NBC’s Fake News King Brian Williams Launches Crusade Against “Fake News”

Now this is rich.  Brian Williams, the disgraced ex-NBC journalist who was literally fired for falsely reporting that he was in a helicopter during the Iraq war that took on combatant fire, is now going on a crusade against “fake news.”  On his MSNBC show last night, Williams decided to attack retired General Flynn and Donald Trump for spreading “fake news” via their twitter accounts.

The retired Army 3-star general has passed on some gems himself.  Here are a few…Flynn retweeted accusations that Clinton is involved with child sex trafficking and has “secretly waged war” on the Catholic Church, as well as charges that Obama is a “jihadi” who “laundered” money for Muslim terrorists.


As we talked about here last night, fake news played a role in this election and continues to find a wide audience.  A BuzzFeed news study of Donald Trump’s own tweets where they followed back news stories to their root source found more of them came from Breitbart originally than any other single source.”


So, we should probably just ignore that time Williams simply “mis-remembered” being in a helicopter taking on combatant fire when he was actually completely safe in a convoy about an hour away.

“I don’t know what screwed up in my mind that caused me to conflate one aircraft with another.”


This pretty much sums it up…



And, of course, more breaking news from Williams’ current employer, the beacon of impartiality and purveyor of “real news,” MSNBC.


In conclusion:

Glass Houses

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Hillary Clinton’s Call for Congress to Do Something About Fake News ‘Epidemic’ Is a Reminder of How Bad Her Presidency Would Have Been on Free Speech

Hillary Clinton has not been seen much since the election, except up in the woods near Chappaqua in her favorite hiking sweater. Sadly, that streak ended yesterday, when she used an appearance at the retirement ceremony for Sen. Harry Reid (D-Nev.) to rail hyperbolically against “The epidemic of malicious fake news and false propaganda that flooded social media over the past year.”

“It’s now clear the so-called fake news can have real-world consequences,” Clinton warned, referencing the gunman who arrived at Comet Pizza to investigate a nonsensical conspiracy theory. “Lives are at risk—lives of ordinary people just trying to go about their days, to do their jobs, contribute to their communities….It’s imperative that leaders in both the private sector and the public sector step up to protect our democracy and innocent lives.”

Watch a snippet of the alarmist sanctimony here:

This is the classic Hillary Clinton progression toward the (often unconstitutional) government restriction of speech.

Step 1: Declare something that is not remotely an epidemic is, in fact, an “epidemic.” As in this hysterical speech Clinton gave in front of the Kaiser Family Foundation in March 2005:

[T]he evidence is conclusive that on balance the exposure to this much media and particularly to the violent content of it is not good for children and teenagers. And so what I’m hoping is that all we can come together. If there were an epidemic sweeping through our children of some kind of SARS of some other kind of infectious disease, we would all band together and figure out what to do to protect our children.

Well this is a silent epidemic.

Let's hear more from you people about how we were soft on Clinton. ||| ReasonStep 2: While the headline-making incident is still fresh in everyone’s minds, insist that the epidemic (which, remember, isn’t remotely an epidemic) must be confronted “urgently” by both the federal government and California-based media companies. Here she was just after the December 2015 San Bernardino terrorist attack:

I know that Americans are anxious and fearful, and we have reason to be. The threat is real. The need for action is urgent….We’re seeing the results of radicalization not just in far off lands, but right here at home fueled by the internet. It’s the nexus of terrorism and technology, and we have a lot of work to do to end it….They are using websites, social media, chat rooms, and other platforms to celebrate beheadings, recruit future terrorists, and call for attacks. We should work with host companies to shut them down. It’s time for an urgent dialogue between the government, and not just our government, government and the high tech community to confront this problem together. […]

[W]e’re going to have to ask our technology companies…to help us on this. You know, the government is good in some respects, but nowhere near as good as those of you who are in this field. Right now the terrorists communicate on very ubiquitous sites: YouTube, Twitter, Facebook. The woman jihadist in San Bernardino posted her allegiance to Baghdadi and ISIS on Facebook. According to the timing we know so far, she did it either shortly before or shortly after the attack, I’m not sure which. We’re going to have to have more support from our friends in the technology world to deny online space. Just as we have to destroy their would-be caliphate, we have to deny them online space. And this is complicated. You’re going to hear all of the usual complaints, you know, freedom of speech, et cetera. But if we truly are in a war against terrorism and we are truly looking for ways to shut off their funding, shut off the flow of foreign fighters, then we’ve got to shut off their means of communicating.

If you are not familiar with the startling words in that passage above, it’s probably because Donald Trump said something similarly awful about free speech and terrorism the very next day, and journalists tend to have aneurysms about Trump’s First Amendment-related commentary while giving Clinton an exaggerated benefit of the doubt.

Step 3: Make a specific awful proposal, such—just spitballing here!—criminalizing the burning of American flags. Thankfully, after a long and terrible career of backing such proposals, Clinton no longer has much power in that regard.

“Fake news,” by whatever definition, does not require a new legislative response from government. Americans and their political leaders have been trafficking in conspiracy from the Founding to the present day. Including the conspiracy that there’s a fake news epidemic in the first place.

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Earnings ‘Magic’ Exposed

Submitted by Michael Lebowitz via 720Global.com,

Following the end of each fiscal quarter, SEC registered corporations release their financial statements. Typically, investors and the media place a lot of importance on these results. Consequently, stock prices tend to rise or fall based on how the financial results compare to a consensus of estimates made by Wall Street analysts.

Since the beginning of the current quarter (10/1/2016), 76% of the 113 S&P 500 companies that have released earnings results have exceeded expectations. Like so many quarters before, many investors and media pundits are supporting the naïve conclusion that earnings are better than expected. Unfortunately, few investors are paying attention to the measurement tool, expected earnings, to gauge its usefulness as a measure of earnings quality. In this article we uncover the crafty game that Wall Street and corporate investor relations departments’ play to put a positive spin on earnings releases and at the same time give the impression that stock prices are cheap based on forward looking earnings expectations.

Miraculous Results

The graph below shows that actual aggregate earnings growth for the S&P 500 has exceeded the corresponding consensus final expectation for earnings growth without fail since at least the second quarter of 2012. Not once has a quarter’s earnings (green bar) been lower than the most recent earnings expectation (red bar).

Final Earnings Expectations versus Actual Earnings

To comprehend how corporate earnings can regularly exceed respective expectations quarter after quarter, one must recognize how earnings forecasts are used to manipulate investor expectations. When one studiesthe trend of earnings forecastsfrom a year preceding the results to the weeks prior the results, one will notice two things. First, initial earnings forecasts, are crafted to tell a bullish long term story of strong earnings growth. Second, over the course of the ensuing year, the estimates are adjusted significantly downward to temper expectations and therefore make actual earnings that fall far short of the original forecast appear pleasantly surprising.

Consider that since the second quarter of 2012, earnings growth forecasts made a year in advance averaged 14.76%. Over the same five year period, actual earnings growth was 3.82%, or 75% below the original estimate. Of the last 17 quarters the best one year advance estimate of earnings growth was overstated by 25%. Astonishingly, this period includes quarters where economic growth exceeded forecasts, so a worse than expected environment cannot always be blamed. The last four quarters have seen actual earnings growth (-2.70%) fall grossly short of one year advance forecasts for growth (+14.30%) by over 100%.

As time progresses from one year prior to any earnings release to three months, we find that earnings expectations were still grossly overestimated. At the three month time frame analysts should have a much better grasp of the factors that drive corporate performance. Despite the additional clarity, three month prior earnings expectations still averaged 32% higher than actual earnings from 2012 through the most recent quarter.

The following graphs illustrate the “earnings game” being peddled by corporate America through their Wall Street enablers. The first graph shows the average migration of earnings expectations over the course of the year preceding the actual results. The data covers the 17 quarters from the second quarter of 2012 to the second quarter of 2016. Note the large forecasting error (labeled “massive miss” below) between expected results a year in advance and actual results. Also, notice the better than expected results (“respectable beat”) when compared to expectations at the end of the quarter immediately prior.

Earnings Expectation Migration


The graph below highlights the consistency with which average earnings expectations have trended lower in each of the last 17 quarters.

Earnings Migration by Period

The black line represents quarterly forecasts of earnings growth one year in the future. The green line shows that,six months later, earnings growth has been revised downwards in every instance.

Earnings expectations continue to get revised lower as shown by the red line, which represents earnings expectations three months prior to their release. The yellow line shows expectations in the quarter that earnings are due to be released. As you can see in every instance, earnings expectations are at their highest a year in advance, and lowest in the quarter they are due to be reported. Hardly a coincidence, we suspect. In Q2 2016 notice how earnings expectations declined from +13.70% a year ago to the final estimate of -3.80%.


Consider the ploy that companies and Wall Street are using to fool the investing public.

  • First, they grossly overestimate earnings for the upcoming year. By overestimating earnings, they tout financial ratios based upon inaccurate expected earnings and sell investors on a bright future. How many times have analysts claimed that forward looking price to earnings ratios are constructive for price gains? How “constructive” would they be if the expectations were reconciled to reality and lowered by 75%?
  • Second, they progressively lower expectations prior to the earnings release so that financial results are effectively underestimated. The same analysts that peddled double digit earnings growth a year earlier somehow can now claim that earnings are better than they expected.

If actual earnings varied somewhat randomly from above expectations to below expectations, we would likely fault the analysts and corporations with being poor forecasters. But when such one-directional forecasting errors routinely and consistently occur, it is more than bad forecasting. At best one can accuse Wall Street analysts and the companies that feed them information of incompetence. At worst this is another pure and simple case of institutions gaming the system through a fraud designed to prop up stock prices. Take your pick, but in either case it is advisable to ignore the spin that accompanies earnings releases and apply the rigor of doing your own analysis to get at the veracity of corporate earnings.

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A New Bubble Emerges: Dollar Index Approaches 14 Year Highs

Over the past 3 years, the dollar is higher vs a basket of major currencies by 21%. According to Factset, about 50% of sales are earned abroad by companies in the S&P 500, compared to just 20% in the Russell. Back in 2015, when the dollar rose by 7% from January through March, the strong dollar wreaked havoc on American multinationals — dinging earnings by about 11%. mi-ci500_abreas_9u_20150322180919
Lo and behold, the dollar index is higher by more than 6% since October and markets are celebrating as if the second coming of the dot com bubble had just been announced. dxy As of right now, the dollar is higher by 0.75% v the euro, +0.21% v the yuan, +1% v the yen and the dollar index is ripping higher by 0.6%. At some point, American multinationals will fess up to the fact that a bubbling higher dollar is scornful for their prospects. Earnings revisions will be made, taking into account the sudden jolt in fx markets and the SPY will reflect that reality.

Until then, however, it doesn’t appear Wall Street is in the least bit interested in disrupting their spiked egg nog induced euphoric feeling, as markets wistfully drift higher on the specter of hope.


Content originally generated at iBankCoin.com

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Official Warning: Stocks Are Going to Crash

Stocks are going to Crash.

This wasn’t the case a mere six weeks ago. But the Bank of Japan has committed one of the most egregious manipulations in history.

The Yen/ $USD pair has imploded by over 14% in the last six weeks. The last time the pair fell this much the BoJ expanded an already monstrous QE program by $260 BILLION.

This time around it is nothing more than abject monetary devaluation. The Bank of Japan has accomplished in SIX WEEKS what previous took $260 BILLION and SIX MONTHS.

This is absolute madness. And it is going to ANNIHILATE US corporate earnings.

Over 47% of US corporate sales come from abroad. With the $USD spiking, courtesy of the Yen devaluation, US corporations are going to be imploding in the 1H17.

The $USD ramp job of 2014 has already imploded corporate profits to 2012 levels. This next ramp to new highs is going to kick them even lower.

You can ignore this, just as the S&P 500 has done for the last six weeks. But soon this will matter in a big way.

At the very least you can expect a collapse to 2100. But 2000 and even 1864 are not out of the question.


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The PizzaGate Gunman Belongs to a Long American Tradition

On December 4, Edgar M. Welch carried a rifle into the Comet Ping Pong pizzeria in Washington, D.C. Welch had stumbled on the “PizzaGate” conspiracy theory, which claims that the restaurant is part of a sex-trafficking ring tied to Hillary Clinton and her associates; children are supposedly being held prisoner and transported through secret tunnels beneath the business. Welch was armed because he wanted to rescue the kids. He didn’t find any prisoners there, but he wound up firing his weapon anyway. No one was injured, fortunately.

You’ve probably heard about that, since it’s been all over the news this week. What hasn’t been all over the news is the long American tradition that Welch belongs to. This is hardly the first time someone has filled up on fantasies that a conspiracy was holding innocents captive and exploiting them. It isn’t the first time a fantasist has set off on a potentially bloody rescue mission either.

In 1834, for example, a mob burned down the Ursuline convent and boarding school in Charlestown, Massachusetts. The resentments toward that institution had very specific local roots, but the rumors that prompted the riot took an oft-told form: Girls were being held prisoner, and they needed to be saved. These stories were spread not just orally but via anonymous placards and handbills—if a pundit from late 2016 were somehow sent back to 1834, he’d probably call them “fake news“—that said things like this:

GO AHEAD! To Arms!! To Arms!! Ye brave and free Avenging Sword unshield!! Leave not one stone upon another of that curst Nunnery that prostitutes female virtue and liberty under the garb of holy Religion. When Bonaparte opened the Nunnerys in Europe he found cords of Infant sculls!!!!!!

That wasn’t the only Catholic institution to be raided by would-be heroes. Throughout the era, paranoid Protestants became convinced that convents contained sex slaves, secret tunnels, and other staples of the modern pizzeria; more than once, they invaded intending to liberate the nuns. Nor was Catholicism the only faith to be afflicted by captivity rumors. A couple decades before the Ursuline Convent riots, for example, a youngster named Ithamar Johnson was “rescued” from a Shaker community in Ohio. He promptly returned the next day, and remained a Shaker until he died in his eighties. Much more recently, the cult scare that took off in the 1970s produced a whole profession of “deprogrammers,” some of whom felt the best way to liberate a cultist was to kidnap and torture him until he declared himself cleansed of the religion’s worldview.

The cult scare helped shape the Satanic panic of the 1980s and ’90s, when the notion took hold that a web of devil-worshippers was raping, kidnapping, and even killing children. In this case, it wasn’t vigilante deprogrammers who browbeat the alleged victim into saying what they wanted to hear. It was agents of the state. In the most infamous case, the authorities embraced the idea that the McMartin Preschool in Manhattan Beach, California, was run by a coven of child molesters. Interrogators badgered the preschoolers into confirming their suspicions, and the children’s imaginations then produced still more lurid details.

Naturally, there were tales of secret tunnels beneath the day care center. You’d think it was a convent or a pizza joint or something.

Not every captivity fantasy involved unpopular religions. In the white-slavery panic of the early 20th century, a flood of exposés—there’s that “fake news” again—made lurid claims about prostitution, greatly exaggerating both the number of women coerced into the profession and the extent to which the trade was controlled by a centralized conspiracy. (In his 1914 book The Girl Who Disappeared, a former Chicago prosecutor called this sex syndicate a “hidden hand,” claiming that “behind our city and state governments there is an unseen power which controls them.”) As Thaddeus Russell has written in Reason, such stories “helped create, expand, and strengthen the police powers of an array of government agencies. Since the onset of the panic, those agencies have imprisoned and sterilized hundreds of thousands of women who worked as prostitutes, taken their children from them, forced them onto the streets and into dependent relationships with male criminals, and made their jobs among the most dangerous in the world.” And as my colleague Elizabeth Nolan Brown regularly points out, modernized versions of the old white-slavery myths frequently turn up when police or the press discuss sex trafficking.

Those mainstream misconceptions clearly influenced the PizzaGate crusade, just as surely as fringier fantasies did. The first time I mentioned Edgar Welch’s Comet assault on this blog, I pointed out that PizzaGate is the latest variation on a decades-old sequence of rumors that claim the country is governed by secret pedophile rings. But that is hardly the only source for the PizzaGate story, and this is hardly the only time something like this happened. The most unusual thing about Welch’s stupid misadventure may be that this time, nobody was hurt.

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The Gig Economy May Flourish Under Donald Trump – And That’s a Good Thing

As Peter Suderman noted yesterday, Donald Trump’s pick for Secretary of Labor, hamburger magnate Andy Pudzer, has registered his disagreement over many regulations he thinks strangles jobs in the fast-food industry. The head of Hardee’s/Carl’s Jr., Pudzer says that doubling the federal minimum wage to $15 will push outfits like his to full automation more rapidly than otherwise. There’s more:

In 2011, he announced that he would stop all restaurant development in the state of California, where CKE is based, and instead focus on opening some 300 restaurants in Texas. California’s bulk of regulations could add as much as $50,000 and two years to the cost of opening a restaurant, he told the Associated Press at the time, compared with Texas, where a restaurant could go from a lease signing to opening for business in as little as six weeks.

But what about the “gig economy,” new, unconventional, and often part-time relationships between outfits such as Uber or airbnb and workers? Barack Obama, Bernie Sanders, and Hillary Clinton were dead-set against allowing the gig economy flourish and development. In a major speech at the Brookings Institution, Clinton promised to “crack down on bosses who exploit employees by misclassifying them as contractors.” The only good job, she averred, was one that looked like the jobs she remembered from her childhood and early adulthood, with clearly delineated divisions between workers and management, standard benefits like insurance and retirement, and more. The Obama administration, various state level pols, and a few activist lawsuits are working to make sure that “gig employees” are treated the same as traditional wage-and-hour workers and offered the same benfits and protections. Which of course will make them more expensive to owners and raise prices to customers. All while reducing the flexiblity the workers themselves might prefer.

Marco Zappacosta, the founder of Thumbtack, which connects contractors and customers, hopes that Pudzer allows the gig economy to proceed with too much interference from Washington, telling CNBC:

“I hope the secretary thinks about all workers and this trend that people are moving toward more independent arrangements,” said Marco Zappacosta, co-founder and CEO of Thumbtack, an online platform that connects customers to local professionals for tasks like house painting, personal training and voice lessons. “The biggest one is basically leveling the playing field in terms of benefits and privileges between W-2 employees and independent workers of all stripes.” (Disclosure: I know Zappacosta and his father, Pierluigi, served on the board of trustees for the nonprofit that publishes this website).

Based on past statements, Pudzer will almost certainly be more hands-off the gig economy than anyone appointed by Clinton. CNBC again:

Puzder credits start-ups as the driver of the U.S. economic engine, calling “entrepreneurial vision and ambition” the invisible hand of America’s economy, according to a book he co-authored. Puzder has advocated the repeal of Obamacare and lambasted campaigns to raise the minimum wage or increase overtime pay.

“Far too many politicians believe that government can orchestrate economic activity through regulations and taxation. We beg to differ,” Puzder wrote in his book.

Interestingly, critics of the gig economy often want to increase the social-welfare state by shoving the costs of their plans onto employers. That’s understandable from a political angle—you don’t raise taxes on everyone, you simply businessmen who can afford it, right?—but making labor costs higher through mandates for health care, minimum wages well above market prices, pensions, leave polices, and the like generally doesn’t increase the demand for workers, does it? To the extent that it pushes the cost of the next hire above what they could produce for the employer, the job will be automated or covered by existing workers. Old models of employment are always breaking down and being revised. In the 20+ years, I’ve been at Reason, for instance, we went from essentially zero employees working from home to a largely dispersed workforce and now are re-aggregating in various places. Individualizing your work situation is one of the great wins for many people over the past few decades and experimentation can’t happen in a rigid regulatory environment.

It sounds like the Thumbtacks, Ubers, and Airbnbs of the sharing economy will get more breathing space under the incoming Trump team. Which also means those companies customers will too. Which also means their workers—whether technically employees or contractors—will too.

Related Video: 8 Great Libertarian Apps That Make Your World Freer & Easier Right NOW!” (2015)

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Trump Picks Goldman President To Be Chief Economic Advisor

It appears squid can live well in the new normal swamp of a Donald Trump administration. Following the appointment of former Goldman alum Mnuchin as Treasury Secretary, NBC News reports that Goldman Sachs President and COO Gary Cohn has been selected as national economic council director.

Donald Trump has offered Goldman Sachs executive Gary Cohn a key economic post, which would add another of the firm’s veterans to the administration, sources close to Cohn told NBC News. This story is developing.

*  *  *

Of course, the big question is – does Cohn get to dump his massively overbought Goldman stock tax-free?

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Dutch Police Arrest Terror Suspect With Loaded AK-47 And ISIS Flag

Just hour after anti-Islam Dutch politician Geert Wilders was convicted of insulting and inciting discrimination against Maroccans, moments ago the local police announced they have arrested a man in Rotterdam, suspected of planning a terrorist attack, according to local media reports. Law enforcement found a Kalashnikov assault rifle and an Islamic State flag while raiding the man’s house, RT adds.

According to various Dutch media outlets, the suspect in question was arrested back on Wednesday, when an anti-terrorist unit raided his house and found a Kalashnikov assault rifle with two full magazines.

An ISIS flag was also found in the 30-year-old man’s apartment. Special forces also seized four boxes containing explosive materials, the suspect’s mobile phone, and some 1,600 euro.

According to the local Limburger media outlet, police initially received a tip off from Holland’s Algemene Inlichtingen-en Veiligheidsdienst (AIVD) intelligence agency.

The arrest comes at a sensitive time for the country, with Wilders rising in the polls, and is expected by many to become the latest anti-establishment politician to rise to the top, leading to further troubles for the European project.

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The Angry German Press Reacts To Draghi’s QExtension

Back in March, when the ECB unexpectedly announced it would begin buying corporate bonds, while the German population was rather angry, its media was furious. The best example of the fury came from Germany’s Handelsblatt, which in an article titled “The dangerous game with the money of the German savers”, the authors provide a metaphorical rendering of what is happening in Europe as follows:

The publication also painted a caricature of the man behind Europe’s monetary policy:

Fast forward to yesterday, when Mario Draghi once again infuriated the Germans by announcing the ECB would extend its QE program until the end of 2017, purchasing a modestly lower €60 billion starting in April through December (with the option to expand it should the economy falter again), but what Germany heard was “more, more, more money printing”…. and reacted.

As a result, Germany’s favorite tabloid Bild, once again slammed Draghi on Friday and asked “when does Draghi’s money bomb go off?” with a picture of the Italian’s face on a bomb with a lit fuse.


The ECB has previously infurated Germany having spent more than €1.4 trillion euros buying bonds and is at risk of running out of things to buy. As shown previously, following yesterday’s revised purchasing schedule, the ECB is set to surpass the Fed as the central bank with the largest balance sheet in the world in 2017.

Germany’s Bundesbank argues that this blurs a legal line and amounts to financing of government budgets, which would go beyond the remit of the central bank. Yesterday Buba’s Weidmann said he disagreed with Draghi’s extension of Qe.

German Finance Minister Wolfgang Schaeuble echoed Weidmann’s sentiment, and called on the ECB to start unwinding its expansive monetary policy.

Then the press got involved:

“The ECB chief is again putting billions at the disposal of crisis countries,” added Bild, which during the euro zone crisis gifted Draghi a spiked Prussian helmet from 1871 to show its confidence the Italian would adhere to German-style discipline.

Cited by Reuters, Markus Soeder, finance minister in the conservative southern state of Bavaria, said the extension of the ECB’s low interest rates and asset purchases sent the wrong signal to countries in the south of the euro zone, especially Italy.

Soeder told the Funke Mediengruppe newspaper chain: “Savers and owners of life insurance in Germany are paying the price for the reform sloppiness with interest losses in three-digit billions.” Did they forget to BTFD?

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