Category: zerohedge

Those who are unfamiliar with Venezuela’s unprecedented economic collapse might be surprised to learn that the country’s oil production has only slowed, even as the price of a barrel of crude has risen in most international markets.

Unsurprisingly (it’s Venezuela), there’s a macabre explanation for this phenomenon: The workers at PDVSA – Venezuela’s state-owned oil company, which once showered Venezuelans with oil wealth – are literally collapsing due to hunger and exhaustion as workers defy their government handlers and flee their jobs in their desperation as the value of their pay has been completely erased.

Bloomberg spoke with several workers in Venezuela’s oil industry about the harsh conditions they face on a daily basis.

Of course, oil workers aren’t the only ones suffering: The situation in Venezuela is getting so dire that ordinary Venezuelans are losing tons of body weight because of the food shortages. Many can no longer afford to buy meat.

One worker told Bloomberg about how his weekly salary barely pays for the corn flour he mixes with water and drinks every morning.

At 6:40 a.m., Pablo Ruiz squats at the gate of a decaying refinery in Puerto La Cruz, Venezuela, steeling himself for eight Sisyphean hours of brushing anti-rust paint onto pipes under a burning sun. For breakfast, the 55-year-old drank corn-flour water.

Ruiz’s weekly salary of 110,000 bolivares — about 50 cents at the black-market exchange rate — buys him less than a kilo of corn meal or rice. His only protein comes from 170 grams of canned tuna included in a food box the government provides to low-income families. It shows up every 45 days or so.

“I haven’t eaten meat for two months,” he said. “The last time I did, I spent my whole week’s salary on a chicken meal.”

Hunger is hastening the ruin of Venezuelan’s oil industry as workers grow too weak and hungry for heavy labor. With children dying of malnutrition and adults sifting garbage for table scraps, food has become more important than employment, and thousands are walking off the job. Absenteeism and mass resignations mean few are left to produce the oil that keeps the tattered economy functioning.

Researchers at three Venezuelan Universities reported losing on average 11 kilograms (24 lbs) in body weight last year and almost 90% now live in poverty, according to a new university study on the impact of a devastating economic crisis and food shortages. That annual survey has become a key barometer of the country’s economic stress since the government stopped releasing reliable economic data, as Reuters reports.

Per Reuters, over 60% of Venezuelans surveyed said that during the previous three months they had woken up hungry because they did not have enough money to buy food. About a quarter of the population was eating two or less meals a day.

After winning the presidency in 1999, leftist President Hugo Chavez was proud of improving Venezuela’s social indicators as the country’s economy was bolstered by oil-fueled welfare policies.

But his successor President Nicolas Maduro, who has ruled since 2013, has allowed corruption to flourish. And his political allies have mismanaged the economy to such a degree that the collapse in the price of oil during 2014 had ruinous consequences.

Even as the price of crude has begun to creep materially higher, the situation in Venezuela is only getting worse.

In contemporary Venezuela, currency controls restrict food imports, hyperinflation eats into salaries, and people line up for hours to buy basics like flour.

As a result, 90% of Venezuelans live in poverty.

In what appears to be a last-ditch effort to rescue the country’s economy and his regime, President Nicolas Maduro yesterday began sales of the Petro, Venezuela’s oil-backed cryptocurerency. The launch was so successful, Maduro has assured the public, that he is considering launch a “Petro Oro” – a cryptocurrency backed by gold reserves.

But perhaps even more shocking than the dire circumstances under which PDVSA’s remaining employees go to work every day is the contrast with the country’s prosperous past, as Bloomberg describes it…

For decades, PDVSA was a dream job in a socialist petro-state. The company supplied workers not only with a good living and revolutionary-red coveralls, but cafeterias that served lunches with soup, a main course, dessert and freshly squeezed juice. Now, the cafeterias are mostly bare, the children are hungry and employees are leaving to work as taxi drivers, plumbers or farmers. Some emigrate. Some hold out as long as they can.

…Now, instead of enjoying the trappings of a comfortable, middle-class life (not to mention freshly squeezed fruit juice), desperate employees are risking the government’s wrath – and possibly sacrificing their chance at a government pension someday – to escape not only from their jobs, but from Venezuela.

Those who quit without notice risk losing their pensions, as bureaucrats refuse to process paperwork. Many managers live in terror of arrest since the Maduro regime purged the industry, imprisoning officials from low-level apparatchiks to former oil ministers. In one human resources office, a sign advertised a limit of five resignations a day.

“Management is holding them back to stop brain and technical drain,” said Jose Bodas, general secretary of United Federation of Venezuelan Oil Workers. He estimates 500 employees have resigned at the Puerto La Cruz refinery and nearby processing facilities in the past 12 months – even though superiors have labeled them “traitors to the homeland,” a phrase that often precedes arrest. In the streets, families sell their boots and the red coveralls.

“They’re giving up because of hunger,” Bodas said. “They’re leaving because they get paid better abroad. This is unheard of, a catastrophe.”

In a nightmarish reflection of what life must’ve been like in some of the most poverty stricken areas of the Soviet Union, widespread adsenteeism is forcing those who stay behind to work long hours at the state’s insistence – without any additional compensation.

Sitting in the living room of his house, on his day off, Endy Torres says he has lost 33 pounds over the past 18 months. He shows his PDVSA identification photo as proof: a chubby-cheeked man, weighing 176 pounds.

Ten years ago, he joined the company expecting an ample salary and comfortable pension. Today, his 700,000 bolivars per month, plus a food bonus of 1.6 million bolivars (about $9.50 altogether) can’t fill the fridge at his grandmother’s house, where he lives.

About 10 people from his department resigned in January. There are 263 plant operators remaining and 180 vacancies at the Puerto La Cruz refinery, he said.

Absenteeism forces those who show up to work extra hours and burn precious calories. The lack of investment in equipment and maintenance has increased technical failures, almost all in the early hours of the morning, he said. When they occur, workers are too fatigued to act quickly, and accidents occur.

And the worst part of it all is: Even if oil prices make a surprise comeback, years of favoritism, corruption and – now – international sanctions mean it’s unlikely Venezuela’s oil industry will suddenly blossom once again: For those who stay behind, the formerly wealthiest country in Latin America will probably remain mired in poverty, for as long as it’s ruled by a corrupt autocracy.

 

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

Authored by Caitlin Johnstone via The Strategic Culture Foundation,

There is still no clear proof that the Russian government interfered with the 2016 US elections in any meaningful way. Which is weird, because Russia and every other country on earth would be perfectly justified in doing so.

Like every single hotly publicized Russiagate “bombshell” that has broken since this nonsense began, Mueller’s indictment of 13 Russian social media trolls was paraded around as proof of something hugely significant (an “act of war” in this case), but on closer examination turns out to be empty. The always excellent ‘Moon of Alabama’ recently made a solid argument that has also been advanced by Russiagate skeptics like TYT’s Michael Tracey and Max Blumenthal of The Real News, pointing out that there is in fact no evidence that the troll farming operation was an attempt to manipulate the US election, nor indeed that it had any ties to the Russian government at all, nor indeed that it was anything other than a crafty Russian civilian’s money making scheme.

The notion that a few Russian trolls committed a “conspiracy to defraud the United States” by “sowing discord” with a bunch of wildly contradictory posts endorsing all different ideologies sounds completely ridiculous in a country whose mainstream media spends all its time actively creating political division anyway, but when you look at it as a civilian operation to attract social media followers to sock puppet accounts with the goal of selling promoted posts for profit, it makes perfect sense. James Corbett of The Corbett Report has a great video about how absolutely bizarre it is that public dialogue is ignoring the fact that these trolls overwhelmingly used mainstream media like the Washington Post in their shares instead of outlets like RT and Infowars. As a scheme to acquire followers, it makes perfect sense. As a scheme to subvert America, it’s nonsensical.

There is currently no evidence that the Russian government interfered in the US election. But it is worth pointing out that if they did they had every right to.

“Whataboutism” is the word of the day. At some point it was decreed by the internet forum gods that adding “-ism” to a description of something that someone is doing makes for a devastating argument in and of itself, and people have hastened to use this tactic as a bludgeon to silence anyone who points out the extremely obvious and significant fact that America interferes in elections more than any other government on earth.

“Okay, so America isn’t perfect and we’ve meddled a few times,” the argument goes. “So what? You’re saying just because we’ve done it that makes it okay for Russia to do it?”

Actually, yes. Of course it does. Clearly. That isn’t a “whataboutism”, it’s an observation that is completely devastating to the mainstream Russia narrative. If it’s okay for the CIA to continuously interfere in the elections of other countries up to and including modern times, it is okay for other countries to interfere in theirs. Only in the most warped American supremacist reality tunnel is that not abundantly obvious.

Every country on earth is absolutely entitled to interfere in America’s elections. America is responsible for the overwhelming majority of election interferences around the world in modern times, including an interference in Russia’s elections in the nineties that was so brazen they made a Hollywood movie about it, so clearly an environment has been created wherein the United States has declared that this is acceptable.

It amazes me that more people aren’t willing to call this like it is. No, it would not be wrong for Russia to interfere in America’s elections. Yes, what America did to Russia absolutely would make a proportionate retaliation okay. Of course it would.

Imagine this:

A guy in a cowboy hat runs into a bar and starts punching people. Most of them just rub their sore jaws and hunch over their drinks hoping to avoid any trouble, but one guy in a fur cap sets down his vodka and shoves the man in the cowboy hat.

The man in the cowboy hat begins shrieking like a little girl. All his friends rush to his side to comfort him and begin angrily shaking their fists at the man in the fur cap.

“Hey, he punched me!” says the man in the fur cap.

“That’s a whataboutism!” sobs the man in the cowboy hat.

Can you imagine anything more ridiculous?

Seriously, how do people think this is a thing? How does anyone think it’s legitimate to respond to my article about a former CIA Director openly admitting that the US still to this day interferes with elections around the world babbling about “whataboutisms”? What a doofy, indefensible monkey wrench to throw into the gears of political discourse.

Yes, obviously by asserting that it is acceptable for the CIA to meddle in other countries’ elections, the US has created an environment where that sort of thing is acceptable. If Americans just want to embrace their American supremacist bigotry and say “Yeah we can do that to you but you can’t do it to us cuz we have big guns and we said so,” that’s at least a logically consistent position. Crying like little bitches and behaving as though they’ve been victimized by some egregious immorality is not.

Channel 4 News reported on the research of the Institute for Politics and Strategy at Carnegie Mellon University’s Don Levin back in November, writing the following:

Dov Levin, an academic from the Institute for Politics and Strategy at Carnegie Mellon University, has calculated the vast scale of election interventions by both the US and Russia.

According to his research, there were 117 “partisan electoral interventions” between 1946 and 2000. That’s around one of every nine competitive elections held since Second World War.

The majority of these – almost 70 per cent – were cases of US interference. And these are not all from the Cold War era; 21 such interventions took place between 1990 and 2000, of which 18 were by the US.

If Americans don’t like election meddling, they need to demand that their government stops doing it. As long as it remains the very worst offender in that department, the US is entitled to nothing other than the entire world meddling in its elections.

I shouldn’t even have to say this. Do unto others as you would have them do unto you. Don’t dish it out if you can’t take it.

Duh.

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

Two days before the February 5 volmageddon, and before everyone became an overnight expert on inverse VIX ETFs, CTAs an risk parity funds, we showed two chart which we explicitly said presaged a turning point for markets, vol-targeting funds, and hinted at an imminent risk-parity tantrum.

The first showed the unmistakable correlation shift between 10Y yields and the S&P, which we said is “considerably worrisome for investors.”

Meanwhile, we also showed that the bond-equity correlation, which has been predominantly negative since the Lehman crisis, had started creeping up towards positive territory. Specifically, we said that “the 90-day correlation between stock (SPY) and bond (TLT) markets has surged ominously in the last few weeks.”

Three weeks later, Bank of America – in response to “many interest rate questions from investors” – published a 50 page report which looks at the relationship between rising rates and stocks to conclude, after tortured and convoluted logic and several goalseeked examples, that rising rates are not bad for stocks.

Actually, they are, and here is the simplest reason why in just 9 words: “Every market crash has been preceded by Fed tightening.“

Still, BofA did have some interesting observations on the long-term historical relationship and rolling 3 year correlation between the S&P and 10Y yields, to wit:

Over the past 64 years, stocks have exhibited a weak and inconsistent correlation with interest rates (-11%).

Over this period, the correlation has seen a wide range from -63% to 75%. The relationship was generally negative for most of the 1960s through the 1990s (higher yields bad for stocks), a period during which the average level of rates was 7.5%. But since the turn of the century, the relationship was generally positive (higher yields good for stocks) a period during which the average level of rates was 3%. The relationship with rates and stock returns peaked about five years ago, but has remained positive and has been trending higher since the recent trough of 13% in late 2015 (Chart 2).

And now it’s flipped again… and it’s not the only one: as the following bloombergchart show, the 6-month rolling correlation between stocks and the dollar, which was also positive for the past 4 years, has turned sharply negative.

 

So why is this (or rather these) most critical market correlation inverting as yields creep ever higher? Overnight, Blackrock’s Russ Koesterich gave an elegant explanation, highlighting three things: i) the reversal in the correlation sign, ii) the nonlinear relationship between the two key asset classes, and iii) the relative interest rate.

First, why the correlation turns negative:

Financial theory does suggest that equity valuations, i.e. the price you pay for a dollar of earnings, should drop as the interest rate used to discount that earning rises. Empirical evidence supports this. A simple linear regression of stock multiples versus interest rates demonstrates that over the very long term, rates and market multiples are negatively correlated. Since 1954, for every one percentage point increase in 10-year Treasury yields the price-to-earnings ratio (P/E) on the S&P 500 contracts by approximately 0.70 points.

Another way of showing this is the following chart from BofA which shows the impact of the change in the real risk free rate on S&P fair value. The higher rate, the lower the S&P, or as BofA explains, “every 50bp increase in the normalized real risk-free rate reduces the fair value of the S&P 500 by roughly 6-8%”

To offset the gloomy message some – like Blackrock – try to extrapolate a non-linear relationship between yields and multiples:

However, if you allow for a more complex expression of the relationship, things look somewhat different. Rather than a straight line, a better description of the relationship between rates and multiples is nonlinear, i.e. the relationship changes depending on the level of rates. Allowing for this nuance, interest rates explain nearly 30% of the variation in S&P 500 earnings multiples (see the accompanying chart).

Finally, there is the special case of low rates: here again is Kosterich:

Rates and multiples are more likely to rise in tandem when interest rates are rising from unusually low levels, as is the case today. Under these circumstances, faster growth is treated as a positive as it alleviates recession and deflation fears. In addition, faster nominal growth is also associated with faster earnings growth.

Unfortunately, there is a caveat. Rates and valuations can rise together—to a point. At some point the negative relationship between rates and valuations reasserts itself. In other words, at a certain level higher bond yields create real competition for stocks, particularly dividend stocks, and put downward pressure on multiples.

What that point is, is of course the $64 trillion question: while some have suggested 2.75%, some 3.0% the latest and greatest estimation of this inflection point came from Credit Suisse this week, which calculated that the day of reckoning for stocks will take place just as the 10Y yield hits 3.50%.

Of course, by the time the 10Y actually does hit 3.5% it will be far too late as anticipating traders will have been busy frontrunning this event… and selling; it explains why the closer we get to 3.00%… or 3.50%, the greater the divergence between the 10Y and the S&P, and why the higher yields go, the more negative the correlation, until it eventually snaps back when stocks finally capitulate and the next crash hits.

via Zero Hedge http://ift.tt/2os4bqr Tyler Durden

Authored by Mac Slavo via SHTFplan.com,

In the United States, there are one million children under the age of six on psychiatric drugs. This number is particularly disturbing, considering the horrifying side effects and ineffectiveness of a good number of these types of harmful drugs.

One in six Americans overall regularly take some type of medication in this category. However, children are now being swept up in Big Pharma’s desire to make money, not improve health. Mental health watchdog group Citizens Commission on Human Rights is drawing attention to the concerning fact that more than a million kids younger than six in our nation are currently taking these psychiatric drugs.

According to Natural News, around half of these children are four to five years old and an incredible 274,804 of them are younger than a year old. That’s right: babies are being given psychiatric drugs. The number rises for toddlers aged two to three, with 370,778 kids in this category taking psychiatric drugs overall. If this isn’t horrifying to you, congratulations on your brainwashing.

Data from IMS Health shows that the drug situation only gets worse as kids get older, with 4,130,340 kids aged 6 to 12 taking some type of psychiatric drug.

You might be forgiven for assuming that most of these statistics are made up by kids taking ADHD drugs given how common that approach seems to be nowadays, but it really only accounts for a small portion of it, with 1,422 of those younger than a year old and just over 181,000 of those aged four to five taking ADHD drugs. –Natural News

The biggest category of psychotic drugs given to children appears to be anti-anxiety drugs. Just over 227,132 babies under one-year-old and nearly 248,000 of those aged four to five take these medications. Again, babies are being given mind-altering drugs before their first birthday. But the news just gets worse from there. Experts believe these estimates are far too low and the real numbers are actually much higher, due in part to the tendency for some doctors to hand out psychiatric medications for “off-label” uses. This risky practice entails giving out a drug to treat something that it is not indicated for, and the long-term effects of such an approach are completely unknown.

When adults choose to take psychiatric medication, it may be ill-advised in many cases, but it is still their choice to make. Children, on the other hand, lack the cognition to fully understand the lifelong impact of such a choice, and this essentially amounts to forced medication. We already know that many doctors have a financial incentive to get young people to start taking these drugs, but why are their parents so willing to get on board? Many of them are also taking psychiatric medications, of course. In fact, it has practically become a way of life in our nation and many people think of these meds as harmless.

The side effects of these drugs are nothing to scoff at, however, with antianxiety, antidepressant and antipsychotic drugs linked to heart attacks, psychosis, suicidal ideation, diabetes, stroke, mania and sudden death. As if that weren’t bad enough, there’s also the fact that many of the high-profile public shootings in recent years were perpetrated by young people on such drugs, so not only do kids have the risk of dying when they take these meds, but they could also take out a whole classroom or movie theater with them. –Natural News

Is this a war on our children perpetrated by Big Pharma and condoned by the government? Maybe. Nothing seems impossible anymore.

H/T [Natural News, Mike Adams The Health Ranger]

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

In what the Japanese press heralds as an important step to safely removing all the radioactive material left inside the Fukushima-Daiichi nuclear power plant’s ruined reactors, the Japanese utility in charge of cleaning up the site has finished installing a roof over reactor No. 3.

The work started last August to set up a dome-shaped cover. It is part of preparations for removing nuclear fuel from the reactor’s storage pool. A total of 566 spent and unused fuel units remain in the storage pool of the No. 3 reactor.

On Wednesday, workers installed the last part of the cover, which is 17 meters high and 22 meters wide, and weighs 55 tons.

Tepco, which ran the plant and also criminally lied and obscured the full extent of the radioactive leakage caused by the disaster, is scrambling to accomplish as much as possible ahead of the 2020 Summer Olympics in Tokyo. Cleanup of the power plant’s crippled reactors – which experienced meltdowns when a tsunami thrashed the Japanese coast back in 2011 – is expected to take decades.

More recently, Tepco has been criticized for draining what it described as “harmless” radioactive material into the water near the plant – sparking outraged local fishermen to fight back.

Last year, the Japanese government started cutting benefits for people who were forced to flee their homes and possessions because of the disaster.  This has forced some people to move back to the exclusion zone for the first time since the initial evacuation. Photos of the area depict a nightmarish ghost town overrun by radioactive wild boars.

it is unclear what the true radiation level is in the zone, as none of the government’s data are reliable or credible.

Which is why – while modest – adding a roof on top of the Fukushima sarcophagus is welcome news for the locals as it will then allow Tepco to remove hundreds of units of nuclear fuel from the reactor’s storage pool, which will begin this fall. The other reactors will be treated afterward.

The roof will prevent radiation from spreading, while also protecting the plant from wind.

Tepco says it’s still working to remove rubble from the ruined reactors.

via Zero Hedge http://ift.tt/2Cf9ZNB Tyler Durden

In November of last year, we set forth the four candidates that would trigger China’s downfall and expose the Potemkin village economy as nothing but a facade…

It might be Anbang – the acquisitive insurance behemoth – see “Anbang Just Became A ‘Systemic Risk’: Revenues Crash As Its Chairman Is “Detained”

It might be China Evergrande – the developer of “ghost” properties and described by J Capital’s, Anne Stevenson-Yang as “the biggest pyramid scheme the world has yet seen” – see “Stevenson-Yang Warns ‘China Is About To Hit A Wall”.

It might be HNA. The highly-leveraged Chinese conglomerate, which has been on an overseas acquisition binge, is paying more for a 363-day dollar loan than serial defaulter, Argentina, paid on a 100-year loan earlier this year.

O… It might be Dalian Wanda, which established itself building and operating commercial property, luxury hotels, culture and tourism, and department stores. While the company has its roots in property and infrastructure, it recently begun to push in a bold new direction: investing in all six of Hollywood’s major studios.

And now we know!

A day after banning VIX, it appears China has finally reached its “Minsky Moment,” or in the case of echoing America’s demise, its “AIG Moment.”

According to the China Insurance Regulatory Commission website, China regulators to take control of Anbang Insurance from Feb. 23, 2018 to Feb. 22, 2019.

Additionally, former Chairman Wu Xiaohui (who, as a reminder, is married to Deng Xiaoping’s granddaughter, and was in talks with Jared Kushner for stake in 666 Fifth Ave) will be removed and prosecuted for alleged economic crime.

China’s insurance regulator said Anbang violated insurance rules in fund use, according to the statement.

As we detailed in June of lat year, while largely ignored on the list of potential Chinese risk factors, Anbang’s troubles could soon become systemic.

In early May, Chinese insurance regulators ordered Anbang to stop selling two investment products. One, they said, was improperly marketed as long-term insurance while a crucial application for the other lacked an actuary’s signature. By that point, Anbang was already in trouble. Questions about Anbang’s financial strength had begun circulating on social media in China in March and April, as Chinese officials publicly raised questions about sales of wealth management products by some insurers.

If the drop in revenue is steep enough, Anbang could eventually be forced to liquidate assets. A big factor will be what happens with its existing policies and investment products, which comprise China’s shadow banking system. As the NYT adds, Anbang’s annual report provides little information on the monthly tempo at which its previously issued investments are maturing. The company might need to pay them out if they are not rolled over into further investments with the company. The company’s policies do have very stiff penalties on early redemption to discourage holders from turning them in early for cash. Anbang could raise money by selling some of its investments, but that could take time.

Additionally, the conglomerate, which over the past 3 years was nothing short of the world’s most aggressive “roll up” has been an active investor in Western hedge funds, in addition to making outright acquisitions of overseas companies. And those terms tend to impose severe limits on Anbang’s ability to ask for its money back quickly. That said, a firesale of Anbang assets, which include the Waldorf Astoria, should be a fascinating event.

The biggest risk from a potential unwind of Anbang, however, is the fate of its billions in  WMP “assets” and whether any troubles at the insurer lead to investor impairment, and a potential run on China’s $8.5 billion “shadow bank” considered by many as the Achilles heel of China’s massively overlevered financial system.

All of which explains why Chinese regulators have finally stepped in, removed and prosecuted Wu, and bailed out the beleagured behemoth with a capital injection aimed at restructuring the organization.

Additionally, China has reportedly told banks to suport the other systemically dangerous conglomerates including HNA Group.

 

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

Authored by Tom Luongo,

The irony is so thick you’d think it was made from ballistic jelly.  But, that’s exactly what’s needed to contain this shot across the election-tampering bow the Russians just pulled off.

image courtesy of CoinTelegraph

According to Coindesk, the city of Moscow is unveiling an Ethereum-based version of its voting system called Active Citizen.  By putting the votes on the blockchain, as long as the code is solid, then the results cannot be disputed.

This is one of the major promises of the trustless systems the crypto-community has been clamoring about for nearly a decade now.  From the moment I heard about Ethereum and smart contracts, the first application that popped into my head was voting.

Votes need to be on the blockchain.

Nothing in our current society is more important than removing the spectre of corruption from our elections.  While I personally think voting is a complete waste of time (Don’t Vote! It only encourages them, is my motto) the reality is a tremendous amount of power is commanded through the siren’s call of the democratic mandate voting confers on a society.

So, it only makes to create a voting system in capable of being hacked.

I can almost hear the screams of terror from the Democratic party in the U.S. as I type those words.

They know they’ll never win a national or state-wide election again without ballot stuffing, voter bussing and illegal immigrants voting multiple times.

So, the next words you’ll hear from them regarding any kind of blockchain-based voting system is “All poll taxes are racist.”

Active vote has been around a while as an Oracle-based system.  For the Ethereum-based system Moscow is starting small …

…allowing residents to cast votes for measures ranging from the name of their new metro train to the color of the seats in a new sports arena. But in an effort to soothe people’s concerns over whether to trust the city in its vote counting, it’s added a private version of the ethereum blockchain to that project’s architecture.

“Of course, sometimes we hear that not all the votes are trusted,” said Andrey Belozerov, the strategy and innovations advisor to the city’s CIO. “So, we decided to use a blockchain for the Active Citizen project, as a platform of electronic trust.”

The ethereum-based platform, which allows anyone to audit the open-source results, has been downloaded by more than 100 node operators since its December launch.

There are concerns, rightly, about scaling and clearing enough transactions in a reasonable amount of time.  So, it is best to test this system on inconsequential votes like the colors of seats on the Moscow Metro.

The Real Message

But, make no mistake, the message here is clear.  Russia is moving towards a transparent, functioning democratic system.  These small matters are simply beta-tests for wider adoption of this technology over time.

The first real milestone should be a local election with the final goal being national elections.

While trust in government institutions in the West is falling at an alarming rate, the evil, corrupt Russians led by chief Mafioso Vladimir Putin are acting to add faith in their system.

Democracy in Russia is just over a generation old but the corruption left behind by the implosion of the Soviet Union and subsequent pillaging by the West under Yeltsin is still very much a problem.

That this announcement comes during the hysteria surrounding Special Counsel Robert Mueller’s indictment of thirteen Russian individuals and groups for the crime of being ‘internet trolls’ makes makes Mueller look even more of the useful idiot for anti-democratic forces than he already does.

Mueller’s witch hunt for Russian bogeymen is the exact wrong way to restore faith in these systems.  All it’s doing is further alienating voters from the process.  The message from him and Assistant Attorney General Rod Rosenstein last Friday was clear.

“You are too stupid to have voted for Donald Trump honestly.  We uncovered the truth that your perceptions were clouded by a bunch of Russian trolls looking for some cheap Google AdWords money.”

I guess that stuff plays on the D.C. cocktail party circuit and college campuses, but it doesn’t play pretty much anywhere else.

And it’s the deadly seriousness with which these people drone on about the ‘sanctity of our elections’ that is the most ironic.

So, while the entrenched powers in D.C. still stamp their feet and complain about an election outcome they didn’t like, Russia is moving to ensure one of Josef Stalin’s most oft-quoted maxims is no longer applicable to theirs.

“Those who cast the votes decide nothing; those who count the votes decide everything.”

* * *

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via Zero Hedge http://ift.tt/2FpV1Di Tyler Durden

National Security Advisor H.R. McMaster may be headed back to the military amid ongoing tensions with the President, CNN reported Thursday.

According to “half a dozen defense and administration officials,” the Pentagon has been quietly considering options that would allow Trump to boot the three-star general out of his current role and back into the military. From CNN:

While administration officials have privately said the preference is to move McMaster into a position within the Army or Defense Department that qualifies as a promotion, some within the Pentagon feel he has become politicized in the White House and have expressed reservations about him returning to the military in a prominent role. Some defense officials caution that the President could also go as far as not to offer him a fourth star and force him to retire.

Five days ago Trump lashed out at McMaster over Twitter, after the National Security Advisor told an international audience at the Munich Security Conference that Russian interference in the US election is “now incontrovertible” following Special Counsel Robert Mueller’s indictments of 13 Russian nationals – while failing to mention that “the results of the 2016 election were not impacted or changed by the Russians,” as told by Deputy Attorney General Rod Rosenstein,” adding “the only Collusion was between Russia and Crooked H, the DNC and the Dems. Remember the Dirty Dossier, Uranium, Speeches, Emails and the Podesta Company!” 

General McMaster forgot to say that the results of the 2016 election were not impacted or changed by the Russians and that the only Collusion was between Russia and Crooked H, the DNC and the Dems. Remember the Dirty Dossier, Uranium, Speeches, Emails and the Podesta Company!

— Donald J. Trump (@realDonaldTrump) February 18, 2018

This isn’t the first time McMaster’s neck has reportedly been on the chopping block, as West Wing rumors swirled over his departure last fall.

In January, McMaster quashed rumors of his departure, telling reporters “I have a job and it is my intention to go as long and hard as I can in service of the President of the nation,” adding that it was “a tremendous honor to do this job every day.” 

Trump’s first National Security Advisor, Michael Flynn, resigned shortly after taking office amid a controversy over whether he lied to Vice President Mike Pence about his contacts with Russian ambassador, Sergey Kislyak. 

On Thursday, the Pentagon directed all inquiries about McMaster to the White House. “General McMaster works for President Trump. Any decision with regards to staff, the White House will make those determinations,” said chief spokesperson Dana White. Meanwhile, White House Press Secretary Sarah Sanders told reporters on Tuesday that Trump “still has confidence in General McMaster.” 

A Source within the White House, leaking to CNN, reports that Trump can’t stand McMaster’s demeanor during briefings – and that the President considers his National Security Advisor to be “gruff and condescending.” 

He prefers the briefing style of someone like CIA Director Mike Pompeo or Defense Secretary James Mattis, who patiently answer his questions, regardless of the premise. McMaster, meanwhile, is the person who delivers the news that Trump doesn’t want to hear on a daily basis, according to the senior Republican source.

The issue is not political but mostly stylistic, as McMaster and Mattis tend to discuss information before it is presented to the President, the same source added. –CNN

Some have suggested that McMaster could fill the role of the current commander of US forces in South Korea, General Vincent Brooks – who is expected to leave his post in the coming months on a scheduled rotation. Others have pointed to a post replacing Gen. John Nicholson as the commander of the coalition in Afghanistan since 2016.

via Zero Hedge http://ift.tt/2GBq0vo Tyler Durden

Via MiddleEastMonitor.com,

Saudi Arabia is moving swiftly to become the next country in the Middle East with nuclear power. The Kingdom is on the verge of striking a deal with the US for the purchase of nuclear reactors despite concerns over its refusal to accept stringent restrictions against the proliferation of nuclear weapons.

Crown Prince Mohamed Bin Salman, who is the de facto ruler of the country, has ambitious plans to diversify the country’s energy source and is in the market to purchase nuclear power reactors. The potential for lucrative deals is too good to be missed and the Trump administration is thought to be mulling over loosening US law to win Saudi contracts, worth billions. The Kingdom has refused to be bound by stringent US regulations that restrict reprocessing and enriching uranium for the production of nuclear weapons.

With competitors like Russia and China waiting in the wings, Trump is keen to strike a deal with the Saudi’s and breathe new life into the American nuclear industry.

Finalists to build nuclear power stations along the Kingdom’s desolate Arabian Gulf strip will be announced in the coming months, but it’s not certain if the US will be the one to strike the deal. Israel, despite having its own nuclear arsenal, is strongly opposed to any other country in the Middle East acquiring nuclear weapons and with alliances constantly shifting in the region it may try to derail any deal.

US policy also seeks to limit nuclear weapons proliferation especially in the Middle East but Trump may have no option other than to lower restrictions with Saudi Arabia.

Although the Saudi’s have insisted that their programme will be peaceful, they have also refused to rule out the right to enrich uranium to weapons grade. A senior Saudi official was quoted by the Wall Street Journal admitting as much.

“I’m not saying Saudi would want to enrich uranium tomorrow or anytime soon but they don’t want to be committed to anything that bans them from doing it. It is quite political,” the unnamed senior official said.

His comments have stirred speculation that one of the purpose of the nuclear program is to compete with Iran and maintain an option to develop nuclear weapons. With some overlapping technology it would be in a strong position to move in that direction if the Kingdom desired so.

It’s not clear to what extent Trump will be able to convince Congress to agree to the deal. Under US law any export of nuclear technology involves signing a non-proliferation document known as a 123 agreement. The UAE signed one in 2009 which is said to be the most restrictive and has become as the gold standard.

Saudi’s, however, have reject the gold standard and the Trump administration must now come out with a new plan that will not completely block Riyash’s path to acquiring nuclear weapons.

via Zero Hedge http://ift.tt/2EP7Aa1 Tyler Durden

As many college athletes know all too well, funding for more niche sports like – for example – luge is often lacking, and securing more often requires hours of fundraising by the team’s boosters.

Which is why, ahead of the Winter Games in PyeongChang, some teams started getting creative. For instance, fundraisers for the US luge team have started accepting donations in bitcoin. Indeed, the team has raised several thousand dollars worth of bitcoin.

The team is hoping crypto donations will eventually comprise a substantial portion of its funding, according to Bloomberg.

“Both know all about speed, crashes, risk management, and holding on. Which is maybe why the US Luge Team and Bitcoin are made for each other,” the team wrote on its website, which features images of athletes lying on top of a flat sled speeding down a curvy ice track. “Funds historically have been scarce, but the sport of luge has always been one to reward innovation and technology.”

Ty Danco, a former 1980 luge Olympian and now an angel investor, pushed the idea for accepting bitcoin. He eventually became the first to make a donation to the team in crypto.

“There’s no doubt in my mind that the luge team needs a whole lot more money,” Danco said.

USA Luge started accepting cryptocurrency donations in December in the run-up to the Winter Olympics in Pyeongchang. As of Feb. 9, the day of the opening ceremony, the team had collected 0.673 Bitcoins, which at the time was worth about $5,400. As of Feb. 20, the value of the Bitcoin donations had risen to about $7,300.

The donations are not only tax deductible, but “from a tax point of view, donating bitcoin to USA Luge gives donors the benefits of not paying taxes on any appreciated Bitcoin” – which could be a huge incentive for potential donors who’ve been long-term holders.

The team received an influx of coins after Chris Mazdzer won silver on Feb. 11, the first-ever US Olympic medal in men’s singles luge. Within hours, three Bitcoin donations worth about $25 as of Feb. 20, came in. The donations haven’t been as promising as the team has hoped, but the team isn’t ready to give up on bitcoin yet.

“It’s just going to sit there and do nothing for at least three years. You know this is a long term bet on the viability of Bitcoin,” Danco said.

via Zero Hedge http://ift.tt/2Foy4jw Tyler Durden