Category: zerohedge

One week after his Watergate colleague, Carl Bernstein, helped author a widely debunked story alleging that Michael Cohen had evidence that President Trump gave the OK for the infamous June 2016 Trump Tower meeting, Washington Post editor Bob Woodward has strategically “leaked” (to his own newspaper) the first excerpts from his upcoming book about the Trump administration. And if the non-stop coverage enjoyed by Michael Wolff’s “Fire and the Fury” is any indication, Woodward’s book will likely dominate the conversation in Washington for the two months between now and the midterms (just as God, and the Washington Post, intended).

Woodward’s book – aptly titled “Fear” – includes explosive anecdotes about the lengths to which members of the Trump administration reportedly went to stop the president from acting on what they believed to be dangerous impulses. Staffers reportedly went as far as grabbing papers off the president’s desk to stop him from acting rashly. Woodward’s book was reportedly drawn from meeting notes, personal diaries and government documents given to him by administration officials, as well as hundreds of hours of interviews with administration officials and “other principals,” according to WaPo.

A central theme of the book is the stealthy machinations used by those in Trump’s inner sanctum to try to control his impulses and prevent disasters, both for the president personally and for the nation he was elected to lead.

Woodward describes “an administrative coup d’etat” and a “nervous breakdown” of the executive branch, with senior aides conspiring to pluck official papers from the president’s desk so he couldn’t see or sign them.

Again and again, Woodward recounts at length how Trump’s national security team was shaken by his lack of curiosity and knowledge about world affairs and his contempt for the mainstream perspectives of military and intelligence leaders.

The most explosive claims have a common theme: Either senior Trump administration officials expressing their frustration about the president’s behavior, or stories of Trump insulting members of his cabinet and administrative staff.

Woodward illustrates how the dread in Trump’s orbit became all-encompassing over the course of Trump’s first year in office, leaving some staff members and Cabinet members confounded by the president’s lack of understanding about how government functions and his inability and unwillingness to learn.

One of the most scathing quotes was attributed to Chief of Staff John Kelly, who reportedly called Trump an “idiot” adding that he had gone “off the rails” and that “I don’t know why any of us are here.”

White House Chief of Staff John F. Kelly frequently lost his temper and told colleagues that he thought the president was “unhinged,” Woodward writes. In one small group meeting, Kelly said of Trump: “He’s an idiot. It’s pointless to try to convince him of anything. He’s gone off the rails. We’re in Crazytown. I don’t even know why any of us are here. This is the worst job I’ve ever had.”

Kelly’s predecessor, Reince Priebus, was also on the receiving end of some scathing comments from Trump, who reportedly told former staff secretary Rob Porter to ignore Preibus’s orders, describing the then-chief-of-staff as “a little rat” who “just scurries around.”

Reince Priebus, Kelly’s predecessor, fretted that he could do little to constrain Trump from sparking chaos. Woodward writes that Priebus dubbed the presidential bedroom, where Trump obsessively watched cable news and tweeted, “the devil’s workshop,” and said early mornings and Sunday evenings, when the president often set off tweetstorms, were “the witching hour.”

Trump apparently had little regard for Priebus. He once instructed then-staff secretary Rob Porter to ignore Priebus, even though Porter reported to the chief of staff, saying that Priebus was “‘like a little rat. He just scurries around.'”

Commerce Secretary Wilbur Ross was “past your prime.”

Trump told Commerce Secretary Wilbur Ross, a wealthy investor eight years his senior: “I don’t trust you. I don’t want you doing any more negotiations. … You’re past your prime.”

Former National Security Advisor HR McMaster wore tacky suits that made him look like “a beer salesman.”

Few in Trump’s orbit were protected from the president’s insults. He often mocked former national security adviser H.R. McMaster behind his back, puffing up his chest and exaggerating his breathing as he impersonated the retired Army general, and once said McMaster dresses in cheap suits, “like a beer salesman.”

Defense Secretary Jim Mattis reportedly disregarded an order from Trump to assassinate Syrian leader Bashar al-Assad following last year’s (alleged) chemical weapons attack.

After Syrian leader Bashar al-Assad launched a chemical attack on civilians in April 2017, Trump called Mattis and said he wanted to assassinate the dictator. “Let’s fucking kill him! Let’s go in. Let’s kill the fucking lot of them,” Trump said, according to Woodward.

Mattis told the president that he would get right on it. But after hanging up the phone, he told a senior aide: “We’re not going to do any of that. We’re going to be much more measured.” The national security team developed options for the more conventional airstrike that Trump ultimately ordered.

Some of the most withering criticism was reserved for Attorney General Jeff Sessions, whom Trump mocked as “mentally retarded” and a “traitor”.

A near-constant subject of withering presidential attacks was Attorney General Jeff Sessions. Trump told Porter that Sessions was a “traitor” for recusing himself from overseeing the Russia investigation, Woodward writes. Mocking Sessions’s accent, Trump added, “This guy is mentally retarded. He’s this dumb Southerner. … He couldn’t even be a one-person country lawyer down in Alabama.”

Notably, President Trump refused to cooperate for the book, though Woodward made several attempts to contact him (Trump eventually called the veteran reporter in August to say he’d changed his mind, only to be told that the manuscript had already been completed).

The 448-page book was obtained by The Washington Post. Woodward, an associate editor at The Post, sought an interview with Trump through several intermediaries to no avail. The president called Woodward in early August, after the manuscript had been completed, to say he wanted to participate. The president complained that it would be a “bad book,” according to an audio recording of the conversation. Woodward replied that his work would be “tough,” but factual and based on his reporting.

While the claims seem tailor-made for the headlines, it’s worth keeping in mind that many of Wolff’s claims were challenged or debunked (though this didn’t receive nearly as much attention on MSNBC as the original claims). Still, that book did have real-world impact and was widely viewed as the final straw that led to Steve Bannon’s ouster from the West Wing. Given this, we can’t help but wonder: Will Trump use this as an excuse to do some early house cleaning (both Kelly and Sessions have long been rumored to be on their way out).

Trump famously lashed out at Bernstein, calling him a “degenerate fool” and invoking his alleged gambling addiction and widely publicized divorce from ex-wife Nora Ephron. We look forward to seeing what the president has in store for Mr. Woodward.

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Less than a month after black Chicagoans called Rahm Emanuel a “con man” as protesters expressed their outrage over the lack of economic development on the South and West Sides of the city, compared to the North Side, as gang violence continues to plague their neighborhoods.

“Rahm Emanuel is a con man. His whole job is to keep black folks divided,” one man told Fox News’ Gianno Caldwell, who covered the march, adding that Emanuel “doesn’t care about anybody” except his own neighborhood and his own family, while another woman said Emanuel seems to care more about illegal immigrants in the city.

“African-Americans, we’re citizens, and our ancestors built this country,” she told Caldwell, whose younger brother survived a shooting last year that killed his best friend.

NBC Chicago reports  that the Chicago mayor will not seek re-election.

In a last-minute press conference, the mayor revealed he would not be seeking a third term after serving since 2011.

“This has been the job of a lifetime but it is not a job for a lifetime,” he said.

Emanuel said he and his wife Amy, who was standing by his side during the announcement, decided to “write another chapter together” as their three children have left for college.

“[Amy] and I look forward to writing the next chapter in our journey together,” an emotional Emanuel said. “I will always be here for the future of this great city. Not as mayor, but in the most important role anyone can play – as a citizen.”

“From the bottom of my heart, thank you, God bless you and God bless the people of Chicago,” he said as he ended his announcement.

The upcoming race began to take shape, with potential candidates already throwing their hats into the ring, including former Chicago Police Supt. Garry McCarthy, who was fired by Emanuel in the wake of the release of video showing the fatal police shooting of Laquan McDonald.

 

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Two weeks after Nomura’s Charlie McElligott noted that he was observing “a multi-month performance disaster for US equity funds”, as a result of hedge funds getting caught offside by yet another vicious short squeeze, coupled with low net leverage and beta exposure, and insufficient exposure to “momentum” stocks, the cross-asset specialist writes today that as part of the call to get long “Momentum” factor in U.S. Equities (which finished August +9.5%), Hedge Fund Long-Short funds have “grabbed” at market exposure, with the bank’s internal metrics showing that L/S funds took up their “Beta to the S&P” to the 100th %ile, in large part thanks to ripping “Momentum Longs”, noting that the “beta to Mo Longs” now 96th %ile, from 44th %ile a week ago.”

At the same time, the broader Asset Manager category has also been “grabbing” at SPX as expected off the multi-month performance drag, adding a monster +$13.9B of S&P futures last week.

This has helped the Hedge Fund HFRX Equity Hedge Index regain some ground in the second half of August, although even with the recent rebound the index is still barely changed YTD and sorely underperforming the S&P500.

And while we noted yesterday that the post-Labor Day period has traditionally meant smooth sailing into the end of the year, with the S&P yet to post a decline in the last 4 months of the year, some are becoming skeptical, and as McElliggott writes, just as the rest of the hedge fund space is levering up for the “momentum” chase, macro funds are are reducing their exposure to “risk-proxies” here:

Equities exposure shows Macro fund “Beta to SPX” at just 4th %ile (cut from 32nd %ile); “Beta to Nikkei” 36th %ile; “Beta to Eurostoxx” at only 1st %ile and “Beta to EEM” at just 1st %ile as well

Macro is also selling the bounce in Crude, with “Beta to CL1” cut to 38th %ile from 50th %ile

Yet having correctly predicted the sharp move higher amid the performance scramble in late August, the Nomura strategist now warns that “due to the massive +++ PNL move in “1Y Momentum,” I am now getting much more tactical”, and makes the following derisking recommendations:

• I have now taken-profits on 1/2 of the trade and will continue to reduce exposure as funds clearly “pre-positioned” into Sep seasonality / “window dressing” phenomenon
• I will likely keep on the “Short Momentum Shorts” leg into the back-half of September, as there is historical weakness in “High Beta” / “Volatility” (while “Low Vol” / “Defensives” rally in the final two weeks of the month)

Last, but perhaps most important, is McElligott’s observation that September has a distinct calendar pattern to it, with equities set-up for a “rally in front half of month, sell off in back half”, as shown in the chart below.

What would catalyze such a move this time? Why the same positional rotation that prompted the furious August rally:

Funds “forced-into” the melt-up at start of month / +++ historic for the first two weeks, just before post-expiry dealer gamma comes off and the “buyback blackout” picks-up for many of the largest S&P sectors.

This is what the seasonal performance for September has looked like over the period 1994-2017.

And some more details on why September is a “tale of two halves”: “Risk on” from 9/1 TO 9/15 before seeing a defensive reversal over the final two weeks of September:

Finally the “1Y momentum” algos also appear to be aware of this September calendar quirk, and have traditionally exploited the performance:

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Confirming the old adage that people love ‘free stuff’, in the month since Fidelity unveiled the first no-fee index fund, the massive asset manager has seen its new funds flooded with $1 billion in AUM.

On August 1st, the closely-held Fidelity announced it would offer two new index funds to individual investors with a zero expense ratio. The funds, which will track indexes Fidelity created, will give investors exposure to the total U.S. stock market and an international benchmark.

One month later, things have started well, as  Bloomberg reports  that the Fidelity Zero Total Market Index Fund attracted $753.5 million through Aug. 31, while the Fidelity Zero International Index Fund gathered $234.2 million, according to Fidelity’s website.

“A billion in a month is a great showing when you consider that the funds are available only to retail investors,” said Ben Johnson, head of global ETF research at Morningstar Inc.

Incidentally, since inception, the Total Market Index Fund has outperformed the S&P 500 in August…

While Fidelity, which manages $2.5 trillion, is best known for its actively-managed funds, in the past few years it has aggressively gone after rivals in the “passive” index arena, and now has about $400 billion in index mutual funds according to Bloomberg.

Russel Kinnel, director of manager research at Morningstar, said the zero-price funds might attract new business. “Fidelity has lots of ways to make money from customers once they are in the door,” he said. “This could work for them.”

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President Trump renewed his attack on “Fake News” coming from the mainstream media, suggesting that NBC’s license to broadcast should be challenged due to their “fumbling around” and “making excuses” for killing the Harvey Weinstein story, which Trump called “probably highly unethical,” adding “Look at their license?“

NBC FAKE NEWS, which is under intense scrutiny over their killing the Harvey Weinstein story, is now fumbling around making excuses for their probably highly unethical conduct. I have long criticized NBC and their journalistic standards-worse than even CNN. Look at their license?

— Donald J. Trump (@realDonaldTrump) September 4, 2018

And while there wasn’t a specific reference to the FCC, Trump seemed to be suggesting that federal regulators review the network’s license after trading barbs with former correspondent Ronan Farrow – who said Monday night: “The story was twice cleared and deemed ‘reportable’ by legal and standards only to be blocked by executives who refused to allow us to seek comment from Harvey Weinstein”  

pic.twitter.com/8vBcYvsl52

— Ronan Farrow (@RonanFarrow) September 4, 2018

Weinstein notably hired a private firm run by former Israeli Mossad agents in a failed attempt to silence his accusers and prevent The New York Times and The New Yorker from publishing allegations of sexual harassment, assault and rape – according to an explosive New Yorker article by Farrow. The firm, US-based Black Cube, was referred to Weinstein by former Israeli Prime Minister Ehud Barack, and promotes itself as “a select group of veterans from the Israeli elite intelligence units.” 

Meanwhile, former NBC News producer Rich McHugh took a swipe at the network, advocating for an independent investigation of what happened. 

Following his remarks to the New York Times last week that NBC News committed a “massive breach of journalistic integrity” in not running Farrow’s Weinstein reporting, ex-NBC Investigative Unit producer Rich McHugh took another strong swing at his old employer late Monday. In a tweet, McHugh advocated an “independent investigation” of what happened,  saying that “the release of an internally drafted report without a complete investigation and transparency for participants only raises more questions than answers.” –Deadline

NBC recently published a memo and “fact sheet” from Andy Lack regarding their handling of the Harvey Weinstein sexual assault story that was never aired. Here is my response: pic.twitter.com/H9RbsW78jB

— Rich McHugh (@RichMcHughNBC) September 4, 2018

What’s more, one of Weinstein’s accusers, Emily Nestor, backed Farrow – saying late Monday that she was “immensely disappointed in, but not surprised to read NBC’s recent comments.” 

This isn’t the first time Trump has suggested NBC’s broadcast license should be called into question. Last October, Trump lashed out after the network “made up a story” that he wanted a “tenfold” increase in the US nuclear arsenal, which he called “pure fiction.” 

With all of the Fake News coming out of NBC and the Networks, at what point is it appropriate to challenge their License? Bad for country!

— Donald J. Trump (@realDonaldTrump) October 11, 2017

“That was just fake news by NBC, which gives a lot of fake news lately,” Trump said Wednesday during a brief interaction with the White House press pool ahead of a meeting with Canadian Prime Minister Justin Trudeau. “It’s frankly disgusting the way the press is able to write whatever they want to write. And people should look into it.” –Politico 

And while last October’s outburst was in response to unfavorable coverage, Trump’s Tuesday tweet takes aim at the network shutting down an unfavorable report on Weinstein, who posted $1 million bail after his arrest in late May. 

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Jeff Bezos was already the richest man in world history, but thanks to the surge in Amazon’s share price today – becoming the third company in history to top $1 trillion market capitalization (after Apple and PetroChina) – his net worth is up almost $70 billion in 2018, nearing $170 billion.

After a brief dip on its earnings, Amazon has not looked back, surging above the key $2050.27 briefly ($2050.50 highs) to become another trillion-dollar market cap company…

Amazon reached this milestone almost exactly one month after Apple. Next up – Microsoft or Alphabet?

Do not worry though – Amazon is not a bubble!

Interestingly, few remember that Apple was not the first company globally to ever hit $1 trillion in market capitalization.

The feat was achieved momentarily by PetroChina in 2007, after a successful debut on the Shanghai Stock Exchange that same year.

And as we noted previously, the $800 billion loss it experienced shortly after is also the largest the world has ever seen.

*  *  *

This pushes Bezos’ dominance of the global wealth leagues even higher…

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Submitted by Nick Cunningham at Oilprice.com

Earlier this year, Venezuelan President Nicolas Maduro rolled out his latest scheme to rescue his economy, offer an alternative to the increasingly worthless bolivar, and skirt U.S. sanctions on financial transactions. But Maduro’s cryptocurrency, supposedly backed by Venezuela’s oil reserves, is a very hollow promise.

To be sure, few analysts expected much from the “petro,” Maduro’s hastily launched cryptocurrency. One petro was supposed to be backed by one barrel of oil, and the vast reserves of oil located in a specific part of Venezuela were promised as a backstop for the new cryptocurrency. It was always an odd scheme. After all, what makes the petro any different from the bolivar, Venezuela’s official currency? Isn’t the value of and faith in the bolivar also effectively backed by the country’s oil wealth?

Well, the bolivar is worthless, and Maduro wanted to start anew. Maduro thought the petro would help the government avoid the reach of U.S. sanctions, at least in theory. But the new cryptocurrency has unsurprisingly failed to catch on.

The petro is supposed to be backed by 5 billion barrels of oil located in Atapirire, a small town in Venezuela’s remote savanna in the middle of the country. Reserves in this region are the lynchpin of the petro, and as such, they are intended to underwrite the regime’s plan for economic recovery.

But as Reuters details in a special report, the region is not only lacking in oil production, but there is no visible effort at developing oil in this area at all. The only evidence of an oil presence were old rigs that have clearly been inoperable for a long time, as they are rusted out and covered in weeds. “There is no sign of that petro here,” a local resident told Reuters. Worse, the town suffers from blackouts, hunger, poverty and decrepit infrastructure, an increasingly common plight for the country on the whole.

More broadly, there is “little evidence of a thriving petro trade,” Reuters correspondent Brian Ellsworth concluded, after interviewing dozens of cryptocurrency experts over a period of months. Maduro says that the sale of the petro have translated into $3.3 billion in funds for the government, a claim that is suspect, to say the least.

Even a cabinet minister involved in the project told Reuters that “nobody has been able to make use of the petro…nor have any resources been received,” and that the technology for the digital token is still under development. And unlike other initial coin offerings (ICOs) for startup cryptocurrencies, which can point to digital records of transactions, there is little evidence that supports Maduro’s notion that trading activity of the petro is thriving.

Adding to the monetary confusion is the assertion by Maduro that the bolivar is now pegged to the petro. It’s not even clear what that means in practice, and experts say its “unworkable,” according to Reuters. “There is no way to link prices or exchange rates to a token that doesn’t trade, precisely because there is no way to know what it actually sells for,” Alejandro Machado, a Venezuelan computer scientist and cryptocurrency consultant who has closely followed the petro, told Reuters.

It would all be laughable if the economic meltdown in Venezuela wasn’t so dire and the oppression and mismanagement from the Maduro government didn’t exact such massive a human toll.

Meanwhile, Venezuela’s oil production continues to erode at a rapid rate. Output fell to just 1.278 million barrels per day in July, down roughly 50,000 bpd from a month earlier and down more than 500,000 bpd since the fourth quarter of 2017.

There is almost no chance of improvement for the foreseeable future. Argus Media reported last week that Venezuela’s crude exports could fall by a third in September because of a tanker collision at an export terminal run by PDVSA. The terminal’s capacity could be hampered by around 425,000 bpd for the month. “But this assumes that PdV manages to repair and restart the dock operations by 30 September at the latest,” a PDVSA terminal official told Argus.

Thus, the meltdown continues. Maduro is going to need to come up with something better than a hapless and inept attempt at a new cryptocurrency to resolve the country’s deep depression.

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…It seems the tables have turned.

As Russian citizens prepare to head to the polls on Sunday to vote in regional elections, a senior Russian diplomat has revealed that Moscow has uncovered a US interference effort involving a Silicon Valley tech giant and activists opposed to the government of Russian President Vladimir Putin.

Following a briefing on the matter, senior Russian diplomat Andrey Nesterenko told Russia’s Interfax news agency that the US “certainly does” meddle in the Russian electoral processes, as RT reported. The revelation followed reports that Russia has resumed a major airstrike of a reputed terrorist stronghold in Idlib province over the objections of President Trump, who warned that such a strike would be a humanitarian disaster.

“Our collective opinion is that electoral sovereignty is a principle that all civilized nations should respect” the diplomat said, adding that Moscow will notify “our American partners that the actions of their media outlets allow us to state that they are close to breaking Russian law.”

Specifically, Nesterenko was referring to a possible violation of Russian election laws by Google parent Alphabet, which hosted advertisements for an illegal campaign rally organized by Russian opposition leader Aleksey Navalny. Navalny is calling for protests to denounce the vote, which he believes is biased. To help spread the word, Navalny’s public movement is using paid ads on Google services like YouTube. However, holding an event dedicated to an election campaign on the same day as the vote goes against Russian law. The Russian Central Election Commission, media watchdog Roskomnadzor, and the Russian Anti-monopoly Service have reportedly informed Google about these illegal activities being carried out on its platform.

“Living in a proper law-abiding nation, we expect every actor to play by the rules. Especially an informed player. If the opposite happens, I believe we have tools at our disposal [to address that],” Andrey Kashevarov, the deputy head of FAS, said.

Vadim Subbotin, the deputy head of RKN, said YouTube ads “serve as a conduit for incitement of anti-social behavior during the election campaign.” He said Google and other social media platforms “offer virtually unrestricted instruments” to “individuals seeking to destabilize the situation in Russia.”

The revelations are just the latest example of US hypocrisy when it comes to election interference following reports that the FBI tried to recruit Russian oligarchs as informants. Aluminum magnate Oleg Deripaska, who was targeted by US sanctions earlier this year,  recently admitted in an interview with the Hill’s John Solomon that he colluded with the US government between 2009 and 2016, working as an FBI asset to try and free kidnapped former agent Robert Levinson. 

While the US hoped to glean information about Russian interference from these assets, they provided little help. Meanwhile, the cooperation of President Trump’s purported “Russian backchannel” with the US government is the latest piece of evidence pointing to the US government’s duplicity when it comes to interfering in the affairs of other nations.

As a reminder, the US is no stranger to this type of interference, as the map below clearly shows:

 

 

 

 

 

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In what we initially assumed was a satire piece, NBC News’ ‘fair and balanced’ political chief Chuck Todd has taken to the auspiciously open-minded pages of The Atlantic to pen an op-ed  explaining how we’ve all got it all wrong – it is Fox News’ Roger Ailes who is to blame for press distrust and in fact, it is time for the mainstream liberal media to ‘rise up’ and defend their work.

Presented with no comment (but some emphasis), here is Chuck Todd explaining that “It’s time for the press to stop complaining… and start fighting back.”

Via The Atlantic,

A nearly 50-year campaign of vilification, inspired by Fox News’s Roger Ailes, has left many Americans distrustful of media outlets. Now, journalists need to speak up for their work.

I’ve devoted much of my professional life to the study of political campaigns, not as a historian or an academic but as a reporter and an analyst. I thought I’d seen it all, from the bizarre upset that handed a professional wrestler the governorship of Minnesota to the California recall that gave us the Governator to candidates who die but stay on the ballot and win.

But there’s a new kind of campaign underway, one that most of my colleagues and I have never publicly reported on, never fully analyzed, and never fully acknowledged: the campaign to destroy the legitimacy of the American news media.

Bashing the media for political gain isn’t new, and neither is manipulating the media to support or oppose a cause. These practices are at least as old as the Gutenberg press. But antipathy toward the media right now has risen to a level I’ve never personally experienced before. The closest parallel in recent American history is the hostility to reporters in the segregated South in the 1950s and ’60s.

Then, as now, that hatred was artificially stoked by people who found that it could deliver them some combination of fame, wealth, and power.

Some of the wealthiest members of the media are not reporters from mainstream outlets. Figures such as Rush Limbaugh, Matt Drudge, and the trio of Sean Hannity, Tucker Carlson, and Laura Ingraham have attained wealth and power by exploiting the fears of older white people. They are thriving financially by exploiting the very same free-press umbrella they seem determined to undermine.

Much of the current hand-wringing about this rise in press bashing and delegitimization has been focused on the president, who – as every reporter in America sadly knows – has declared the press the “enemy of the people.” But, like much else in the Trump era, Donald Trump didn’t start this fire; he’s only spread it to a potentially more dangerous place.

The modern campaign against the American press corps has its roots in the Nixon era. President Richard Nixon’s angry foot soldiers continued his fight against the media even after he left office.

Roger Ailes, who went on to help found Fox News, was the most important of those figures. His sustained assault on the press created the conditions that would allow a president to surround himself with aides who argue for “alternative facts,” and announce that “truth isn’t truth.” Without Ailes, a man of Trump’s background and character could never have won. Roger Ailes was the godfather of the Trump presidency.

Nixon’s acolytes blamed the press for drumming a good man out of office. From their perspective, his crimes were no different from the misdeeds of the Kennedys or Lyndon B. Johnson—but only Nixon was held to account. Did they blame this on Nixon? On the voters? No, they blamed the stars of the Watergate drama, the heroes of All the President’s Men. They blamed the media.

Enter Roger Ailes.

He first made his name by taking credit for Nixon’s rise in Joe McGinniss’s campaign book, The Selling of the President 1968. Ailes was a media genius who understood better than most how to use television to move people. There’s a fine line between motivating people through TV messages and simply manipulating them. Ailes’s gift, and the secret to his success, was his comfort in plunging across that line and embracing the role of TV manipulator.

He made his name as a political TV-ad man, one of the pioneers of the field, but he couldn’t help dabbling in news and talk. As a network programmer, Ailes excelled at matching a mood with an audience. From Mike Douglas to Limbaugh to, later, Chris Matthews and Bill O’Reilly, Ailes had a gift for promoting engaging, smart, man-of-the-people talkers.

In the early ’90s, while he was president of CNBC, Ailes had a hunch that an evening lineup catering to a culturally conservative audience would thrive. He wanted to give his theory a chance, but he was passed over for the leadership of the network’s new channel, MSNBC. Enter Rupert Murdoch. The mogul bought into Ailes’s theory, and in 1996 they launched Fox News with the slogan “Fair and balanced.”

From the very beginning, Ailes signaled that Fox News would offer an alternative voice, splitting with the conventions of television journalism. Take the word balanced. It sounded harmless enough. But how does one balance facts? A reporting-driven news organization might promise to be accurate, or honest, or comprehensive, or to report stories for an underserved community. But Ailes wasn’t building a reporting-driven news organization. The promise to be “balanced” was a coded pledge to offer alternative explanations, putting commentary ahead of reporting; it was an attack on the integrity of the rest of the media. Fox intended to build its brand the same way Ailes had built the brands of political candidates: by making the public hate the other choice more.

Ailes’s greatest gift as a political strategist lay not in making his clients more electable, but in making their opponents unelectable. His last formal presidential campaign was in 1988. Then–Vice President George H. W. Bush was on his way to defeat when Ailes helped orchestrate a devastating campaign against Michael Dukakis, exploiting a series of superficial issues that touched many voters’ cultural beliefs and fears about everything from the Pledge of Allegiance to furloughs for violent felons. Ailes helped destroy Dukakis by making him seem an other to many Americans.

Fox News adopted a similar strategy, rarely showcasing its own reporting or journalism. There are some great journalists at Fox, including Chris Wallace, Bret Baier, and Shep Smith, but it’s not an organization that emphasizes journalism. Instead, Ailes created an organization that focuses on attacking the “liberal media” whose “liberal bias” was ruining America. Almost anybig story that was potentially devastating to a conservative was “balanced” with some form of whataboutism. The Ailes construction has been so effective that these days, I often get mail from viewers who say: Now that you’ve focused on all of President Trump’s misdeeds, you are biased if you don’t dedicate the same amount of time to Hillary Clinton’s misdeeds. It seems completely lost on this segment of the population that one person is the leader of the free world, and the other is a retiree living in the suburbs of New York City. Because journalists report on new and controversial ideas all the time, it’s not uncommon for us to be accused of championing an idea—think of same-sex marriage—that some members of our audience find objectionable. Letting folks know that a movement is afoot, and documenting its successes and failures, is our job. But Ailes exploited the public’s lack of knowledge of journalistic conventions, portraying reports aboutsocial change as advocacy for such change. He played up cultural fears, creating the mythology of a biased press.

Reporters, I fully acknowledge, bring their own biases to their work. The questions they ask, and the stories they pursue, are shaped by things as simple as geography. I grew up in Miami; I follow Cuban politics more closely than many other Americans did. As a result, when I covered the White House, I was more likely than my colleagues to ask questions about Cuba. A New York–based reporter may approach reporting on guns, or on evangelical Christianity, differently than a reporter in Pensacola, Florida.

The charge of media bias can encompass a great many different problems. Critics, for example, may be pointing to the way that certain journalists pay more attention to some issues than to others, or complaining about the unquestioned assumptions reflected in journalists’ work. These are real issues, and most journalists labor to correct them. At the other extreme, critics may be accusing journalists of having deliberately and consciously shaped their reporting to serve some political end. That sort of overt bias is far rarer. Ironically, the best example of this kind of bias airs regularly in prime time on Fox News.   

But this was the genius of Roger Ailes. He didn’t sweat the nuance; he exploited it. Errors of omission and commission, inadvertent inattention and willful disregard, unconscious assumptions and deliberate distortions—Ailes collapsed all of it into the single charge of bias.

And what did we reporters do in the face of this cable onslaught that would eventually turn into a social-media virus and lead us to the election of the most fact-free presidential candidate in American history? Nothing.

We did nothing, because we were trained to say nothing. Good reporters know that they have to let the chips fall where they may, and that criticism comes with the gig. We know that the loudest squealers are usually the ones we’ve exposed doing something untoward—and that eventually they’ll get theirs.

“Don’t engage” is a phrase I’ve heard internally at NBC over the decade I’ve been here. And “Don’t engage” was a mantra that I actually believed in. I embraced it. On most days, I still want to believe that eventually, the truth will matter. That eventually, folks will see through the silly name-calling and recognize good reporting.

In fact, we not only failed to defend our work in real time from this onslaught; we helped accelerate the campaign to delegitimize the American press corps. From unforced errors by high-profile anchors to the biggest missed news story of the 21st century—the lack of weapons of mass destruction in Iraq—we have handed critics some lethal ammunition. There’s not a serious journalist alive who hasn’t had one of those “gulp” moments when you realize that you really messed up. But serious journalists correct the record, serious journalistic organizations allow themselves to be held to account, own up to mistakes, and learn from them so they can do a better job the next time. I’m fully aware that some entity will try to tarnish this piece simply because I work at a news organization that, yes—gasp—has made mistakes. Here’s what comforts me: The record is there for all to see. The same can’t be said for the manipulators who aren’t playing by any set of serious journalistic rules.

The American press corps finds itself on the ropes because it allowed a nearly 50-year campaign of attacks inspired by the chair of Fox News to go unanswered.

If you hear something over and over again, you start to believe it, particularly if the charge is unrebutted. The Trump team now keeps pounding this message, compounding the challenge. And the president faces little penalty with his voters, no matter how disparagingly he talks about the press corps; it’s precisely what Ailes conditioned them to believe.

For me, idle death threats are now the norm. (I don’t take them seriously, because if I did, I’d never feel at peace.) But forget the personal animus or safety issues reporters now face. American democracy requires a functioning press that informs voters and creates a shared set of facts. If journalists are going to defend the integrity of their work, and the role it plays in sustaining democracy, we’re going to need to start fighting back.

The idea that our work will speak for itself is hopelessly naive. Fox, Limbaugh, and the rest of the Trump echo chamber have proved that. Meanwhile, even in Ailes’s absence, Fox seems more comfortable than ever pushing the limits of responsible behavior by a supposed news organization. It recently allowed a sitting state attorney general to co-host a show for three days. The network effectively gave a GOP candidate for Florida governor nearly unfettered access to its airwaves during his primary campaign, providing a more significant boost than any super pac can offer. The fact that so few viewers batted an eye shows how conditioned they have become to the network’s unique ethical standards.

Does this mean that other cable-news networks should follow Fox News’s lead and become advocates? That’s not the answer. Newspapers did this in the early 19th century, when they operated as arms of the political parties. And while American democracy survived, the polarization of the early republic produced threats, brandished weapons, and even open violence on the floors of Congress with shocking regularity.

Instead of attacking rivals, or assailing critics—going negative,in the parlance of political campaigns—reporters need to showcase and defend our reporting. Every day, we need to do our job, check our facts, strive to be transparent, and say what we’re seeing. That’s what I’ve tried to do here. I’ve seen a nearly 50-year campaign to delegitimize the press, and I’m saying so. For years, I didn’t say a word about this publicly, and at times I even caught myself drawing false equivalencies because I was afraid of being labeled as biased. I know that stating the obvious will draw attacks, but I’ve also learned that the louder critics bark, the more they care about what’s being reported.

I’m not advocating for a more activist press in the political sense, but for a more aggressive one. That means having a lower tolerance for talking points, and a greater willingness to speak plain truths. It means not allowing ourselves to be spun, and not giving guests or sources a platform to spin our readers and viewers, even if that angers them. Access isn’t journalism’s holy grail—facts are.  

The truth is that most journalists, in newsrooms large and small across the country, are doing their best each day to be fair, honest, and direct. These values are what Americans demand of one another, and it should be what they demand of their media. The challenge for viewers and readers is this: Ask yourself why someone is so determined to convince you not to believe your lying eyes.  

*  *  *

Congratulations Chuck, Orwell would be proud.

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President Xi Jinping will send his right-hand man to North Korea as nuclear negotiations between Pyongyang and Washington recently hit a snag. SCMP reports that Li Zhanshu – chairman of the National People’s Congress and the third-ranking official in the ruling Communist Party’s Politburo Standing Committee – will go to North Korea on Saturday.

Li will attend the 70th anniversary event to mark North Korea’s founding on Sunday. He will be travelling as a special representative of Xi, indicating that the president is not likely to attend the event himself as an earlier report suggested. Li will be the highest level Chinese official to visit North Korea since Xi came to power in 2012. The last Politburo Standing Committee member to go to Pyongyang was Liu Yunshan, in 2015.

President Trump said in late August that he did not believe Beijing was “helping with the process of denuclearisation as they once were” – a remark that sparked anger in China whose foreign ministry described as “contrary to the facts.” Li’s visit comes as progress has stalled between Washington and Pyongyang following the landmark summit between Trump and North Korean leader Kim Jong-un in Singapore in June.

Critically, late last month, Trump cancelled a planned trip to the North by Secretary of State Mike Pompeo. That was followed by Jim Mattis saying America did not plan to suspend more joint military drills with South Korean forces amid reports Pyongyang was rejecting US demands to give up its nuclear warheads.

So why not Xi?

A Pyongyang official told South Korean media in July that the North had invited Xi for the 70th anniversary event, but Beijing did not confirm the reports. Analysts said sending Li was the “most appropriate” arrangement for China.

“With Trump stepping up his rhetoric against China over trade and North Korea, Xi going to Pyongyang would probably reinforce his thinking that Beijing has not been enthusiastic enough about denuclearisation,” said Zhang Baohui, an international relations professor at Lingnan University in Hong Kong. “Sending Li as a top official representative will help as a goodwill gesture to North Korea, but it avoids reinforcing Trump’s thinking.”

Boo Seung-chan, a research fellow at the Yonsei Institute for North Korean Studies in Seoul, said Xi appeared to have made a strategic decision to protect China’s national interests by trying to improve its relations with the US.

“If Xi went to Pyongyang after Trump’s warning, it could worsen the US tariffs situation for China and this ‘assertive China’ view held by other nations,” Boo said, adding that more trade actions would also make it difficult for China to pursue its goals.

“However, this does not mean relations between China and North Korea will worsen. Xi has carefully chosen his right-hand man, who he trusts to go in his place, which will show Pyongyang that it’s still important to Beijing … China’s strategy has not changed and so its relations and policies towards the North are also unlikely to change,” Boo said.

The anniversary on September 9 is one of the hermit kingdom’s most important annual holidays, along with the birthdays of late leaders Kim Il-sung and Kim Jong-il.

Lu Chao, a Korean affairs expert at the Liaoning Academy of Social Sciences, said sending Li to the anniversary celebrations was a sign China wanted to keep the momentum going in its relations with North Korea, even though Xi did not appear to be attending the event: “It means that China still holds its relations between the state and party of North Korea in high regard, and it’s a sign of China’s support for North Korea’s strategy.”

Finally, Michael Kovrig, senior adviser for Northeast Asia at the International Crisis Group, said Li would have the political savvy and foreign policy experience to gather insights about Pyongyang’s intended approach to negotiations with the US and South Korea. He added that sending Li to the event showed that North Korea’s standing had improved in China’s eyes.

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