Category: zerohedge

As the number of confirmed coronavirus cases at 830 with 25 deaths, worldwide Google searches for “virus mask” have erupted ahead of the Lunar New Year holiday. 

The deadly virus is causing alarm because of how easily it spreads between people. So far, there are no drugs, known at the moment, that can prevent human to human transmission. 

Videos are surfacing on social media, showing people in China dropping dead as authorities have locked down seven cities in an unprecedented effort to contain the outbreak. 

In #Wuhan，people are collapsing on streets due to the deadly #WuhanPneumonia .
so helpless.#WuhanCoronavirus #WuhanOutbreak pic.twitter.com/X5ho3Llpcm

— 巴丢草 Badiucao (@badiucao) January 23, 2020

More and more…pic.twitter.com/z5Dpu7RASa

— Turkish Market (@kamerknc) January 23, 2020

Bugün kaçıncı oldu bu yerde rastgele yatanların videosu… Vücut pat diye gidiyor. pic.twitter.com/29YA3uZCCu

— Turkish Market (@kamerknc) January 23, 2020

There have been multiple cases of people collapsing on the streets due to the coronavirus outbreak in Wuhan & various parts of China#WuhanCoronavirus #Wuhan#WuhanOutbreak #China pic.twitter.com/4iIwJCGl0M

— Jimmy Lee Curtains (@WulfMunkey) January 23, 2020

Worldwide searches for “virus mask” have surged in the last five days as cases of the deadly virus have spread from China to the U.S., Singapore, Thailand, Japan, South Korea, and Vietnam. 

Top regions for “virus mask” searches are in Singapore, China, Macao, Hong Kong, and the Philippines. 

Other related global queries are “n95 mask,” “buy n95 mask,” “wuhan,” “wuhan virus,” and “where to buy n95 mask.” 

More related global queries include “china virus,” “3m n95 mask,” “n95 respirator mask,” “n95 respirator,” and “chinese virus.” 

Google searches for “n95 mask,” a medical respirator designed to protect the wearer from liquid and airborne particles contaminating the face, was the most searched across the world, and in Macao, Singapore, China, Hong Kong, and the Philippines over the last five days.  

Since the first coronavirus case was confirmed just north of Seattle on Tuesday, searches for “virus mask” across the U.S. have exploded. People in Washington, Hawaii, California, District of Columbia, and Massachusetts Googled it the most. 

On related queries within the U.S. – many searched “n95 mask,” and where to buy the surgical respirator. Some searches include”n95 mask cvs,” “n95 mask home depot,” and “n95 mask target.”

It seems the global run on surgical masks has started as the deadly virus spreads across the world. 

As far as world epidemics and the global stock market performance, here’s a chart showing what could happen next: 

 

Authored by Nick Cunningham via OilPrice.com,

The global oil and gas industry is facing the “twin threats” of the loss of profitability and the loss of social acceptability as the climate crisis continues to worsen. The industry is not adequately responding to either of those threats, according to a new report from the International Energy Agency (IEA).

“Oil and gas companies have been proficient at delivering the fuels that form the bedrock of today’s   energy system; the question that they now face is whether they can help deliver climate solutions,” the IEA said.

The report, whose publication was timed to coincide with the World Economic Forum in Davos, critiques the oil industry for not doing enough to plan for the transition. The IEA said that companies are spending only about 1 percent of their capex on anything outside of their core oil and gas strategy. Even the companies doing the most are only spending about 5 percent of their budgets on non-oil and gas investments.

There are some investments here and there into solar, or electric vehicle recharging infrastructure, but by and large the oil majors are doing very little to overhaul their businesses. The top companies only spent about $2 billion on solar, wind, biofuels and carbon capture last year.

Before even getting to the transition risk due to climate change, the oil industry was already facing questions about profitability. Over the past decade the free cash flow from operations at the five largest oil majors trailed the total sent to shareholders by about $200 billion. In other words, they cannot afford to finance their operations and also keep up obligations to shareholders. Something will have to change.

But, of course, as climate policy begins to tighten, oil demand growth will slow and level off. Most analysts say that it won’t require a big hit to demand in order for the financial havoc to really begin to devastate the balance sheets of the majors. Demand only needs to stop growing.

The IEA said there are things the industry can do right now – and should have done a long time ago. Roughly 15 percent of the energy sector’s total greenhouse gas emissions comes from upstream production. “Reducing methane leaks to the atmosphere is the single most important and cost-effective way for the industry to bring down these emissions,” the IEA said. But, the Permian is flaring more gas than ever, and methane leaks at every stage of the extraction and distribution process. Drillers have promises improvements, but the industry’s track record to date is not good.

Meanwhile, the IEA also noted that while attention is often focused on the oil majors, national oil companies (NOCs) account for more than half of global oil production. The majors only account for about 15 percent.

It is one thing for ExxonMobil or Chevron to face an existential crisis – which, absent an attempt to transition to a low-carbon business, they certainly do – but it’s an entirely different thing for the NOCs who will struggle to deal with the energy transition. The threat from the energy transition is not just to a specific business, but to whole governments and entire populations. “Some are high performing, but many are poorly positioned to adapt to changing global energy dynamics,” the IEA said. “None of the large NOCs have been charged by their host governments with leadership roles in renewables or other noncore areas.”

Ultimately, the report from the IEA should be worrying for the industry. The agency itself has faced criticism for not being more at the forefront of calling for a clean energy transition, and its forecasts for renewables have consistently undershot actual improvements for renewable technologies. The agency also continues to call for more upstream oil and gas investment. In other words, the IEA is somewhat conservative, and has been slow to recognize major shifts in the energy sector.

As such, the majors should probably take note when the IEA says something like “the transformation of the energy sector can happen without the oil and gas industry.” They can drag their feet, and will become increasingly ravaged by policy change and a deterioration in their core business. Or, they could proactively transform themselves, as the IEA says they should. Solutions to climate change “cannot be found within today’s oil and gas paradigm,” the agency said.

President Trump was dismissive of widespread reports of eleven US soldiers sustaining head injuries as a result of the Jan.8 Iranian ballistic missile attack on Ayn al-Asad airbase in Iraq. At least eight had been airlifted to a medical facility in Germany for possible “traumatic brain injuries”, which the Pentagon and administration kept mum about in the days following. 

While fielding questions at Davos on Wednesday, Trump downplayed what he likened as mere “headaches” when pressed about the issue and the administration’s evolving narrative, which initially emphasized “no US casualties” as a result of the Iranian attack.

Trump explained at the news conference his view that the injuries were “not very serious,” and added that “I heard they had headaches.” This prompted some veterans groups to reportedly say Trump is “somewhat out of touch” with the seriousness of it.

‘THEY HAD HEADACHES’: President Trump told reporters injuries sustained by several U.S. service members airlifted from Iraq after the Iran missile attacks were “not very serious” compared to combat injuries he’s seen that have resulted in lost limbs. https://t.co/2UHJ5xQXUq pic.twitter.com/kKSbMOrXTL

— World News Tonight (@ABCWorldNews) January 22, 2020

Meanwhile, the Pentagon is preparing for a ‘likely’ deployment of anti-air defense systems to Iraq in order to provide greater protection for US forces against future Iranian missile threats. 

In the wake of the Iranian assault, a number of pundits and officials questioned why there weren’t anti-air defenses already in place.

According to FOX:

Fox News previously reported that the U.S. military didn’t shoot down any of Iran’s ballistic missiles because there was no missile defense system in position.

A senior Pentagon official told Fox News that they believed an Iranian missile attack was “unlikely.” U.S. officials say a Patriot air defense system will now likely be deployed.

There is a worldwide shortage of Patriots. Some units are currently bogged down protecting bases in Saudi Arabia.

Patriots are also currently deployed in defense of US assets, especially expensive military aircraft, around bases in Kuwait, Qatar, and the UAE.

These defensive systems could be placed in Iraq at a time when the entire question of a future US military presence there is in doubt, given Iraq’s parliament is moving to expel the Americans. 

Trump recently threatened sanctions on its uneasy ally should Baghdad go through with it. Washington fears ‘Iranian expansion’ and entrenchment should it bring the troops home. 

Authored by Bob Williams via Alhambra Investments,

What feeling do you have when you hear IRS? Is there a sick feeling in the pit of your stomach or do you just roll your eyes knowing that April 15th will be here all too quickly? Throw in the word audit and emotions and blood pressure can reach levels you never dreamed of.

CPA Jim Buttonow has 30 years of experience in tax technology and representing people before the IRS. He’s written this article outlining 10 major trends he sees in IRS audits.

Most taxpayers envision Internal Revenue Service audits as intrusive investigations resulting in criminal sentences. Today, nothing could be farther than the truth: The IRS’s auditing power has been greatly diminished in the past decade. IRS audit resources have been reduced by 28 percent in the last decade and the audit rate has dropped from 0.9 percent in 2010 to 0.5 percent in 2018. In fact, the number of IRS audits in 2018 (991,168) dropped by almost half compared to 2010 (1.735 million).

Since 2010, the IRS has been tasked with doing more with less resources, but the reality is that the IRS cannot do more audits with less resources. The IRS audit data reveals 10 trends from the past decade that have become the new realities for current state of IRS audits.

1. Most audits are done by mail

This trend started with IRS reforms in the late 1990s. In 1998, just before IRS reforms, the service audited 47 percent of taxpayers by mail. In the past decade, IRS data shows that the service prefers the less-intrusive mail audit. Today, three out of four audits of individual taxpayers are done by mail — a ratio that has held since 2010. These audits usually challenge small amounts of credits or deductions on a return, and require only a mail response, with documentation, to an IRS central campus location.

2. The main issue in audits: The EITC

Fifty percent of all individual audits involve a taxpayer who is claiming the Earned Income Tax Credit. IRS efforts to curb EITC errors largely rely on audits to hold a questionable EITC claim on a return. Politicians have criticized the IRS in the past for picking on low-income taxpayers, and the EITC audit rate is their main evidence. Compared to other taxpayer profiles, the IRS clearly has the propensity to address the EITC taxpayer more than other issues, even the small-business individual taxpayers. (See below for the trend on high wealth audits.)

3. An alarming amount of people do not respond to an audit

There is linkage here to the EITC mail audit. The Taxpayer Advocate reports that almost two-thirds of all mail audits go without response or are assessed by taxpayer default. That is, the IRS just assesses the additional tax without the taxpayer contesting the service’s determination. Only one in five taxpayers agree to their mail audit adjustment — and likely, from the data, they don’t understand how to appeal. This mess leads to many audit reconsiderations (i.e., an audit “re-do” request). Again, more question marks here for the targets of mail audits — the low-income population.

4. The most common IRS challenge to a return is not an audit

The dreaded CP2000 Automated Underreporter notice is current three times more prevalent than an IRS audit. The CP2000 program utilizes IRS information returns (W-2s and 1099s) to match them against the filed return to discover discrepancies. A discrepancy may result in a CP2000 notice proposing additional tax (and possibly penalties) to the return. Most taxpayers do not realize (or care, for that matter) that a CP2000 is not an audit. The CP2000 is less intrusive than an audit because the IRS is not allowed to examine the taxpayer’s books and records. For most taxpayers, however, the difference does not matter: The average amount owed for a CP2000 notice in 2018 was $1,773.

However, there is good news for taxpayers: Even the mostly automated underreporter process has been cut back due to lack of IRS resources.

5. The IRS knows who to audit

The audit change rate was 89 percent for all taxpayer types in 2018. In fact, the audit change rate has been between 81 percent and 89 percent since 2005. When the IRS selects a return for audit, they pretty much know it will likely result in an adjustment.

6. Field audits are rare, but expensive

In 2018, the IRS hit an all-time low for the number of field audits conducted. Field audits are the most comprehensive, and are saved for complex taxpayers and situations — like businesses and tax avoidance schemes. The IRS has said that their audits have a great return on investment and reduction of audit results in large amounts lost to the U.S. Treasury. The numbers support the IRS. In 2018, the average amount owed in a field audit was $85,400. Luckily for taxpayers, the IRS only conducted just under a quarter of a million field audits in 2018.

7. Want your business to escape audit? Be an S corp or partnership

The IRS continues to struggle to audit S corp and partnership returns. This situation is likely to get worse as the more experienced IRS business auditors continue to retire. Audit rates for S corps and partnerships are both 0.22 percent — or, put another way, one in every 455 passthrough entities were examined in 2018. It is no wonder that the number of S corporations have increased by 38 percent from 2005 to 2018 (3.5 million in 2005 versus 4.85 million in 2018).

8. Audits on the wealthy are still popular, but have dropped

In 2011, one out of every eight taxpayers who earned more than $1 million in income were audited. In 2018, the number dropped to one in every 31 taxpayers. However, those who earn more than $1 million are still among the most popular audit profiles.

9. Audits have dropped, but penalties are still prevalent

The total volume of individual audits and CP2000 notices has dropped from 4 million in 2005 to 3.9 million in 2018. However, in 2018, 606,121 individual taxpayers were assessed the accuracy penalty for making an error on a tax return (audit or CP2000 notice). In 2005, that number was only 58,366. The moral here is if the IRS has to audit or send a CP2000 notice, it will now look to penalize errors to deter future noncompliance. The number of individual taxpayers with an accuracy penalty from an audit/CP2000 notice has increased 10 times since 2005.

10. Tax evasion prosecutions are low

Finally, the “fear of an audit” myth buster. The IRS does not like to publish this statistic. In 2018, there were only 636 indictments of legal source tax crimes. IRS tax evasion criminal investigation cases have dropped by 58 percent since 2013. The main source of IRS legal source tax crime cases are IRS field auditors and criminal investigators, i.e., revenue agents and special agents. From 2013 to 2018, the numbers of revenue agents and special agents have decreased by 26 percent and 21 percent, respectively. As a result, the number of criminal investigations and indictments continue to decline.

Fear of an audit has always been a main driver for compliance with the IRS. The 2018 Realities and the IRS ability to close the tax gap. Comprehensive Taxpayer Attitude Survey continued to show that 63 percent of taxpayers cited fear of an audit as an influential behavioral factor for correctly filing and timely paying their taxes. The tax gap, as currently measured on 2011-2013 returns, shows that the Treasury loses $352 billion a year due to inaccurate tax returns. With the fear of an audit becoming a myth, how will the IRS close the tax gap?

As the fear of an audit motivator becomes less of a reality, the IRS must seek to simulate the audit by touching as many taxpayers as they can. For now, that looks like sending a lot of non-audit notices to taxpayers. Recently, the Treasury Inspector General for Tax Administration reported that the IRS sent over 219 million notices annually to taxpayers. In 2001, the number of notices sent was only 30 million. With the IRS’s current resources, the IRS notice may be the only means the IRS has to let taxpayers know that they are still there.

The Department of Justice has concluded that the Obama-era FBI should have discontinued its surveillance of Trump campaign adviser Carter Page far earlier than they did, and that the Foreign Intelligence Surveillance Act (FISA) court was shown insufficient evidence to show that Page was a foreign spy, according to the Wall Street Journal.

The DOJ delivered its conclusion to the FISA court in December filing unsealed on Thursday.

The Justice Department now appears to have concluded that there was “”insufficient predication to establish probable cause” in the last two renewals in 2017. Probable cause is the legal standard to obtain a secret warrant against suspected agents of a foreign power. The letter is classified, but is referenced in a new order declassified by a judge on Thursday. The Justice Department said it would sequester all the material it collected against Mr. Page pending further internal review of the matter. –Wall Street Journal

“The court understands the government to have concluded, in view of the material misstatements and omissions, that the court’s authorizations in (two applications) were not valid,” wrote Judge James Emanuel Boasberg, a federal district judge in Washington who also sits on the FISA court.

As The Federalist notes, this could have far-reaching consequences for special counsel Robert Mueller’s findings.

“The final warrant against Page overlapped with former special counsel Robert Mueller’s investigation of Russian interference in the 2016 election. The final three-month authorization to spy on Page was signed nearly six weeks after Mueller was appointed, meaning that Mueller may have had real-time access to and utilized nearly five months worth of surveillance of Page during the course of Mueller’s investigation. If his office used any of the information in subsequent cases, the declaration that the final two spy warrants against Page were invalid could potentially nullify previous or future convictions sought by Mueller’s office.“

In a blockbuster ruling, the FISA court declared that least two of the four Carter Page spy warrants were illegal, meaning ANY evidence collected from that surveillance is now invalid.

This could have huge implications for every case brought by Mueller. https://t.co/XIIVBKf7XI

— Sean Davis (@seanmdav) January 23, 2020

Judge Boasberg set a Jan. 28 deadline for the government to show the court what steps they have taken to avoid similar abuses in the future.

Authored by Ryan McMaken via The Mises Institute,

In most times and places, crime tends to be a highly localized phenomenon. I have covered this for Mises.org at the national level, pointing out that homicide rates in, say, the Mountain West and New England are far lower than homicide rates in the Great Lakes region or the South. Gun-control laws clearly don’t explain these differences, since many places with rock-bottom homicide rates such as Idaho and Maine also have few controls on private gun ownership.

Thus, discussion of the “US homicide rate” tells us precious little about general trends since US homicide rates are kept relatively high by only a small number of cities. Baltimore city, for example, has a homicide ten times higher than the nation overall, and seventeen times larger than the Baltimore suburbs. In 2018, Baltimore reported more than three hundred homicides while similarly sized Denver reported about 67. These are huge differences.

Clearly, speaking generally of homicides as a problem in the United States or even in the State of Maryland tells us little about conditions experienced by most of the population in these places.

Given the very low homicide rates that prevail throughout most of the US, it is clear that enormous swaths of the US population are able to obtain, own, and use firearms freely without turning their cities and towns into war zones.

Given the recent drive for more gun control in the state of Virginia, it may be helpful to look and see whether homicides are a general problem for Virginians or limited to only certain parts of the state.

Regional Differences in Homicides in Virginia

In 2018, the homicide rate in Virginia was 4.6 per 100,000. That’s below the national rate of 5 per 100,000, but is well above that of many states such as Iowa, Utah, and Minnesota.

But, of course, homicides are not spread evenly across Virginia. As with many other states, homicide rates are far higher in some cities and metro areas than in others.

For example, according to the FBI’s 2018 crime statistics, the homicide rate in the city of Richmond (i.e., not the overall Richmond metro area) was nearly five times higher, with 22.9 homicides per 100,000 people. But among cities with more than 10,000 people, the highest rate was found in Petersburg, which in 2018 had a homicide rate nearly ten times that of the state overall, with 45 homicides per 100,000. Other especially violent cities (proportionally speaking) were Danville, Portsmouth, Norfolk, Newport News, and Hampton. These can be contrasted with some large cities with very few homicides, including Charlottesville and Virginia Beach.

Source: Table 8, Offenses Known to Law Enforcement, by City (2018)

And, of course, the FBI report lists more than one hundred Virginia cities—ranging in size from 300 to 44,000 residents—with zero homicides.

What would homicide rates look like in Virginia without some of these cities?

Well, according to the FBI’s report, there were 391 total homicides in Virginia in 2018. Of those, 122 were in the Virginia Beach-Norfolk metro area, and 100 were in the Richmond metro area. These two metros alone contributed more than half (57 percent) of all the state’s homicides. Combined, these two metros (which amount to only 2.9 million of the state’s 8.5 million residents) had more homicides than all the rest of the state.

Source: Table 6, Crime in the US by Metropolitan Statistical Area (2018)

By removing just these two metro areas from Virginia, the homicide rate for the remainder of the state would be reduced from 4.6 per 100,000 to 3 per 100,000.

Political Implications

Since Democrats won a majority in both houses of the state legislature last election day, legislators have begun to push through new restrictions on gun ownership in Virginia. Proposals include limiting the number of guns bought per month, a ban on “assault” weapons, and so-called red flag laws.

Supporters insist the laws are necessary for the safety of residents statewide. But it is unclear that the issue of homicides in Virginia ought to be addressed by statewide policies.

The new push for gun control in the state has been pushed largely by advocates claiming the new measures are necessary to prevent shootings like the 2019 Virginia Beach mass shooting. It is unclear why any of the proposed rules would address the factors behind the Virginia Beach shooting given that the shooter had no criminal record. Moreover, it is clear that the overwhelming majority of homicides in the state are ordinary homicides tied to specific areas and municipalities—and the conditions therein.

If policymakers wish to address these issues, it is not at all clear why general statewide legislation would provide any solutions. After all, as we have discovered in a great many local governments, policies tends to focus on nonviolent crime, with most resources devoted to petty drug enforcement or similar infractions. In Baltimore, for example, the police department assigns less than three percent of its police force to homicide investigations. Yet, this sort of neglect by city personnel has been shown to be a key factor in fostering an environment of lawlessness.

Moreover, since we have no data on how often firearms are used to deter crime, it is impossible to know what the likely effect of additional prohibitions on legal gun ownership will be.

Not surprisingly, however, state lawmakers have taken the easy way out. Rather than address the serious and unexciting steps necessary to truly address violence at the local level, policymakers have opted to do the politically expedient thing and pass statewide laws designed to pander to specific interest groups. Whether or not these laws have the desired effect, of course, is politically unimportant. Some politicians have decided that it is “worth it” to burden much of the state’s population—millions of whom own firearms without ever using them for violent ends—with a wide array of new regulations that could render many residents criminals for owning devices which had been purchased legally in the recent past.

The U.S. Air Force (USAF) conducted its second Elephant Walk within weeks, this time with ten Fairchild Republic A-10 Thunderbolt II fighters at Selfridge Air National Guard Base, located in Harrison Township, Michigan, said Defense Blog. 

Earlier this month, we reported 52 Lockheed Martin F-35 Lightning II stealth fighters conducted an Elephant Walk down a runway at Hill Air Force base in Utah. It was a show of massive force against Iran as the world was on edge for war. Since then, tensions have receded but are still elevated. 

Elephant walks are generally conducted right before a minimum interval takeoff (MITO), a technique used by USAF to scramble all jets to take off at twelve- and fifteen-second intervals.

The objective of the exercise is to get all fighters and bombers in the air within fifteen minutes of an alert of an incoming missile attack.

“A-10 Thunderbolt II fighter aircraft flown here by pilots of the 107th Fighter Squadron, perform an, “Elephant Walk,” on the runway as they deploy for Snowbird January 21, 2020,” according to a press release issued by the 127th Wing Public Affairs.

Defense Blog noted that an Elephant Walk “is a fundamental training element when preparing for global strike missions.”

The 127th Wing’s motto is “We Stand Ready,” as the latest training exercise suggests the A-10s could be preparing for combat in the Middle East. 

We’ve noted in the last several weeks the Pentagon has sent thousands of troops, B-52 bombers, stealth fighters, and other military equipment to the Middle East as a show of force against Iran. 

Earlier this month, Iranian state media tweeted a promotional war video of its defensive missile systems, the same one that shot down Ukraine International Airlines Flight 752, going against a wide range of U.S. warplanes. 

عاجل : التلفزيون الإيراني بث قبل قليل نشيد الحرب الإيرانية – العراقية في إشارة إلى حالة الحرب التي قد تشهدها المنطقة بعد مقتل سليماني . هذا النشيد ومترجم إلى اللغة العربية. pic.twitter.com/2NnNxYDOKW

— محمد مجيد الأحوازي (@MohamadAhwaze) January 6, 2020

Authored by Jacob Hornberger via The Future of Freedom Foundation,

There have been two completely different Americas in U.S. history.

Let’s examine twelve ways in which they differ.

1. For more than a century after the United States came into existence, there was no income taxation or IRS. People were free to keep everything they earned and decide for themselves what to do with it.

Today, income taxation and the IRS are a core feature of American life. The government essentially owns everyone’s income and decides how much people will be permitted to keep, much as a parent permits his children to have an allowance.

2. No Social Security. Earlier Americans rejected the concept of mandatory charity. People were left free to decide for themselves whether to help out their parents and others.

Today, Social Security is a core feature of American life. The federal government forces younger people to help out seniors by forcibly taking their money from them and giving it to seniors. Social Security is a classic example of a socialist program, one in which the government forcibly takes money from people to whom it belongs and gives it to people to whom it does not belong.

3. No Medicare and Medicaid. Americans had a free-market healthcare system, one in which there was no government involvement. The result was the finest healthcare system in the world, one in which healthcare prices were low and stable, innovations were soaring, doctors loved what they did in life, and the poor were receiving free healthcare services from doctors and hospitals.

Today, seniors and the poor are dependent on Medicare, another socialist program that is characterized by massive dysfunction, soaring prices, perpetual crisis, and physicians who hate what they do in life.

4. No centrally managed economy. Americans believed that people should be free to manage their own economic activities.

Today, whoever happens to be president assumes the role of centrally managing the economy, taking credit when the economy is going well and blaming the Federal Reserve when the inevitable crashes come. Central planning is, of course, a socialist principle.

5. No Federal Reserve or paper money. The official money of the country consisted of gold coins and silver coins. There was no central bank (i.e., Federal Reserve) to inflate or debase the currency.

Today, the Federal Reserve continues to destroy people’s money through monetary central planning, inflation, and debasement. The official money is now paper Federal Reserve notes, which promise to pay nothing. 

6. Very few economic regulations, including minimum-wage laws. Americans favored a free-enterprise economic system, one in which economic enterprise was free of government control and management.

Today, economic regulation, including minimum-wage laws, form a core feature of American economic life.

7. No immigration controls. Americans believed in the right of people to freely cross borders in the pursuit of happiness.

Today, Americans maintain an enormous apparatus that centrally plans the movements of people into the United States. To enforce the system, the federal government has brought a brutal police state into existence in the American Southwest. This socialist immigration system is characterized by death, suffering, and perpetual crisis.

8. No drug laws. Americans believed that people have the right to ingest whatever they want, no matter how harmful or destructive.

Today’s Americans believe that it is a rightful role of government to punish people for ingesting harmful substances, much as a parent punishes a child for putting bad things into his mouth.

9. No national-security state, including a Pentagon, military-industrial complex, empire of domestic and foreign military bases, CIA, NSA, or FBI. Our ancestors used the Constitution to call into existence a governmental structure known as a limited-government republic.

Today, the centerpiece of American life is the national-security state, along with its sordid, dark-side practices of state-sponsored assassinations, torture, indefinite detention, kangaroo military tribunals, and mass secret surveillance.

10. No empire, foreign interventionism, or foreign wars.

Today, military empire, foreign interventionism, coups, foreign aid, alliances with dictatorial regimes, regime-change operations, sanctions, embargoes, invasions, and occupations are an ongoing central part of American life.

11. No public-schooling systems. Education was, by and large, based on free-market principles.

Today, Americans are required to subject their children to a state-approved education. There are compulsory school-attendance laws, government schoolteachers, government-approved textbooks, government-established curricula, and compulsory taxation to fund it all. Public schooling is another example of a socialist, centrally planned program.

12. No gun control. Americans believed that the right to keep and bear arms is a natural, God-given right that cannot be controlled and regulated, much like such other rights as freedom of speech, freedom of the press, and freedom of religion.

Today, the right to keep and bear arms is controlled, regulated, and even nullified in certain areas of the country.

These twelve major differences naturally give rise to an important question: Was the abandonment of America’s sound founding principles the reason for the massive chaos, crises, and dysfunction that riddle our society today?

Stephan Halper, the longtime CIA and FBI operative who conducted espionage on the 2016 Trump campaign, was feeding information to Washington Post reporter David Ignatius through his handler, according to The Federalist, which describes his actions as “more evidence that the intelligence community has co-opted the press to push anti-Trump conspiracy theories.”

According to a court filing by Michael Flynn’s defense team, Halper’s ‘handler’ in the Office of Net Assessment (ONA), Col. James Baker, “regularly lunched with the Washington Post reporter.“

(Also leaking to Ignatius was Christopher Steele)

As we noted in May of 2018, Halper was paid over $1 million by the Obama administration through the Office of Net Assessment – nearly half of which came during ‘Russiagate’ – in which he not only surveilled multiple Trump campaign aides, he was involved in an effort to tie General Flynn to a Russian academic, Svetlana Lokhova, as part of a smear campaign.

Svetlana Lokhova, the Russian-born English citizen and Soviet-era scholar, told The Federalist that she only realized the significance of her communications with and about Ignatius following the filing of attorney Sidney Powell’s reply brief in the Michael Flynn case.

In last week’s court filing, Powell highlighted how the CIA, FBI, Halper, and possibly James Baker used the unnamed and unaware Lokhova and the complicit Ignatius to destroy Flynn. This James Baker is not the one who worked under James Comey at the FBI, but a James Baker in the Department of Defense Office of National Assessment. –The Federalist

Powell wrote:

Stefan Halper is a known long-time operative for the CIA/FBI. He was paid exorbitant sums by the FBI/CIA/DOD through the Department of Defense Department’s Office of Net Assessment in 2016. His tasks seem to have included slandering Mr. Flynn with accusations of having an affair with a young professor (a British national of Russian descent) Flynn met at an official dinner at Cambridge University when he was head of DIA in 2014. Flynn has requested the records of Col. James Baker because he was Halper’s ‘handler’ in the Office of Net Assessment in the Pentagon, and ONA Director Baker regularly lunched with Washington Post Reporter David Ignatius. Baker is believed to be the person who illegally leaked the transcript of Mr. Flynn’s calls to Ignatius. The defense has requested the phone records of James Clapper to confirm his contacts with Washington Post reporter Ignatius—especially on January 10, 2017, when Clapper told Ignatius in words to the effect of ‘take the kill shot on Flynn.’ It cannot escape mention that the press has long had transcripts of the Kislyak calls that the government has denied to the defense.

Lokhova sued Halper and multiple MSM outlets for defamation after Halper-fuelled rumors that she was a Russian spy who had ‘honeypotted’ Flynn, which were first promoted by Lokhova’s mentor at Cambridge University – Professor Christopher Andrew, who wrote in the London Sunday Times in February 2017 that her brief meeting with Flynnn during a 2015 dinner event was the beginning of the former National Security Adviser’s relationship with a Russian spy.

Prior to Andrew’s article, other outlets such as the Wall Street Journal, Washington Post and the New York Times had published rumors of a Flynn connection to a supposed Russian spy, however Lokhova had no clue it was her until she was outed.

“Halper had been pushing the story that I was a Russian spy and Flynn’s mistress since December of 2016,” Lokhova told The Federalist. “The New York Times’ Mathew Rosenberg told me a source had been circulating these stories since December 2016,” she said, adding “but they held the story until they could find a second source and someone at the Cambridge dinner.”

In his book “The Plot Against the President,” Lee Smith confirms that the story about a Flynn-Lokhova intrigue was circulated to the press starting in December 2016.

But it wasn’t until the Wall Street Journal published its March 17, 2017, article suggesting she had inappropriate contacts with Flynn that Lokhova discovered the earlier article Andrew had written about her for the Sunday Times, Lokhova said. Before then, within days of February 28, 2017, several journalists reached out to her for comment, including two working for the Wall Street Journal, but Lokhova didn’t know why.

She also didn’t comprehend who the inquiring journalists were at the time. That remained true even after her mentor and unknown betrayer, Andrew, wrote Lokhova telling her that “David Ignatius of Washington Post is in UK at moment. I’ve known him for years and trust him. I’ve given him your email and he accepts that if you don’t wish to respond, that an end to it.” –The Federalist

It is unknown what Andrew meant by Ignatius’s “inside track,” however the above email was sent to Lokhova just one month after Ignatus reported the illegally leaked details of Flynn’s conversation with Russia’s ambassador – leading to his firing.

Read the rest of the report here.

Authored by Brandon Smith via Alt-Market.com,

There are two subjects that the mainstream media seems specifically determined to avoid discussing these days when it comes to the economy:

• the first is the problem of falling global demand for goods and services; they absolutely refuse to acknowledge the fact that demand is going stagnant and will conjure all kinds of rationalizations to distract from the issue.

• The other subject is the debt bubble, the corporate debt bubble in particular.

These two factors alone guarantee a massive shock to the global economy and the US economy are built into the system, but I believe corporate debt is the key pillar of the false economy.  It has been utilized time and time again to keep the Everything Bubble from completely deflating, however, the fundamentals are starting to catch up to the fantasy.

For example, in terms of stock markets, which are now meaningless as an indicator of the health of the real economy, corporate stock buybacks have been the single most vital mechanism for inflation. Corporations buy their own stocks, often using cash borrowed from each other and from the Federal Reserve, in order to reduce the number of shares on the market and artificially boost the value of the remaining shares. This process is essentially legal manipulation of equities, and to be sure, it has been effective so far at keeping markets elevated.

The problem is that these same corporations are taking on more and more debt through interest payments in order to maintain the facade. Over the period of a decade, corporate debt has skyrocketed back to levels not seen since 2007, just before the credit crisis. The official corporate debt load now stands at over $10 trillion, and that’s not even counting derivatives exposure.  According to the Bank for International Settlements, the amount of derivatives still held by corporations stands at around $544 trillion in notional value (theoretical value), while the current market value is only around $10 trillion.  This is a massive discrepancy that can only lead to disaster.

In terms of debt-to-GDP, the credit cycle peak has spiked beyond any other peak in the past 40 years. This amount of borrowing always has consequences. Even if central banks were to intervene on a level similar to TARP, which saturated markets with $16 trillion in liquidity, the amount of cash needed is so immense and the economic returns so muted that such measures are ultimately a waste of time. The Federal Reserve fueled this bubble, and now there is no stopping it’s demise. Though, they’re behavior and minimal response to the problem suggests that they have no intention of stopping it anyway.

Currently, stock buybacks are set to decline this year, and I don’t think this is because corporations have decided they want to quit the tactic. They have to quit, because the amount of debt they are accumulating is is now outpacing their falling profits. Corporate profits peaked in the 3rd Quarter of 2018 and have been in decline ever since.  The Price-to-Earnings ratio as well as the Price-to-Sales ratio are now well above their historic peak during the dot-com bubble, meaning, stocks have never been more overvalued compared to the profits that corporations are actually bringing in.

As I warned back in 2018, Trump’s tax cuts were a gift to corporations, not average people, and that gift was designed to be squandered as there was no doubt that companies would pour all extra cash into stock buybacks instead of innovation and new jobs. This is exactly what happened.

While corporations, the Fed and Trump have been putting some effort into keeping stock markets from imploding, the real economy has been evaporating. Global import/exports are crashing, US manufacturing is in recession territory, US GDP is in decline (even according to rigged official numbers), US retail outlets are closing by the thousands, the poverty rate jumped in 30% of US counties in the past year, and high paying jobs are disappearing and being replaced with minimum wage service sector jobs.

To be sure, this process did not start under Trump, it’s been a slow motion train wreck for over a decade. But, it’s important to point out that Trump has done nothing to mitigate the crash and his obsession with the fraudulent stock market shows that he has no plans to try. The amount of time the tax cuts and debt increase bought was a couple of years. That’s it. With buybacks in decline, the question is what will keep the bubble afloat now? The Fed? That’s doubtful…

Global corporations with the most VISIBLE debt include:

• AT&T with $180 billion

• SoftBank with $154 billion

• Apple with $136 billion

• Verizon with $114 billion

• Comcast with $112 billion

• AbInbev with $110 billion

• General Electric with $115 billion

• Shell with $77 billion

• Microsoft with $67 billion

Some companies, like Apple and Warren Buffet’s Berkshire Hathaway are holding extensive cash reserves, but most do not. Also, the level of cash reserves held by certain top corporations suggests they know something is on the horizon. Why hold piles of cash when the stock market is a “sure thing”? Unless, the debt bubble is about to collapse and cash will be needed to absorb the damage?

Stock buybacks, I believe, are the litmus test for how long the corporate world can hold out against the weight of the debt bubble. 2020 appears to be the year in which buybacks are set to crumble. Corporate profits degraded over 2019 and the slide is set to continue this year. This means profits are not going to come to the rescue and stave off the explosion of the debt structure (once again, the problems of demand and debt intertwine). All that is left is the Fed, as the “buyer of last resort” becomes the buyer of only import.

The list above, of course, does not include financial companies like JP Morgan and other banks that are suspected of harboring an extensive debt load and borrowing cash frantically through the Fed’s overnight repo markets.

These loans are now coming due, and the Fed has indicated it plans to tighten liquidity once again next month while returning to balance sheet cuts. Interest rates remain well above zero, which means the more companies borrow through repo markets, the more interest they will accrue. The Fed will have to institute a full QE program on the level of the TARP bailouts and cut interest rates to zero in order to end the constant repo liquidity threat and kick the can for a couple more years, and they’ve given no indication that they plan to do this in time to stop the current crash.

For now, Fed repo intervention has achieved little except keeping stocks at all-time highs. The rest of the economy is in disarray.

The real economy will start to drag down the establishment’s favorite distraction – The Dow, as this process continues. The big question is always one of timing. How long can the delusional euphoria keep the system levitated?

The situation is one of complacency and condition. If people are suddenly confronted with an enormous forest fire surrounding their city, they will ask “What can we do to save ourselves?” But what if people are surrounded by a forest fire for ten years and it hasn’t quite reached them yet? You warn them that the winds have finally changed and it is about to expand and take their homes and they will say “What forest fire?”

It’s hard to imagine a scenario in which there are no major shocks to the financial structure for the rest of the year. With the corporate system tapped out and no longer able to act as a support for the bubble, the fundamentals will start to take over again. Geopolitical events will also have a more visible effect. A whole year without escalation with Iran?  Without escalation with North Korea? Without a pandemic threat like the coronavirus going global? Without threats of a liquidity crisis as banks starve for more and more repo loans? I think not…

It’s important not to let complacency interfere with vigilance.  A slow motion train wreck is still ultimately a train wreck.  The damage can only be mitigated by removing one’s self from the train, and preparing for the fallout.  Do not think that simply because the system has been able to drag it’s nearly lifeless body along for ten years that this means all is well.  All bubbles collapse, and corporate debt has already sealed the fate of the Everything Bubble.

*  *  *

If you would like to support the work that Alt-Market does while also receiving content on advanced tactics for defeating the globalist agenda, subscribe to our exclusive newsletter The Wild Bunch Dispatch.  Learn more about it HERE.