WaPo Defends Decision To Mothball Graphic Sex-Assault Claim Against Virginia Lt. Gov Fairfax

The Washington Post is defending its decision to pass on a sexual assault allegation against Virginia Lt. Gov. Justin Fairfax after having “carefully investigated the claim for several months,” while failing to mention why they didn’t apply the same standards to Supreme Court Justice Brett Kavanaugh. 

The woman claims that the 2004 sexual encounter with Fairfax began with consensual kissing and ended with Fairfax forcing her to give him a blowjob. 

The woman described a sexual encounter that began with consensual kissing and ended with a forced act that left her crying and shaken. She said Fairfax guided her to the bed, where they continued kissing, and then at one point she realized she could not move her neck. She said Fairfax used his strength to force her to perform oral sex. –WaPo

Explaining their side of things, the Post writes: “The woman approached The Post after Fairfax won election in November 2017 and before he was inaugurated in January 2018, saying she felt like she had an obligation to speak out,” writes WaPo, adding “Fairfax and the woman told different versions of what happened in the hotel room with no one else present. The Washington Post could not find anyone who could corroborate either version. The Post did not find “significant red flags and inconsistencies within the allegations,” as the Fairfax statement incorrectly said.”

In other words, the WaPo afforded Fairfax, a Democrat, the benefit of the doubt – something they did not do with Supreme Court Justice Brett Kavanaugh when his accuser, Christine Blasey Ford levied a similarly uncorroborated accusation from over 30 years ago. 

The allegation against Fairfax first surfaced on the website Big League Politics – the same outlet that broke the story about Fairfax’s boss – Virginia Governor Ralph Northam, allegedly pictured in blackface or a KKK outfit in his 1984 medical school yearbook. 

Big League Politics‘ Luke Rohlfing wrote on Monday that Fairfax acknowledged the allegation in response to their story, calling the woman’s claim “false,” and claiming that the woman reached out to the Washington Post “more than a year ago,” but that they decided to pass because of “significant red flags and inconsistencies within the allegation.” 

The Post hit back, claiming that it “did not find” significant red flags and inconsistencies – just that the accounts were inconsistent. 

During a Monday press conference, Fairfax denied the allegation, suggested that Governor Northam is behind it, and said that the timing was suspect: 

As The Federalist notes, the Washington Post‘s decision to pass on the Fairfax story stinks to high heaven. 

“The Washington Post, in phone calls to people who knew Fairfax from college, law school and through political circles, found no similar complaints of sexual misconduct against him. Without that, or the ability to corroborate the woman’s account — in part because she had not told anyone what happened — The Washington Post did not run a story,” the newspaper reported on Monday.

This is quite the opposite of the standard the Post applied when reporting on allegations of sexual misconduct against Supreme Court Justice Brett Kavanaugh last year. The Washington Post reported Christine Blasey Ford’s accusations against Kavanaugh despite no evidence and no corroboration of Ford’s account. The Post claims the fact that Fairfax’s accuser, “had not told anyone what happened,” is a reason for not running the story — something that Ford did not do either until Kavanaugh was listed as a potential Supreme Court pick. 

Unlike with Kavanaugh – the Washington Post simply passed on the Fairfax story due to a lack of corroboration – despite the fact that Fairfax admitted it happened, yet claimed it was consensual. 

Kavanaugh, on the other hand, was able to corroborate his version of events with statements from multiple friends and alleged witnesses, yet Ford’s corroboration fell completely short.

via ZeroHedge News http://bit.ly/2t7Lb3A Tyler Durden

“No Need To Be Pessimistic” – World’s Biggest Pension Fund Suffers Record Collapse In Q4

“fleshwound”?

The world’s largest pension fund – in the world’s most demographically-challenged nation – suffered a stunning record loss in the last quarter as its Abe-supporting domestic-stock-buying-spree crushed Japan’s Government Pension Investment Fund (GPIF).

Bloomberg reports that GPIF lost 9.1 percent, or 14.8 trillion yen ($136 billion), in the three months ended Dec. 31, it said in Tokyo on Friday. The decline in value and the rate of loss were the steepest based on comparable data back to April 2008. Domestic stocks were the fund’s worst performing investment, followed by foreign equities. Assets fell to 150.7 trillion yen at the end of December from a record 165.6 trillion yen in September.

While global central-bank-liquidity driven gains in global stocks helped the GPIF generate returns for the previous two fiscal years, December’s global rout underscored the risks facing the fund since it revamped strategy in 2014 to accumulate stocks and pare domestic bonds – something they vehemently deny is anything but prudent independent risk-managed behavior.

Bloomberg notes that the GPIF may have little choice but to invest in equities as fixed-income yields, especially those of Japanese government debt, are too low, said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. in Tokyo.

“It makes sense for the GPIF to hold some risk assets in this environment because yields are low globally and bond investments don’t give good returns,” Fujiwara said.

“Yet from a pensioner’s point of view, it takes too much risk on its investments.”

But that won’t stop Abe (and Kuroda) from pushing their nation’s “independent” pension fund administrators to keep buying the dip in domestic stocks… or else.

Analysts are mixed on what to make of this collapse… some are blindly toeing the government line that any quarter now, everything will be awesome.

Shingo Ide, the chief equity strategist at NLI Research Institute in Tokyo, points out that the GPIF’s long-term performance is more important than quarterly moves. GPIF’s cumulative investment return since fiscal 2001 was 56.7 trillion yen for an annualized 2.7 percent gain.

“There’s no need to be pessimistic just because GPIF would incur loss on its investment on a quarterly basis,” Ide said.

“For pension funds, it’s more important to focus on how they secure long-term returns rather than their quarterly performance.”

But some worry about just how much risk GPIF carries…

Still, with about half of its assets in domestic and foreign equities, the GPIF’s performance may be in danger of declining as concerns about the U.S.-China trade war and the U.K.’s departure from the European Union increase the risk of a global economic slowdown, according to Hidenori Suezawa, an analyst at SMBC Nikko Securities Inc. in Tokyo.

“Trade frictions between the U.S. and China haven’t been fully solved yet and there’s a possibility that the Brexit problem may be prolonged,” Suezawa said.

“We can’t be optimistic about the investment performance toward March.”

And yet, as we noted previously, it may be about to get even worse. As Sumitomo Mitsui strategist Ayako Sera said, the GPIF has little choice but to diversify into alternative assets and high-yield bonds if it wants higher returns because Japan’s bonds, which make up about 27% of the GPIF’s assets, have virtually zero returns (well, the may rise as high as 0.2% as per the BOJ’s latest announcement) as the Bank of Japan maintains its unprecedented monetary easing.

“The GPIF’s biggest problem is it can’t keep taking in domestic bonds – especially government bonds – as a staple with Japanese interest rates so low,” Sera said.

“The fund needs to sample a wider variety of dishes.”

Apparently that’s prudent banker talk for “we need to put more pensions into, well, junk.” What it really is, is the famous yield creep to justify buying ever riskier securities, which of course, are “not risky” because the GPIF can hold in perpetuity, which somehow means the laws of the business cycle no longer matter.

via ZeroHedge News http://bit.ly/2REYDWb Tyler Durden

Trading In Venezuela Bonds Has Frozen After Trump Sanctions

One day after a mini mutiny broke out at the Venezuela central bank, where some staffers received “early retirement offers” Friday after disregarding orders from upper management and refusing to carry out financial operations that have been barred by US sanctions (although realistically besides printing money do Venezuela central bankers really do all that much), the financial boycott hit Venezuela where it hurts even more: its sovereign bonds, where trading ground to a halt on Monday after the White House updated its sanctions guidelines on transactions tied to Maduro’s regime.

Mutual funds and exchange-traded funds that are U.S. persons “may not buy, sell, or otherwise engage in transactions related to debt, equity or other holdings in blocked persons and must block such holdings, unless authorized by OFAC,” the Treasury Department advised on its website, even as Treasury officials declined to elaborate on the rule or its implications for traders.

As a result, bondholders at nine investment firms and hedge funds from New York, Miami, London and Berlin queried by Bloomberg said that on Monday they stopped trading in Venezuela sovereign bonds and debt from state oil giant PDVSA following the U.S. Treasury Department instructions which were interpreted as barring virtually all transactions.

Ironically, the trading freeze comes amid renewed hopes of a regime change which sent the bonds to 1 year highs as investors scrambled to load up. Now they won’t be able to sell their exposure for an indefinite period of time.

While European and Asian funds weren’t subject to the same restrictions, the concentration of debt trading within the U.S. financial system makes it challenging for those firms to buy and sell as well. Many financial institutions, for example, adhere worldwide to U.S. sanctions. Meanwihle, according to Bloomberg, Trace showed zero trades on PDVSA’s debt since last Wednesday although Bloomberg caught a handful of trades in Venezuela’s 9.25% bonds due Sept 2017.

“Legally and theoretically I should be able to trade these bonds, but practically I am not able to do it anymore,” said Lutz Roehmeyer, a Berlin-based money manager at Capitulum Asset Management, which holds PDVSA bonds.

Previously, the Treasury Department said the financial restrictions are meant to cripple the Maduro government and spur regime change, explaining that this US-headed “soft coup” of the Maduro regime will end when state-run companies like PDVSA transfer control to National Assembly President Juan Guaido or “a subsequent, democratically-elected government that is committed to taking concrete and meaningful actions to combat corruption, restore democracy, and respect human rights.”

Meanwhile, the complicated, lengthy and sometimes contradictory instructions from the Treasury forced investors to seek legal assistance parsing the text word-for-word.

“If the Venezuela sanctions aren’t clarified, trading of the debt will be similar to what we had with Cuban debt,” Jean-Dominique Butikofer, of Voya Investment Management told Bloomber. “Everyone will trade with a legal tweezers.”

via ZeroHedge News http://bit.ly/2UGCuZD Tyler Durden

Dissidents Must Be Clear On The Difference Between Fact And Narrative

Authored by Caitlin Johnstone via Medium.com,

A politician can run a flawless campaign, say all the right things from a place of authenticity, hold wildly popular positions and an impeccable public record, but if they say things which upset the powerful, the narrative can be reshaped to paint them as crazy, incompetent, unelectable, treasonous, or all of the above, keeping them out of office forever.

An investigative journalist can spend months breaking a story that severely incriminates extremely powerful people. They can get all the facts right, source everything perfectly, report clearly and concisely, and get full exposure in a mainstream news outlet. But extremely powerful people can use their influence over the political/media class to quickly shift the narrative in the wake of that breaking news story to almost completely nullify its impact by making it seem insignificant.

A leak outlet can create a new and innovative drop box to protect the anonymity of leakers, opening up the possibility of bringing transparency and accountability to power. It can take the utmost care and implement the most exacting standards in confirming the authenticity of documents and protecting the identities of their sources, and it can get true bombshell documents that expose appalling amounts of corruption and malfeasance. But extremely powerful people can shift the narrative around that outlet, and soon millions of people will believe it’s a Kremlin operation and its founder is a smelly Nazi rapist who abuses his cat.

We’ve seen all these things happen. We live in a world in which you can tell the truth at all times, make no mistakes, get very lucky, and be fully supported, but if you do anything to upset those in power, the narrative can be shifted around you to kill your ability to do any good.

The reason I talk about narrative so much is because it’s ultimately what all our problems boil down to. The ability of the plutocratic class and their allied government agencies to manipulate the way people think, act and vote is the only thing holding the ecocidal, omnicidal unipolar world order in place, which is why billions and billions of dollars are poured into the plutocratic media, think tanks, the agenda to censor the internet, and other influence campaigns.

Any attempt to replace that world order with a system that serves humanity instead of a few wealthy sociopaths must necessarily understand and interact with this dynamic.

Do you know the difference between fact and narrative? Are you sure? The ability to be as lucid as possible about the difference between raw data and the story that is spun about it is absolutely essential to understanding and fighting the establishment propaganda machine.

Let’s look at Russiagate for an easy example. The narrative is that Donald Trump is secretly conspiring with the Russian government to subvert American interests to advance the agendas of the Kremlin. But what are the facts? The facts are that a few people who were associated with Trump during his presidential campaign have been convicted and pled guilty to process crimes and some underhanded dealings with nations that aren’t Russia, while Trump has been staging a regime change intervention against Venezuela, bombing Syria, arming Ukraine, implementing a Nuclear Posture Review with a more aggressive stance toward Russia, withdrawing from the INF Treaty, throwing out Russian diplomats, sanctioning Russian oligarchs, expanding NATO and securing it more funding. The narrative and the facts couldn’t be more different.

But that hasn’t mattered, has it? The propagandists have been able to get everyone worked up about the idea that Putin has managed to influence the very highest levels of the US government, despite there being no facts whatsoever to substantiate that idea. It’s pure narrative, yet it’s been used to manufacture a conceptual framework which allows anyone challenging the unipolar world order to be undermined as a Kremlin crony, from Jill Stein to Tulsi Gabbard to Glenn Greenwald to Rand Paul. There is nothing but insinuation and innuendo backing up those narratives, but that’s all they need.

This dynamic is not limited to political power, by the way. In an abusive relationship, for example, the abuser must control the narrative about what’s going on to keep the abused party from leaving: I hit you because you made me so angry with your actions that I lost control. I’m not sleeping around, you’re paranoid and crazy. You can’t leave, no one will ever love you and you’ll fail out there on your own. Narrative control is power, from the smallest possible group of people to the very largest.

Anyone who wants to legitimately challenge the status quo will necessarily find themselves up against this protective wall of narrative that the ruling power establishment has surrounded itself with, so it’s important to know how to fight against it.

There are a lot of great alternative media outlets out there, and a lot of good dissident politicians and activists, but the problem they run into again and again is that they often stay calm and monotonous while repeating cold, hard facts. This is a problem because while they’re trying to calmly fight the status quo using raw data, the establishment is using sparkly narratives in all the right places. They’re appealing to emotions, they’re condensing their stories into catchy 20-second sound-bites, and they’re using facts only when facts help advance the narrative.

I am not saying that dissidents should abandon truth and facts; if you’re not trying to build a world that is based on truth then what the hell are you fighting for? But it is absolutely essential not just to tell the truth, but to seize control of the narrative as well. Get all your facts right, then tell their story. Make it interesting. Make it funny. Activists can be some of the most dry, boring people you’ll ever encounter, believing that their rightness compensates for the fact that nobody’s ever interested in listening to what they’ve got to say. Bollocks! If you want to convey a message, make that message pop! What’s the point of speaking out if nobody’s even listening? Being right isn’t enough.

Humans are storytelling animals; have been ever since we invented language and campfires. If you want to shake people awake, you’re going to have to interface with that reality. Being able to rattle off a bunch of data about your issue of concern isn’t going to accomplish anything by itself; what the establishment understands and most dissidents do not is that people listen to stories, not data, and the more interesting the story the better. Russiagate didn’t gain traction because it’s factually accurate, it gained traction because it’s a scandalous story about the president of the United States conspiring with nefarious forces and being blackmailed over a night of water sports with Russian prostitutes.

So tell stories. Tell truthful, interesting stories. Fight their deceitful interesting stories with truthful interesting stories; authenticity resonates with people in a way think tank-manufactured narratives just don’t. If enough of us can find authentically interesting, funny, amusing, colorful ways to tell the story about what’s happening, it’s only a matter of time before they get picked up and circulated by the public like a good joke or a viral video. Help fight the narrative war against the plutocratic establishment that is strangling our species to death, and have fun doing it. The more fun you have with it, the better.

*  *  *

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via ZeroHedge News http://bit.ly/2DSSi67 Tyler Durden

This Russian Oil Giant Is Driving Putin Toward Showdown With Trump In Venezuela

“Russia is now so deeply invested in the Maduro regime that the only realistic option is to double down,” writes senior fellow at the Carnegie Moscow Center Alexander Gabuev.

He details in a Financial Times op-ed that Moscow-based state oil giant Rosneft owns two offshore gas fields in Venezuela and further has “stakes in assets boasting more than 20m tonnes of crude.” But as embattled President Nicolas Maduro faces US-led efforts to oust him in favor of opposition leader Juan Guaido, billions are on the line for Moscow making its interest in preserving the regime run deep.

in 2017 Caracas awarded licenses to Russian oil giant Rosneft for the development of two offshore gas fields, via Reuters.

In total Caracas owes Rosneft $3 billion, according to Gabuev, which could lead to “a new sort of proxy conflict in America’s backyard,” which is at once economic, political, and could increasingly turn to proxy military intervention. Indeed the Kremlin has already accused the US of “meddling” in the affairs of a sovereign country in order to foster a “slow motion coup”.

“Any solution to the internal political crisis in Venezuela is possible only by Venezuelans themselves,” Kremlin spokesman Dmitry Peskov said on Monday. “Imposing any solutions or efforts aimed at legitimizing the attempt of usurping power is, in our view, just direct and indirect meddling in Venezuela’s internal affairs,” Peskov said.

“This does not contribute in any way to the peaceful, effective and vital settlement to the crisis, which Venezuelans are enduring and who should, as we believe, pull through it on their own,” the Kremlin spokesman noted.

This comes after a significant weekend development in which US National Security Adviser John Bolton promised that the United States will begin humanitarian aid shipments into Venezuela via Brazil and Colombia, despite Maduro denying acceptance of such aid. Guaido, considered “Interim President” by Washington has “authorized” such aid.

But as Gabuev suggests in FT, Rosneft’s powerful Chief Executive Igor Sechin’s involvement in decision-making on Venezuela means Moscow’s foreign policy is “increasingly driven by a combination of corporate interests and ambitions” led by Putin’s oligarchic inner circle. According to Gabuev, Sechin met Maduro in Moscow last September and followed that by flying to Caracas in November. Sechin is “arguably the most powerful man in Putin’s entourage” and oversees Russia’s energy sector.

Rosneft CEO Igor Sechin with President Vladimir Putin, via Getty

In November Sechin relayed a strong message to Caracas, rebuking the Maduro government over delayed oil shipments designed to repay loans. Reuters reported at the time that:

Sechin and a large delegation of executives met with officials at PDVSA in a Caracas hotel this week. Sechin also met with Venezuela’s leftist leader Maduro, and chided him overoil-for-loans shipments that are behind schedule.

“He brought information showing that they were meeting obligations with China but not with them,” said one source with knowledge of the talks.

Meanwhile, both China and Russia further remain the Latin American country’s biggest arms suppliers. And as both countries have billions in oil-for-credit type unpaid loans on the line, neither is likely to give up on Maduro so easily.

“Russia and China are using Venezuela as a proxy conflict to challenge the U.S. This is more than just economic support. Russia and China are leveraging its economic support to establish a military-industrial presence in Venezuela,” Joseph Humire, executive director of the Center for a Secure Free Society, told Fox News  recently.

All of this suggests amidst what some analysts have dubbed “a new Cold War” scenario that another Cuban Missile Crisis in America’s backyard could be around the corner. 

via ZeroHedge News http://bit.ly/2MMTESw Tyler Durden

How Do You Beat The Bankers At Their Own Game?

Authored by Tom Chatham via Project Chesapeake blog,

Those that have been following events for several years know they are under attack by an enemy that has no face and means to do them great harm. Nothing less than their sovereignty and freedom is at stake. Absolute control over people and resources is the ultimate goal.

People need to understand that the bankers need to collapse everything and leave the population in want of resources and supplies. Just like after a natural disaster when the government shows up to provide help to those that have lost everything, the bankers want to show up after the population has lost everything in a collapse, to be their savior and gain control of everyone by offering resources in exchange for compliance.

There are several actions you can take to prevent these people from gaining control over your life.

You must be able to feed yourself-

You must have a home to live in that you own free and clear-

You need to be your own energy company-

You need to be your own bank-

You need to be able to defend what you have-

You need to have skills to operate your own business-

You need to promote a community based economy-

To put it simply, you need to get out of their game and start your own. Remember, the house always wins.

The bankers can only win the game if people are dependent on the elite for everyday necessities. The bankers have created a society of dependent people that they can exploit. They can only continue to exploit people as long as they are dependent on the bankers for the things they need. Once this dependence is broken the bankers lose much of their control on society. This dependence is broken by people who can provide their own necessities.

Early Americans were largely self sufficient in many things which prevented the bankers from controlling everything. Most people used barter to get the things they needed and bankers have no control over barter transactions. They also have little control when gold and silver are used in cash transactions. These people tried several times to build a central bank in the U.S. but were thwarted. Once the bankers created the FED in 1913, they had the mechanism to control the people.

The bankers and politicians can only win if they have absolute control over you and your family. They can only do this by controlling your access to the things you need and must get from others. By maintaining control over these things yourself, you retain that control and rob them of that power.

In many ways, freedom is a result of self sufficiency. The less you depend on others, the more freedom you have to make your own choices in life. People who make their own choices are difficult to control and once people realize they can live without the bankers and government entities the collective power of these entities falls away. The future will be either a collective society where government controls everything you do every minute of the day or it will be a free society where people make their own decisions and take responsibility for what happens. What people do today to free themselves from the control of the bankers, will determine what world we will live in tomorrow.

via ZeroHedge News http://bit.ly/2DT6QTe Tyler Durden

More Alarm Bells As Banks Report Tightening Lending Standards While Loan Demand Slides

The latest alarm signal that the US economy is on collision course with a recession came after today’s release of the latest Senior Loan Officer Opinion Survey (SLOOS) by the Federal Reserve, which was conducted for bank lending activity during the fourth quarter of last year, and which reported a double whammy of tightening lending standards and terms for commercial and industrial loans on one hand, and weaker demand for those loans on the other. Even more concerning is that banks also reported weaker demand for both commercial and residential real estate loans, echoing the softer housing data in recent months.

This tightening in C&I lending standards coupled with sharp declines loan demand, especially for mortgage and auto loans, is shown below.

Here are the details via Goldman:

  • 20% of banks surveyed reportedly widened spreads of loan rates over the cost of funds for large- and medium-sized firms, while 16% narrowed spreads. 14% of banks surveyed reported higher premiums charged on riskier loans, while 4% reported lower premiums. Other terms, such as loan covenants and collateralization requirements, remained largely unchanged. Demand for loans reportedly weakened on balance.
  • Relative to the last survey, standards on commercial real estate (CRE) loans tightened on net over the fourth quarter of the year. On net, 17% of banks reported tightening credit standards on loans secured by multifamily residential properties, while 13% of banks on net reported tightening standards for construction and land development loans. As above, banks reported that demand for CRE loans across a broad range of categories moderately weakened on net.
  • Banks reported that lending standards for residential mortgage loans remained largely unchanged on net in 2018Q4 relative to the prior quarter. However, this benign environment was largely as a result of slumping demand for credit, as banks reported weaker demand across all surveyed residential loan categories, including home equity lines of credit.
  • While banks reported that lending standards on consumer installment loans and autos remained largely unchanged, banks reported that lending standards for credit cards had tightened slightly. Here too demand – for all categories of consumer loans – was moderately weaker, while respondent willingness to make consumer installment loans tumbled to the lowest value since the financial crisis.

Finally, and most concerning of all, is that in their response to special questions on their 2019 outlook, assuming that economic activity continues to be in line with consensus forecasts, banks reported they plan to tighten lending standards somewhat for C&I loans, commercial real estate loans, and residential mortgage loans, in other words the most important credit would become even more difficult to attain. As a result, or perhaps due to the slowdown in the economy, banks also expect demand for C&I, CRE, and residential mortgage loans to weaken somewhat in 2019.

Banks also reported expecting delinquencies and charge-offs to increase somewhat on C&I, CRE, and residential mortgage loans; as Bloomberg’s Andrew Cinko muses “if America was heading toward an economic contraction that would be a typical expectation. But this doesn’t seem to be the case for the foreseeable future. So what gives?”

Perhaps “what gives” is that the economy is not nearly as strong as consensus would make it appear, and behind closed door, loan officers are already batting down the hatches and preparing for a recession. 

* * *

Here would be a good time to remind readers that according to a Reuters investigation conducted in mid-December, when looking behind headline numbers showing healthy loan books, “problems appear to be cropping up in areas such as home-equity lines of credit, commercial real estate and credit cards” according to federal data reviewed by the wire service and interviews with bank execs.

Worse, banks are also starting to aggressively cut relationships with customers who seem too risky, which is to be expected: after all financial conditions in the real economy, if not the markets which just enjoyed the best January since 1987, are getting ever tighter as short-term rates remain sticky high and the result will be a waterfall of defaults sooner or later. Here are the all too clear signs which Reuters found that banks are starting to prepare for the next recession by slashing and/or limiting risky loan exposure:

  • First, nearly half of the applications from customers with low credit scores were rejected in the four months ending in October, compared with 43 percent in the year-ago period, according to a survey released by the Federal Reserve Bank of New York.
  • Second, banks shuttered 7 percent of existing accounts, particularly among subprime borrowers, the highest rate since the Fed started conducting surveys in 2013.
  • Third, home-equity lines of credit declined 8 percent across the industry, with growth slowing in areas such as credit cards and commercial-and-industrial loans, the survey showed.

Then there are the bank-specific signs, starting with Capital One – one of the biggest U.S. card lenders – which is restricting how much it lends to each customer even as it aggressively recruits new ones, CEO Richard Fairbank said last December.

We have been more cautious in the extension of credit, initial credit lines, the broad-based credit line increase programs,” he said. “At this point in the cycle, we’re going to hold back on that option a bit.”

Regional banks have become more cautious lately as well, as they avoid financing riskier projects like early-stage construction loans and properties without pre-lease agreements (here traders vividly recall the OZK commercial real estate repricing fiasco that sent the stock crashing). New Jersey’s OceanFirst Bank also pulled back on refinancing transactions that let customers cash out on their debt, and has started reducing exposure to industrial loans, CEO Chris Maher told Reuters.

“In a downturn, industrial property is extremely illiquid,” he said. “If you don’t want it and it’s not needed it could be almost valueless.”

What happens next?

While a recession is looking increasingly likely, especially as it becomes a self-fulfilling prophecy with banks slashing loans resulting in even slower velocity of money, while demand for credit shrinks in response to tighter loan standards and hitting economic growth, the only question whether a recession is a 2019 or 2020 event, bankers and analysts remain optimistic that the next recession will look much more like the 2001 tech bubble bursting than the 2007-09 global financial crisis.

We wonder why they are so confident, and statements such as this one from Flagship Bank CFO Schornack will hardly instill confidence:

“I lived through the pain of the last recession. We are much more prudent today in how we underwrite deals.”

We disagree, and as evidence we present Exhibit A: the shock write down that Bank OZK took on its commercial real estate, which nobody in the market had expected. As for banks being more “solid”, let’s remove the $1.5 trillion buffer in excess reserves that provides an ocean of artificial liquidity, and see just how stable banks are then. After all, it is this $1.5 trillion in excess reserves that prompt Powell to capitulate and tell the markets he is willing to slowdown or even pause the Fed’s balance sheet shrinkage.

via ZeroHedge News http://bit.ly/2HOPzOP Tyler Durden

Jim Kunstler’s ‘State Of The Union’

Authored by James Howard Kunstler via Kunstler.com,

It’s conceivable, in a nation that absolutely can’t make sense of itself, that Mr. Trump’s annual report to congress will be as incomprehensible as this year’s Superbowl halftime show. Even the weather in Atlanta was a complete mystery with Maroon 5’s front man, Adam Levine, capering half-naked in tattoo drag amid artificial fires-of-hell, and then local hero rapper Big Boi’s triumphal entry in a limo, nearly lost inside what looked like the pelt of a giant ground sloth – an eight-year-old’s idea of what it means to be important. Or maybe it was just all code for two sides of the climate change debate.

You can be sure the atmosphere will be frosty to the max when the Golden Golem of Greatness lumbers down the aisle of congress’s house on Tuesday night. I wouldn’t be surprised if the Democratic majority turns its backs on him during the always excruciating preliminaries and then just walks out of the chamber. Don’t expect the usual excessive rounds of applause from the president’s own party this time, either, in the big, half-empty room. They don’t know what to do about him at this point… or what to do with themselves, for that matter.

The running theme for State of the Union (SOTU) messages going back to Ronald Reagan is American Wonderfulness, so expect at least forty minutes of national self-esteem therapy, which nobody will believe. Throw in another ten minutes of elevating sob stories about “special guests” up in the galleries. But leave a little time for Mr. Trump to roll a few cherry bombs down the aisles. He must be good and goddam sick of all the guff shoveled at him for two years.

The hinge of the whole story will be how fabulous the US economy is. Mr. Trump performed miracles like unto Moses in Egyptland. The manufacturing economy that made America great in the 1950s is back (not). Unemployment has been vanquished (not). We are “energy independent” (not). The once-again rising stock market is proof-of-life for US business prospects (not). We have the best medical care and higher ed in the world (cough cough). It would all come as a surprise to the people dining on dog food with ketchup out in the flyover precincts – but they are not exactly the types to sit around and listen to Don Lemon and Jeffrey Toobin dissect the speech post-game.

Following the new-ish tradition of a designated opposition respondent to the SOTU, Democratic sore loser Stacy Abrams (Georgia Governor’s race, 2018), will virtue-signal her party’s dedication to identity politics, concealing its dark connection to the Wall Street / K Street grift machine, and to the Neocon war hawks so eager to manufacture failed states in parts of the world that are too bothersome to try to get along with. I suppose she will try to revive the Russian collusion angle, with a spin on how the Georgia election of 2018 was also rigged by malign forces to prevent her victory.

Mostly though, Ms. Abrams will extol the wonders and marvels of free health care and free college for all under the coming 2020 Democratic Party landslide, a comfy-cozy future of women-led caring-and-sharing, plus the promise of punishing taxes-to-come on super-rich toffs like Mr. Trump. The media will eat it up. Ms. Abrams will then be promoted as the next vice-president. The party’s strategy is to get every female voter in America on-board along with its supplemental People-of-Color-and-LBGTQ army for a surefire electoral victory. I can see that possibly working, but is it a good fate for the country to be literally divvied up between a women’s party and a men’s party?

It sounds like a recipe for Greek tragedy to me.

Anyway, both sides are marinated in delusion these days. Whatever Mr. Trump trumpets about the economy on Tuesday night will unwind stupendously in the months ahead. In private, he probably knows this, and I’m sure that he’s preparing to preside over some form of a national bankruptcy work-out. But even that won’t stop the roaring choo-choo train of the “democratic socialist” nirvana to come. The new religion of Modern Monetary Theory (MMT) they subscribe to says that the government can spend as much money as it feels like spending because, one way or another, they create the money. Of course, this is Karl Marx with all the humor removed. And when it comes rolling down the tracks, it won’t be much of a joke.

via ZeroHedge News http://bit.ly/2DbHJcL Tyler Durden

Mega-Rich Scoff At Democrat Tax Grab Even As Most Americans Support

Ultra-rich partygoers at a Palm Beach soirée thumbed their noses at robin-hood tax proposals pitched by various Democratic candidates going into 2020, according to Bloomberg. 

The party at the Norton Museum of Art Saturday night had all the trappings of the Palm Beach high season – those Stubbs & Wootton slippers, some fabulous gowns, and, with President Trump ensconced at Mar-a-Lago, a healthy disregard for the tax plans being floated by a wide field of potential Democrat candidates in 2020.

“They’re going to eat themselves alive,” Commerce Secretary Wilbur Ross said. –Bloomberg

Except – a majority of Americans are now saying they’re cool with plans to extract up to 70% from the income of the super-rich over certain levels, according to Politico. 

Out of several polls showing support for the money grab, a new POLITICO/Morning Consult poll released Monday reveals that 76% of registered voters think the rich should pay more in taxes, while a survey conducted by Fox News concluded that 70% oif Americans thought raising taxes on those earning more than $10 million was warranted – including 54% of Republicans. 

The surveys suggest that perhaps the Palm Beach crowd might want to take such proposals more seriously, as average voters are keenly aware of the rise in income inequality in the United States. Imagine how voters will feel during the next recession, should one materialize? 

“There is a deep wellspring in terms of perception of unfairness in the economy that’s been tapped into here that either didn’t exist five years ago or existed and had not had a chance to be expressed,” said JPMorgan chairman of market and investment strategy, Michael Cembalest. “This is quite a moment in American economic history where all of a sudden in a matter of months this thing has kind of exploded like this.”

A plan from first-term Rep. Alexandria Ocasio-Cortez (D-N.Y.) to slap a 70 percent marginal rate on income earned over $10 million clocked in at 59 percent support in a recent Hill/HarrisX poll.

The new POLITICO/Morning Consult poll, conducted Feb. 1-2, found that 61 percent favor a proposal like the “wealth tax” recently laid out by Sen. Elizabeth Warren (D-Mass.) that would levy a 2 percent tax on those with a net worth over $50 million and 3 percent on those worth over $1 billion. Just 20 percent opposed the idea. The poll surveyed 1,993 registered voters and carries a margin of error of plus or minus 2 percent.

It showed 45 percent favored a plan like that laid out by Ocasio-Cortez while 32 percent opposed it. –Politico

In short, Republicans who think they’ll be able to easily spin the Democrat tax plans as irrational cash-grabs in 2020 may find it difficult to make their case. 

“There is certainly an appetite for more taxes on the rich, though the threshold matters,” said polling expert Karlyn Bowman with the American Enterprise Institute. “There is also some support for redistributing income.“

Last year, 48% of taxpayers described their own taxes as “about right,” while around 45% said they were “too high.” Democrats, keenly aware that raising taxes on the middle class is probably a really bad idea at this point, have concluded that raising taxes on the ultra-wealthy is a safe bet that could help pay for government programs such as a “Green New Deal” or “Medicare for All.” 

That said, proposals have varied as to who exactly would end up paying more taxes under a Democrat president in 2020. 

Some Democrats piling into the 2020 race are now competing to get further to the left on boosting taxes on the rich. After Warren’s wealth tax announcement, likely candidate Sen. Bernie Sanders (I-Vt.), who bucked recent political tradition with calls for tax hikes in his 2016 campaign, unveiled a proposal to increase the number of wealthy Americans subject to the estate tax.

Those who aren’t calling for big new taxes — including Sen. Kamala Harris (D-Calif.), who prefers refundable tax credits — are facing some heat on the left as insufficiently progressive. –Politico

“It’s not surprising to me at all. Washington has been working so long for the billionaire class that people around here cannot imagine crossing them,” said Elizabeth Warren, adding “It never even becomes a topic of conversation. The ultra-millionaires have gotten so much from this country that it’s not unreasonable to ask them to give back a little bit.”

Warren claimed that she wouldn’t raise taxes on the middle class, should she win the Democratic nomination. “That’s just wrong. Why on earth would I do that? It makes no sense. I think I’ve already lost the billionaire vote,” she said. 

Trump once pushed for an ultra-wealth tax

President Trump pushed for a measure in 1999 while pondering a presidential bid on the Reform Party ticket – suggesting a 14.25% one-time tax on those with a net worth of more than $10 million. Trump suggest this would wipe out the national debt entirely – which was just $5.5 trillion at the time, as opposed to today’s nearly $22 trillion. 

“By my calculations, 1 percent of Americans, who control 90 percent of the wealth in this country, would be affected by my plan,” said 1999 Trump. 

Trump has long since abandoned that idea, focusing instead on wedge issues like immigration to target voters concerned about their jobs and wages as well as those worried about demographic changes in the country.

But he may have vulnerability on the tax issue heading into 2020 given his biggest legislative accomplishment as president so far was a $2 trillion tax cut that showered most of its benefits on corporate America while offering much smaller reductions to middle-class taxpayers. –Politico

Trump’s $2 trillion tax cuts, meanwhile, has been lauded by Republicans for the promse of faster growth and higher wages – however the new POLITICO/Morning Consult poll found that just 33% of those surveyed thought the tax bill was helping the economy, while 41% said it made no difference, and 25% had no idea or no opinion on how effective it was. 

While the progressive plans have been panned by most of the ultra-wealthy, JPMorgan Chase CEO Jamie Dimon said last week: “I believe that individuals earning the most can afford to pay more,” adding “And I have no problem paying higher taxes to address some of the fundamental challenges and inequities in our society.”

via ZeroHedge News http://bit.ly/2GaVBbg Tyler Durden

“End The Assaults!” Ron Paul Urges: Shut Down The TSA

Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

Hard as it is to believe, airline travel recently became even more unpleasant. Transportation Security Administration (TSA) employees being required to work without pay for the duration of the government shutdown resulted in many TSA workers calling in sick. The outbreak of “shutdown flu” among TSA employees forced some large airports to restrict the number of places mandatory TSA screenings were performed, making going through screening even more time-consuming and providing one more reason to shut down the TSA.

Airline security should be provided by airlines and airports. Private businesses, such as airlines, have an incentive to ensure their customers’ safety without treating them like criminal suspects or worse. Security personnel hired by, and accountable to, airlines would not force a nursing mother to drink her own breast milk or steal a stuffed lamb from a wheelchair-using three-year-old and subject the child to such an intensive screening that she cries “I don’t want to go to Disneyworld.” Those who claim that the TSA is necessary to keep us safe should consider that the Department of Homeland Security’s own studies show that TSA’s screenings and even the intrusive pat-downs are ineffective at discovering hidden guns, explosives, and other weapons.

TSA employees have no incentives to please, or even care about the well-being of, airline passengers. Instead, their jobs depend on pleasing politicians and bureaucrats. If we have learned anything since 9/11, it is that most politicians are more concerned with appearing to be “doing something” about security than actually reducing the risk of terrorist attacks. That is why politicians’ response to 9/11 was a series of actions — such as creating the TSA, passing the PATRIOT Act, and invading Iraq — that trade our real liberties for phantom security. Sometimes, pro-TSA politicians will bemoan the TSA’s “excesses” and even call for “reforming” the agency in order to pretend they care about their constituents’ rights.

Restoring responsibility for providing security to private businesses will encourage the development of new and innovative ways to more effectively provide security. In a free market, airlines and airports could compete for business on the basis that their flights are safer or their screening is less unpleasant then that of their competitors. If airlines were able to set their own security policies, they would likely allow pilots to carry firearms.

Private companies also strive to be consistent in providing services. Therefore, a company providing private security would never inconvenience its customers because of a “temporary shutdown.”

Because government operations are funded by coercive taxation rather than voluntary choices of consumers, federal officials cannot rely on the price system to inform them of whether they need to increase or decrease spending on airline security. In the private sector, businesses that charge more for security — or any other good or service — than individuals are willing to pay lose customers. Also, if businesses do not spend enough on security, people concerned about safety will be unwilling to use their services. Privatizing airline security is the only way to ensure that the “correct” amount of resources is being spent on airline safety.

In the 18 years since Congress created the TSA, the agency has proven itself incapable of providing real security, but more than capable of harrying Americans and wasting taxpayer dollars on security theater.

Congress should permanently close the TSA and return responsibility for security to private businesses.

via ZeroHedge News http://bit.ly/2HSDtV8 Tyler Durden