, to enable the continuation of legitimate trade with Iran, including through the operationalisation of the special purpose vehicle “INSTEX”. In this regard, the shareholders are committed to significantly increasing their financial contributions to INSTEX’s operational budget. We encourage all countries, including Russia and China as JCPOA participants, to make their best efforts to pursue the legitimate trade that the agreement allows for, through concrete steps.  

We recall the European Council conclusions adopted on 4 February 2019 and EU’s support for the development of EU-Iran relations in areas of common interest. Complementary to preserving the JCPoA, we support a comprehensive approach with Iran with a view to addressing all issues of concern, including its contribution to regional instability and its missile activities.

 

via ZeroHedge News http://bit.ly/2VQpswI Tyler Durden

The European Union has expressed its “grave concern” about the upcoming drilling to be conducted by Turkey in the Exclusive Economic Zone of Cyprus.

Turkey does not recognize the government in Nicosia or its agreements regarding EEZ. Ankara thinks that the right to extract gas should also be exercised by the Turkish Cypriots and also by Turkey in the case of Blocks 4, 5, 6, and 7, through which – according to Ankara – passes the Turkish maritime border (the map below).

As KeepTalkingGreece reports, in a statement issued on Saturday, EU’s High Representative and Vice President Federica Mogherini said that the European Council had “strongly condemned Turkey’s continuous illegal actions in the Eastern Mediterranean Sea.”

Mogherini pledged to “respond appropriately and in full solidarity with Cyprus.”

Mogherini’s statement:

“We express grave concern over Turkey’s announced intention to carry out drilling activities within the exclusive economic zone of Cyprus. In March 2018, the European Council strongly condemned Turkey’s continued illegal actions in the Eastern Mediterranean. In this context, we urgently call on Turkey to show restraint, respect the sovereign rights of Cyprus in its exclusive economic zone and refrain from any such illegal action to which the European Union will respond appropriately and in full solidarity with Cyprus.”

As we poreviously noted, according to a recent statement from Greece’s Ministry of Foreign Affairs:

“Greek-Turkish disputes over the Aegean continental shelf date back to November 1973, when the Turkish Government Gazette published a decision to grant the Turkish national petroleum company permits to conduct research in the Greek continental shelf west of Greek islands in the Eastern Aegean.

“Since then, the repeated Turkish attempts to violate Greece’s sovereign rights on the continental shelf have become a serious source of friction in the two countries’ bilateral relations, even bringing them close to war (1974, 1976, 1987).”

This friction has only increased with the authoritarian rule of Turkish President Recep Tayyip Erdogan, particularly since, as Uzay Bulut notes:

There is one issue on which Turkey’s ruling Justice and Development Party (AKP) and its main opposition, the Republican People’s Party (CHP), are in complete agreement: The conviction that the Greek islands are occupied Turkish territory and must be reconquered. So strong is this determination that the leaders of both parties have openly threatened to invade the Aegean.

The only conflict on this issue between the two parties is in competing to prove which is more powerful and patriotic, and which possesses the courage to carry out the threat against Greece. While the CHP is accusing President Recep Tayyip Erdoğan’s AKP party of enabling Greece to occupy Turkish lands, the AKP is attacking the CHP, Turkey’s founding party, for allowing Greece to take the islands through the 1924 Treaty of Lausanne, the 1932 Turkish-Italian Agreements, and the 1947 Paris Treaty, which recognized the islands of the Aegean as Greek territory.

This has been Turkish policy despite the fact that both Greece and Turkey have been members of NATO since 1952. Greece became a member of the European Union in 1981 — a status that Turkey has spent decades failing to achieve, mainly due to its human-rights violations.

Recently, EU and Turkish officials met in Brussels on November 30 to discuss an intelligence-sharing agreement between the European Police Service (Europol) and Ankara. Such an agreement is reportedly one of 72 requirements that Ankara would have to meet in order to receive visa-free travel to the Schengen zone.

Ankara’s ongoing challenges to Greek land and sea sovereignty are additional reasons to keep it from enjoying full acceptance in Europe and the rest of the West.

via ZeroHedge News http://bit.ly/2DQPpCu Tyler Durden

Germany’s Health Minister Jens Spahn wants to fine parents who refuse to vaccinate their children €2,500 ($2,800) in a bid to “eradicate measles,” according to an interview Spahn gave to Bild am Sonntag. 

“Anyone going to a kindergarten or school should be vaccinated against measles,” he said, adding “Whoever does not get their child vaccinated, faces up to 2,500 euros in fines.” 

A draft law put forward by Spahn would also throw unvaccinated children out of kindergarten, which he says would help protect children too young to receive immunizations. 

“Kindergartens have children under 10 months of age, who are too young for vaccinations and are therefore especially threatened,” he said. 

According to the Robert Koch Institute of Germany, 93% of children are immunized, however this falls short of the recommended rate of 95% to maintain herd immunity. 

Spahn believes he has broad support for his draft law in the ruling coalition of Chancellor Angela Merkel’s conservatives, to which he belongs, and the left-leaning Social Democrats (SPD).

SPD health policy expert Karl Lauterbach spoke of a “very good basis” for a joint discussion. “It will not work without fines,” he told the Augsburger Allgemeine newspaper. –Reuters

Spahn’s bill has a different solution for parents of older schoolchildren, which are required by law to receive an elementary school education. So instead of removing the children from school, parents would just pay a fine. 

For children with health conditions preventing them from getting vaccinated, such as organ recipients or people suffering from leukemia, parents would be required to provide proof of the medical condition. 

By July 2020, all parents who attempt to sign their kids up for kindergartens or schools would be required top provide evidence that their children have been vaccinated. 

Vaccinations would also become mandatory for hospital and other healthcare workers under the new law – which is currently being discussed in the Cabinet and is expected to be adopted this year, with a March 2020 enforcement date. 

 The World Health Organization (WHO) and the United Nations have repeatedly called for action over a recent increase in measles outbreaks across the world. Measles killed 136,000 people last year, and the number of people infected with the disease surged by 50% compared to 2017.

Developed countries have also seen a rise in measles infections, partly due to a debunked claim that vaccines cause autism. Germany, which has seen large outbreaks in several of its states, registered 170 measles cases in the first two months of 2019. –DW

Opposition parties in Germany have been split over the proposal, particularly among the Greens, who say that while they support vaccinations, they are skeptical about requiring them. 

Greens health policy spokeswoman Kordula Schulz-Asche told public broadcaster ZDF that instead of punishing parents, the government should educate them, and remind to get follow-up vaccines. 

“Compulsory vaccinations are therefore counter-productive,” she said, suggesting that instead “We need a better public health service.” 

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Authored by Tim Daiss via Oilprice.com,

Russia’s second largest natural gas producer, independent player Novatek, has signed up key participation from two state-owned Chinese oil majors in its massive Arctic LNG 2 project. The deals were inked last week at the Second Belt and Road Forum for International Co-operationheld in China. This cements Novatek’s position as Russia’s leading liquefied natural gas (LNG) developer, moving it a step ahead of the country’s two state-backed companies, Rosneft and Gazprom. China National Offshore Oil Corp. (CNOOC) and China National Oil and Gas Development Co. (CNODC), a unit of China National Petroleum Corp. (CNPC), signed up to acquire 10 percent each in the project. CNOOC is also China’s largest offshore oil and gas producer and developer.

Novatek’s chairman, Leonid Mikhelson, welcomed CNOOC’s involvement, saying China was “one of the key consuming markets for our LNG sales.” He added that Arctic LNG 2 would be a “game-changer” in the global gas market and noted the company’s experience from its Yamal LNG project as a demonstration of its ability to carry out operations in the Arctic.

The entry of the CNPC unit, meanwhile, was described by Mikhelson as an “important milestone” for Arctic LNG 2, while he noted the Chinese company’s participation in Yamal LNG. “The accumulated experience of working together is a solid basis for the successful implementation of our new LNG project,” he said. No details have been given yet for the price the Chinese companies paid. French oil major Total also invested in Arctic LNG 2 in March. Novatek, in its first-quarter results, said the sale of a 10 percent stake in the project had resulted in a net gain of $4.8 billion.

Experience

China was instrumental in making the Yamal LNG work. In addition to the participation of CNPC, which acquired a 20 percent stake in 2013, the Silk Road Fund (SRF) purchased a 9.9 percent stake for $1.21 billion in March 2016. SRF also provided a 15-year loan worth some $813 million. Additionally, CNPC signed up to a 20-year off-take agreement, covering 3 million tons per annum (mtpa) of Yamal LNG’s production, indexed to the Japanese Crude Cocktail (JCC) price, the leading LNG pricing benchmark in Asia. The Export-Import Bank of China (China Eximbank) and the China Development Bank (CDB) also provided loans, of $10.4 billion and $151 million in 2016. This came on top of a $4 billion loan from Russian funding.

Massive gas project

The Arctic LNG 2 project will cover three production trains, each with 6.6 mtpa worth of capacity.  An all-important final investment decision (FID) on the project is anticipated later this year, with the first LNG delivery slated for the end of 2023, around the time when most analysts forecast that global LNG markets will pivot from its current overhang to a possible shortage of the super-cooled fuel.

Insatiable gas demand

Chinese LNG demand could reach 80-100 mtpa by 2025, according to various industry forecasts, up from 53.7 million tonnes in 2018. Rising demand for the fuel is part of Beijing’s drive to clean up the air quality of the country’s largest cities, which have been plagued by high air pollution levels for years. This drive has seen an explosion of demand in recent years that has been increasingly met by imports, including U.S.-sourced geopolitically charged gas imports that have also been embroiled in the ongoing trade war between Washington and Beijing. Overall demand for gas is expected to climb to 620 bcm by 2035, according to CNPC, up from at 280.3 bcm in 2018. The oil major has also predicted that domestic production will amount to 300 bcm by 2035, up from 161 bcm last year. This will mean an expansion in imports from 124.7 bcm in 2018 to 320 bcm in 2035.

via ZeroHedge News http://bit.ly/2DPbGQY Tyler Durden

Authored by William Astore via TomDispatch.com,

Six Ways to Curb America’s Military Machine

Donald Trump is a con man. Think of Trump University or a juicy Trump steak or can’t-lose casinos (that never won). But as president, one crew he hasn’t conned is the Pentagon. Quite the opposite, they’ve conned him because they’ve been at the game a lot longer and lie (in Trump-speak) in far biglier ways.

People condemn President Trump for his incessant lying and his con games — and rightly so. But few Americans condemn the Pentagon and the rest of the national security state, even though we’ve been the victims of their long con for decades now. As it happens, from the beginning of the Cold War to late last night, they’ve remained remarkably skilled at exaggerating the threats the U.S. faces and, believe me, that represents the longest con of all. It’s kept the military-industrial complex humming along, thanks to countless trillions of taxpayer dollars, while attempts to focus a spotlight on that scam have been largely discredited or ignored.

One thing should have, but hasn’t, cut through all the lies: the grimly downbeat results of America’s actual wars. War by its nature tells harsh truths — in this case, that the U.S. military is anything but “the finest fighting forcethat the world has ever known.” Why? Because of its almost unblemished record of losing, or at least never winning, the wars it engages in. Consider the disasters that make up its record from Vietnam in the 1960s and 1970s to, in the twenty-first century, the Iraq War that began with the invasion of 2003 and the nearly 18-year debacle in Afghanistan — and that’s just to start down a list. You could easily add Korea (a 70-year stalemate/truce that remains troublesome to this day), a disastrous eight-year-old intervention in Libya, a quarter century in (and out and in) Somalia, and the devastating U.S.-backed Saudi war in Yemen, among so many other failed interventions.

In short, the U.S. spends staggering sums annually, essentially stolen from a domestic economy and infrastructure that’s fraying at the seams, on what still passes for “defense.” The result: botched wars in distant lands that have little, if anything, to do with true defense, but which the Pentagon uses to justify yet more funding, often in the name of “rebuilding” a “depleted” military. Instead of a three-pointed pyramid scheme, you might think of this as a five-pointed Pentagon scheme, where losing only wins you ever more, abetted by lies that just grow and grow. When it comes to raising money based on false claims, this president has nothing on the Pentagon. And worse yet, like America’s wars, the Pentagon’s long con shows no sign of ending. Eat your heart out, Donald Trump!

Eternal MADness

“So many lies, so little time” is a phrase that comes to mind when I think of the 40 years I’ve spent up close and personal with the U.S. military, half on active duty as an Air Force officer. Where to begin? How about with those bomber and missile “gaps,” those alleged shortfalls vis-à-vis the Soviet Union in the 1950s and 1960s? They amounted to Chicken Little-style sky-is-falling hoaxes, but they brought in countless billions of dollars in military funding. In fact, the “gaps” then were all in our favor, as this country held a decisive edge in both strategic bombers and nuclear-tipped intercontinental ballistic missiles, or ICBMs.

Or consider the 1964 Gulf of Tonkin Resolution that served to authorize horrific attacks on Vietnam in retaliation for a North Vietnamese attack on U.S. Navy destroyers that never happened. Or think about the consistent exaggeration of Soviet weapons capabilities in the 1970s (the hype surrounding its MiG-25 Foxbat fighter jet, for example) that was used to justify a new generation of ultra-expensive American weaponry. Or the justifications for the Reagan military buildup of the 1980s — remember the Strategic Defense Initiative (aka “Star Wars”) or the MX ICBM and Pershing II missiles, not to speak of the neutron bomb and alarming military exercises that nearly brought us to nuclear war with the “Evil Empire” in 1983. Or think of another military miracle: the “peace dividend” that never arrived after the Soviet Union imploded in 1991 and the last superpower (you know which one) was left alone on a planet of minor “rogue states.” And don’t forget that calamitous “shock and awe” invasion of Iraq in 2003 in the name of neutralizing weapons of mass destruction that didn’t exist or the endless global war on terror that still ignores the fact that 15 of the 19 September 11th terrorist hijackers came from Saudi Arabia.

And this endless long con of the Pentagon’s was all the more effective because so many of its lies were sold by self-serving politicians. Exhibit one was, of course, John F. Kennedy’s embrace of that false missile gap in winning the 1960 presidential election. Still, the Pentagon was never shy in its claims. Take the demand of the Air Force then for 10,000 — yes, you read that right! — new ICBMs to counter a Soviet threat that then numbered no more than a few dozen such missiles (as Daniel Ellsberg reminds us in his recent book, The Doomsday Machine).

To keep the Air Force happy, Secretary of Defense Robert McNamara settled on a mere 1,000 land-based Minuteman missiles to augment the 54 older Titan II ICBMs in that service’s arsenal, a figure I committed to memory as a teenager in the 1970s. And don’t forget that some of those missiles were MIRVed, meaning they had multiple nuclear warheads that could hit many targets. It all added up to the threat of what, in those years, came to be called “mutually assured destruction,” better known by its all-too-apt acronym, MAD.

And the Pentagon’s version of madness never ends. Think, for instance, of the planned three-decade $1.7 trillion “modernization” of the U.S. nuclear triad now underway, justified in the name of “overmatching” China and Russia, “near-peer” rivals in Pentagon-speak. No matter that America’s current triad of land-based, submarine-based, and air-deployed nukes already leave the arsenals of those two countries in the shade.

Reason doesn’t matter when the idea of a new cold war with those two former enemies couldn’t be more useful in justifying the through-the-ceiling $750 billion defense budget requested by President Trump for 2020. The Democrats have pushed back with a still-soaring budget of $733 billion that accepts without question the “baseline” minimum demanded by Pentagon officials, a level of spending Trump once called “crazy.” Talk about resistance being futile!

In other words, when it comes to spending taxpayer dollars, the Washington establishment of both parties has essentially been assimilated into the Pentagon collective. The national security state, that (unacknowledged) fourth branch of government, has in many ways become the most powerful of all, siphoning off more than 60% of federal discretionary spending, while failing to pass a single audit of how it uses such colossal sums.

All of this is in service to what’s known as a National Defense Strategy (NDS) whose main purpose is to justify yet more prodigious Pentagon spending. As Vietnam War veteran and professor at National Defense University Gregory Foster wrote of the latest version of that document:

“In the final analysis, the NDS is an unadulterated call for a new Cold War, with all its attendant appurtenances: more gluttonous defense spending to support escalatory arms races in all those ‘contested domains’ of warfare; reliance on bean-counting input measures (weapons, forces, spending) for determining comparative ‘competitiveness’; reinforcement and reaffirmation of the sacrosanct American way of war; and the reassuring comfort of superimposing an artificially simplistic Manichean worldview on the world’s inherent complexity and thereby continuing to ignore and marginalize actors, places, and circumstances that don’t coincide with our established preconceptions.”

Such a critique is largely lost on Donald Trump, a man who models himself on perceived tough guys like Andrew Jackson and Winston Churchill. During the 2016 presidential campaign, he did, at least, rail against the folly and cost of America’s wars in Iraq, Syria, and Afghanistan. He said he wanted better relations with Russia. He talked about reinvesting in the United States rather than engaging in new wars. He even attacked costly weapons systems like the sky’s-the-limit $1.4 trillion Lockheed Martin F-35 fighter.

Suffice it to say that, after two-plus years of posing as commander-in-chief, strong man Trump is now essentially owned by the Pentagon. America’s wars continue unabated. U.S. troops remain in Syria and Afghanistan (despite the president’s stated desire to remove them). Relations with Russia are tense as his administration tears up the Cold War-era Intermediate-Range Nuclear Forces Treaty negotiated by Ronald Reagan and Mikhail Gorbachev.

What to make of the president’s visible capitulation to the Pentagon? Sure, he’s playing to his conservative base, which is generally up for more spending on weaponry and war, but like so many presidents before him, he’s been conned as well. The con-man-in-chief has finally met his match: a national security state that, when you consider its record, has had far greater success at lying its way to power than Donald J. Trump.

The Biggest Lie of All

Now, let’s take a hard look at ourselves when it comes to weaponry and those wars of “ours.” Because the most significant lies aren’t the ones the president tells us, but those we tell ourselves. The biggest of all: that we can continue to send young men and women off to war without those wars ever coming home.

Think again. America’s shock-and-awe conflicts have indeed come home, big time — with shocking and awful results. On some level, many Americans recognize this. PTSD (post-traumatic stress disorder) is now a well-known acronym. A smaller percentage of Americans know something about TBI, the traumatic brain injuries that already afflict an estimated 314,000 troops, often caused by IEDs (improvised explosive devices), another acronym it would have been better never to have to learn. Wounded Warrior projects remind us that veterans continue to suffer long after they’ve come home, with roughly 20 of them a day taking their own lives in a tragic epidemic of suicides. Meanwhile, surplus military equipment — from automatic weapons to tank-like MRAPs — made for the mean streets of Iraq are now deployed on Main Street, USA, by increasingly militarized police forces. Even the campus cops at Ohio State University have an MRAP!

Here, Americans would do well to ponder the words of Megan Stack, a war correspondent for the Los Angeles Times who drew on her own “education in war” when she wrote: “You can overcome the things that are done to you, but you cannot escape the things that you have done.” She was undoubtedly thinking about subjects like the horrors of Abu Ghraib prison in Iraq, torture at the CIA’s “black sites,” cities rubblized in the Greater Middle East, and refugees produced by the tens of millions. Somehow, sooner or later, it all comes home, whether we as Americans admit it, or even realize it, or not.

“Here is the truth,” Stack notes:

“It matters, what you do at war. It matters more than you ever want to know. Because countries, like people, have collective consciences and memories and souls, and the violence we deliver in the name of our nation is pooled like sickly tar at the bottom of who we are. The soldiers who don’t die for us come home again. They bring with them the killers they became on our national behalf, and sit with their polluted memories and broken emotions in our homes and schools and temples. We may wish it were not so, but action amounts to identity. We become what we do… All of that poison seeps back into our soil.”

And so indeed it has. How else to explain the way Americans have come to tolerate, even celebrate, convenient lies: that, for instance, Tomahawk missile strikes in Syria could make a feckless figure like Donald Trump presidentialor even that such missiles are beautiful, as former NBC Nightly News anchor Brian Williams once claimed.  Imagine if leading media and political figures boasted instead of taking on the Pentagon, reining in its ambitions, and saving taxpayers trillions of dollars, as well as countless lives here and overseas.

Ending the Pentagon’s Long Con

War is the ultimate audit and, as any American should know, the Pentagon is incapable of passing an audit. Sadly, even when Congress acts to end U.S. support for a near-genocidal war that has nothing to do with any imaginable definition of national defense, in this case in Yemen, President Trump vetoes it. Remember when Candidate Trump was against dumb and wasteful wars? Not anymore. Not, at least, if it involves the Saudis.

The best course for this country, unimaginable as it might seem today, is to fight wars only as a last resort and when genuinely threatened (a sentiment that 86% of Americans agree with). In other words, the U.S. should end every conflict it’s currently engaged in, while bringing most of its troops home and downsizing its imperial deployments globally.

What’s stopping us? Mainly our own fears, our own pride, our own readiness to believe lies. So let me list six things Americans could do that would curb our military mania:

1. Our nuclear forces remain the best in the world, which is hardly something to brag about. They need to be downsized, not modernized, with the goal of eliminating them — before they eliminate us.

2. The notion that this country is suddenly engaged in a new cold war with China and Russia needs to be tossed in the trash can of history — and fast.

3. From its first days, the war on terror has been the definition of a forever war. Isn’t it finally time to end that series of conflicts? International terrorism is a threat best met by the determined efforts of international police and intelligence agencies.

4. It’s finally time to stop believing that the U.S. military is all about deterrence and democracy, when all too often it’s all about exploitation and dominance.

5. It’s finally time to stop funding the Pentagon and the rest of the national security state at levels that outpace most of the other major military powers on this planet put together and instead invest such funds where they might actually count for Americans. With an appropriate change in strategy, notes defense analyst Nicolas Davies, the U.S. could reduce its annual Pentagon budget by 50%.

6. Finally, it’s time to stop boasting endlessly of our military strength as themeasure of our national strength. What are we, Sparta?

The Pentagon will never be forced to make significant reforms until Americans stop believing in (and consenting to) its comforting lies.

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