iftttwall

It’s been a bad year for inflation forecasters: every month this year, economist consensus has expected core CPI to rise by 0.2% and every month since March, that figure has proven to be too high, resulting in 5 consecutive inflation misses and the weakest stretch of core inflation growth since 2010.

Tomorrow’s CPI print, however, should finally break the spell: following a stabilization in cell phone plan costs, a rebound in hotel prices, and the ongoing weakness in dollar, should make tomorrow’s 0.2% core CPI forecast easier to achieve. And while year-over-year core growth is expected to slow to just 1.6% , the weakest since January 2015, Fed officials – having telegraphed a December rate hike – have indicated they’re looking more closely at the month-to-month trends for hints on what inflation will do next.

“Inflation matters for the December decision, which is still very much up in the air,’’ Jonathan Wright, an economics professor at Johns Hopkins University and former Fed economist told Bloomberg. If core price gains remain low through the end of the year, “it would be too hard to insist that inflation is still on track.’’

Headline inflation is also expected to come in a tad stronger: 0.3% M/M the highest since January, and 1.8% year-over-year due largely to a jump in gasoline prices following hurricane Harvey. “The core inflation numbers are going to be some of the lesser-affected of the key data between now and December,” said Stephen Stanley of Amherst Pierpont.

And yet, while countless algos will react within nanoseconds of tomorrow’s CPI print, with a laser focus on whether tomorrow’s US core CPI will come out at 0.1%, 0.2% or 0.3%, it is easy to lose sight of the bigger inflation story. Simply put, inflation has been trending down across the major economies for decades. Take the US, each decade has seen inflation average as follows:

• 1970s: 7.1%
• 1980s: 5.6%
• 1990s: 3.0%
• 2000s: 2.6%
• 2010s: 1.7%

A similar pattern can be seen in Europe and Japan, though the latter seems to have settled around zero for the past two decades. Returning to the US, a big contributor has been a strong decline in goods inflation to around zero since the early 2000s. Meanwhile, services inflation has fallen but at a much slower pace and seems to be settling around 2%

As Nomura’s Bilal Hafeez writes, it comes as no surprise that the early 2000s saw a major expansion in US (and world) trade with China. Indeed, President Clinton with the help of Republicans in Congress passed legislation to normalise trade relations with China in 2000. Soon after that, trade with China increased substantially, which helped put downward pressure on goods inflation. While there has been rhetoric from the current administration about reversing some of these measures, nothing has passed. Moreover, US trade is also increasing with other low-cost Asian producers, such as Vietnam, which is now the fifth largest net goods exporter to the US. Vietnam has not so far featured in any anti-trade rhetoric.

Still, tomrrow’s numbers matter particularly for what the Fed will do next: with core inflation stubbronly below the Fed’s 2.0% core traget, FOMC members have been scrambling to justify they ongoing rate hike in light of persistent price weakness. “Fed policy makers seem to believe that inflation weakness is temporary, and they are probably right on that,” said Roberto Perli of Cornerstone Macro LLC in Washington. “But the more weak data we get, the more uncertain they will be about that interpretation and therefore the higher the likelihood of a postponement.”

One key factor, however, which may spoil the party and keep inflation prints depressed is the deflationary impact of technology in general, something even the Fed has admitted in recent months, and the role of tech giants like Amazon in particular.

Discussing this issue, Nomura writes that while globalisation was the meme of the 2000s, this decade’s has to be the “Amazonisation” of commerce. Hafeez takes the argument further, and while ascribing  to Amazon much of the good disinflation in recent years, suggests that one solution would be to weaken the dollar, i.e., go back to square 1 and either cuts rates or engage in QE…. just to offset the effect of Amazon!

 Given the bulk of the cost of goods is distribution costs, Amazon’s unique distribution model and widening range of products could impart a new disinflationary impulse on goods prices. There may already be signs of that if we compare the expected growth at Amazon with that of more conventional retail outlets as expressed through their relative share prices (Figure 3).

 

So what can policymakers do to generate inflation? Services inflation is already around 2% – with the bulk of services accounted for by housing, medical and education costs, further increases may not be politically viable. That leaves raising goods inflation. But the forces of global trade and Amazonisation are unlikely to turn soon, barring some kind of breakthrough for President Trump in accomplishing political goals.

 

The most obvious step, then, could be to weaken the nation’s currency. It worked for Japan when Abenomics was first launched with a weak yen in 2012 (inflation rose as high as 1.7% by 2014), and recently the weak pound has helped propel UK inflation to close to 3%. For the US, it’s noteworthy that goods inflation appears fairly tied to the dollar cycle – so a weak dollar in the 2000s saw inflation rise, while dollar strength since 2012 has seen goods inflation fall (Figure 4).

 

But is it really Amazon’s fault the Fed can’t hit its inflation target? 

Conveniently, that is just the question posed recently by Capital Economy in a recent research report. What it found is that, contrary to FOMC members seeking an easy scapegoat, it’s not Jeff Bezos’ fault why the Fed has failed at one of its two key mandates for nearly a decade. As Capital Eco’s Paul Ashworth writes:

The drop back in core inflation to well below the Fed’s 2% target this year has prompted claims that prices are being held down by structural changes linked to the growing importance of online sales. With Amazon also regularly in the news recently thanks to its surging revenues and stratospheric stock price, it is understandable that people have put two and two together. Unfortunately, the data simply don’t support the theory that competition between online sellers and traditional bricks and mortar stores explains the low level of inflation.

A breakdown of his argument:

• The shift to online sales is having a transformative effect on the retail industry, but does not explain the weakness in core inflation, either this year specifically or the Fed’s more general failure to hit the 2% target in recent years.
• Online retailing should be boosting productivity, since it eliminates the cost of running expensive stores in prime locations and reduces staffing needs. Those productivity gains should be reflected in lower prices. But goods prices have been falling since the early 2000s, when production was first outsourced to low-cost developing countries and behemoths like Walmart unleashed their own efficiency revolution in the retail sector.
• Thanks to the rapid growth in non-store retail sales, the proportion of total retail sales accounted for by e-commerce has doubled since 2010. But it still accounts for a relatively minor 8.4%. Looking at Amazon specifically, its recent performance has been undoubtedly impressive. Nevertheless, Amazon’s importance within the overall US retail market still pales in significance to more traditional retailers. Even after years of strong growth, Amazon’s revenues are still only one-fifth of Walmart’s.
• The biggest categories for online sales are clothing, furniture & home furnishings and electronics. Looking at price inflation for those top three categories, a mixed picture emerges. There is little evidence that clothing prices are falling more rapidly now. In contrast, there is perhaps some evidence that prices for household furnishings and sporting goods have been falling at a slightly faster pace over the past five years. Before we conclude that is due to structural shifts in online versus bricks and mortar stores, however, it is worth bearing in mind that the dollar’s strength has also probably played a role.
• In the services sector, e-commerce now accounts for almost a third of revenues in air transportation and travel agencies. But airline fares are still being driven almost entirely by fuel prices. Despite the explosion in private short-term rentals through sites like Airbnb, hotel room rates continue to rise.

In short, CapEco finds that “the drop off in core inflation this year is mainly due to transitory factors”, not Amazon, and as a result, “it will rebound next year as those factors fade and the dollar’s weakness begins to feed through.”

Or at least it should.

Meanwhile, if tomorrow’s CPI is the 6th consecutive miss, the Fed would be better advised to look at its own erroneous decision-making, its faulty models, and the flawed CPI basket construction, the before trying to once again pin the blame on some external force.

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Presented with minimal comments, the following 'picture' from Fathom Consulting paints a thousand words of unsustainability and delusion…

h/t @Schuldensuehner

While we agree with most of the chart above's content, we note that the call on the 'housing' non-bubble all depends on which market you are looking at…

 

Of course, the charts above are merely the symptoms.

This is the cause…

Compared to the 'normalized' movement in central bank balance sheets before Lehman; the current (and utterly ridiculous) size of the G-3 central banks balance sheet is 47 standard deviations above trend!!

So where is the real 'disease' that needs to be cured? "I'm the hero of the new world" … "No, you're the disease…"

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Authored by Robert Parry via ConsortiumNews.com,

Crossing a line from recklessness into madness, The New York Times published a front-page opus suggesting that Russia was behind social media criticism of Hillary Clinton…

For those of us who have taught journalism or worked as editors, a sign that an article is the product of sloppy or dishonest journalism is that a key point will be declared as flat fact when it is unproven or a point in serious dispute – and it then becomes the foundation for other claims, building a story like a high-rise constructed on sand.

This use of speculation as fact is something to guard against particularly in the work of inexperienced or opinionated reporters.

But what happens when this sort of unprofessional work tops page one of The New York Times one day as a major “investigative” article and reemerges the next day in even more strident form as a major Times editorial? Are we dealing then with an inept journalist who got carried away with his thesis or are we facing institutional corruption or even a collective madness driven by ideological fervor?

What is stunning about the lede story in last Friday’s print edition of The New York Times is that it offers no real evidence to support its provocative claim that – as the headline states – “To Sway Vote, Russia Used Army of Fake Americans” or its subhead: “Flooding Twitter and Facebook, Impostors Helped Fuel Anger in Polarized U.S.”

In the old days, this wildly speculative article, which spills over three pages, would have earned an F in a J-school class or gotten a rookie reporter a stern rebuke from a senior editor. But now such unprofessionalism is highlighted by The New York Times, which boasts that it is the standard-setter of American journalism, the nation’s “newspaper of record.”

In this case, it allows reporter Scott Shane to introduce his thesis by citing some Internet accounts that apparently used fake identities, but he ties none of them to the Russian government. Acting like he has minimal familiarity with the Internet – yes, a lot of people do use fake identities – Shane builds his case on the assumption that accounts that cited references to purloined Democratic emails must be somehow from an agent or a bot connected to the Kremlin.

For instance, Shane cites the fake identity of “Melvin Redick,” who suggested on June 8, 2016, that people visit DCLeaks which, a few days earlier, had posted some emails from prominent Americans, which Shane states as fact – not allegation – were “stolen … by Russian hackers.”

Shane then adds, also as flat fact, that “The site’s phony promoters were in the vanguard of a cyberarmy of counterfeit Facebook and Twitter accounts, a legion of Russian-controlled impostors whose operations are still being unraveled.”

The Times’ Version

In other words, Shane tells us, “The Russian information attack on the election did not stop with the hacking and leaking of Democratic emails or the fire hose of stories, true, false and in between, that battered Mrs. Clinton on Russian outlets like RT and Sputnik. Far less splashy, and far more difficult to trace, was Russia’s experimentation on Facebook and Twitter, the American companies that essentially invented the tools of social media and, in this case, did not stop them from being turned into engines of deception and propaganda.”

Besides the obvious point that very few Americans watch RT and/or Sputnik and that Shane offers no details about the alleged falsity of those “fire hose of stories,” let’s examine how his accusations are backed up:

“An investigation by The New York Times, and new research from the cybersecurity firm FireEye, reveals some of the mechanisms by which suspected Russian operators used Twitter and Facebook to spread anti-Clinton messages and promote the hacked material they had leaked. On Wednesday, Facebook officials disclosed that they had shut down several hundred accounts that they believe were created by a Russian company linked to the Kremlin and used to buy $100,000 in ads pushing divisive issues during and after the American election campaign. On Twitter, as on Facebook, Russian fingerprints are on hundreds or thousands of fake accounts that regularly posted anti-Clinton messages.”

Note the weasel words: “suspected”; “believe”; ‘linked”; “fingerprints.” When you see such equivocation, it means that these folks – both the Times and FireEye – don’t have hard evidence; they are speculating.

And it’s worth noting that the supposed “army of fake Americans” may amount to hundreds out of Facebook’s two billion or so monthly users and the $100,000 in ads compare to the company’s annual ad revenue of around $27 billion. (I’d do the math but my calculator doesn’t compute such tiny percentages.)

So, this “army” is really not an “army” and we don’t even know that it is “Russian.” But some readers might say that surely we know that the Kremlin did mastermind the hacking of Democratic emails!

That claim is supported by the Jan. 6 “intelligence community assessment” that was the work of what President Obama’s Director of National Intelligence James Clapper called “hand-picked” analysts from three agencies – the Central Intelligence Agency, National Security Agency and Federal Bureau of Investigation. But, as any intelligence expert will tell you, if you hand-pick the analysts, you are hand-picking the conclusions.

Agreeing with Putin

But some still might protest that the Jan. 6 report surely presented convincing evidence of this serious charge about Russian President Vladimir Putin personally intervening in the U.S. election to help put Donald Trump in the White House. Well, as it turns out, not so much, and if you don’t believe me, we can call to the witness stand none other than New York Times reporter Scott Shane.

Shane wrote at the time: “What is missing from the [the Jan. 6] public report is what many Americans most eagerly anticipated: hard evidence to back up the agencies’ claims that the Russian government engineered the election attack. … Instead, the message from the agencies essentially amounts to ‘trust us.’”

So, even Scott Shane, the author of last Friday’s opus, recognized the lack of “hard evidence” to prove that the Russian government was behind the release of the Democratic emails, a claim that both Putin and WikiLeaks founder Julian Assange, who published a trove of the emails, have denied. While it is surely possible that Putin and Assange are lying or don’t know the facts, you might think that their denials would be relevant to this lengthy investigative article, which also could have benefited from some mention of Shane’s own skepticism of last January, but, hey, you don’t want inconvenient details to mess up a cool narrative.

Yet, if you struggle all the way to the end of last Friday’s article, you do find out how flimsy the Times’ case actually is. How, for instance, do we know that “Melvin Redick” is a Russian impostor posing as an American? The proof, according to Shane, is that “His posts were never personal, just news articles reflecting a pro-Russian worldview.”

As it turns out, the Times now operates with what must be called a neo-McCarthyistic approach for identifying people as Kremlin stooges, i.e., anyone who doubts the truthfulness of the State Department’s narratives on Syria, Ukraine and other international topics.

Unreliable Source

In the article’s last section, Shane acknowledges as much in citing one of his experts, “Andrew Weisburd, an Illinois online researcher who has written frequently about Russian influence on social media.” Shane quotes Weisburd as admitting how hard it is to differentiate Americans who just might oppose Hillary Clinton because they didn’t think she’d make a good president from supposed Russian operatives: “Trying to disaggregate the two was difficult, to put it mildly.”

According to Shane, “Mr. Weisburd said he had labeled some Twitter accounts ‘Kremlin trolls’ based simply on their pro-Russia tweets and with no proof of Russian government ties. The Times contacted several such users, who insisted that they had come by their anti-American, pro-Russian views honestly, without payment or instructions from Moscow.”

One of Weisburd’s “Kremlin trolls” turned out to be 66-year-old Marilyn Justice who lives in Nova Scotia and who somehow reached the conclusion that “Hillary’s a warmonger.” During the 2014 Winter Olympics in Sochi, Russia, she reached another conclusion: that U.S. commentators were exhibiting a snide anti-Russia bias perhaps because they indeed were exhibiting a snide anti-Russia bias.

Shane tracked down another “Kremlin troll,” 48-year-old Marcel Sardo, a web producer in Zurich, Switzerland, who dares to dispute the West’s groupthink that Russia was responsible for shooting down Malaysia Airlines Flight 17 over Ukraine on July 17, 2014, and the State Department’s claims that the Syrian government used sarin gas in a Damascus suburb on Aug. 21, 2013.

Presumably, if you don’t toe the line on those dubious U.S. government narratives, you are part of the Kremlin’s propaganda machine. (In both cases, there actually are serious reasons to doubt the Western groupthinks which again lack real evidence.)

But Shane accuses Sardo and his fellow-travelers of spreading “what American officials consider to be Russian disinformation on election hacking, Syria, Ukraine and more.” In other words, if you examine the evidence on MH-17 or the Syrian sarin case and conclude that the U.S. government’s claims are dubious if not downright false, you are somehow disloyal and making Russian officials “gleeful at their success,” as Shane puts it.

But what kind of a traitor are you if you quote Shane’s initial judgment after reading the Jan. 6 report on alleged Russian election meddling? What are you if you agree with his factual observation that the report lacked anything approaching “hard evidence”? That’s a point that also dovetails with what Vladimir Putin has been saying – that “IP addresses can be simply made up. … This is no proof”?

So is Scott Shane a “Kremlin troll,” too? Should the Times immediately fire him as a disloyal foreign agent? What if Putin says that 2 plus 2 equals 4 and your child is taught the same thing in elementary school, what does that say about public school teachers?

Out of such gibberish come the evils of McCarthyism and the death of the Enlightenment. Instead of encouraging a questioning citizenry, the new American paradigm is to silence debate and ridicule anyone who steps out of line.

You might have thought people would have learned something from the disastrous groupthink about Iraqi WMD, a canard that the Times and most of the U.S. mainstream media eagerly promoted.

But if you’re feeling generous and thinking that the Times’ editors must have been chastened by their Iraq-WMD fiasco but perhaps had a bad day last week and somehow allowed an egregious piece of journalism to lead their front page, your kind-heartedness would be shattered on Saturday when the Times’ editorial board penned a laudatory reprise of Scott Shane’s big scoop.

Stripping away even the few caveats that the article had included, the Times’ editors informed us that “a startling investigation by Scott Shane of The New York Times, and new research by the cybersecurity firm FireEye, now reveal, the Kremlin’s stealth intrusion into the election was far broader and more complex, involving a cyberarmy of bloggers posing as Americans and spreading propaganda and disinformation to an American electorate on Facebook, Twitter and other platforms. …

“Now that the scheming is clear, Facebook and Twitter say they are reviewing the 2016 race and studying how to defend against such meddling in the future. … Facing the Russian challenge will involve complicated issues dealing with secret foreign efforts to undermine American free speech.”

But what is the real threat to “American free speech”?

Is it the possibility that Russia – in a very mild imitation of what the U.S. government does all over the world – used some Web sites clandestinely to get out its side of various stories, an accusation against Russia that still lacks any real evidence?

Or is the bigger threat that the nearly year-long Russia-gate hysteria will be used to clamp down on Americans who dare question fact-lite or fact-free Official Narratives handed down by the State Department and The New York Times?

via http://ift.tt/2y6vBX9 Tyler Durden

Sarah Sanders’ White House press briefings have seemingly become way more entertaining over the past couple of days.  Maybe it’s just us, but ‘gotcha’ questions from the usual narrative-pushing mainstream media outlets that used to be quickly dismissed by Sanders are suddenly being exploited to put on a daily clinic on how to school brain-dead reporters.

The latest example came today after one such reporter had to seek clarification on why Comey’s leaking of confidential FBI property to the New York Times might violate federal laws.  Here was Sanders’ response:

“The memos that Comey leaked were created on an FBI computer while he was the director.  He claims they were private property, but they clearly followed the protocol of an official FBI document.”

 

“Leaking FBI memos on a sensitive case regardless of classification violates federal laws including the Privacy Act, standard FBI employment agreements, and nondisclosure agreements all personnel must sign. I think that is clean and clear that that would be a violation.”

 

“The Department of Justice has to look into any allegations of legality, whether or not something is illegal or not — that’s not up to me to decide.”

 

“What I’ve said and what I’m talking about are facts. James Comey’s leaking of information, questionable statements under oath, politicizing investigations, those are real reasons for why he was fired and the president’s decision was 100 percent right, which we’ve said multiple times over and over. In fact, I think the more and more we learn, the more and more that’s been vindicated.”

 

Of course, Sanders’ response could always be even clearer…we highly encourage the New York Times, CNN and/or Wapo to ask additional clarifying questions on this Comey issue tomorrow.

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Authored by Nick Giambruno via InternationalMan.com,

Only a fool tries to survive by acting like a vegetable, staying rooted in one place, when the political and economic climate changes for the worse.

—Doug Casey

Unless you’ve been living under a rock, you know that America is in turmoil. That was on full display recently in Charlottesville, Virginia.

But it’s not just Charlottesville. There have been deadly clashes in Ferguson, Charleston, Dallas, St. Paul, Baltimore, Baton Rouge, and Alexandria.

America is headed for a new kind of civil war.

And when it erupts, you and your family will want “freedom insurance” – the ability to get out fast and set up comfortably in a more stable country.

I recently spoke with my friend and colleague Chris Lowe about this, and I knew I had to pass along our discussion to International Man readers. Chris is the editor of Bonner & Partners’ Inner Circle. His publication shares insights from Bill Bonner’s personal global network of analysts and investment experts.

*  *  *

Chris Lowe: You’ve been urging folks to diversify internationally. Why is that message so important now?

Nick Giambruno: The US is becoming more and more fragmented, as I’m sure our readers have noticed. I’ve never seen it more polarized.

In fact, I’ve only seen this degree of polarization in countries that have gone through civil wars. It all feels eerily familiar.

I was born in the US, and grew up there. But I used to live in Lebanon, which went through a nasty 15-year civil war. More than 120,000 died. Thousands more lost their homes.

And I currently live in Colombia part of the year. The country has a 50-year history of civil conflict.

Chris Lowe: What’s to blame for this situation?

Nick Giambruno: Identity politics are a big factor.

That’s when your religion, race, ethnic background, and so forth are the most important thing in politics. You’re no longer an individual American. You’re part of some group, undoubtedly being victimized by another group.

This naturally leads to collectivism, tensions… and eventually violence between the groups.

Identity politics were a big factor in Lebanon’s civil war. And they’re a big factor in the US right now. This poisonous trend is growing, and it’s probably unstoppable.

The media is another big factor. Most Americans live in a partisan information bubble with these 24-hour news networks and partisan websites. That accelerates the divide.

I lived in Beirut, Lebanon’s capital city, for about three years. It reminds me of the media there. About 6 million people live in Lebanon, but it has about a dozen 24-hour news channels. Each one caters to a different political/sectarian/ethnic group. This allows each group to live in its own media bubble.

Lebanon’s bloody civil war happened in the 1970s and 1980s. But it’s still an extremely divided country. It wouldn’t take much for its civil war to start up again.

The media in Lebanon helps incubate tensions there. Today, the same thing is happening in the US.

I don’t mean to sound dramatic, but Americans hate each other right now. And it’s getting worse. We’re just a market crash… a recession… or some other extreme event away from more widespread violence. A new form of civil war is even possible.

Chris Lowe: We’re not talking a return to 1861—to pitched battles between armies and hundreds of thousands dead. But if you define “civil war” as a situation where you have widespread violence, a rejection of political authority, and the National Guard on the street, it’s easy to see how America gets there.

Nick Giambruno: I agree. I can’t say exactly what it is. But something does seem to be brewing. And it’s not good. That’s why Doug Casey and I urge our readers to internationalize their lifestyles.

Call it what you want, but American society is cracking. Like you say, it’s not necessarily just the political system, but society itself. And that’s probably more worrisome.

Doug and I have talked about this a lot lately. Doug is older than I am. He’s in his 70s. And he says he hasn’t seen anything like this in his lifetime.

This is why I urge readers to diversify outside of the US. The fracturing of society will create a lot of political risk. And that’s on top of the risks from money printing, higher taxes, and increasing regulations.

Chris Lowe: What do you say to folks who see the idea of an America at war with itself as farfetched?

Nick Giambruno: We’ve seen this movie before. As Doug has been warning his readers for years, it happened in Bosnia in the 1990s. It happened in Afghanistan in the 1980s. It happened in Rhodesia—now Zimbabwe—in the 1970s. It happened in the Belgian Congo in the 1960s… in Cuba in the 1950s… in China in the 1940s… in Germany in the 1930s… and in Russia in the 1920s.

It also happened recently in Ukraine, where Doug and I visited last year. There, it started with the downfall of a Russian-backed thug who was replaced by a US-backed thug. The country lost itself in identity politics—people who identified with Russia versus those who didn’t.

From there, it descended into armed conflict. So far, more than 10,000 are dead and many thousands more are wounded.

As Doug puts it, if you stay put in one place… and you don’t have options when one of these extreme events happens… you’re going to wind up a victim.

No matter where you live, international diversification can greatly reduce the threat your home government poses to your personal and financial wellbeing.

Chris Lowe: How does it work?

Nick Giambruno: You know the benefits of diversifying your investment portfolio. If you put all of your asset “eggs” in one basket, you could lose your entire portfolio if that basket breaks.

The same idea applies to political risk. If your home country fractures—and suffers the kind of civil unrest and violence we’ve been talking about—you could lose everything.

Most people have medical, life, fire, and car insurance policies. You hope you never have to use these policies. But you have them anyway. They give you peace of mind and protection if the worst comes to pass.

International diversification is the ultimate insurance policy. Think of it as “freedom insurance.” It frees you from dependence on any one country. Achieve that freedom, and it becomes extremely difficult for any one group of bureaucrats to control you. The results can be life changing.

Everyone in the world should aim for political diversification. But it’s especially critical for those who live under a government that’s sinking hopelessly deeper into financial trouble. That means most Western governments… and the US in particular, given what’s going on right now.

*  *  *

We recently released a memo that reveals the underlying source of all this political polarization and social unrest in America… and a troubling truth about America that no one else will tell you. Click here to read it now.

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For the better part of a year now Americans have speculated over precisely what pressing national security issue may have prompted the Obama administration to take the extreme measure of unmasking the names of Trump officials captured in foreign intelligence reports…you know, because bypassing the typical warrant process and violating an American citizen’s fourth amendment protections is kind of a big deal. 

So what was it…intelligence concerning an imminent terrorist attack…concrete evidence that Putin stole Hillary’s emails?  No, according to CNN, National Security Advisor Susan Rice ultimately made the call to unmask Trump officials because Obama was offended that the crown prince of the United Arab Emirates traveled to New York last December, after the election mind you, without giving him a heads up first.

Former national security adviser Susan Rice privately told House investigators that she unmasked the identities of senior Trump officials to understand why the crown prince of the United Arab Emirates was in New York late last year, multiple sources told CNN.

 

The New York meeting preceded a separate effort by the UAE to facilitate a back-channel communication between Russia and the incoming Trump White House.

 

The crown prince, Sheikh Mohammed bin Zayed al-Nahyan, arrived in New York last December in the transition period before Trump was sworn into office for a meeting with several top Trump officials, including Michael Flynn, the president’s son-in-law, Jared Kushner, and his top strategist Steve Bannon, sources said.

 

The Obama administration felt misled by the United Arab Emirates, which had failed to mention that Zayed was coming to the United States even though it’s customary for foreign dignitaries to notify the US government about their travels, according to several sources familiar with the matter. Rice, who served as then-President Obama’s national security adviser in his second term, told the House Intelligence Committee last week that she requested the names of the Americans mentioned in the classified report be revealed internally, a practice officials in both parties say is common.

Of course, CNN attempts to downplay the gravity of these new revelations but somehow we suspect that Obama getting his feelings hurt over a breach in travel protocol of a foreign dignitary is not a valid reason to spy on American citizens…though we’re not lawyers.

 

CNN noted that it’s unclear precisely which Trump officials Rice discussed at the House meeting, and thus which officials were ultimately unmasked, but multiple sources apparently confirmed to them that Zayed met at the time with Flynn, Kushner and Bannon. The three-hour discussion focused on a range of issues, including Iran, Yemen and the Mideast peace process, according to two of CNN’s sources who insisted that opening up a back-channel with Russia was not a topic of discussion.

A senior Middle East official told CNN that the UAE did not “mislead” the Obama administration about the crown prince’s visit, but acknowledged not telling the US government about it in advance. The meeting, which took place December 15, 2016, the official said, was simply an effort to build a relationship with senior members of the Trump team who would be working in the administration to share assessments of the region.

 

“The meeting was about ascertaining the Trump team’s view of the region and sharing the UAE’s view of the region and what the US role should be,” the official said. “No one was coming in to sell anything or arrange anything.”

Meanwhile, Republican responses on the hearing have been mixed with Trey Gowdy saying it appears as if Rice did nothing illegal while White House press secretary Sarah Sanders simply deferred on the legality of her actions.

Rep. Trey Gowdy, a South Carolina Republican who is helping lead the House investigation, told the Daily Caller “nothing that came up in her interview that led me to conclude” that she improperly unmasked the names of Trump associates or leaked it to the press.

 

Sarah Sanders, the White House press secretary, did not say explicitly whether Trump still believes Rice committed a crime but added the issue of leaking and unmasking needs to be investigated.

 

“We’ve seen illegal leaking of classified materials, including the identities of American citizens unmasked in intelligence reports,” Sanders told CNN. “That’s why the President called for Congress to investigate this matter and why the Department of Justice and Intelligence Community are doing all they can to stamp out this dangerous trend that undermines our national security.”

Just to summarize, Susan Rice unmasked the names of American citizens, which effectively means she spied on them without a warrant, because President Obama was offended that the crown prince of the UAE met with the newly elected administration without first giving him a heads up?  Does that sound reasonable to everyone?

Then again, maybe this entire story from Rice/CNN is complete bullshit and was only concocted as a way to avoid admitting that the Obama White House was pissed they lost an election and basically turned the entire U.S. intelligence apparatus into a political weapon to dig up any dirt they could find on an adversary.

So, what say you?

via http://ift.tt/2x1nACI Tyler Durden

Authored by Mike Krieger via Liberty Blitzkrieg blog,

I’m really grateful JP Morgan CEO Jamie Dimon decided to once again lash out in anger at Bitcoin, as it provides us with ample opportunity to highlight a practice very near and dear to how the bank operates. Fraud.

The way the news cycle works, any topic that isn’t already at the forefront of enough people’s minds will be largely ignored irrespective of its importance. The fact that Jamie Dimon ironically called Bitcoin a fraud, allows us to ask highlight some very important facts about the seemingly systemic fraud inherent in America’s largest bank, JP Morgan.

First, let’s take a quick look at some of what Mr. Dimon said. Courtesy of the financial plutocrat network, CNBC:

Jamie Dimon has not changed his mind about bitcoin.

 

Mr. Dimon, the long-time CEO at J.P. Morgan Chase, continued his well-documented criticism of the digital currency bitcoin. Speaking at the Barclays financial services conference on Tuesday, Mr. Dimon was asked whether his bank had a trader who traded bitcoin.

 

His response? “If we had a trader who traded bitcoin, I’d fire them in a second,” he said. “It’s against our rules” and any trader that deals in them is “stupid.”

 

Ultimately though, Mr. Dimon said that he thinks Bitcoin is “a fraud” and it “will eventually blow up.” He referenced approvingly the comments of another titan of the traditional markets, Howard Marks, who recently called bitcoin “an unfounded fad.”

Of course he hasn’t changed his mind about Bitcoin, and he never will. As he himself noted back in 2014.

It’s not the first time Dimon has issued a warning about Silicon Valley businesses.

 

“They all want to eat our lunch,” he told investors a year ago. “Every single one of them is going to try.”

What he once saw as competition, he now seems increasingly terrified of, which is notable in its own right. Beyond that, the most interesting aspect of his recent comments was the use of the word fraud, which provides us with a textbook case of psychological projection. After all, it’s there’s anything Jamie Dimon seems intimately familiar with, it’s fraud.

But don’t take my word for it. Financial journalist and author, William Cohan, wrote an important piece earlier this month for Vanity Fair titled, Jamie Dimon’s $13 Billion Secret—Revealed. I thought about sharing it when it was published, but ultimately decided it wouldn’t get the traction it deserved. Fortunately, Dimon’s Bitcoin commentary has propelled him into the spotlight long enough to turn your attention to this very important piece. Indeed, you can barely read a single paragraph without coming into contact with the word fraud, not in relation to Bitcoin, but in myriad descriptions of routine practices at JP Morgan.

Here are a few choice excerpts:

In November 2013, JPMorgan Chase, the nation’s largest bank, agreed to pay a then-record $13 billion fine to federal and state authorities in order to settle claims that it had misled investors in the years leading up to the financial crisis. JPMorgan Chase’s settlement raised many eyebrows on Wall Street. The huge settlement appeared inconsistent with the oft-repeated narrative of the bank’s heroism during the crisis…

 

People wondered why one of Wall Street’s ostensible white knights would pay $13 billion—$9 billion of its shareholders’ cash, plus another $4 billion in mortgage relief—in a government case…

 

A number of clues about what had forced Dimon’s hand, however, began emerging soon after the conference call. As I reported in The Nation in 2014, JPMorgan Chase’s settlement came at the end of an intense series of negotiations with a wide range of government officials. Perhaps the most pivotal moment in the conversations occurred in September 2013 when D.O.J. lawyers shared with Dimon and his attorneys a draft of a 92-page civil complaint that Benjamin B. Wagner, the then U.S. attorney in the Eastern District of California, and his colleagues were prepared to file in federal court. The draft complaint—based upon hundreds of thousands of subpoenaed internal JPMorgan documents; and interviews with its bankers, employees in its mortgage-backed securities division, and third-party mortgage originator—alleged that the bank’s due-diligence process had been subverted, and ignored, during the years before the crisis. In Wagner’s narrative, the bank was not nearly the white knight of Wall Street.

 

No one knew precisely what Wagner’s investigation had uncovered about JPMorgan Chase, however, because his brief was never filed publicly. Within weeks of Wagner sharing a draft copy of the complaint with Dimon—and following a tense face-to-face meeting at the Department of Justice between Dimon and Eric Holder, then the U.S. attorney general—the two sides agreed to the $13 billion settlement, at the time the largest ever. (It has since been surpassed by Bank of America’s $16.65 billion fine, settling similar claims.) In return, the Department of Justice agreed with Dimon and JPMorgan Chase that, among other things, it would not file Wagner’s complaint. Instead, an anodyne 11-page “Statement of Facts” was released. But it didn’t offer a tremendous amount of insight.

There’s some banker justice for you.

Wall Street C.E.O.s have many reasons for using their shareholders’ money to settle nettlesome lawsuits—from “optics” and brand preservation, to boosting their stock price and keeping embarrassing facts out of the public’s hands. And in the wake of his bank’s $13 billion settlement, Dimon made clear that he was frustrated that the bank had to settle. At a Microsoft C.E.O. summit, Dimon confessed that he “had to control his rage” regarding the topic.

 

To keen observers, though, it also seemed that he and JPMorgan Chase appeared intent on keeping Wagner’s unfiled complaint out of the public record. The specter of the document becoming public was again raised in a separate court case, when, a few weeks after the Department of Justice announced the settlement with JPMorgan Chase, lawyers for the Federal Home Loan Bank of Pittsburgh, which had sued JPMorgan Chase’s investment bank, along with other defendants, alleging it had sold the bank more than $1.7 billion in squirrelly mortgage-backed securities, wanted a copy of Wagner’s complaint. In fact, a state judge in Allegheny County, Pennsylvania, ordered the bank to turn over the draft complaint. But JPMorgan Chase settled the litigation after the judge’s ruling—a settlement that, among other things, included a provision that the draft complaint was to remain private. (Disclosure: after JPMorgan Chase fired me as a managing director in January 2004, I brought—and lost—an arbitration claim against the bank. I also remain in litigation with the bank as the result of a soured investment I made in 1999.)

 

Now, nearly four years later, as part of a Freedom of Information Act lawsuit initiated by Daniel Novack, an enterprising First Amendment attorney in New York City, the D.O.J. sent Novack a partially redacted copy of Wagner’s curiosity-stoking draft complaint against JPMorgan Chase. Novack provided a copy of the partially redacted complaint to me. “By this action,” the draft complaint begins, “the United States seeks to recover civil penalties” against JPMorgan Chase and its investment banking arm “for a fraudulent and deceptive scheme to package and sell residential mortgage-backed securities” that the bank “knew contained a material amount of materially defective loans.” As the unfiled complaint continued, “JPMorgan knowingly securitized and sold billions of dollars of mortgage loans that were originated in material violation of underwriting guidelines and law.” (When reached for comments and responses to the various allegations in Wagner’s unfiled brief, a spokesperson for JPMorgan Chase told me, “These allegations have been addressed, resolved, or refuted years ago.”)

Perhaps I’m delusional, but I think I saw the word fraud in there somewhere.

Wagner’s unfiled brief catalogs behavior rather at odds with the public narrative about the bank in the years preceding the crisis. It further asserts that JPMorgan Chase knew that “many of these loans were tainted with fraud” and “knowingly misrepresented” that the loans met its underwriting guidelines, even though they clearly did not, and that the loans had sufficient equity value to collateralize the mortgages even though they did not. Notably, Wagner’s complaint argues that “these fraudulent misrepresentations” cost investors “to suffer billions of dollars in losses.”

There’s the pesky word again. Twice in one paragraph, but, but Bitcoin.

Worse, the unfiled brief notes, the bank continued to sell mortgage-backed securities even though Dimon himself was worried that the residential mortgage-backed securities market was about to crash. According to Wagner, during the second week of October 2006, Dimon allegedly told King, the co-head of the Securitized Products Group, that he needed to “watch out for subprime”—a reference to low-quality mortgage-backed securities—because he feared that the market “could go up in smoke.” The document also notes that Dimon wanted King to reduce the bank’s exposure to that market. The “impetus” for Dimon’s concern, Wagner continues, was his review of reports from the mortgage-servicing arm of the bank that showed that delinquencies on such mortgages “were rising at an alarming rate.” At Dimon’s “insistence,” the unfiled complaint asserts, “JPMorgan formulated an exit strategy to divest itself” of the riskiest pieces of mortgage-backed securities that had been accumulating on its balance sheet. But, Wagner writes in the draft complaint, “despite knowledge at the highest levels that underwriting had deteriorated across the industry and early payment defaults were spiking, JPMorgan continued to purchase and securitize subprime loans without addressing the known breakdown of its due diligence practices and without disclosing its knowledge to investors.” This is pretty much the exact same thing that Goldman Sachs did leading up to the financial crisis, a practice for which the bank was roundly criticized.

 

Wagner’s unfiled complaint provided details on 10 allegedly fraudulent mortgage-backed securities that JPMorgan Chase underwrote and sold to investors. (Four of the 10 examples were redacted in the copy the D.O.J. provided to Novack and that Novack provided to me, because “the D.O.J. contends that these paragraphs contain information pertaining to an ongoing investigation,” according to a recent ruling in Novack’s case.)

 

The draft complaint further stated that the 10 examples “do not encompass the full extent of JPMorgan’s fraudulent scheme.” In one un-redacted example, the U.S. attorney’s office in the Eastern District of California described what happened to a $1 billion security that JPMorgan underwrote in August 2006 that contained more than 5,500 mortgages issued by Countrywide Financial, then an independent public company (and now part of Bank of America). Prior to purchasing the Countrywide pool, one-quarter of the loans were tested by an independent third-party consultant hired by JPMorgan. The third-party evaluator’s report, received by JPMorgan in May 2006, showed that up to 17 percent of the mortgages contained “material” defects, including “excessive” loan-to-value ratios, “incomplete or defective” appraisals, and missing verifications of income, employment, or assets at closing, among other problems.

 

According to Wagner’s draft complaint, after JPMorgan received the third-party report showing the defects in the mortgages, the company’s bankers “manipulated” the results by re-categorizing the defective mortgages because of “missing documents,” which lowered their risk assessment and made them appear to comply with the bank’s underwriting standards. But, according to Wagner’s unfiled complaint, “these missing documents were not delivered” and despite “knowledge of the material defects in the Countrywide pool,” JPMorgan Chase nevertheless bought 99 percent of the mortgages, and securitized all but seven of them into what became known as JPMAC 2006-CW2. Furthermore, the bank “did not inform investors of material amount of materially defective loans” that created the security. Wagner’s complaint, drafted seven years after the security was issued, noted that JPMAC 2006-CW2 “has suffered hundreds of millions of dollars in cumulative lost principal balance, and more losses are projected.” The complaint noted that although the top tranches of the security were once rated AAA, they had since been downgraded to “junk bond” status or below. And some had defaulted.

 

In another un-redacted example from Wagner’s complaint, a mortgage-backed security that JPMorgan Chase underwrote in February 2007—relatively late in the cycle—for some $980 million contained around 35 percent of mortgages originated by GreenPoint Mortgage Funding, Inc. The mortgages, which were drawn from two pools with unpaid principal balances of $459 million and $300 million, respectively, had many of the same underwriting flaws as found in the Countrywide mortgages. Once again, JPMorgan hired a third-party consultant to look at a sample of them and to report back to it about their quality. Approximately 25 percent of the sample evaluated came back as containing unacceptable risks because of the low quality of the initial underwriting. According to Wagner’s draft complaint, “JPMorgan had knowledge that a substantial portion of the loans did not comply with the originator’s underwriting guidelines and had a substantial risk of default.” The bank packaged up the GreenPoint mortgages and sold them anyway. In the end, investors suffered “hundreds of millions of dollars” of losses on that one security. In all, the unfiled document concludes, JPMorgan Chase and its investment bank “reaped substantial profits from their fraudulent scheme, having sold over $25 billion in nonprime RMBS”—residential mortgage-backed securities—“certificates backed by toxic loans.”

Not only did the bank view fraud as a key revenue driver, but key employees escaped criminal prosecution and came out like bandits. Indeed, Cohan ends his piece with the following observation.

Dimon’s pay package for 2013, the year of the big government settlement, was $20 million—a raise of 74 percent from the year before.

Certainly, you say, bank executives must have learned lessons from the crisis and reformed their fraudulent ways. Certainly not.

Wall Street on Parade did an excellent job of chronicling post-crisis JP Morgan fraud. Here are some examples from the post, What JPMorgan and Citigroup Have in Common When It Comes to Crime:

The crime spree at JPMorgan Chase became so surreal that two trial lawyers, Helen Davis Chaitman and Lance Gotthoffer, published a breathtaking book on the subject, comparing the bank to the Gambino crime family. In addition to the settlements noted above, the authors add more details as to what has occurred on Dimon’s watch, such as:

 

“In April 2011, JPMC agreed to pay $35 million to settle claims that it overcharged members of the military service on their mortgages in violation of the Service Members Civil Relief Act and the Housing and Economic Recovery Act of 2008.

 

“In March 2012, JPMC paid the government $659 million to settle charges that it charged veterans hidden fees in mortgage refinancing transactions.

 

“In October 2012, JPMC paid $1.2 billion to settle claims that it, along with other banks, conspired to set the price of credit and debit card interchange fees.

 

“On January 7, 2013, JPMC announced that it had agreed to a settlement with the Office of the Controller of the Currency (‘OCC’) and the Federal Reserve Bank of charges that it had engaged in improper foreclosure practices.

 

“In September 2013, JPMC agreed to pay $80 million in fines and $309 million in refunds to customers whom the bank billed for credit monitoring services that the bank never provided.

 

“On December 13, 2013, JPMC agreed to pay 79.9 million Euros to settle claims of the European Commission relating to illegal rigging of benchmark interest rates.

 

“In February 2012, JPMC agreed to pay $110 million to settle claims that it overcharged customers for overdraft fees.

 

“In November 2012, JPMC paid $296,900,000 to the SEC to settle claims that it misstated information about the delinquency status of its mortgage portfolio.

 

“In July 2013, JPMC paid $410 million to the Federal Energy Regulatory Commission to settle claims of bidding manipulation of California and Midwest electricity markets.

 

“In December 2013, JPMC paid $22.1 million to settle claims that the bank imposed expensive and unnecessary flood insurance on homeowners whose mortgages the bank serviced.”

In contrast, Bitcoin is the fraud killer, and Dimon must know this. Its code is open source, while its supply is capped and distributed in a transparent process. Sure, there are many legitimate criticisms of Bitcoin, but one thing it certainly isn’t is fraud. This is what makes Jamie Dimon’s commentary so fascinating. He must know deep down that the financial system that has made him so fabulously wealthy is the real fraud and that Bitcoin, and technologies like it, threaten that corrupt and destructive paradigm. The more anger Jamie Dimon spews toward Bitcoin, the more confident we should be that we’re the right side of history.

Finally, let me end this on a more humorous note with a few tweets that perfectly sum up the situation.

My memory is failing, was it Bitcoin or was it JP Morgan that was bailed out by the government? https://t.co/DHqFzr5UJN

— Erik Voorhees (@ErikVoorhees) September 12, 2017

BREAKING: CEO of horse and carriage says cars are a fraudulent scam

— CRYPTO CO?AIN (@CryptoCobain) September 12, 2017Finally, one from yours truly.

Jamie Dimon is like a dinosaur talking trash to the asteroid about to hit him.#bitcoin

— Michael Krieger (@LibertyBlitz) September 12, 2017

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Did the doomsday clock on the petrodollar (and implicitly US hegemony) just tick one more minute closer to midnight?

Source: The Burning Platform

Apparently confirming what President Maduro had warned following the recent US sanctions, The Wall Street Journal reports that Venezuela has officially stopped accepting US Dollars as payment for its crude oil exports.

As we previously noted, Venezuelan President Nicolas Maduro said last Thursday that Venezuela will be looking to “free” itself from the U.S. dollar next week. According to Reuters,

“Venezuela is going to implement a new system of international payments and will create a basket of currencies to free us from the dollar,” Maduro said in a multi-hour address to a new legislative “superbody.” He reportedly did not provide details of this new proposal.

Maduro hinted further that the South American country would look to using the yuan instead, among other currencies.

“If they pursue us with the dollar, we’ll use the Russian ruble, the yuan, yen, the Indian rupee, the euro,” Maduro also said.

*  *  *

And today, as The Wall Street Journal reports, in an effort to circumvent U.S. sanctions, Venezuela is telling oil traders that it will no longer receive or send payments in dollars, people familiar with the new policy said.

Oil traders who export Venezuelan crude or import oil products into the country have begun converting their invoices to euros.

 

The state oil company Petróleos de Venezuela SA, known as PdVSA, has told its private joint venture partners to open accounts in euros and to convert existing cash holdings into Europe’s main currency, said one project partner.

 

The new payment policy hasn’t been publicly announced, but Vice President Tareck El Aissami, who has been blacklisted by the U.S., said Friday, "To fight against the economic blockade there will be a basket of currencies to liberate us from the dollar."

There is no major market reaction for now – a modest bid to Bitcoin and some weakness in EUR and Gold (seems someone wants this to look like nothing).

However, as Nomura debt analyst Siobhan Morden warns:

“You can say whatever you want for your domestic propaganda and make it look like you’re retaliating against the U.S…. This political posturing will only be to their detriment.”

So what happens if Europe also sanctions Venezuela? Will Rubles or Yuan… or Gold be the only way to buy Venezuela's oil?

*  *  *

This decision by the nation with the world's largest proven oil reserves comes just days after China and Russia unveiled the latest Oil/Yuan/Gold triad at the latest BRICS conference.

It’s when President Putin starts talking that the BRICS reveal their true bombshell. Geopolitically and geo-economically, Putin’s emphasis is on a “fair multipolar world”, and “against protectionism and new barriers in global trade.” The message is straight to the point.

“Russia shares the BRICS countries’ concerns over the unfairness of the global financial and economic architecture, which does not give due regard to the growing weight of the emerging economies. We are ready to work together with our partners to promote international financial regulation reforms and to overcome the excessive domination of the limited number of reserve currencies.”

“To overcome the excessive domination of the limited number of reserve currencies” is the politest way of stating what the BRICS have been discussing for years now; how to bypass the US dollar, as well as the petrodollar.

Beijing is ready to step up the game. Soon China will launch a crude oil futures contract priced in yuan and convertible into gold.

This means that Russia – as well as Iran, the other key node of Eurasia integration – may bypass US sanctions by trading energy in their own currencies, or in yuan.

Inbuilt in the move is a true Chinese win-win; the yuan will be fully convertible into gold on both the Shanghai and Hong Kong exchanges.

The new triad of oil, yuan and gold is actually a win-win-win. No problem at all if energy providers prefer to be paid in physical gold instead of yuan. The key message is the US dollar being bypassed.

RC – via the Russian Central Bank and the People’s Bank of China – have been developing ruble-yuan swaps for quite a while now.

Once that moves beyond the BRICS to aspiring “BRICS Plus” members and then all across the Global South, Washington’s reaction is bound to be nuclear (hopefully, not literally).

Washington’s strategic doctrine rules RC should not be allowed by any means to be preponderant along the Eurasian landmass. Yet what the BRICS have in store geo-economically does not concern only Eurasia – but the whole Global South.

Sections of the War Party in Washington bent on instrumentalizing  India against China – or against RC – may be in for a rude awakening. As much as the BRICS may be currently facing varied waves of economic turmoil, the daring long-term road map, way beyond the Xiamen Declaration, is very much in place.

*  *  *

Having threatened China today with exclusion from SWIFT, we suspect Washington is rapidly running out of any great ally to sustain the petrodollar-driven hegemony (and implicitly its war machine). Cue the calls for a Venezuelan invasion in 3…2..1…!

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The mysterious case of Imran Awan, Debbie Wasserman Schultz’s now indicted former IT staffer, continues to grow more interesting by the day.  As we’ve noted before, Awan and his wife, Hina Alvi, have so far only been charged with bank fraud and conspiracy though new allegations of wrongdoing seemingly surface on a daily basis. 

Now, the latest revelation comes via an exclusive report from The Daily Caller which suggests that Awan may have been fired only after Capitol Police discovered a “secret server” being housed by the House Democratic Caucus.

A secret server is behind law enforcement’s decision to ban a former IT aide to Democratic Rep. Debbie Wasserman Schultz from the House network.

 

Now-indicted former congressional IT aide Imran Awan allegedly routed data from numerous House Democrats to a secret server. Police grew suspicious and requested a copy of the server early this year, but they were provided with an elaborate falsified image designed to hide the massive violations. The falsified image is what ultimately triggered their ban from the House network Feb. 2, according to a senior House official with direct knowledge of the investigation.

 

The secret server was connected to the House Democratic Caucus, an organization chaired by then-Rep. Xavier Becerra. Police informed Becerra that the server was the subject of an investigation and requested a copy of it. Authorities considered the false image they received to be interference in a criminal investigation, the senior official said.

 

Data was also backed up to Dropbox in huge quantities, the official said. Congressional offices are prohibited from using Dropbox, so an unofficial account was used, meaning Awan could have still had access to the data even though he was banned from the congressional network.

 

Awan had access to all emails and office computer files of 45 members of Congress who are listed below. Fear among members that Awan could release embarrassing information if they cooperated with prosecutors could explain why the Democrats have refused to acknowledge the cybersecurity breach publicly or criticize the suspects.

 

According to the DC, the “secret server” was discovered when California Congressman, and chair of the House Democratic Caucus, Xavier Becerra asked to have his server wiped clean (you know, like with a cloth) in advance of his departure to take his new seat as Attorney General of California.

On Jan. 24, 2017, Becerra vacated his congressional seat to become California’s attorney general. “He wanted to wipe his server, and we brought to his attention it was under investigation. The light-off was we asked for an image of the server, and they deliberately turned over a fake server,” the senior official said.

 

“They were using the House Democratic Caucus as their central service warehouse … It was a breach. The data was completely out of [the members’] possession. Does it mean it was sold to the Russians? I don’t know,” the senior official said.

 

Capitol Police considered the image a sign that the Awans knew exactly what they were doing and were going to great lengths to try to cover it up, the senior official said. The House Sergeant-at-Arms banned them from the network as a result.

 

The senior official said the data was also funneled offsite via a Dropbox account, from which copies could easily be downloaded. Authorities could not immediately shut down the account when the Awans were banned from the network because it was not an official account.

 

“For members to say their data was not compromised is simply inaccurate. They had access to all the data including all emails. Imran Awan is the walking example of an insider threat, a criminal actor who had access to everything,” the senior official said.

Meanwhile, these latest allegations come after Congressman Trent Franks (R-AZ) appeared on Fox News yesterday to share his prediction that the Awans could be working on a broader immunity deal with prosecutors in return for a “significant” and “pretty disturbing” story about Debbie Wasserman Schultz.

“I don’t want to talk out of school here but I think you’re going to see some revelations that are going to be pretty profound.  The fact that this wife is coming back from Pakistan and is willing to face charges, as it were, I think there is a good chance she is going to reach some type of immunity to tell a larger story here that is going to be pretty disturbing to the American people.”

 

“I would just predict that this is going to be a very significant story and people should fasten their seat belts on this one.”

 

This all follows speculation that surfaced last week suggesting that even if the Awans were originally acting to protect/extort Debbie Wasserman Schultz, that may have all changed on April 6, 2017 when Imran seemingly led U.S. Capitol Police directly to her laptop.  Per The Daily Caller:

A laptop that Rep. Debbie Wasserman Schultz has frantically fought to keep prosecutors from examining may have been planted for police to find by her since-indicted staffer, Imran Awan, along with a letter to the U.S. Attorney.

 

U.S. Capitol Police found the laptop after midnight April 6, 2017, in a tiny room that formerly served as a phone booth in the Rayburn House Office Building, according to a Capitol Police report reviewed by The Daily Caller News Foundation’s Investigative Group. Alongside the laptop were a Pakistani ID card, copies of Awan’s driver’s license and congressional ID badge, and letters to the U.S. attorney. Police also found notes in a composition notebook marked “attorney-client privilege.”

 

The laptop had the username “RepDWS,” even though the Florida Democrat and former Democratic National Committee chairman previously said it was Awan’s computer and that she had never even seen it.

 

The laptop was found on the second floor of the Rayburn building — a place Awan would have had no reason to go because Wasserman Schultz’s office is in the Longworth building and the other members who employed him had fired him.

Of course, we’re certain this is just more attempts to “criminalize behavior that is normal.”

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By Stock Board Asset

According to eMarketer, digital video consumption is on the rise leading to a seismic shift in the industry. Traditional TV viewers are expected to shrink nearly 10% by 2021 with the expectation of a sharp decrease of total media ad spending upwards of -30% reduction. Even in 2017, the trend is accelerating with eMarketer expecting a slowdown in ad spending, after 2016 benefited from the Olympics and U.S. presidential election.

As eMarketer explains, traditional TV advertising is slowing even more than expected as viewers cut cable and transition to digital video platforms. The estimates for ‘cord-cutters’ is expected to explode this year through 2021. The timeframe provided could explain cable-apocalypse is here. Per eMarketer,

In fact, by 2021, the number of cord-cutters will nearly equal the number of people who have never had pay TV (“cord-nevers”).

 

This year, there will be 22.2 million cord-cutters ages 18 and older, a figure up 33.2% over 2016. The overall tally is much higher than the 15.4 million eMarketer previously predicted. Meanwhile, the number of US adult cord-nevers will grow 5.8% this year to 34.4 million.

“Younger audiences continue to switch to either exclusively watching Over-The-Top video or watching them in combination with free TV options,” said Chris Bendtsen, senior forecasting analyst at eMarketer. “Last year, even the Olympics and presidential elections could not prevent younger audiences from abandoning pay TV.”

The hemorrhaging of traditional TV viewers will only accelerate. Overall, there are 196.3 million Americans that watch traditional TV, down 2.4% over 2016. By 2021, Emarketer thinks the total will fall nearly 10% compared to five years earlier. TV views over the age of 55 will continue to watch conventional TV, because that is tradition in their generation. The cord-cutting revolution is mainly impacting younger generations, as the old system is dismantled and the new system is ushered in.

Who are these disrupting digital streaming video services?

Back in August, WPP, the world’s largest advertising company cut full-year revenue forecasts and offered “terrible guidance”, which sent shares lower -13%.  Goldman Sachs reports:

• Results confirm weak trends seen across advertising companies/TV, with ad spending cuts in fast-moving consumer goods being the common driver
• Key question whether pick-up in organic growth from 2H is credible
• Goldman sees new organic growth guidance as “achievable,” based on comments by several consumer goods companies on higher ad spending in 2H, easier comparables, recent improvement in WPP’s new business performance

Paul Verna, a principle analyst at eMarketer listed several factors in the acceleration of cord-cutting trend:

• First, traditional pay TV operators are increasingly developing streaming platforms, such as Dish Network’s Sling TV.
• Second, networks such as HBO and ESPN have launched standalone subscription services that allow users to tap those channels without a cable subscription.
• Third, digital players like Hulu and YouTube are now delivering live TV channels over the internet at reasonable prices—including sports properties that were previously available only through traditional distribution.”

Average time spent per day with video by US Adults, by device, 2015-2017

While the end of legacy cable may not be here, it is approaching. America is currently in a transitional period and is increasingly gravitating to the cheapest possible option away from cable, and unless cable providers drastically change their cost structure and pivot their business models, the revolution in America’s viewership habits will be televized for all to see.

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