Category: zerohedge

In its latest annual letter, released at 8am on Saturday, Warren Buffett’s Berkshire Hathaway said Q4 profit hit an all time high, rising more than five time, as net income soared to a record $32.44 billion, or $19.790 a share, from $6.29 billion, or $3.823 the prior year, while operating EPS fell 24% to $3,338, hurt by losses in the company’s insurance operations, however it was enough to beat the $2,617 consensus estimate.

For the full year, Berkshire earned $44.940 billion, up 87% last year’s $24.1 billion, despite “only” an 8% increase in total revenue to $242.1 billion. Where did the delta come from? Largely from Trump’s tax reform, which needless to say Berkshire was not a big fan of.

As Berkshire admits in its annual report, while the gain in net worth during 2017 was $65.3 billion – which increased the per-share book value of both our Class A and Class B stock by 23% –  $29.11 billion of its net income to the reduction of the U.S. corporate tax rate, to 21 percent from 35 percent.

As Buffett admits in starting the letter, “the format of that opening paragraph has been standard for 30 years. But 2017 was far from standard: A large portion of our gain did not come from anything we accomplished at Berkshire.”

The $65 billion gain is nonetheless real – rest assured of that. But only $36 billion came from Berkshire’s operations. The remaining $29 billion was delivered to us in December when Congress rewrote the U.S. Tax Code attributed roughly $29.11 billion of its net income to the reduction of the U.S. corporate tax rate, to 21 percent from 35 percent, that President Donald Trump signed into law in December.”

Next, on the increasingly sensitive topic of Berkshire’s mounting cash pile – which as discussed yesterday is invested mostly in Treasury bills – it grew to $116 billion at year-end, up from $109 billion in the third quarter.

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First a few thoughts on what was not discussed in the letter: the most notable omission appears to be the lack of succession discussion – which is particularly notable given yesterday’s news that Buffett would retire from the board of Kraft Heinz.

Last month, Buffett elevated Ajit Jain and Greg Abel – the two most likely candidates to succeed Buffett and Charlie Munger atop the Berkshire Hathaway hierarchy – to vice chairmen, which the financial press widely interpreted as a signal that Buffett was toying with retirement.

Other things missing: any discussion on Wells Fargo, the recently announced Bezos-Buffett-Dimon employee health plan, Buffett’s traditional American bullishness… oh, and bitcoin.

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Before moving on to discuss his company’s performance in greater detail, Buffett advised readers about a change in GAAP that could lead to significant distortions in Berkshire’s numbers:

After stating those fiscal facts, I would prefer to turn immediately to discussing Berkshire’s operations. But, in still another interruption, I must first tell you about a new accounting rule – a generally accepted accounting principle (GAAP) – that in future quarterly and annual reports will severely distort Berkshire’s net income figures and very often mislead commentators and investors.

The new rule says that the net change in unrealized investment gains and losses in stocks we hold must be included in all net income figures we report to you. That requirement will produce some truly wild and capricious swings in our GAAP bottom-line. Berkshire owns $170 billion of marketable stocks (not including our shares of Kraft Heinz), and the value of these holdings can easily swing by $10 billion or more within a quarterly reporting period.

Including gyrations of that magnitude in reported net income will swamp the truly important numbers that describe our operating performance. For analytical purposes, Berkshire’s “bottom-line” will be useless. The new rule compounds the communication problems we have long had in dealing with the realized gains (or losses) that accounting rules compel us to include in our net income. In past quarterly and annual press releases, we have regularly warned you not to pay attention to these realized gains, because they – just like our unrealized gains – fluctuate randomly.

That’s largely because we sell securities when that seems the intelligent thing to do, not because we are trying to influence earnings in any way. As a result, we sometimes have reported substantial realized gains for a period when our portfolio, overall, performed poorly (or the converse).

As Buffett points out, coverage of corporate earnings releases is often instantaneous, with media reports focusing on the year-over-year change in GAAP net income. Buffett said he would try to alleviate this problem by methodically explaining how the company’s per-share earning power – the key metric that he and Munger use to evaluate the company’s performance – changed during the quarter, and also by continuing their longtime practice of releasing earnings reports late Friday or early Saturday, when markets are closed – allowing investors more time to digest the material.

Acquisitions:

Addressing a topic near and dear to the company’s shareholders, Buffett lamented the lack of well-priced acquisition opportunities and reiterated his advice that individuals should avoid debt and invest passively. He also said that Berkshire needs to make “one or more huge acquisitions” to increase Berkshire Hathaway earnings, but admitted that finding a deal at “a sensible purchase price” has become a challenge.

“Prices for decent, but far from spectacular, businesses hit an all-time high” in 2017, preventing Berkshire from spending more cash on acquisitions, Buffett said, fondling his $116BN. “Our smiles will broaden when we have redeployed Berkshire’s excess funds into more productive assets.”

Buffett said that a debt-fueled “purchasing frenzy” binge by deal-hungry chief executives is making that task very difficult. “Price seemed almost irrelevant to an army of optimistic purchasers,” Buffett said. “The ample availability of extraordinarily cheap debt in 2017 further fueled purchase activity.”

In terms of M&A activity, Berkshire was notably inactive during 2017, largely thanks to one recurring factor: Buffett’s inability to find sensibly-valued companies:

While the rest of the world embarked on an M&A frenzy fueled by cheap debt and the incessant cheerleading of investment bankers, Buffett says he and Munger sleep well at night because of their aversion to taking on debt.

As Buffett says, it’s foolish to risk what you have – and something you need – for something you don’t.

In our search for new stand-alone businesses, the key qualities we seek are durable competitive strengths; able and high-grade management; good returns on the net tangible assets required to operate the business; opportunities for internal growth at attractive returns; and, finally, a sensible purchase price.

That last requirement proved a barrier to virtually all deals we reviewed in 2017, as prices for decent, but far from spectacular, businesses hit an all-time high. Indeed, price seemed almost irrelevant to an army of optimistic purchasers.

Why the purchasing frenzy? In part, it’s because the CEO job self-selects for “can-do” types. If Wall Street analysts or board members urge that brand of CEO to consider possible acquisitions, it’s a bit like telling your ripening teenager to be sure to have a normal sex life.

Once a CEO hungers for a deal, he or she will never lack for forecasts that justify the purchase. Subordinates will be cheering, envisioning enlarged domains and the compensation levels that typically increase with corporate size. Investment bankers, smelling huge fees, will be applauding as well. (Don’t ask the barber whether you need a haircut.) If the historical performance of the target falls short of validating its acquisition, large “synergies” will be forecast. Spreadsheets never disappoint. The ample availability of extraordinarily cheap debt in 2017 further fueled purchase activity.

After all, even a high-priced deal will usually boost per-share earnings if it is debt-financed. At Berkshire, in contrast, we evaluate acquisitions on an all-equity basis, knowing that our taste for overall debt is very low and that to assign a large portion of our debt to any individual business would generally be fallacious (leaving aside certain exceptions, such as debt dedicated to Clayton’s lending portfolio or to the fixed-asset commitments at our regulated utilities). We also never factor in, nor do we often find, synergies.

Our aversion to leverage has dampened our returns over the years. But Charlie and I sleep well. Both of us believe it is insane to risk what you have and need in order to obtain what you don’t need. We held this view 50 years ago when we each ran an investment partnership, funded by a few friends and relatives who trusted us. We also hold it today after a million or so “partners” have joined us at Berkshire.

Berkshire’s one notable deal was the purchase of a 38.6% partnership interest in truck stop operator Pilot Flying J, which Buffett describes as “far and away the nation’s leading travel-center operator.” Berkshire, Buffett explains, is obligated to increase its partnership interest to 80% in 2023.

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Check back for updates…

Read the report in its entirety below (pdf link):

via Zero Hedge http://ift.tt/2GHO9QZ Tyler Durden

Authored by James George Jatras via The Strategic Culture Foundation,

Republicans love to caricature Democrats as big spenders whose only approach to any problem is to throw money at it. As with most caricatures, it is made easy by the fact that it is mostly true. At least when it comes to domestic entitlement programs, nobody can top the party of FDR and JFK when it comes to doling out goodies to favored constituencies paid for by picking someone else’s pocket.

However, Republicans are hardly the zealous guardians of the public purse they would have us believe. While quick to trash their partisan opponents for making free with taxpayers’ money, they are no less happy to do the same – at least when it’s called “national defense.”

Over the next five years, the Trump administration will spend $3.6 trillion on the military. The GOP-controlled Congress’s approved, with Republicans voting overwhelmingly in the affirmative, the “Bipartisan Budget Act of 2018” (HR 1892) and the “National Defense Authorization Act for Fiscal Year 2018” (HR 2810). With respect to the former, the watchdog National Taxpayers Union urged a No vote:

‘An initial estimate of approximately $300 billion in new spending above the law’s caps barely scratches the surface in terms of total spending. The two-year deal also includes $155 billion in defense and non-defense Overseas Contingency Operations (OCO) spending, $5 billion in emergency spending for defense, and more than $80 billion in disaster funding. $100 billion in proposed offsets are comprised of the same budget gimmicks taxpayers have seen used as pay-fors over and over and are unlikely to generate much of a down-payment on this new spending.’  

Senator Rand Paul (R-Kentucky) poses the question that few in Washington – and certainly few Republicans – are willing to ask: “Is our military budget too small, or is our mission too large?” He notes:

‘Since 2001, the U.S. military budget has more than doubled in nominal terms and grown over 37% accounting for inflation. The U.S. spends more than the next eight countries combined.

It’s really hard to argue that our military is underfunded, so perhaps our mission has grown too large. That mission includes being currently involved in combat operations in Iraq, Syria, Afghanistan, Somalia, Niger, Libya, and Yemen. We have troops in over 50 of 54 African countries. The wars in Iraq and Afghanistan have cost over a trillion dollars and lasted for over 15 years.’

Defense spending is about survival, right? If you need to spend it, you spend it. But realistically, how does one assess whether spending is too much or too little without looking at the strategy the military is tasked with carrying out, and whether it makes any sense?

Proponents of increased – always increased – spending, like Defense Secretary James Mattis, point to real problems with increased accident rates due to poor training or equipment maintenance or the fact that most army brigades and navy planes are not ready for combat. But is that a symptom of too little money or of a force stretched beyond its limits by conducting operations anywhere and everywhere with little regard for actual U.S. interests?

That doesn’t matter politically, though. The message is, if you don’t support giving more money, you are guilty of neglecting the nation’s security and of killing service personnel. No wonder only a brave handful of Republican legislators consistently are willing to say No, like Senator Paul and a few House members: Justin Amash (Michigan), John Duncan (Tennessee), Walter Jones (North Carolina), Raul Labrador (Idaho), and Thomas Massie (Kentucky).

Here’s a crazy idea. What if instead of taking for granted a national security policy that seeks to maintain U.S. supremacy over every square inch of the globe we figure out what our real defense needs are – protecting our own country, not mucking about in the rest of the world – and then structure and fund the forces we need? What would that look like?

To start with, we know what it doesn’t look like: the policies followed by Presidents and Congresses of both parties for the past three decades since the Berlin Wall came down.  While the Trump administration’s new National Security Strategy (NSS) takes a commendable but befuddled nod toward genuine American interests – Pillar I (defense of American borders and tightening immigration controls to keep dangerous people out) and Pillar II (ending unfair trade practices and restoring America’s industrial base) – the real meat and potatoes is in Pillar III (“Preserve Peace Through Strength”), which could have been drafted by any gaggle of George W. Bush retreads – and no doubt was – or for that matter by Obama holdovers.

The NSS’s Pillar III is little more than a rehash of the usual litany of “threats” from China, Russia, North Korea, Iran, etc. It’s symptomatic that these are clustered under “Strategy in a Regional Context” as Indo-Pacific (a perfectly ridiculous concept that could best be summed up as “China – bad!”), Europe (“Russia – bad!”), Middle East (“Iran – bad!”), and South and Central Asia.  Next comes the region that should be our first concern, but isn’t: the Western Hemisphere (“Cuba and Venezuela – bad!”).  Last comes Africa (well, at least we can agree on something), but we still need a dedicated Africa Command (which for some reason is located not in Africa but in Stuttgart, Germany).

Still, just suppose that by some wild unpredictable accident we ended up with a strategy that in some way resembled the “America First!” prioritization Donald Trump promised us? Here’s a possible broad sketch:

1. Western Hemisphere comes first, not last. As they say in New England, “Good fences make good neighbors.” Presumably good walls make even better neighbors. Whatever happened to controlling our own border with Mexico, which was the cornerstone of President Donald Trump’s campaign? That remains hostage to political horse-trading and a budgetary game of chicken in the Washington Swamp. As far as the political class is concerned, the Wall can wait until mañana.

At the same time, the U.S. is all too happy to meddle in our neighbors’ internal affairs under the justification of “democracy promotion.” Recently Secretary of State Rex Tillerson claimed such meddling was an expression of the Monroe Doctrine, which he said “clearly has been a success, because… what binds us together in this hemisphere are shared democratic values.” Really? That would have been big news to President James Monroe, who promulgated the Doctrine back in 1823 when no other country in the Americas could be described as a democracy and when even most of the U.S. Founding Fathers would have disputed that label for the Republic they sought to create. Monroe’s declaration had nothing to do with democracy. Rather, its core was a warning to other powers not to establish colonies in our hemisphere, an exclusion which we have considered essential to our security for almost two centuries. Even as a relative infant on the international scene, long before our young nation had emerged as a power on a par with those of Europe, the United States considered it reasonable to ask other powers not to step on our toes in our own neighborhood.

2. Respecting the “Monroe Doctrines” of other powers: The regional deference the United States has demanded in our own area for nearly 200 years is precisely the one we today refuse to accord to other respectable powers, namely China and Russia, by conceding the primacy of their security interests in, respectively, the former Soviet space and in the western Pacific. Instead – as under Bill Clinton, Barack Obama, George W. Bush – the Trump administration still rejects the principle of “spheres of influence,” which in practice means not only asserting mastery in the Western Hemisphere but over every square inch of the globe. Today not a single sparrow falls to the ground anywhere but that a divinely omniscient and omnipotent Washington must have the last word about it – generously lubricated with rhetoric about democracy, human rights, rule of law, and other invocations of “universal principles.”

Despite suggestions from the foreign policy establishment, neither China nor anyone else is threatening the sea lanes in the South China Sea. Even America’s closest regional partners do not want to be pushed into a military confrontation with China to suit the agenda of “indispensables” in Washington. American concerns about North Korea can only be solved with Beijing’s security respected – and without the presence on the peninsula of almost 30,000 American “tripwire” troops and tens of thousands more in Japan.

In Europe, NATO forces should stand back from Russia’s borders and territorial waters.  NATO expansion should be ended – even after the Trump administrations ill-advised decision to induct tiny and corrupt Montenegro – while a new security architecture in Europe takes shape. The Alliance’s 2008 pledge to bring in Georgia and Ukraine should be withdrawn. Better yet, get us out of NATO entirely! We and our European friends should be finding a way to cooperate with Russia on pulling Ukraine out of its political and economic crisis as a united, neutral state, not pumping in lethal weapons so touch off renewed large-scale fighting.

An American accord with Russia and China is the stable tripod of any rational global peace, and no one else really matters at the moment. Russia boasts the world’s greatest landmass and natural resources unrivalled by any other country. She also has the only nuclear arsenal comparable to America’s. China is the most populous country in the world, with an economy achieving a par with ours and a burgeoning military sector. If American policy had been designed to alienate both of these giants and drive them to cooperate against us – and maybe it was designed to do that – it could not have been more successful.

3. Get the hell out of the Middle East and Central Asia. The NSS risibly refers to the undesirability of America’s earlier “disengagement” from the region, evidently a reference to the Obama administration’s not being quite as bellicose as its authors might prefer (for example, only supporting terrorists in Syria, not invading the place outright), Of dubious value even in its time, President Jimmy Carter’s 1980 declaration that the Persian Gulf region lies within thevital interests of the United States is only a dangerous absurdity now.  The entire region designated under the goofy moniker “Greater Middle East” is a welter of ethnic and religious antagonisms and unstable states that for America have only two things in common: (1) they ain’t us, and (2) they ain’t nowhere near us. It’s not America’s job to sort the place out, via such fool’s errands as nation-wrecking in Libya and Syria, nation-building in Afghanistan and Iraq (after wrecking them), and “mediating” to “solve the problem” of the Israelis and the Palestinians.

The sole interest the U.S. and the American people have in the region is to ensure that jihad terrorism doesn’t achieve a sufficient foothold as to present a threat to us here. However, our regional efforts have instead served to increase and import that threat, not diminish it. American policy toward the region should rest on two pillars: (1) limiting our contact with it, above all drastically cutting down immigration from the area and, hence, the prospect of importing more terrorists; and (2) instead of favoring terrorism-supporting regimes like Saudi Arabia and Pakistan, defer to countries with more direct interests in the region but who also have a fundamentally anti-jihad outlook, principally Russia, China, and India. Let them babysit Afghanistan.

Other than that – include us out.

Granted, this is only an outline, but it’s a start.

Back to the matter of Republicans’ penchant for overspending on the military, the force needed for this concept of “America First!” – one that focuses first of all on defending our territory and people – could only be a fraction of what we spend now.

Wouldn’t it be great to finally get that “Peace Dividend” we were promised until George H.W. Bush decided he’d rather build a New World Order starting in Kuwait?

via Zero Hedge http://ift.tt/2Fs6x0T Tyler Durden

We now have supporting evidence that Baltimore is the “nation’s most dangerous city,” according to a new report issued by USA Today’s crime desk. The implosion of Baltimore’s inner city comes as little surprise to us, considering our recent reporting of out of control murders and violent crime plunging the town into turmoil after the Ferguson effect (2015).

“Baltimore is the big city with the highest per capita murder rate in the nation, with nearly 56 murders per 100,000 people. At 343 murders in 2017, the city tallied the highest per capita rate in its history,” USA Today wrote on Sunday.

The newspaper analyzed 2017 law enforcement crime data from the 50 largest cities across the nation and discovered that Baltimore had a higher per capita murder rate than Detroit, Memphis, Chicago, Philadelphia, and New Orleans.

Back in December, we detailed how Baltimore’s murder rate is more than 4x the average of large cities, and to make matters worse— tied with Venezuela.

Surprisingly, the newspaper’s crime desk says the overall homicide rate for the 50 largest cities started to decline in 2017.

However, the drop was not by much roughly 1 percent, which was produced by a rapid decline in murders for cities like Chicago (14.7 percent), New York City (13.4%) and Houston (11%).

Meanwhile, in Baltimore, the region added 25 homicides in 2017 (343) up from the prior year (318).

On the chart below, Baltimore logged the nation’s second highest homicides for large cities in 2017, only behind Chicago with 650 homicides in 2017, down from 762 the prior year, a town with a population of 2.7 million, verse Baltimore’s population of 620,000. For Baltimore’s small size, the city had more homicides in 2017, than New York, Los Angeles, and Philadephia, where populations are astronomically higher.

“Where they rank us is very alarming,” Commissioner Designate Darryl De Sousa told WBAL Radio.

He added: “But I know Baltimore in another way…I know the moms and dads that struggle each and every day that try and make the city better.”

De Sousa said the new violence reduction initiative that he and Mayor Catherine Pugh have implemented across the city is working; he further stated homicides are down 37 percent and nonfatal shooting are down 46 percent as compared to this time last year.

There have been 32 homicides as of February 21, 2018, according to The Baltimore Sun; at this time last year, police reported around 47 murders.

Crime is “trending downward in every single category” in 2018, Pugh said at a Tuesday press conference.

The mayor described Baltimore’s violence prevention initiative as “very data-driven.”

Said Pugh: “Are we satisfied yet? No. Are we trending in the right direction? Yes.”

Baltimore’s law enforcement officers have already arrested some 200 violent repeat offenders in recent weeks on outstanding warrants, De Sousa said on WBAL Radio. The city’s violence prevention strategy is about “putting resources in the right places at the right times,” he said.

“We know our problematic areas,” said De Sousa, who proposed diverting more energy and time to districts that are considered troubled areas, such as Sandtown-Winchester, a neighborhood in West Baltimore, Maryland where Freddie Gray was arrested and ultimately died– triggering the 2015 Baltimore riots.

Dr. Nicole Gonzalez Van Cleve, a criminology expert and professor at Temple University in Philadelphia, tells the Baltimore Patch that citizens should ignore USA Today’s rankings of the city.

“We kind of throw around these rankings and it makes it sound like everyone is equally vulnerable to violence, when really, in most cities, especially a city like Chicago for instance, violence is mostly concentrated in areas that are most socially neglected. Areas with the highest rates of poverty. Failing schools,” Van Cleve said.

“Major American cities with high levels of segregation, poverty and inequality will often see high rates of violence, she says. But crime statistics and rankings don’t paint an accurate picture of where that violence actually happens. Violence is concentrated within communities, and individual blocks within neighborhoods see vastly different levels of violence than others,” she added.

“Literally, one side of the street will have less crime in the same neighborhood than the other side of the street,” she says.

USA Today cited some crime experts and law enforcement officials believe the fracturing of community and law enforcement relationships could have had some impact on elevated homicides in areas like Baltimore and Chicago.

While it is only day 53 into 2018, Mayor Catherine Pugh has already indicated success in her new crime-fighting strategies. Homicides in Baltimore tend to be a seasonal thing, which, perhaps, the recent split of the polar vortex could signal homicides will increase from here due to warmer weather. As for now, Pugh and her PR firm are merely spreading propaganda…

Something tells us that the implosion of Baltimore is far from over, as the opioid crisis is fueling the next wave of turmoil. The Baltimore Sun identifies the next wave of chaos to be originating from an explosion of commercial robberies. This will further complicate the situation for the police department, who is already stretched thin with out of control murders. In the last five years, commercial robberies have risen 88 percent, from 560 in 2013 to more than 1,000 last year. 

The explosion of commercial robberies started on April 18, 2015, just six days after Baltimore Police officers arrested Freddie Gray, a 25-year-old African American resident of Baltimore, Maryland. Gray sustained injuries to his spine while being transported in a police vehicle, where he later passed away. In return, residents spurred city-wide riots that targeted commercial stores. The National Guard was called in and shut down the town for a week in a variant form of Martial law.

Business owners in the inner city are panicking about the threats outside their stores: drug dealing, intimidation, stabbings, and shootings, said the Baltimore Sun. Businesses have adapted to the warzone like environment by hiring guards, installing bullet-resistant glass, door buzzer systems, and basically turning their shop into a mini-fortress. Some businesses are just shutting down, as the warzone like climate is not producing a sustainable atmosphere for a healthy economy.

“Our members are very concerned,” said Cailey Locklair Tolle, president of the Maryland Retailers Association. “Unfortunately, a lot of our members don’t relocate. It’s a massive endeavor. A lot of times they just go out of business.”

Baltimore is a mess. America is a shithole. Do we have your attention now? 

via Zero Hedge http://ift.tt/2Ch9Glo Tyler Durden

Authored by Eric Zuesse via The Strategic Culture Foundation,

On Sunday, February 17th, I was surprised to see in the reliably neoconservative newspaper, New York Times, an ‘opinion’-article headlined with the distinctively non-neoconservative title, “Russia Isn’t the Only One Meddling in Elections. We Do It, Too.”

But, then, I got to the neocon core, in the article itself: 

But in recent decades, both Mr. Hall and Mr. Johnson argued, Russian and American interferences in elections have not been morally equivalent. American interventions have generally been aimed at helping non-authoritarian candidates challenge dictators or otherwise promoting democracy. Russia has more often intervened to disrupt democracy or promote authoritarian rule, they said.

Equating the two, Mr. Hall says, “is like saying cops and bad guys are the same because they both have guns — the motivation matters.”

That’s just a typical neocon lie — reality turned upside-down, black-is-white and white-is-black.

When the CIA hired Iranian mercenaries to rebel against and overthrow the progressive democratically elected Iranian Prime Minister Mohammed Mosaddegh in 1953 and installed there a dictatorship (which lasted till 1979); and did the same to overthrow and replace the progressive democratically elected Guatemalan President Jacobo Arbenz in 1954; and, more recently, in 2009, helped Honduras’s aristocracy to overthrow that country’s progressive democratically elected President Manuel Zelaya, and to cement and make permanent their new and fascist regime; and, in 2014, perpetrated a brutal coup in Ukraine overthrowing that country’s democratically elected but corrupt (like all prior post-communist Ukrainian Presidents were) President Viktor Yanukovych — even the Soviets (including the pre-1991 and pre-independent Russians) weren’t that bad; and a 1992 classic BBC documentary about the CIA’s having set up in Western Europe during the Cold War numerous deadly terrorist incidents which were designed so as to be blamed on ‘communists’, makes clear, that the US CIA is a spiritual implant into the US Government, of Adolf Hitler’s Nazi (but now American) Gehlen Organization — a darling of the CIA Director Alan Dulles, and which is still today the CIA’s spirit.

But, even that hypocrisy misses the essentially fascist nature of America’s secret-police agencies, because America’s Presidents are now reliably pro-fascist, and on many occasions are even pro-racist-fascist, or pro-“nazi” (standing out to defend the nazi ideology itself). At the U.N., both President Obama and President Trump have stood America up publicly as being one of only three countries (in Obama’s case) and then of only two countries (in Trump’s case) publicly defending nazism. Furthermore, on one day (31 October 2015), twice in close succession, the U.N. Secretary-General publicly criticized Obama, though not by name, for opposing and insisting on blocking, democracy in Syria. Whereas Russia insists upon a democratic and united — instead of ethnically broken-up — Syria, and polls amongst Syrians consistently show that the vast majority of Syrians insist upon the same thing, the US Government not only does everything possible to block it, but has the gall to deny the blatant fact that it’s seeking to replace Syria’s secular non-sectarian Government, by a fundamentalist-Sunni Government that will do the Sauds’ bidding (and the bidding of America’s oil-giants).

However, that February 17th New York Times article is deceptive not merely on account of its holier-than-thou admission of the CIA’s supposedly ‘past history’ of badness and its presumption of today’s Russia being almost as bad as was the Soviet Union.

Actually, the article includes several other lies, such as are exposed in these three articles about how American billionaires systematically robbed Russia during the 1990s:

“Russia’s Fiscal Whistleblower”

“The Summers Conundrum”

“Soros and His CIA Friends Targeted USSR/Russia in 1987”

Those articles offered at least some of the explanation as to why America’s billionaires (at least the ones who care about this matter at all) hate Vladimir Putin: they had loved Boris Yeltsin because he allowed them to rape Russia, but Putin put a stop to it.

So, while millions of Americans, who subscribe to the New York Times, will learn the lie, that (and here is the regime’s basic message) internationally ‘we’re the good guys against the bad guys’, there’s no more reason to trust that, than there was when the same lies came from Joseph Goebbels’s shop, at which time, the US itself was a progressive country, heading in progressive directions, under President FDR.

Bill Clinton and the post-Clinton Democratic Party have repudiated that direction for their Party; and, now, in international relations, the US is solidly fascist, in both Parties. The CIA lies, as usual, indistinguishably differently when it’s run by a Democratic President and Congress, than when it’s run by a Republican President and Congress. 

In international relations, it’s the same regime, regardless: full of the same lies. And that historical fact, and ongoing but unpublished news, is not to be found to be accepted in the Times’s masthead-lie, “All the News That’s Fit to Print” — or else the truth itself, just isn’t “Fit to Print.” It’s fit to print here (and without paying a subscription), but how many people even read here? This explains how the regime protects itself, against democracy — by hiding what’s essential.

via Zero Hedge http://ift.tt/2HGEf3p Tyler Durden

As the People’s Bank of China’s longtime leader Zhou Xiaochuan prepares for retirement in March, speculation about who Chinese leader Xi Jinping might choose to succeed him is mounting – and according to Reuters, a formerly dark horse candidate is now being viewed with increasing certainty as Xi’s likely pick. 

His name is Liu He, and he’s both a senior government bureaucrat and longtime friend of Xi. Insiders say Liu has leapfrogged two other candidates as part of the wide-ranging government reshuffle that has accompanied Xi’s elevation to supreme leader during November’s Congress.

If he is, in fact, chosen to succeed Zhou, Liu could become one of the  most powerful central-bank governors in modern Chinese history.

Liu may be in a position to become one of China’s most powerful economic and financial officials ever, as he is already top adviser to Xi on economic policy and is also expected to become vice premier overseeing the economy.

Liu would replace current PBOC chief, 70-year-old Zhou Xiaochuan, who is China’s longest-running head of the central bank, having taken the job in 2002. Zhou is expected to retire around the time of the annual session of parliament in March, sources previously told Reuters.

The change would be part of a wider government reshuffle following the 19th Communist Party Congress in October last year, during which Xi laid out his vision for China’s long-term development, and elevated his key allies.

Speculation has been rife for months over the choice of the next central bank governor. Xi will have the final say, and the sources noted that while Liu is clearly the frontrunner he is not yet certain to get the job.

…

Just before last October’s Congress, sources told Reuters that China’s banking regulator head Guo Shuqing and veteran banker Jiang Chaoliang were leading contenders for the PBOC job.

Not only would Liu – who was educated at Harvard and speaks fluent English – be responsible for running the central bank, Reuters  says he is also set to become one of China’s four vice premiers who would oversee the economy and financial sector.

Reuters sources previously said that Liu was in line to become one of China’s four vice premiers, and that he would oversee the economy and financial sector. Whether he might hold both positions concurrently is unclear. As Reuters points out, only Zhu Rongji in the early-1990s held both the posts of vice premier and central bank governor simultaneously. Zhu later went on to become China’s premier from 1998-2003.

As Reuters points out, the PBOC is different from Western central banks in that it doesn’t have control over monetary policy – decisions on interest rates and the yuan are still governed by policies determined by the Party leadership. In a strategy that has repeatedly been employed by Chinese officials, Liu dangled the prospect of an open, internationalized economy in front of his audience at Davos last month, saying the country might soon roll out market-opening measures that would exceed “international expectations.”

But the next leader of the central bank will face tough challenges as he will have to walk a tightrope between ensuring economic stability and pushing reforms to rein in debt risks.

But perhaps most importantly of all, Liu has one key advantage over his rivals that, in addition to his friendship with and support of Xi Jinping, would probably aid his oversight of one of the world’s largest economies: He currently heads a government office in charge of preserving financial stability, and as a result almost undoubtedly had a hand in last night’s shocking news that Chinese regulators had decided to take control of Anbang Insurance – one of the country’s “big four” hyperleveraged conglomerates. That move was first announced by the China Insurance Regulatory Commission.

He was also widely seen by political analysts as being behind the voice of an unnamed “authoritative person” who wrote in the People’s Daily, the party’s mouthpiece, in May 2016 warning about risks from the country’s debt-driven growth model.

Liu, like Zhou, stands out among Chinese bureaucrats because of his grey hair. Many top officials dye their hair jet-black.

Liu, who currently heads the General Office of the ruling Communist Party’s Central Leading Group for Financial and Economic Affairs, is also set to become the head of the cabinet-level Financial Stability and Development Committee (FSDC), sources previously told Reuters.

He has been closely following Xi on regional tours and meetings with foreign leaders. When then-U.S. National Security Adviser Tom Donilon visited Beijing in 2013, Xi introduced Liu as “very important to me”, according to the Wall Street Journal.

The PBOC also recently shut down VIX trading, purportedly to halt market turbulence. Liu and Xi share a uniquely Chinese family history: that is, both their families were purged during the 1966-76 Cultural Revolution, and both their fathers were senior government officials.

“Without the reflection on the catastrophe of the Cultural Revolution, it is impossible for China to have today’s economic growth,” Liu said in an article published in 2017.

Amazingly, sources tell Reuters that Liu and Xi have been friendly since their teens, and have always kept in touch.

via Zero Hedge http://ift.tt/2GHSX93 Tyler Durden

Authored by John Vibes via The Mind Unleashed blog,

Raising rent prices and low wages have resulted in thousands of people across the city of Los Angeles becoming homeless, many of them now living in cars and RVs if they were able to keep it together that well.

According to the most recent counts by the KPCC, there are at least 7,000 people live in their cars in Los Angeles.

Many of these people still maintain jobs and try to live the most fulfilled lives that they can, but they are constantly facing problems from authorities.

It is such a common issue that many churches have opened up their parking lots to people living out of their cars. For example, the New Beginnings Counseling Center opened up their parking lot for a “Safe Parking program,” which was intended to provide a safe and welcome parking place for people living out of their cars. Unfortunately, under new legislation passed in Los Angeles, programs like this will be illegal, because sleeping in cars and RVs have been entirely outlawed.

Under the new laws, it is illegal to sleep in a car or RV that is parked in a residentially zoned area from 9 p.m. to 6 a.m. Areas within one block of a park, daycare, or school are entirely off limits. Fines will range anywhere from $25 to $75 which is impossible to pay for most people in these situations.

In 2014, LA lawmakers attempted to pass a similar bill but it was shot down in a federal appeals court. The judge in the case ruled that the legislation was “broad enough to cover any driver in Los Angeles who eats food or transports personal belongings in his or her vehicle. Yet it appears to be applied only to the homeless.”

The policy is up for debate and reconsideration in July, where homeless advocates are expected to strongly protest for an appeal.

Policies like this can have disastrous consequences, in Canada where laws like this have been implemented for some time, one man racked up over $110,000 worth of fines for essentially being homeless.

Last year, The Mind Unleashed reported that the city of Seattle was planning to set up razor-wire fencing to keep homeless populations from camping. Then, earlier this year we reported that San Francisco was using Robots scare homeless people away from encampments and report them to police.

Not soon after that, the city of San Francisco spent $8,700 installing large boulders under overpasses to prevent homeless people from setting up camps. There were numerous homeless encampments in the area until they were recently forced out of the area, and now the City’s government is doing everything they can to keep the camps out of the area.

via Zero Hedge http://ift.tt/2GFCuCn Tyler Durden

After admitting last week that “protocol was not followed” when at least two individuals called the FBI’s anonymous tip line to warn that Nikolas Cruz, the 19-year-old suspected of murdering 17 of his former classmates, the No. 2 FBI official said Thursday that he had visited the FBI’s call center this week as part of his review of why the tip wasn’t followed.

He also addressed, in the most detail yet, the mounting criticisms facing the bureau, according to the Washington Post.

The remarks followed NRA spokeswoman Dana Loesch’s assertion that the FBI was primarily to blame for not preventing the shooting.

Shortly before Bowdich spoke Thursday, NRA chief executive Wayne LaPierre, who was speaking at the same event, said the FBI’s leaders had gone “rogue.”

Acting deputy director David Bowdich said he believes the biggest threat to the FBI is “losing the faith of the American people”

“Look, I don’t want to get into who says what, but I do want to project out to the public, is when I look through the prism of risk for our organization, I find the number one risk for our organization is losing the faith and confidence of the American people. Number one,” Bowdich said when asked about the criticism from the NRA and others.

FBI Director Christopher Wray – who was appointed by Trump – has come under fire, with several prominent Republicans, including Florida Gov. Rick Scott, calling for him to resign. President Trump has said the bureau’s handling of the matter was “not acceptable.”

Still, while Bowdich provided some details about his visit to the FBI call center, he offered no new insight into why or how the tip wasn’t followed up on. The FBI is actively investigating why the tip wasn’t passed on to its Miami field office.

Bowdich said Thursday that he had visited the call center Monday with a team and sat in on some calls. He called the center “a professional operation” but added: “Now let me be clear that there was a mistake made. We know that. But it is our job to make sure that we do everything in our power to ensure that does not happen again.”

Bowdich did not directly address a question about why the tip on Cruz was not passed to agents in the field, though he hinted that those in the call center might have made a judgment error.

“People make judgments out on the streets every day. Every now and then, those judgments may not have been the best judgment based on the information they had at the time,” Bowdich said.

Last year, the FBI received about 765,000 calls, in addition to about 750,000 Internet tips, and 9 out of 10 did not produce leads that could be followed. He said the bureau was going back through its “holdings”  to make sure there aren’t any other similar tips that have slipped through the cracks.

Wray has held on so far, and speculation is mounting that he might stay on to supervise the internal probe into why, exactly, these tips weren’t followed up on.

via Zero Hedge http://ift.tt/2HH33Ix Tyler Durden

Authored by Daniel Greenfield via Sultan Knish blog,

Bots. Is there anything they can’t do?

The Internet Research Agency indictment accuses a troll bot farm of trying to influence the election in what the media claims is the worst attack on America since Pearl Harbor. 9/11 need not apply.

Bots are everywhere.

“Bots Are Trying to Help Populists Win Italy’s Election,” claims Bloomberg. “Russian Bots Are Using 2016 Tactics to Hijack the Gun Debate,” shrieks Vanity Fair. ABC spins that bots are trying to make Black Panther look bad. “Rampaging Twitter ‘bots’ bred in Suffolk farmhouse,” the London Times asserts.

This media madness might make you think that bots are some sort of new and advanced technology. But you can see them in the comments and they’ve been around forever. Automated programs that log into social media accounts are not a new technology. Internet users of a bygone era remember seeing them in chat rooms and on bulletin boards without ever rampaging around Suffolk farmhouses.

Bots have become a convenient media scapegoat. The new formula is “Bots + Thing We Disagree With = Proof We’re Right”. That’s why there are stories claiming that Russian bots are tweeting against gun control or Islamic migration. And it explains the “Russian Bots Rigged the Election for Trump” meme.

Bots are an informational technique. Media spin reverse engineers the technique to discredit the idea. Not only is that a fallacy, but bots just piggyback on popular trends to gain influence. Russian bots don’t tweet about gun control because they care about guns, but because they get retweeted. The same was true of the bots promoting Bernie Sanders and Donald Trump. There are a million brands doing the same thing with bots and influencers. But that’s okay because they push politically correct messages.

And that’s the bot double standard.

When Russian bots and trolls push Black Lives Matter, Bernie Sanders or Dakota Access Pipeline protests, their programmed actions don’t reflect on leftist causes, organizations and politicians. But the revelation that Russian bots and trolls tweeted about the Bill of Rights, Islamic migration or Trump is spun by the media into a conspiracy that indicts the ideas and discredits the previous election.

The latest example of the Big Bot Conspiracy is a bizarre Newsweek article by Nina Burleigh blaming Senator Franken’s problems on bots. Some might have thought that Franken had been forced to resign for groping women across America. But according to Burleigh, it was the fault of the Japanese bots.

The feminist activist was already infamous for putting her allegiance to Democrats ahead of sisterhood.

“I would be happy to give him a b_____ just to thank him for keeping abortion legal,” Nina Burleigh had said of Bill Clinton. “I think American women should be lining up with their Presidential kneepads on to show their gratitude.” Now Burleigh has brought her kneepads to the raided offices of Newsweek.

Nina Burleigh’s article blames Franken’s problems on “fake news sites, an army of Twitter bots and other cyber tricks”. The Democrat Senator’s original accuser is dismissed as a “Hooters pinup girl and lad-mag model”. So there was either nothing wrong with groping her or no reason to believe her.

That’s what leftists denounce as ‘slut-shaming’, but, as with Bill Clinton, it’s okay when Democrats do it.

Burleigh mentions the “release of a picture of a Tweeden and Franken” (editors are one of the casualties of Newsweek’s troubles), but neglects to mention that it’s a picture of Franken groping Tweeden. None of the other many accusers rate a mention from this feminist Franken activist.

There was the feminist choir member and book editor who accused Franken of groping her at the Women’s Political Caucus. It’s really hard to write her off as a “right-wing plant” or a “lad-mag model”.

Especially since she then voted for Senator Franken.

Another accuser was groped at the Loft Literary Center in Minneapolis and claimed that Franken wanted to join her in the bathroom. Nina Burleigh would have probably told her to go along and bring her senatorial kneepads in gratitude for his support of Planned Parenthood.

A Democrat congressional aide remembers Franken trying to give her an open mouth kiss while he was still a radio host with Air America. “It’s my right as an entertainer,” she recalls Franken telling her.

An Army vet on a USO tour described being groped by Franken during the Iraq War. “When he put his arm around me, he groped my right breast. He kept his hand all the way over on my breast.”

Jezebel, a hard left feminist site, offered an account from a liberal “former elected official in New England” who remembers Franken trying to plant a “wet, open-mouthed kiss” on her, on stage.

Instead of addressing the many accounts of Franken’s liberal accusers who supported him and, many of whom indicated they didn’t want him to quit, Burleigh, like most Frankentruthers from Tom Arnold to Richard Silverstein, smears Leeann Tweeden while ignoring Franken’s numerous other accusers.

After silencing the women who came out against Franken, Nina Burleigh surreally claims that the Franken accusations had served to “silence the testimonies of eight former female staffers who defended the Minnesota Democrat”.

Presenting testimonies from the few women you didn’t grope is not considered a compelling argument.

But instead of talking about any of this, Burleigh talks about bots. A “bot army” made the Franken accusations go viral. And then there was “a developer named Atsufumi Otsuka” who “registered a web domain in Japan” that hosted “Japanese-registered fake-news sites”. But, “by November 17, the trending of ‘Al Franken’ was officially also a Russian intelligence operation.”

The Japanese and the Russians had teamed up against the Minnesota groper. This wasn’t just worse than Pearl Harbor. It was WW2 and the Cold War combined in one hashtag.

“Researchers have found that each bot account had 30 to 60 followers, all Japanese. The first follower for each account was either Japanese or Russian,” Burleigh breathlessly relates.

Now that the Russian and Japanese bots had teamed up, all hope for humanity was lost.

Burleigh’s article has more international locations than a Tom Clancy novel. It also completely ignores the question of whether Franken groped his victims to discuss the bots who tweeted about it.

That’s not accidental. Burleigh doesn’t want to talk about whether Franken is guilty; she wants to write a progressive thriller in which international bots caused the problem by talking about it. And if it can be shown that bots amplified a scandal, then the facts somehow no longer matter. In the same way that if it can be shown that bots amplified Trump’s message, the 2016 election results were illegitimate.

But shooting the messenger bot doesn’t tell us anything the truth of the inconvenient message.

Since the election, these types of articles are everywhere. They rely on the work of “researchers” who are usually partisan activists, often amateurs with no actual technical training, to spread conspiracy theories. These conspiracy theories confuse correlation and causation. If a foreign bot retweets Trump, he works for the bot’s masters. If a bot tweets any conservative story, it’s a right-wing global bot plot.

Anyone who knows anything about how the internet works knows that this is nonsense.

Bots imitate to amplify. In this comments section, a bot will show up sooner or later, it will copy a comment that someone else made and post it in order to get likes so that it resembles a real account. For every stupid bot telling you how much it makes by working online, there’s a smarter bot leaving legitimate comments to blend in. And so bots tweet, comment and chat about everything popular.

If there’s a trending topic, the bots will quickly show up. And everyone uses them.

Rachel Maddow feeds the left’s appetite for bot conspiracy nonsense. But in 2013, MSNBC personalities, including Maddow, were being promoted by Chinese bots. Does that mean Maddow is a Chinese spy?

Bots are ads that pretend to be people. Tracking how they’re deployed can be interesting, but it’s dangerous to read too much into that.

Correlating bots with narratives isn’t actually causation.

The bot paranoia is being used to delegitimize real stories and candidates. If you can connect bots to a point of view you don’t like, then no one really believes it. Link it to a candidate you don’t like and he was never really elected. Hook it up to a serial predator in the Senate and you can ignore his victims.

But if you believe that, then MSNBC must be a Chinese informational warfare operations.

via Zero Hedge http://ift.tt/2BOEtoL Tyler Durden

Ten days after the reality of “rampant manipulation” in VIX was exposed yet again, perhaps because this time the market went down, US regulators are reportedly escalating their investigations into whether any wrongdoing occurred within VIX ETPs.

Following previous reports that The Financial Industry Regulatory Authority (FINRA) was scrutinizing whether traders placed bets on S&P 500 options in order to influence prices for VIX futures, and a whistleblower’s detailed explanation of how easy it is to spoof VIX’s tail to wag the market’s dog; Bloomberg reports that The Securities and Exchange Commission and the Commodity Futures Trading Commission have been conducting a broad review of trading since Feb. 5, when volatility spiked and investors lost billions of dollars, several people familiar with the matter said.

As a reminder, according to his letter, the whistleblower blames this VIX manipulation as the driver of last week’s volatility complex collapse:

“We contend that the liquidation of the VIX ETPs last week was not due solely to flaws in the design of these products, but instead was driven largely by a rampant manipulation of the VIX index,”

And, Bloomberg notes that after the losses, SEC officials reached out to Credit Suisse, a person with direct knowledge of the conversations said. Neither Credit Suisse nor ProShares have been accused of any wrongdoing. The regulators’ examinations are at an early stage and won’t necessarily lead to sanctions or new rules.

As another reminder, in May of last year we academic confirmation of the rigged nature the US equity market’s volatility complex, when a scientific study found “systemic VIX auction settlement manipulation.”

Two University of Texas at Austin finance professors found “large transient deviations in VIX prices” around the morning auction, “consistent with market manipulation.”

​Griffin and Shams calculate that “the size of VIX futures with open interest at settlement is on average 5.7 times the size SPX options traded at settlement, and it is 7.3 times for VIX options that are in-the-money at settlement.”

*  *  *

Bloomberg concludes that there is no indication thus far that specific companies, including Credit Suisse, are being probed, and an SEC spokesman declined to comment, while CFTC officials didn’t respond to requests for comment; but with losses now piling up, allegations of market manipulation are getting more attention and government watchdogs face questions about why small-time investors were permitted to buy such products in the first place.

While we certainly won’t be holding out breath for any regulatory crackdown on these products (as they are the mothers’ milk of the stock market), it is at least a positive that there is finally some scrutiny on the volatility complex (that may, just may, prompt some retail investors to be at least a little less willing to pile all their investments into the short-vol trade once again).

via Zero Hedge http://ift.tt/2CGvCSK Tyler Durden

Following “strained” magma chamber concerns at Yellowstone, Bay Area residents have grown increasingly concerned this week as a swarm of well over 50 earthquakes has struck in recent days…

Culminating in at least 32 quakes in the last 24 hours as large as magnitude 3.6 which struck the East Bay town of Danville around 3pmET today.

“It’s been nuts. It wakes us up every night. We have a little dog, sleeps on the bed with us, and he freaks out all the time,” said Danville resident Christian Sommer.

Bay Area Rapid Transit (BART) trains were impacted by the quakes with trains delayed.

“Looking in that general region, I’m counting 55 quakes just in the last week,” said Amy Vaughan, a geophysicist with the Geological Survey.

8 fault lines run through the bay.

Several more significant temblors then shook up Diablo area businesses at midday – the strongest being a 3.6.

“I was sitting at my desk when the first one hit,” said Danville resident Brenda Hammer. “And I thought something hit the building was my initial reaction. What just hit us?”

There was another swarm of quakes just three days ago on Tuesday.Some in the East Bay are busy retrofitting for a bigger quake.

This swarm comes just a few weeks after a 4.4 quake jolted much of Bay Area awake in January.

via Zero Hedge http://ift.tt/2ouVRGK Tyler Durden