Bizarre: Colombian Navy Rescues Shipwrecked Smuggling Suspects Found Floating On Cocaine Bales

Bizarre: Colombian Navy Rescues Shipwrecked Smuggling Suspects Found Floating On Cocaine Bales

In a bizarre story reported by the Colombian Navy, personnel from the Colombian Navy and Coast Guard found drug smugglers clinging to cocaine bales in shark-infested Pacific Ocean waters after their vessel was hit by a rogue wave last week.

The incident occurred in the waters near Tumaco in Colombia, about 30 nautical miles from shore, said Captain Jorge Maldonado of Colombia’s Task Force Against Drug Trafficking.

Maldonado said navy and coast guard personnel were conducting surveillance and maritime control operations when they discovered the shipwreck. He said the smugglers were clinging onto cocaine hydrochloride bales for at least seven hours. In total, the navy and coast guard recovered 2,789 lbs of cocaine. 

“The coastguard arrived, and these three people were floating on a material that by its characteristics resembled drugs,” Maldonado said.

Footage of the rescue was posted on the official Twitter account of the Colombian Navy. Several pictures show three men floating in the water, surrounded by black bales of cocaine. Navy personnel can be seen tossing in life preserves to the smugglers. The men and the cocaine were eventually extracted from the water and hauled to a support base on land for further analysis.

Maldonado said the floating bales tested positive for cocaine hydrochloride.

He said the smugglers were en route to Central America. It’s likely, he said, the men left the Port of Tumaco, which is one of the primary exit points of cocaine from the country.

The United Nations Office on Drugs and Crime (UNDOC) indicated in a 2018 report that, Colombia is the top producer of cocaine in the world.

A majority of the cocaine is smuggled by boat to the US. 

The UNDOC report also said Colombia’s 2018 cocaine output hit record highs as demand from the US soared.

Back in July, we reported on a container ship that had around $1 billion worth of cocaine hidden in containers at a Philadelphia port after having stopped in Colombia. We also learned the vessel, the MSC Gayane, is owned by JP Morgan, was seized by US authorities. 

And as long as stocks blast to new highs, partly funded by endless stock buybacks and easy money policies by the Federal Reserve, cocaine demand will continue to soar on Wall Street, giving Colombian drug cartels more of a reason to continue boosting output.


Tyler Durden

Mon, 10/07/2019 – 22:45

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“Paper Money Systems Have Always Wound-Up With Collapse And Chaos”, Buffett Senior

“Paper Money Systems Have Always Wound-Up With Collapse And Chaos”, Buffett Senior

Authored by Simon Black via SovereignMan.com,

Warren Buffett, despite his extraordinary investment success, has a rather famous and long-standing love/hate relationship with precious metals.

Maybe it started with his dad – Congressman Howard Buffett of Nebraska – who, as a staunch advocate for the gold standard, argued to his colleagues on Capitol Hill that “paper money systems have always wound up with collapse and economic chaos.”

Warren himself acquired a record-setting 128 million ounces of silver back in the late 1990s… which he later sold at a profit in the early 2000s.

But to listen to him talk about precious metals these days, he’s always negative.

Buffett often quips that if you took the world’s entire supply of gold and melted it together, it would form a cube of about 68 feet (~21 meters) per side and be worth around $9 trillion.

With that same $9 trillion, you could buy every share of Apple, Disney, Google, Microsoft, JP Morgan, Exxon Mobil, all the farmland in the United States, all the developable land in Manhattan, and still have more than a trillion dollars left over.

This is Buffett’s central argument: gold doesn’t produce anything. So it’s much better to invest in a productive asset like a business, farmland, etc.

Sure, I’d rather own a profitable, productive asset than a pile of metal.

But Buffett is completely wrong to compare gold to productive assets… they’re apples and oranges.

Gold isn’t an ‘investment’. It’s an insurance policy against paper currencies will lose value over time. So a MUCH better comparison for gold is CASH.

Using Buffett’s same thought experiment, would an investor with $9 trillion rather have all that money sitting in a bank earning 0%? Or buy all the productive assets I mentioned above?

Clearly it’s more attractive to own productive assets than cash sitting in a bank.

Now, most people obviously don’t have hundreds of billions or trillions of dollars to invest.

But foreign governments, pension funds, central banks, and Sovereign Wealth Funds do.

And if it were so easy to simply buy up all the farmland in the United States, or every share of Disney, etc. they would have done it already.

But life isn’t so black and white. Negotiating and closing a very large investment deal takes a lot of time and hard work.

Buffett himself understands this. That’s why he made only ONE major acquisition in 2017 (a chain of gas stations called Pilot Flying J) and ZERO in 2018.

Buffett’s company has $700 billion in assets and over $100 billion in cash; it’s extremely difficult to find enough large, credible deals to invest that much capital.

And large institutions like central banks and foreign governments have the same problem.

I have friends who are senior executives at some of these institutions who manage hundreds of billions of dollars; they’re constantly on the lookout for sensible deals where they can invest billions of dollars at a time.

But those opportunities are rare. And in the meantime, they need to park the money somewhere.

Just like Warren Buffett’s father, many of these institutional managers understand that paper money loses value over time.

Especially now, in places like Europe and Japan, interest rates are actually NEGATIVE. And any large fund that has a mountain of euros or yen is bleeding money due to negative yields.

So let’s go back to Buffett’s analogy:

Imagine you’re a large Sovereign Wealth Fund with $500 billion in cash.

Of course you’re searching for high quality, productive assets that you can acquire. But you know it’s going to take 10-15 years to fully invest that capital.

So in the meantime, do you:

(A) keep the $500 billion in a paper currency that has a 100+ year track record of losing value and being abused as a political prop?

Or

(B) keep at least a portion of the investment capital in gold– an asset with a 5,000+ year history of maintaining its value?

For large institutions, Option B is extremely compelling.

And THAT’S what has been primarily driving gold prices over the past year.

Central Banks and foreign governments like China, Russia, Turkey, Qatar, Colombia, etc. have been loading up on gold because it’s a better, safer, long-term alternative to holding dollars and euros.

As a result, the price has risen.

Clearly they’re still holding plenty of dollars (and euros). But they’re increasingly diversifying their reserves.

They can see that the US government will continue having $1+ trillion deficits. They can see that the Federal Reserve will continue debasing the currency with interest rate cuts…

(and the European Central Bank recently made interest rates even MORE negative.)

They can see that diplomatic and trade relations with the US are strained.

So it would be foolish for a foreign government to keep 100% of its reserve assets denominated in US dollars.

They can also see that gold is practically the ONLY asset that isn’t at an all-time high.

Almost ever major stock market, property market, and bond market around the world is at/near an all-time high.

Gold has had a good run lately. But its price (in US dollars) would still need to rise another 25% before surpassing its previous all-time high.

This is what’s likely to keep fueling demand for gold: very large sovereign wealth funds and central banks don’t have a lot of options, and gold is one of the only assets that makes sense for them.

This will likely continue to be the case.

It’s worth noting that, even though gold is not a ‘productive asset’, the price of gold over the past 20 years has beaten the stock market, including Warren Buffett.

From September 1999 through September 2019, the S&P 500 returned a solid 229%, including dividends. And the stock price of Buffett’s company (Berkshire Hathaway) is up an astonishing 536% over the same period. But the price of gold has surpassed even Buffett, returning 591%.


Tyler Durden

Mon, 10/07/2019 – 22:25

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Watch Paralyzed Man Walk Thanks To Brain-Controlled Exoskeleton Suit

Watch Paralyzed Man Walk Thanks To Brain-Controlled Exoskeleton Suit

A paralyzed man has spent nearly two years testing a mind-controlled robotic suit. Now French researchers, who are responsible for building the exoskeleton, have published a new report documenting the proof-of-concept demonstration

Researchers at the University of Grenoble, located in southeastern France, published the latest results of the suit and a video last week. 

The suit was operated by a 30-year-old man, only identified as Thibault. He was able to control the suit with his brain, moving the suit forward while he was strapped to the exterior of it.  

Thibault told BBC that his latest robotic walk was like being “the first man on the moon.” The tests were held in a heavily secured lab at Clinatec and the University of Grenoble. 

The robotic suit is controlled by two implants that were surgically placed in Thibault’s head. The implants are wireless, able to beam brain activity to a nearby computer where artificial intelligence converts the signals into instructions for the exoskeleton. 

Thibault has been paralyzed for four years. He’s been training with the researchers for two years, at several labs to control the 140-pound exoskeleton suit.

Researchers first trained an algorithm to interpret brain signals and convert them into commands for the suit. Thibault was able to play a game similar to Pong, while the algorithm learned his brain activity and turned the signals into commands to control a digital paddle where he hit a ball. The training started as early as 1H17 and went on for at least two years. 

Once the algorithm learned Thibault’s brain commands, researchers strapped him to mechanical exoskeleton with 14 moveable joints. He first used the arms of the machine to tap levers, and it was only until recently, he was able to walk the machine forward. 

As shown in the video below, Thibault’s exoskeleton suit was suspended with cables from the ceiling during the test. 

Researchers have said the technology will be refined in the coming years and could be a replacement for wheelchairs in the next decade. But within the next 5-years, it’s likely the technology will be used to control wheelchairs. 

“Our findings could move us a step closer to helping tetraplegic patients to drive computers using brain signals alone, perhaps starting with driving wheelchairs using brain activity instead of joysticks and progressing to developing an exoskeleton for increased mobility,” Professor Stephan Chabardes, a neurosurgeon from the CHU of Grenoble-Alpes, said.

And it’s almost guaranteed that when millennials start retiring in 2045-2055, mind-controlled robotic suits will be fully matured and have already entered series production decades before. Can you imagine, elderly millennials in exoskeleton suits walking to the corner store for some avocado toast?


Tyler Durden

Mon, 10/07/2019 – 22:05

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China Services PMI Tumbles To 7-Month Lows

China Services PMI Tumbles To 7-Month Lows

With China coming back from Golden Week celebrations, all eyes are on PMI data (expected to be flat from August) as a sign that things are not getting any worse ahead of this week’s trade negotiations in Washington.

This is the last PMI print for September (after a mixed bag from official data across services and manufacturing):

  • China Official Manufacturing PMI small rise to 49.8

  • China Official Non-Manufacturing small drop to 53.7 (lowest since Nov 2018)

  • China Caixin Manufacturing notable rebound to 51.4 (highest since Feb 2018)

  • China Caixin Non-Manufacturing dropped to 51.3 (lowest since Feb 2019)

The weakness is somewhat surprising given the position China might want to portray during this week’s negotiations.

Source: Bloomberg

For the first time since Sept 2017, Services PMI is weaker than Manufacturing.

The level of positive sentiment in the manufacturing sector was little-changed from August, while optimism in the service sector slipped to its lowest since May. In both cases, expectations were among the lowest seen in the series history.

Commenting on the China General Services PMI data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said:

“The Caixin China General Services Business Activity Index dipped to 51.3 in September from 52.1 in the previous month, the lowest reading in seven months.

1) Among the gauges included in the survey, the one for new business rose further, hitting the highest point since January 2018 and reflecting stable demand in the services sector. The increase was partly driven by new product launches. The gauge for new export business continued to drop, reflecting that growth in new business was mainly driven by domestic demand.

2) The employment measure increased significantly, reaching a level unseen since January 2017. The increase in employment was linked to growth in new orders.

3) The measure for input prices increased to the highest in a year, mainly driven by rising costs for labor, fuel and raw materials. However, the gauge for prices charged by service providers dipped marginally, indicating fierce competition. The gauge for business expectations dropped as rising costs restrained company confidence. “

China’s notable credit impulse recovery is perhaps helping overall as China’s Composite PMI rises for the third month in a row…

Source: Bloomberg

The Caixin China Composite Output Index increased to 51.9 in September from 51.6 in August, mainly driven by strengthened growth in the manufacturing sector. The gauge for new orders increased, hitting the highest level since February 2018. Employment increased at the fastest pace since January 2013, driven by the service sector. Backlogs of work had not expanded this quickly since April 2018. The pressure on companies from rising costs was great and business confidence dipped further.

China’s economy showed signs of marginal recovery in September, as the labor market improved and domestic demand increased at a faster pace. However, fluctuations in exchange rates, and rising costs of labor and raw materials increased pressure on companies, which restrained business confidence. Due to previous destocking and capacity-reduction activities, constraints on companies’ production capacity became more severe and backlogs of work increased noticeably, which will help companies restore their investment. After a fast slowdown in previous quarters, China’s economic growth began to show signs of stability.”

Since China has been closed, US equities have dumped and pumped back to almost unchanged but the Trump administration placed eight Chinese tech companies on a blacklist after the US close today.

Source: Bloomberg

Chinese officials have confirmed that Vice Premier Liu He has departed China for his visit to Washington later in the week (so at least that’s a positive).

Finally, we note that gold has bounced modestly as the Chinese return from celebrations, fitting with the historical pattern of weakness into and through Golden Week, and strength after.


Tyler Durden

Mon, 10/07/2019 – 21:54

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Capital Flight Is Killing The US Shale Boom

Capital Flight Is Killing The US Shale Boom

Authored by Nick Cunningham via OilPrice.com,

The growth in U.S. shale production is grinding to a halt as low prices put drillers in a financial vice.

The slowdown has been unfolding for much of 2019, but the latest slide in oil prices is another blow to cash-strapped companies. Share prices for many E&Ps are down sharply. For instance, Devon Energy’s stock is down 20 percent since mid-September; EOG Resources is off by 17 percent and Pioneer Natural Resources is down by more than 13 percent. Many other companies have seen similar declines.

Rig counts have fallen by 20 percent since last year, drilling is down, hotel rates are down, and employment is in decline.

“If you can’t wring out any costs savings then you’ve got to buy less stuff if you want to get your costs down, and that’s the phase we’re entering into,” Jesse Thompson, senior business economist at the Houston branch of the Federal Reserve Bank of Dallas, told Bloomberg.

Source: Bloomberg

As Bloomberg noted, annualized employment grew only 0.7 percent through August, compared to 11.4 percent for the same period in 2018. The unemployment rate has ticked up from 2 to 2.3 percent. The number of fracking crews has fallen to its lowest level in 30 months.

For embattled shale drillers, there is another imminent hurdle that they must clear. For the first time since 2016, Permian shale drillers could see their access to borrowing slashed. Lenders periodically reassess the borrowing base that they offer to oil and gas producers, a so-called “credit redetermination” period.

According to a survey of financial institutions as well as oil and gas firms by law firm Haynes and Boone, the industry is set to see “a decrease in credit availability for producers and a strong interest in alternative sources of capital.”

In other words, lenders are turning off the spigots.

Interestingly, when respondents were asked when equity markets might reopen for upstream oil and gas companies, only 25 percent said 2020, while 47 percent said 2021. A further 14 percent said 2022 and 13 percent said sometime after 2022. That suggests that the vast majority of industry and financial players see several years of restricted access to credit for the shale industry.

Without capital, shale drillers have to take an axe to their spending budgets, which means less drilling and ultimately lower-than-expected U.S. oil production. It also means that bankruptcies are likely to continue to pile up. Through the end of September, there have been 199 oil and gas bankruptcies in North America since 2015, according to Haynes and Boone, and the number of companies folding this year is at the highest since 2016.

“I think that you’re going to have a big problem when it comes to that redetermination,” Mark Rossano, founder and CEO of C6 Capital Holdings, said on Bloomberg TV. He added that the oil majors can “weather” the storm, but the smaller drillers are going to have a tough time.

“The market has told them, ‘don’t come to us for money, because it’s not gonna be there.’”

In just the past week, there were signs of trouble at the company level. Small shale driller Abraxas Petroleum announced that it would suspend drilling operations in the Delaware basin.

Also, American Energy-Permian Basin LLC managed to convince its creditors to restructure $2 billion worth of debt that the company could not pay. The company, backed by private equity and originally founded by the late Aubrey McClendon in 2014, has been struggling financially for a long time. Having already missed an interest payment in May, American Energy told creditors that if they did not agree to a restructuring, the company would file for bankruptcy. This is actually the second time that American energy restructured its debt – the first time was in 2016.

With WTI in the low-$50s, some companies are hovering right around their breakeven levels, or are in negative territory. Even those with lower breakeven prices will feel the effects. Because of the rapid decline in output from shale wells, drillers need to pump capital into the ground on a constant basis, so the fact that investors are souring on the sector is a problem.

With Wall Street cutting off struggling drillers, and oil prices languishing in the low-$50s, the U.S. shale industry is already slowing down and might even be heading for a contraction.


Tyler Durden

Mon, 10/07/2019 – 21:45

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Elizabeth Warren’s Story About Getting Fired For Being “Visibly Pregnant” Unravels After Documents, Video Emerge

Elizabeth Warren’s Story About Getting Fired For Being “Visibly Pregnant” Unravels After Documents, Video Emerge

Sen. Elizabeth Warren (D-MA) has been using a fabricated tale of injustice a cornerstone of her 2020 campaign pitch – telling people that she was told not to return to teaching after a single year because she was “visibly pregnant,” and the principal “did what principals did in those days … wish me luck and hire someone else for the job.” 

Warren’s claim about her dismissal from the Riverdale Elementary School came under scrutiny last week when the journalist Meagan Day of Jacobin magazine noted that Warren’s story appeared to have changed over the years. Day pointed to a 2007 interview Warren gave at the University of California-Berkeley in which she suggested that she left her teaching job after realizing the graduate school classes required for her to obtain a teaching certificate weren’t going to “work out for [her].” –Free Beacon

Warren then claimed: 

“I was married at nineteen and then graduated from college [at the University of Houston] after I’d married,” adding “My first year post-graduation, I worked — it was in a public school system but I worked with the children with disabilities. I did that for a year, and then that summer I actually didn’t have the education courses, so I was on an ’emergency certificate,’ it was called.” 

“I went back to graduate school and took a couple of courses in education and said, ‘I don’t think this is going to work out for me,'” Warren continued. “I was pregnant with my first baby, so I had a baby and stayed home for a couple of years, and I was really casting about, thinking, ‘What am I going to do?‘”

Warren had been working as a speech pathologist at New Jersey’s Riverdale Elementary School during the 1970 – 1971 school year, according to the Beacon

On Monday, the Washington Free Beacon dealt another blow to Warren’s story – publishing minutes from a Riverdale Board of Education meeting from April 21, 1971 which reveal the board voted unanimously on a motion to extend Warren’s contract for a “2nd year” of teaching. 

Minutes of an April 21, 1971, Riverdale Board of Education meeting obtained by the Washington Free Beacon show that the board voted unanimously on a motion to extend Warren a “2nd year” contract for a two-days-per-week teaching job. That job is similar to the one she held the previous year, her first year of teaching. Minutes from a board meeting held two months later, on June 16, 1971, indicate that Warren’s resignation was “accepted with regret.” –Free Beacon

What’s more, the minutes from a June 16, 1971 meeting include: The resignation of Mrs. Elizabeth Warren, speech correctionist effective June 30, 1971 was accepted with regret.” 

Sounds like they really liked her – and now she’s going around throwing (likely deceased) Principal Peter J. Polo under the bus for a callous act he didn’t commit. 

Riverdale Board of Educatio… by Washington Free Beacon on Scribd

 

As the Beacon notes, Warren’s latest lie comes after her ‘team’ orchestrated a massive image-rehabilitation campaign after her claims of Native American ancestry unraveled into a botched effort to prove she was actually part Indian. After Warren took a DNA test which her team misinterpreted due to a math error, she self-owned by announcing herself to be as little as 1/1024th Native American. Shortly thereafter, the Cherokee Nation condemned her for her “continued claims of tribal heritage.” 

“A DNA test is useless to determine tribal citizenship. Current DNA tests do not even distinguish whether a person’s ancestors were indigenous to North or South America. Sovereign tribal nations set their own legal requirements for citizenship, and while DNA tests can be used to determine lineage, such as paternity to an individual, it is not evidence for tribal affiliation. Using a DNA test to lay claim to any connection to the Cherokee Nation or any tribal nation, even vaguely, is inappropriate and wrong. It makes a mockery out of DNA tests and its legitimate uses while also dishonoring legitimate tribal governments and their citizens, who ancestors are well documented and whose heritage is prove. Senator Warren is undermining tribal interests with her continued claims of tribal heritage.

– Cherokee Nation Secretary of State Chuck Hoskin, Jr.

 Maybe this is why Twitter is abuzz with rumors of Hillary Clinton putting the ol’ pantsuit on again to try and knock Trump off the mountain. 


Tyler Durden

Mon, 10/07/2019 – 21:25

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No, Capitalism Doesn’t Threaten Humanity

No, Capitalism Doesn’t Threaten Humanity

Authored by Robert Murphy via The Institute for Energy Research,

Presumably bolstered by the fiery claims of Greta Thunberg and the general theme of Climate Week, people on Twitter have been declaring that capitalism threatens humanity. This angst rekindled interest in a Guardian article that ran a few months ago, in which author George Monbiot argued that the very nature of capitalism is “incompatible with the survival of life on Earth.” Not only do such claims ignore the obvious progress of humanity staring us in the face—and the environmental activists are supposed to be the empirical ones in this debate—but even if Monbiot’s worries about the climate were correct, capitalism would still be the best social system to deal with the crisis.

Monbiot’s Case Against Capitalism

The following excerpt summarizes Monbiot’s two-pronged argument for why capitalism threatens our entire species:

Capitalism’s failures arise from two of its defining elements. The first is perpetual growth. Economic growth is the aggregate effect of the quest to accumulate capital and extract profit. Capitalism collapses without growth, yet perpetual growth on a finite planet leads inexorably to environmental calamity.

…The absolute decoupling needed to avert environmental catastrophe (a reduction in material resource use) has never been achieved, and appears impossible while economic growth continues. Green growth is an illusion.

A system based on perpetual growth cannot function without peripheries and externalities. There must always be an extraction zone – from which materials are taken without full payment – and a disposal zone, where costs are dumped in the form of waste and pollution. As the scale of economic activity increases until capitalism affects everything, from the atmosphere to the deep ocean floor, the entire planet becomes a sacrifice zone: we all inhabit the periphery of the profit-making machine.

The second defining element is the bizarre assumption that a person is entitled to as great a share of the world’s natural wealth as their money can buy. This seizure of common goods causes three further dislocations. First, the scramble for exclusive control of non-reproducible assets, which implies either violence or legislative truncations of other people’s rights. Second, the immiseration of other people by an economy based on looting across both space and time. Third, the translation of economic power into political power, as control over essential resources leads to control over the social relations that surround them.

Monbiot’s critique of capitalism is entirely unfounded. In the first place, it defies all empirical grounding, which is ironic because it’s my side of this debate that’s allegedly composed of unscientific “deniers.” Especially as formerly communist countries move towards freer markets, the world has seen dramatic improvements in living standards, while the relevant availability of “depletable” resources has increased; even climate-related deaths have plummeted over time.

But it gets even worse for Monbiot’s thesis. Even if we imagine a scenario—contrary to reality—where humanity did run into a crisis because of natural resource crunch, the best way to deal with the situation would be reliance on private property and market prices. To blame capitalism for the potential problems of a finite world is like blaming thermometers for the flu.

Just the Facts: It’s Getting So Much Better All the Time

In this section I’ll illustrate some of the basic facts, documenting that human welfare has drastically improved during the same period that we have ostensibly seen the ravages of human-induced climate change.

First, consider a chart from Bjørn Lomberg (and reproduced by Marlo Lewis) that shows climate-related deaths from 1920-2017:

It’s hard to see evidence of impending disaster in the above chart.

Next, because Monbiot is worried about the “finite” planet, let’s look at U.S. “proved reserves” of crude oil, from the Energy Information Administration (EIA):

U.S. Crude Oil Proved Reserves

As the chart shows, U.S. “proved reserves” of crude are at an all-time high at some 39.2 billion barrels (as of 2017), up from 13.6 billion barrels in 1930. The increase in crude reserves has occurred despite the fact that the U.S. has produced an enormous amount of crude oil over this period.

Indeed, as the separate EIA chart shows below, since 1950 U.S. crude production has rarely fallen below 5 million barrels per day, and it’s currently (as of June 2019) at a record high of some 12.1 million barrels per day.

U.S. Field Production of Crude Oil

The pattern is similar for world oil reserves and production, but I chose to use U.S. data because it is the most reliable. There’s also a similar pattern for natural gas and coal; as this 2011 IER report shows, North America alone has enough fossil fuels in the broader category of “recoverable resources” to satisfy current consumption rates for literally centuries. And they are growing. According to the Potential Gas Committee’s latest report, U.S. reserves of natural gas increased by the energy equivalent of 100 billion barrels of oil in just the last 2 years.

Now how can this be possible? How can the U.S., for example, have more “proved reserves” of oil now, than it did in (say) 1950? The answer is that it doesn’t make sense for humans to go out and find every last drop of oil (or lump of coal) housed in planet Earth. At any given time, it’s only sensible to have located the precise deposits of a healthy margin of such depletable resources, which is only a small fraction of the physical stockpile.

Yes, since there is a finite amount of crude oil, it must be the case that humanity will eventually have to switch to some other energy source. But humanity—especially in the modern age of relatively capitalistic institutions—has so far had no trouble maintaining consistent increases in total output, notwithstanding the “finite” resources on Earth (or the physical universe, for that matter).

Presumably Monbiot would say that past success is no guarantee of future performance, but as a different Guardian article explains, the UN reports that the world has seen “astonishing” improvements in human welfare just since 1990. Specifically, more than a billion people were lifted out of “extreme poverty,” with “the number of people living on less than $1.25 a day [falling] from 1.9 billion in 1990 to 836 million in 2015.”

What would the data have to look like to vindicate capitalism from the charges of Monbiot?

Even in a Collapsing World, Capitalism Would Be Our Best Defense

As I illustrated in the previous section, Monbiot’s hysterical warnings are utterly divorced from reality. At most, he has to argue that the future will be radically different from the past. In other words, Monbiot must argue, “Capitalism is going to start killing us, starting…NOW.”

Yet even the more dire forecasts in the UN IPCC’s latest summary of the climate science and impact analyses come nowhere close to threatening humanity itself. It’s still the case, even in the worst-case scenarios examined, that per capita global GDP is much higher in (say) the year 2100 than now. In an excellent article for CEI, Marlo Lewis gives the details, along with other lines of evidence to show that climate change, though possibly a serious challenge, is hardly an “existential threat” as Monbiot and several Democratic presidential candidates are matter-of-factly claiming.

But it gets even worse. Even if it were the case that the natural environment were such that humanity really did have to settle for constant (or even declining) living standards, private property and market prices—i.e., capitalism—would still be vital for helping humans organize their activities in the best way.

For example, Harold Hotelling proved way back in 1931 what the equilibrium trajectory of spot oil prices would be, in a hypothetical scenario where we started with a fixed pool and knew what the rate of consumption would be for various possible spot prices. The elegant answer (given certain assumptions) is that the market price of oil would rise according to the interest rate, so that on the margin the owner of the pool would be indifferent between selling one more barrel today, versus holding it off the market to sell next year. (For example, if oil were selling for $100 today and the interest rate were 5%, then the spot price would have to rise to $105 next year. This is because the owner could always sell a barrel today for $100 and then invest in bonds to yield $105 next year.)

I’m guessing that Monbiot would be scandalized by such bean-counting, but this is exactly the kind of outcome we want capitalism to foster. Given that there is a finite quantity of a useful resource like oil, the optimal pattern of usage is that it is gradually drawn down over time, being devoted to ever more important uses as it becomes scarcer and scarcer. The higher spot price of the future ensures that distant generations “register their claim” on the use of the oil, while the positive interest rate in a sense reflects the “impatience” of humans. (If the interest rate were 0% and the population were always growing, we would have the absurd result that no oil would ever be used—it would keep getting passed down the generations, growing in market value but with it never being profitable to actually burn a single barrel.)

Conclusion

George Monbiot alleges that capitalism, left unchecked, will cause the literal extinction of humanity. His arguments ignore all of the evidence of capitalism’s benefits staring us in the face. Yet even on a theoretical level, private property and market prices help organize human activity so that we can deploy our scarce resources in the most efficient manner. Empirically, capitalism has allowed humanity to flourish with an ever-rising standard of living. But even in a catastrophic scenario where we hit a hard resource constraint, capitalism would still be an important tool in our defense, just as we would badly need math and science to help us cope with the emergency.


Tyler Durden

Mon, 10/07/2019 – 21:05

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10,000 ISIS Unleashed: Syrian Kurds Warn Of Mass Prison Break If Turkey Invades

10,000 ISIS Unleashed: Syrian Kurds Warn Of Mass Prison Break If Turkey Invades

Syria’s US-backed Kurdish militias are warning that over 10,000 jihadists, among these thousands of ISIS terrorists, could go free as a result Turkey’s ‘imminent’ invasion of northeast Syria. The numbers of ISIS terrorists unleashed in the wake of the Turkish military incursion could be the biggest since the height of the Islamic State caliphate’s existence, per Syrian Kurdish official statements reported by Fox News:

Aside from the existential threat to the Kurdish fighters posed by Turkey, Syrian Kurdish forces are also warning that ISIS sleeper cells are actively plotting to free about 12,000 militants currently detained by the Kurds and may take advantage of the Turkey-triggered turmoil to aid their plans.

Those in custody include about 2,500 foreign fighters from Europe and elsewhere whose native countries have been reluctant to take them back — and about 10,000 other captured fighters from Syria and Iraq.

An ISIS “Guantanamo in Syria” with US support, via Baladi News.

One major but relatively underreported fact is that over at least the past two years makeshift Kurdish/SDF prisons have held many of the region’s most dangerous terrorists with the Pentagon’s help. Kurdish forces have blamed Turkey for unleashing ISIS jihadists on northern Syria in the first place.

Despite a US statement late Sunday saying that Turkey will now take custody of the thousands of militants after Washington announced it “will not support or be involved in the [Turkish] operation” and “will no longer be in the immediate area,” a rapid US withdrawal from border bases such as at Tel Abyad and Ras al Ain in northeast Syria (which has already happened at both locations), leaves the fate of ISIS prisoners in the area in question. 

“Turkey, Europe, Syria, Iran, Iraq, Russia and the Kurds will now have to figure the situation out,” Trump tweeted Monday morning in a series of statements defending his decision to move out of Turkey’s way. 

It was clear that the ISIS prisoner question is on the president’s mind, however, given the following statement as part of the series of tweets

They [Turkey] must, with Europe and others, watch over the captured ISIS fighters and families. The U.S. has done far more than anyone could have ever expected, including the capture of 100% of the ISIS Caliphate. It is time now for others in the region, some of great wealth, to protect their own territory.

But the Kurdish-led Syrian Democratic Forces shot back in a Monday statement: “The American forces did not abide by their commitments and withdrew their forces along the border with Turkey.”

ISIS prisoners round up by Kurdish forces in Syria at the Dayrik prison near the Iraqi border, via AFP/Getty.

Mustafa Bali, the SDF spokesman, highlighted the potential for mass ISIS jail breaks in the wake of the US withdrawal: “People here are owed an explanation regarding the security mechanism deal and destruction of fortifications,” he said

There’s also the question of al-Hol refugee camp in northeast Syria, which media reports throughout the summer described as a festering hotbed out of which a renewed ISIS underground insurgency is ready to explode, given it is home to over 70,000 people, mostly families of known ISIS fighters. 

Al Hol camp via BBC: “Al-Hol is a nightmare, a camp that has grown from 11,000 people, to more than 70,000. It is swollen with the dark aftermath of the collapsed pseudo-caliphate. It is ready to burst.

As The Independent reported last week, the timing of this week’s chaotic developments couldn’t be worse:

Camp authorities have warned that they may not be able to control the roughly 70,000 inhabitants, most of whom were detained as they fled the last remnants of the Isis caliphate earlier this year. 

Previously US special forces assisted local SDF fighters in administering prison camps, but amid inevitable Turkish-SDF clashes to come, those camps will likely bust wide open. 

“This is an Isis city – 70,000 people cannot be controlled. We have only enough guards to protect from outside attack,” the SDF’s Mustafa Bali said, noting that his group’s administration of the prison camp won’t last long if Turkey invades. 


Tyler Durden

Mon, 10/07/2019 – 20:45

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Luongo: Are These The Five Tweets That Change The World?

Luongo: Are These The Five Tweets That Change The World?

Authored by Tom Luongo via Gold, Goats, ‘n Guns blog,

Over the weekend I asked whether Donald Trump had risen to the level of Grey Champion. A few days later Trump takes to Twitter and puts a big line item in his resume.

There have been signs of change coming since Trump rightly refused to go to war with Iran over their shooting down an unmanned U.S. drone.

Starting with a major shake up of his cabinet by firing National Security Director John Bolton to his tepid response to the Houthi attack on the Saudi Aramco Abqaiq facility, Trump has sought to defuse a situation that had flown way to close to the sun and threatened to burn millions.

These five tweets taken in context of the past few days, however, blow the lid off a number of narratives as well as ongoing operations.

I posted his thread in its entirety because it’s that important.

By focusing on the ISIS angle of what’s wrong with our Syria policy, Trump is keeping things simple, telling Americans what they need to know about why some of the troops in Syria are coming home.

He may be playing fast and loose with the nuance here but Twitter isn’t the platform for nuance.

Why do these tweets change everything?

Because it signals that Trump is…

  1. Ascendant in his own White House.

  2. Realizing nothing good comes from further escalation

  3. Not getting re-elected if he’s in quagmires around the world

  4. Washing his hands of the Arab infighting

  5. Responding to the realpolitik of a vulnerable Saudi Arabia

  6. Understanding that Syria is an Obama-era mess which is now unwinnable.

  7. Telling Israel what the limits of his support is.

  8. Informing our allies the U.S. is not subsidizing their adventures anymore.

  9. Notifying the Neocons that he’s done making deals they won’t keep.

  10. Resetting the conflicts in Syria, Iraq and Afghanistan as unwinnable by neocon/Israeli standards.

I could add a lot more to that list. A. Lot. More. Because in context of the last few days these five tweets are a bombshell which blows open the possibilities of a much different future foreign policy from the U.S. if Trump survives this ridiculous push to impeach him.

Trump didn’t do this as a response to impeachment proceedings in the House. If anything he’s daring them to impeach him before he tears down their plans.

These tweets could be seen coming for weeks. The collapse of Benjamin Netanyahu in Israel undermines most of the reasons for the U.S. staying in Syria in the first place.

With Netanyahu fighting for his political and social life, Trump had to see it was time to cut bait, because he’d already over fished that river. Israeli politics could be frozen for a lot longer than the next couple of weeks.

In fact, no less than two articles in Haaretz this weekend confirm that Israel knows that 1) Saudi Arabia has to sue for peace with Iran and the Houthis and 2) that Trump will not come to their rescue.

Netanyahu made the mistake of thinking that Trump’s love of Israel outweighed that of the U.S. That was a bad bet. Whatever Trump’s faults are, he’s a patriot.

Trump was more than willing to go along with Israel’s wants if it meant the benefits to the U.S. were worth it.

Trump wanted the world safe from ISIS and Iran. The former was easy, stay out of Russia’s and Iraq’s way, let them clean things up. The latter was never achievable.

Because it was always going to come down to war or no war. Netanyahu et.al. always thought they could manipulate Trump the Rube into a war on their behalf when the time came.

They didn’t. They’re pissed. They are coming after him. And he’s bailing on them for the good of the U.S. and, frankly, the world.

Iran/Russia/China always knew where the bluff would be called. They played the game out to the bitter end. And Trump walked away from the Abyss, smartly. There is no other policy at this point than reversing course and letting the instigators, Saudi Arabia, Israel, Europe and former U.S. administrations figure it out for themselves.

Trump is not neutered by this impeachment, if anything it is emboldening him.

Why?

Because he has nothing to lose and everything to gain here. His fundraising doesn’t need Sheldon Adelson or AIPAC, it’s off the charts good and pulling out of Syria will only boost his approval ratings.

If he beats the impeachment he gets to go after his accusers without reservation and finally do what he promised as a candidate. If he doesn’t he’s done anyway.

Playing the impeachment card was the wrong move. It removed all of Trump’s shackles. It said there was no more room for deals. Now, it’s war.

And that makes things a lot simpler.

The truth is the attacks in Saudi Arabia by the Houthis now have people overtly wondering if the House of Saud will last another year. It’s not likely.

And Trump realizes, as proven by these five tweets, that U.S. presence there precludes solving the region’s problems. We are the reason these people who hate each other don’t work out their differences.

Iran and the Houthis will step up their game against the Saudis unless they back down. Trump pulling out of Syria makes it clear he doesn’t have their backs anymore.

The message is clear, “Get started folks.”

The U.S./Saudi/Israeli alliance looks pretty pitiful from a realpolitik perspective right now.

I’ve been consistent in my criticism of Trump’s foreign policy because this was always going to be the outcome. The U.S. was always going to be forced to retreat and leave our ‘allies’ in the lurch.

Maintaining an untenable presence in Syria, pushing Iran, Iraq and Lebanon financially to their breaking point, and doubling down on support of Saudi Crown Prince Mohammed bin Salman after l’affair Kashoggi and the War in Yemen while upping sanctions on Russia and starting a trade war with China were all mistakes.

They would do nothing but unite the U.S.’s opposition in defiance to fight an asymmetric, hybrid war of attrition. They would have no other choice. Trump named the names of those that need to sort the Middle East out, they are all there, except Israel.

But this is all about Israel.

And their apologists wasted zero time taking to the airwaves and the Twitterverse to howl at the unfairness of it all. Ye gods even Nikki Haley came out from behind the counter at Waffle House to complain about it.

They know that if Trump survives the next few weeks Israel will be the policy-takers here not the policy-makers.

Moreover, Trump finally put the world on notice that the Brzezinski/Wolfowitz Doctrine is dead while he’s in the White House. Sowing chaos so no one can control The Heartland is not his job.

The focus will be on how we are abandoning the Kurds. They’ll play the humanitarian angle to the hilt because they have nothing else. But the YPG was offered protection by the Assad government multiple times over the past two years and they willingly hitched their wagon to the U.S., knowing full well that Trump wasn’t on board with this plan.

And Putin pulls the strings on Erdogan. Putin wants ISIS destroyed more than Trump, because the whole point of the Syria Operation was to give them a country and then point them at Russia.

This point will be lost in the pearl clutching that will follow in the thirty-minute news cycles like syringes full of botox follow Nancy Pelosi.

Given these five tweets and the implications for them among the people most exposed to what comes next, what I said recently about the coup against him being real is looking prophetic now.

The question is still whether there are around fifteen people in the Senate that can be convinced to get rid of him. The first five are already signed up – Graham, Rubio, Romney, Collins, Murkowski.

If Trump is expecting to be impeached and convicted he certainly isn’t acting like it. As I said over the weekend, he’s too much of a street-fighter and troll to go quietly.

Moreover, he wouldn’t have Secretary of State Mike Pompeo in Greece setting up alternate supply lines to the Balkans preparing for a post-Turkey NATO if he wasn’t in charge.

Regardless of whether he survives this or not Donald Trump just threw down a gauntlet that finally blows open the hypocrisy of U.S. Middle East policy.

And I don’t think the genie goes back in this bottle.

*  *  *

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Tyler Durden

Mon, 10/07/2019 – 20:25

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Rare Fox News Segment Details Saudi State Sponsorship Of 9/11 Attacks

Rare Fox News Segment Details Saudi State Sponsorship Of 9/11 Attacks

During an episode this past week, Tucker Carlson of Fox News laid out the growing evidence of Saudi state sponsorship of 9/11, based on additional details coming out of the 9/11 victims families’ lawsuit against the kingdom. 

Noting that the US increasingly appears “on the brink of bombing Iran” he questioned, “why are we doing that?” Carlson answered, “well we’re primarily doing that to protect Saudi Arabia.”

“Iran had nothing to do with 9/11,” he noted in his opening comments. “Saudi Arabia, meanwhile, was so connected to 9/11 that the families of many 9/11 victims are seeking justice  payment as recompense for the Saudis’ role. So How exactly does the country and its government get to ignore this?”

Saudi Arabia knowingly provided al Qaeda with support, financing and resources that were material, substantial and critical to the success of the September 11th Attacks — 9/11 victims families’ lawsuit.

“A heavily redacted 2012 [government] report describes the support Saudi government officials gave to two hijackers after they arrived in Los Angeles. The officials gave the two al Qaeda members assistance in daily activities’…” Carlson explained. 

The Fox host also referenced a sworn testimony by a high ranking FBI agent privy to the investigation who admitted the hijackers “would have had zero chance for success without a support structure waiting for them.”

“The families still want more information declassified about Saudi involvement and feel as if their own government has betraed them,” Carlson continued in his report. 

Relative of one 9/11 victim, Brett Eagleson, said during the segment, “One would like to think that the FBI works for the American people and not the interests of Saudi Arabia.”

Carlson added shockingly as part of his report that “Shortly after the attacks the Bush administration allowed more that a hundred Saudis, including members of the bin Laden family to leave the country on chartered airplanes.”

“And two years ago the Trump administration cautioned a retired FBI agent from working for the 9/11 families,” Carlson added. 


Tyler Durden

Mon, 10/07/2019 – 20:05

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