Tag: finance

The Faster America “Grows”, The Faster America Goes Bust

Authored by Chris Hamilton via Econimica blog,

As of October 1st of 2007 (the start of the 2008 Federal Government fiscal year), federal debt stood at $9 trillion and 70 billion.  In the subsequent ten years and nearly five months, the US federal debt has grown $11 trillion and 785 billion and now stands at $20 trillion and 855 billion (chart below).  Over the same period, US GDP grew $5 trillion and 169 billion. 

Simply put, for every $1 of new federal debt undertaken, the US achieved $0.44 cents of economic activity or “growth”.  However, as the chart below shows, the huge increase in federal debt (red line) was accompanied by a minimal increase in interest payable on all that debt (blue line).  The boxes detail the total debt incurred during each period against the annual increase in interest payments on that additional debt.  The Federal Reserve is primarily to thank for the cheapening of debt and encouragement to undertake all that debt, but many fear the same Fed is set to hike those interest payments with its ongoing rate hikes.

In nearly five months of fiscal year 2018 (through Feb 27), the Treasury has already issued $611 billion in new debt.  The Treasury is on pace to issue $1.2+ trillion in new debt (2017 was a mere $672 billion increase).  But let’s be conservative and assume the Treasury reins it in and “only” issues another $389 billion over the next seven months…for a nice round $1 trillion in new debt.  Big numbers are hard to comprehend, so I’ll show just the added responsibility from the debt undertaken in 2018, per every full time employee in the US (there are 127 million FT US employees):

+$31 a day
+$157 week
+$658 month
+$7.9 thousand annually

This would be in addition to the $163 thousand every full time employee is already responsible for.  But, sadly, this vastly understates the issue.  According to the Treasury’s 2017 Financial Report of the US Government, the “total present value of future expenditures in excess of future revenues” is $49 trillion in addition to the federal debt!!!  Simply said, Social Security and Medicare require $49 trillion here and now to allow that money to grow at a compounded annual rate in conjunction with estimated future tax revenues to meet the present and future payouts that have been promised.

The US Treasury is telling you that between the federal debt and unfunded liabilities, the US is $70 trillion in the hole and despite record tax revenue, record stock and real estate valuations…the US is bankrupt.  Of course, the US can never “technically” go bankrupt as it will issue new debt at an accelerating rate to pay the old debt…but this has been the “end times” for every empire.  Debasement is the functional equivalent of national bankruptcy, the only means to pay the just the interest on the debt is creation of new debt at an accelerating rate.

So, a little focus on that $49 trillion unfunded liability (UL) portion (solid red line) seems due.  Charted below is the UL, according to the US Treasury, from 2000 through 2017 alongside the federal debt (dashed red line), and Gross Domestic Product (market value of all goods and services provided, annually).

Clearly, UL’s and federal debt are far larger and growing so much faster than economic growth represented by GDP.  Since ’00, GDP has not quite doubled (+88%) while UL’s have more than doubled (+157%) and federal debt has nearly tripled (+258%).  You may notice a dip in the UL from 2009 to 2010…a $15 trillion dip essentially overnight, when America’s UL fell by a third?!?  This was the estimated impact of the ACA, aka Obamacare.

The UL is made up of four primary components; the OASDI (Old Age, Survivors, and Disability Insurance), Medicare Part A, B, and D.  The UL components are broken out below (again, according to the US Treasury Financial Report of the United States Government)…

  • The OASDI deficit has been growing consistently.

  • Medicare, Part A…the liability fell by 80% with the passage of ObamaCare and has essentially been unchanged since.

  • Medicare, Part B…the liability fell by 25% with the passage of ObamaCare, but has again been rapidly increasing.

  • Medicare, Part D…the liability has essentially been unchanged since 2000.

The chart below details the unfunded liabilities, by source, and federal debt.

To comprehend the magnitude of the growing unfunded liabilities,  I’ll briefly explain what each is and show its revenues vs. expenditures on a net present value basis.

OASDI (Old Age, Survivor, Disability Insurance)

What – Federal program that provides earned benefits to retirees, their beneficiaries, and the disabled.
Eligibility – If you worked minimum of 10 years and are at least 62 years old (for partial benefits) or 65+ (rising to 67) for full benefits.  Presently, 61 million beneficiaries vs. 127 million full time employees.  Beneficiaries set to swell, quantity of full time employees likely to be little changed.
Unfunded Liability – UL is $15.4 trillion and set to grow rapidly as revenue stalls versus fast growing expenditures.

Medicare Part A

What – Hospital Care, nursing facility care, limited home health care, hospice care.
Eligibility – 65+ year olds receiving SS or those disabled (also those with ALS), typically no premium is paid.  Presently 44 million Americans enrolled in Medicare.
Unfunded Liability – With the passage of the Affordable Care Act (aka, Obamacare) in 2010, it was estimated that the gross costs of the ACA would be more than offset by reductions in Medicare spending, increased revenue, etc.  The massive Part A UL was estimated to have been reduced by 80%.   

Medicare Part B

What – Outpatient care, preventative care, ambulance services, durable medical equipment.
Eligibility – If eligible for Part A, you are eligible for Part B plus paying a premium.
Unfunded Liability – The UL is huge and growing faster than any other liability.

Medicare Part D

What – Prescription drug coverage.
Eligibility – If you are eligible for Part A and/or Part B, you are eligible for Part D.  Monthly premiums and out of pocket expenses help subsidize prescription drugs, premiums vary by plan.
Unfunded Liability – I only have full data back to ’04 for Part D…but apparently the UL is large but stable?!?

The problem areas should be fairly easy to see; Federal Debt, OASDI (SS), and Medicare Part B.  I have major questions regarding the assumptions going into these and the validity of these numbers?  Big questions regarding the assumptions of reduced costs via the ACA,and the potential impacts of an Obamacare repeal on the unfunded liabilities?  I have detailed why this situation is only going to worsen, (HERE) because of decelerating population growth among the young and surging growth among the elderly.  But still, the above is the governments baseline from which they are working and I think it’s important to at least know that.

But in search of higher economic growth rates, the US federal government is again running huge deficits in a vain attempt to grow its way out of the hole it finds itself.  In an attempt to hit a growth “home run” and achieve 3.5% GDP (or about a $700 billion increase in economic activity via debt fueled deficit spending), the federal government will undertake $1+ trillion in new debt plus $2 to $3 trillion increase in unfunded liabilities.  If a more realistic 2% GDP growth is achieved, that’s a $400 billion “growth” on a net increase of $3 to $4 trillion in federal debt and UL’s.  The chart below shows annual GDP “growth” minus the annual deficit incurred to achieve the growth, from 2000 through 2017.  Plus estimated “growth” through 2025 based on 2% GDP “growth”?!?

And no one sees a problem with this math???  Said more simply, the faster America “grows”, the faster America functionally goes bankrupt (detailed HERE).

via Zero Hedge http://ift.tt/2FNSnHp Tyler Durden

Delta Reveals Only 13 Passengers Used NRA Discount Which Cost Airline $40 Million Tax Break

Delta Air Lines is paying a hefty price for jumping on the gun control bandwagon in the wake of the February 14 school shooting in Parkland, FL. After eliminating a discount for NRA members, the Georgia state legislature responded by eliminating a $40 million discount on jet-fuel which had been part of a larger tax package. 

Delta admitted, however, that only 13 people had taken the airline up on the NRA discount – which translates to roughly $3 million per discount in tax breaks. While one can imagine Delta looked at the low participation rate and felt the discount was an expendable token to jump on the anti-gun bandwagon, they probably didn’t see the Georgia legislature coming:

Georgia GOP lawmakers signed into law a broad tax bill which had been amended to kill a proposed break on jet fuel, signed into law by Georgia Governor Nathan Deal – despite objecting to the Delta fight as an “unbecoming squabble.” 

In response, Delta CEO Ed Bastian sent out a memo to employees that insisted the airline’s aim is to stay neutral in the gun debate. 

“While Delta’s intent was to remain neutral, some elected officials in Georgia tied our decision to a pending jet fuel tax exemption, threatening to eliminate it unless we reversed course,” Bastian said. “Our decision was not made for economic gain and our values are not for sale.”

Delta will also review discounts offered to other politically involved groups. “We are in the process of a review to end group discounts for any group of a politically divisive nature,” Bastian said.

Delta is one of Georgia’s largest private employers – a state in which 31.6% of residents own firearms.

The NRA and Georgia GOP legislators argued that Delta’s elimination of the NRA discount amounted to a punishment for people who cherish the Second Amendment. 

The Georgia Senate passed the tax measure 44-10 after the jet-fuel provision was removed, while the House followed with a 135-24 vote. 

 

via Zero Hedge http://ift.tt/2HYOeRL Tyler Durden

Charles Nenner: “We’re Totally Out Of Stocks, What’s Coming Is Big”

Authored by Greg Hunter via USAWatchdog.com,

Renowned geopolitical and financial cycle expert Charles Nenner says forget what the mainstream media talking heads are telling you about this market.

Nenner says, “When unemployment is low, it’s the end of the bull market.  Last Sunday, I published a chart that shows every time the unemployment is around 4.1% or 4.2%, and you can see this in 1973, 1987, 1990 and 2007, and you can go on and on, and now, also, you have a market crash.  I find it amazing that people can come on television and say things that are totally wrong factually, and you can prove it is wrong.”

So, Charles Nenner is calling a top right now, but the market is not going to go straight down. Market tops are a process.  Nenner explains,

“The cycles saw a market top.  It doesn’t always have to come down immediately, it just means the market will not go higher.  I don’t think we will go back to the highs one more time because the quarterly cycle, and it is a long cycle, did top at the end of last year.  I also want to put in a caveat about all this talk that we are in a 10% correction.  Somebody came up with 10%, and it is not based on anything…

The fact is we are totally out of stocks.  What is coming is big, but market tops take time.  I don’t think it’s going to go down immediately.”

When will this new bear market hit bottom? Nenner says,

“We should hit a major low in 2020… I have been on record saying that the next bear market goes down to 5,000.  If you are in stocks, I say you could lose everything if the DOW goes to 5,000.  This is the price target I have had for a couple of years.”

What does Nenner think you should buy for protection? Nenner says,

“You buy gold because nothing else is going to keep its value.  Gold is going, as I have said for a long time, to $2,500 (per ounce) at least.  Again, you buy gold because nothing else will keep its value. 

Stocks can go down, you can get stuck with some losses in the bond market, the housing market will go down based on homebuilder stocks and the financial system can scare you.  So, what is left? Buy gold.”

Join Greg Hunter as he goes One-on-One with financial expert Charles Nenner of the Charles Nenner Research Center.

(To Donate to USAWatchdog.com Click Here)

After the Interview: 

Charles Nenner points out if you look back every year that ended in the number 7, it was a market top year. He said, “2017 will follow the same pattern as 2007, 1997, 1987, 1977, 1967, 1957, 1947 and 1937.”  Nenner contends 1927 was supposed to be a market top year, but things got distorted and it was pushed off until 1929.

Nenner predicts the next market crash will not be quite as bad as 1929, but it will be bad.

There is free information and videos on CharlesNenner.com. To sign up for a free trial of Nenner’s detailed analysis, click here.

via Zero Hedge http://ift.tt/2CVwq66 Tyler Durden

New York, Los Angeles Dominate List Of Fastest-Gentrifying Neighborhoods

Nobody wants to admit they’re a gentrifier, but as college-educated professionals pour into inner-city neighborhoods, they’re pushing up rents and pushing out the low-income or working-class residents who had lived there before, it’s becoming an unfortunate fact of life in some of the largest cities on both the east and west coast.

At least that’s what RentCafe found in its analysis of the most rapidly gentrifying zip codes in the US. To come to its conclusion, RC incorporated data on average home valuations, average income and percentage of the population that holds a bachelor’s degree or higher.

RC

And as the table below shows, most of the top 20 most gentrified zip codes are clustered in cities like New York – Brooklyn alone sported 5 of the top 20, more than any other city, while Manhattan had 2 – Los Angeles (2), Tacoma (1), Washington DC (2), Baltimore (1) and Philadelphia (2). Down South, Texas had four, including two in Houston, one in Fort Worth and one in Austin. The only addition from the Midwest was, surprisingly, from St. Louis.

Gentrified

But RentCafe’s rankings mask the truly outrageous increases in the individual categories of home value, median income and percentage of residents with a bachelor’s degree.

The average home value in 2016 for RC’s top 20 most gentrified ZIPs was $446,730 with an average increase of no less than 224% since 2000.

Two

Unsurprisingly, New York dominates. The median home value in New York’s 10044 (Roosevelt Island) exploded, increasing from just over $48K to almost $627K – an astonishing 1,258% expansion rate.

ZIP code 20001 in Washington, DC stands out with a 163% growth rate in its median household income, from just shy of $37K, to almost $97K.

Three

Houston’s 77007, which ranked #19 overall, and which is also the only one out of the top 20 with a median household income above $100K, saw the its median income more than double.

Meanwhile, the percentage of the population holding a bachelor’s degree has more than doubled in 16 of the nation’s top 20 most gentrified ZIP codes – the exceptions being Brooklyn’s 11222 and 11211 with 97%, and 95%, respectively, 10026 in Harlem with 92% and DC’s 20010 with 84%.

Four

Yet again, we revisit 90014 in Downtown Los Angeles, as this is where the number of residents holding a higher education degree has increased the most out of all ZIPs analyzed, more than nine times, registering a whopping 857% increase.

via Zero Hedge http://ift.tt/2CUgiSE Tyler Durden

Uber and Lyft Are Begging Government For A Monopoly On Self-Driving Cars

Authored by Brittany Hunter via The Foundation for Economic Education,

It’s only a matter of time before American roads are filled with self-driving cars. In fact, it is quite likely that within the next decade or so, all the vehicles we see on the road will be self-driving, making the cars of today a thing of the past.

Already, the race to develop these vehicles is well underway, as major companies from Volvo to Alphabet Inc, the parent company of Google, are competing to have the first line of autonomous cars to obtain government approval.

While there is no denying the impact these cars of the future will have on the way Americans drive, some ridesharing companies would like to take from consumers the decision about the shape of this future.

And this is not sitting well with free-market advocates who have spent years defending companies like Lyft and Uber. 

Fighting the Good Fight

Since its inception, the ridesharing industry has faced enormous opposition from established cab companies. The latter enjoyed a nearly 80-year monopoly over the taxi sector, as there was simply no better way to operate, and thus no real competition. But the widespread use of smartphones and other technologies has made hailing a cab in the traditional sense inconvenient and outdated.

But instead of responding appropriately to this new competition, the cab industry utilized its connections with local governments in an attempt to regulate ridesharing out of existence. And these cab cronies enjoyed moderate success on this front.

Luckily, the demand for ridesharing was too sizeable to ignore. Consumers preferred the sharing economy to the old way of doing things. And this is largely why the ridesharing sector was able to survive a “David and Goliath” battle. But now, instead of seeking to understand what the consumers of the near future might actually want, Uber, Lyft, and others are seeking to force a new model of car ownership on the American public. And it is one that is simply incompatible with the free market principles that have allowed these companies to achieve success in the first place.

A Murky Proposal

Imagine a world where private ownership of self-driving automobiles is prohibited. If Uber, Lyft, and Zipcar get their way, this might be a reality we soon have to face. In a document entitled, “Shared Mobility Principles for Sustainable Cities,” many major players in the ridesharing sector have laid out their vision for the future of self-driving cars.

While the proposal itself merely spells out the long-term goals of multiple private organizations, its implementations reek of government interference. The first point, for example, states:

“1. WE PLAN OUR CITIES AND THEIR MOBILITY TOGETHER.

The way our cities are built determines mobility needs and how they can be met. Development, urban design and public spaces, building and zoning regulations, parking requirements, and other land use policies shall incentivize compact, accessible, livable, and sustainable cities.”

The last thing consumers need is more zoning regulations. In fact, zoning regulations have horrible consequences that hurt individuals, not helped them.

Another point states:

“7. WE SUPPORT FAIR USER FEES ACROSS ALL MODES.

Every vehicle and mode should pay their fair share for road use, congestion, pollution, and use of curb space. The fair share shall take the operating, maintenance and social costs into account.”

Individuals are already paying more than “their fair share” for road use via forced taxation. No additional cost should be imposed on drivers unless this is done through private, voluntary means.

But the most troubling aspect of the document is saved for the last point, which states:

“10. WE SUPPORT THAT AUTONOMOUS VEHICLES (AVS) IN DENSE URBAN AREAS SHOULD BE OPERATED ONLY IN SHARED FLEETS.

Due to the transformational potential of autonomous vehicle technology, it is critical that all AVs are part of shared fleets, well-regulated, and zero emission. Shared fleets can provide more affordable access to all, maximize public safety and emissions benefits, ensure that maintenance and software upgrades are managed by professionals, and actualize the promise of reductions in vehicles, parking, and congestion, in line with broader policy trends to reduce the use of personal cars in dense urban areas.”

For years, Uber, Lyft, and others have fought the cab companies and their quest to use the state to enforce regulatory policies. This is what initially made so many free marketeers rally behind the ridesharing sector. Now, after enjoying many victories, the ridesharing sector is trying to create their own monopoly on driverless cars.

As CEI’s Marc Scribner writes, “Uber, Lyft, ZipCar, and others propose outlawing personally owned self-driving cars in central cities, leaving the entire urban core market for automated road vehicles in the hands of corporate fleet owners, as Uber, Lyft, and ZipCar all imagine they will be in the coming years. Uber sees the competition of the future—and it’s you.” Scribner rightly characterizes this proposal as, “shameless, greenwashed crony capitalism.”

The Future of Driving

True, this document makes no assertion that Uber and others would seek to ban privately owned vehicles altogether. But making such a bold statement about who should be able to own driverless cars is problematic, especially since driverless cars are poised to be the only road vehicles of the future.

It is highly probable that once these cars get to a point of mass production, the use of regular cars will be limited naturally, if not outlawed entirely for environmentalist reasons. If not prohibited, mass adoption is likely to occur regardless, making autonomous vehicles the only real game in town. And if anyone has any doubt of this, how many people do you know still strolling around with Sony Walkmans in the age of the iPhone? Unless you’re a hipster with an affinity for vinyl records, new technology eventually replaces the old.

But legislative restrictions are not beyond the realm of possibility either. Green activists are always looking for ways to ban products they believe to be detrimental to the environment. Only a few years ago a ban on incandescent light bulbs was supposed to usher in a new era of energy efficient light bulbs.

It is for this reason that the proposal to ban the private ownership is so problematic. If “regular” vehicles are no longer on the roads, prohibiting private ownership of driverless cars would effectively mean banning the private ownership of vehicles altogether.

Since this document was drafted by private companies, there is no plan listed for how these proposed restrictions would be enforced. But enforcement would have to happen for any of these points to become a reality. This means that state involvement would have to happen as the government holds the monopoly on force. This is arguably even worse than what the cab companies have done.

Instead of trying to pass new arbitrary regulations, the ridesharing sector wants to ban private ownership of self-driving vehicles. This is extremely dangerous and can only lead to further restrictions that lead towards public, rather than private ownership of market commodities. This pushes us further down the road to serfdom that F.A. Hayek so fervently warned against. But not all those invested in the future of self-driving cars want to abolish private ownership.

The Tesla Network

While scanning through the names of the various companies who have signed on in support of the Shared Mobility Principles for Sustainable Cities, one major player is missing: Tesla.

While Elon Musk has also hypothesized about how driverless cars will impact the future of driving, he has made no attempt to propose that private ownership be banned. On the contrary, he has laid out a plan that would allow the owners of his autonomous cars to earn money while their vehicles are not being used.

Musk, by way of his Master Plan, Part Deux, has proposed the “Tesla Network.”

As the document states:

“When true self-driving is approved by regulators, it will mean that you will be able to summon your Tesla from pretty much anywhere. Once it picks you up, you will be able to sleep, read or do anything else en route to your destination.

You will also be able to add your car to the Tesla shared fleet just by tapping a button on the Tesla phone app and have it generate income for you while you’re at work or on vacation, significantly offsetting and at times potentially exceeding the monthly loan or lease cost. This dramatically lowers the true cost of ownership to the point where almost anyone could own a Tesla. Since most cars are only in use by their owner for 5% to 10% of the day, the fundamental economic utility of a true self-driving car is likely to be several times that of a car which is not.

In cities where demand exceeds the supply of customer-owned cars, Tesla will operate its own fleet, ensuring you can always hail a ride from us no matter where you are.”

Where Uber and others want to ban private ownership of vehicles, Tesla wants to give owners the ability to earn extra money through that ownership while also making private ownership accessible to more consumers. This is a plan worthy of praise.

This is not to say that there is no place for an Uber fleet of self-driving cars. Just as many consumers are choosing to use Uber rather than own their own vehicle there will certainly be market demand for this type of service. But this should be the consumer’s choice, not the decision of private companies backed by government force.

Technology is making our lives much more convenient. This is undeniable. But when that convenience comes at the cost of private ownership, there is a huge problem. Ridesharing has changed the way we travel, and Uber and Lyft have played an integral role in making this a reality. They have also been strong opponents of the crony capitalism that has allowed the cab industry to hold a state-sanctioned monopoly for so long. And while these aspects are surely worthy of praise, the proposal to ban private ownership of cars is more than worthy of condemnation.  

 

via Zero Hedge http://ift.tt/2F92G81 Tyler Durden

Contradictions In Seth Rich Murder Continue To Challenge Hacking Narrative

As rumors swirl that Special Counsel Robert Mueller is preparing a case against Russians who are alleged to have hacked Democrats during the 2016 election – a conclusion based solely on the analysis of cybersecurity firm Crowdstrike, a Friday op-ed in the Washington Times by retired U.S. Navy admiral James A. Lyons, Jr. asks a simple, yet monumentally significant question: Why haven’t Congressional Investigators or Special Counsel Robert Mueller addressed the murder of DNC staffer Seth Rich – who multiple people have claimed was Wikileaks’ source of emails leaked during the 2016 U.S. presidential election?

Mueller has been incredibly thorough in his ongoing investigations – however he won’t even respond to Kim Dotcom, the New Zealand entrepreneur who clearly knew about the hacked emails long before they were released, claims that Seth Rich obtained them with a memory stick, and has offered to provide proof to the Special Counsel investigation.

On May 18, 2017, Dotcom proposed that if Congress includes the Seth Rich investigation in their Russia probe, he would provide written testimony with evidence that Seth Rich was WikiLeaks’ source.

In addition to several odd facts surrounding Rich’s still unsolved murder – which officials have deemed a “botched robbery,” forensic technical evidence has emerged which contradicts the Crowdstrike report. The Irvine, CA company partially funded by Google, was the only entity allowed to analyze the DNC servers in relation to claims of election hacking:

Notably, Crowdstrike has been considered by many to be discredited over their revision and retraction of a report over Russian hacking of Ukrainian military equipment – a report which the government of Ukraine said was fake news. 

In connection with the emergence in some media reports which stated that the alleged “80% howitzer D-30 Armed Forces of Ukraine removed through scrapping Russian Ukrainian hackers software gunners,” Land Forces Command of the Armed Forces of Ukraine informs that the said information is incorrect.

Ministry of Defence of Ukraine asks journalists to publish only verified information received from the competent official sources. Spreading false information leads to increased social tension in society and undermines public confidence in the Armed Forces of Ukraine. –mil.gov.ua (translated) (1.6.2017)

In fact, several respected journalists have cast serious doubt on CrowdStrike’s report on the DNC servers: 

 

Pay attention, because Mueller is likely to use the Crowdstrike report to support the rumored upcoming charges against Russian hackers.

Also notable is that Crowdstrike founder and anti-Putin Russian expat Dimitri Alperovitch sits on the Atlantic Council – which is funded by the US State Department, NATO, Latvia, Lithuania, and Ukranian Oligarch Victor Pinchuk. Who else is on the Atlantic Council? Evelyn Farkas – who slipped up during an MSNBC interview with Mika Brzezinski and disclosed that the Obama administration had been spying on the Trump campaign: 

The Trump folks, if they found out how we knew what we knew about the Trump staff dealing with Russians, that they would try to compromise those sources and methods, meaning we would not longer have access to that intelligence. –Evelyn Farkas

Odd facts surrounding the murder of Seth Rich

“The facts that we know of in the murder of the DNC staffer, Seth Rich, was that he was gunned down blocks from his home on July 10, 2016. Washington Metro police detectives claim that Mr. Rich was a robbery victim, which is strange since after being shot twice in the back, he was still wearing a $2,000 gold necklace and watch. He still had his wallet, key and phone. Clearly, he was not a victim of robbery,” writes Lyons. 

Another unexplained fact muddying the Rich case is that of a stolen 40 caliber Glock 22 handguns stoken from an FBI agent’s car the same day Rich was murdered. D.C. Metro police said that the theft occurred between 5 and 7 a.m., while the FBI said two weeks later that the theft had occurred between Midnight and 2 a.m. – fueling speculation that the FBI gun was used in Rich’s murder. 

Furthermore, two men working with the Rich family – private investigator and former D.C. Police detective Rod Wheeler and family acquaintance Ed Butowsky, have previously stated that Rich had contacts with WikiLeaks before his death. 

“According to Ed Butowsky, an acquaintance of the family, in his discussions with Joel and Mary Rich, they confirmed that their son transmitted the DNC emails to Wikileaks,” writes Lyons. 

While Wheeler initially told TV station Fox5 that proof of Rich’s contact with WikiLeaks lies on the murdered IT staffer’s laptop, he later walked the claim back – though he maintained that there was “some communication between Seth Rich and WikiLeaks.” 

Wheeler also claimed in recently leaked audio that Seth Rich’s brother, Aaron – a Northrup Grumman employee, blocked him from looking at Seth’s computer and stonewalled his investigation.

Wheeler said that brother Aaron Rich tried to block Wheeler from looking at Seth’s computer, even though there could be evidence on it. “He said no, he said I have his computer, meaning him,” Wheeler said. “I said, well can I look at it?…He said, what are you looking for? I said anything that could indicate if Seth was having problems with someone. He said no, I already checked it. Don’t worry about it.”

Aaron also blocked Wheeler from finding out about who was at a party Seth attended the night of the murder.

“All I want you to do is work on the botched robbery theory and that’s it,” Aaron told Wheeler –Big League Politics

Perhaps the most stunning audio evidence, however, comes from leaked audio of a recorded conversation between Ed Butowsky and Pulitzer Prize winning investigative journalist Seymour Hersh, who told him of a “purported FBI report establishing that Seth Rich sent emails to WikiLeaks.”

As transcribed and exclusively reported on by journalist Cassandra Fairbanks last year: 

What the report says is that some time in late Spring… he makes contact with WikiLeaks, that’s in his computer,” he says. “Anyway, they found what he had done is that he had submitted a series of documents — of emails, of juicy emails, from the DNC.”

Hersh explains that it was unclear how the negotiations went, but that WikiLeaks did obtain access to a password protected DropBox where Rich had put the files.

“All I know is that he offered a sample, an extensive sample, I’m sure dozens of emails, and said ‘I want money.’ Later, WikiLeaks did get the password, he had a DropBox, a protected DropBox,” he said. They got access to the DropBox.”

Hersh also states that Rich had concerns about something happening to him, and had

“The word was passed, according to the NSA report, he also shared this DropBox with a couple of friends, so that ‘if anything happens to me it’s not going to solve your problems,’” he added. “WikiLeaks got access before he was killed.”

Brennan and Russian disinformation

Hersh also told Butowsky that the DNC made up the Russian hacking story as a disinformation campaign – directly pointing a finger at former CIA director (and now MSNBC/NBC contributor) John Brennan as the architect.

I have a narrative of how that whole f*cking thing began. It’s a Brennan operation, it was an American disinformation, and the fu*kin’ President, at one point, they even started telling the press – they were backfeeding the Press, the head of the NSA was going and telling the press, fu*king c*cksucker Rogers, was telling the press that we even know who in the Russian military intelligence service leaked it.

Listen to Seymour Hersh leaked audio: 

(full transcription here and extended audio of the Hersh conversation here) 

Hersh denied that he told Butowsky anything before the leaked audio emerged, telling NPR “I hear gossip… [Butowsky] took two and two and made 45 out of it.”

Techincal Evidence

As we mentioned last week, Dotcom’s assertion is backed up by an analysis done last year by a researcher who goes by the name Forensicator, who determined that the DNC files were copied at 22.6 MB/s – a speed virtually impossible to achieve from halfway around the world, much less over a local network – yet a speed typical of file transfers to a memory stick.

The big hint

Last but not least, let’s not forget that Julian Assange heavily implied Seth Rich was a source:

Given that a) the Russian hacking narrative hinges on Crowdstrikes’s questionable reporting, and b) a mountain of evidence pointing to Seth Rich as the source of the leaked emails – it stands to reason that Congressional investigators and Special Counsel Robert Mueller should at minimum explore these leads. 

As retired U.S. Navy admiral James A. Lyons, Jr. asks: why aren’t they?

via Zero Hedge http://ift.tt/2GZUh74 Tyler Durden

Exposing The Media’s Long History Of Pandering To Presidents & The Pentagon

Authored by James Bovard, op-ed via The Hill,

Much of the media nowadays is portraying itself as heroes of the #Resist Trump movement.

To exploit that meme, Hollywood producer Steven Spielberg rushed out “The Post,” a movie depicting an epic press battle with the Nixon administration. But regardless of whether Spielberg’s latest wins the Academy Award for best picture on Sunday night, Americans should never forget the media’s long history of pandering to presidents and the Pentagon.

“The Post” is built around the Pentagon Papers, a secret study begun in 1967 analyzing where the Vietnam war had gone awry. The 7000-page tome showed that presidents and military leaders had been profoundly deceiving the American people ever since the Truman administration and that the same mistakes were endlessly repeated. Like many policy autopsies, the report was classified and completely ignored by the White House and federal agencies that most needed to heed its lessons.

Daniel Ellsberg, a former Pentagon official, heroically risked life in prison to smuggle the report to the media after members of Congress were too cowardly to touch it. The New York Times shattered the political sound barrier when it began courageously publishing the report despite a profusion of threats from the Nixon administration Justice Department. After a federal court slapped the Times with an injunction, the Washington Post and other newspapers published additional classified excerpts from the report. Likely because the Washington Post had a female publisher, Spielberg made it, rather than the Times, the star of the show.

Spielberg’s movie portrays Post editor Ben Bradlee denouncing dishonest government officials to publisher Katharine Graham: “The way they lied — those days have to be over.”

Defense Secretary Robert McNamara, who deluged the media with falsehoods about battlefront progress, did more than anyone else (except perhaps President Lyndon Johnson) to vastly increase the bloodbath for Americans and Vietnamese. McNamara’s disastrous deceits did not deter the Washington Post from appointing him to its Board of Directors. As author Norman Solomon recently observed, “The Washington Post was instrumental in avidly promoting the lies that made the Vietnam War possible in the first place.”   

The Pentagon Papers proved that politicians and their tools will brazenly con the American public to drag the nation into unnecessary wars. But that lesson vanished into the D.C. memory hole – conveniently for obsequious journalists like Post superstar Bob Woodward.

On March 17, 2003, President George W. Bush justified invading Iraq by invoking UN resolutions purportedly authorizing the U.S. “to use force in ridding Iraq of weapons of mass destruction.” A year later, Bush performed a skit at the Radio and Television Correspondents annual dinner featuring slides showing him crawling around the Oval Office peeking behind curtains as he quipped to the poohbah attendees (Donald Trump among them, incidentally): “Those weapons of mass destruction have got to be somewhere… Nope, no weapons over there… Maybe under here?” The crowd loved it and the Post headlined its report on the evening: “George Bush, Entertainer in Chief.” Greg Mitchell, the editor of Editor and Publisher, labeled the performance and the press’s reaction that night as “one of the most shameful episodes in the recent history of the American media, and presidency.”

Most of the media had embedded themselves for the Iraq war long before that diner. The Post buried pre-war articles questioning the Bush team’s shams on Iraq; their award-winning Pentagon correspondent Thomas Ricks complained, “There was an attitude among editors: ‘Look, we’re going to war, why do we even worry about all this contrary stuff?’” Instead, before the war started, the Post ran 27 editorials in favor of invasion and 140 front-page articles supporting the Bush administration’s case for attacking Saddam.

It wasn’t just the Post. Former NBC news anchor Katie Couric revealed in 2008 that there was pressure from “the corporations who own where we work and from the government itself to really squash any kind of dissent or any kind of questioning of” the Iraq war.

Despite the Iraq fiasco, the media happily resumed cheerleading when the Obama administration launched assaults in Libya and Syria. Even in the Trump era — when the press is openly clashing with a president — bombing still provides push button presidential redemption. Trump’s finest hour, according to much of the media, occurred last April when he attacked the Assad regime with 59 cruise missiles, raising hopes that the U.S. military would topple the Syrian government.

When Trump announced he was sending more U.S. troops to Afghanistan, the Washington Post editorial page hailed what Trump calls his “principled realism” – regardless of the futility of perpetuating that quagmire. At a time when Trump is saber-rattling against Iran and North Korea, the media should be vigorously challenging official claims before U.S. bombs begin falling. Instead, much of the coverage of rising tensions with foreign regimes could have been written by Pentagon flacks.

Supreme Court Justice Hugo Black, in his 1971 opinion on the New York Times’ right to publish the Pentagon Papers, declared: “Only a free and unrestrained press can effectively expose deception in government.”

Unfortunately, the media often chooses to trumpet official lies instead of fighting them. Permitting glorious tales from eight presidencies ago to absolve subsequent media kowtowing would be as foolish as forgetting the lessons of the original Pentagon Papers. Worshiping the media is as foolish as worshiping politicians.

via Zero Hedge http://ift.tt/2teE4ct Tyler Durden

Worsening Lumber “Supply Crisis” Is Driving Record Home Prices Higher

As we’ve repeatedly pointed out, home prices in the US have been climbing at a blistering pace (and, more importantly, much faster than wages) thanks to a shortage of supply. But builders trying to alleviate that shortage are struggling under some of the most adverse market conditions in more than a decade: To wit, a lumber shortage has pushed prices to their highest levels since the financial crisis as wildfires and a blossoming trade spat between the US and Canada have choked off some supplies.

As a result, homebuilders are being forced to pass on thousands of dollars in additional costs to the buyers, perhaps one reason why new- and pending- home sales have fallen recently…

Homesales

Lumber prices started climbing last year thanks to wildfires destroying prime forest land along the Pacific Northwest, as well as a worsening trade spat over softwood lumber that dates back to the Obama administration. While US media was preoccupied with the California wildfires, Canada’s Pacific coast saw its worst wildfires on record, too. Furthermore, Trump last year slapped tariffs on most types of lumber, with the highest rate at 24%, one of several protectionist moves against its northern neighbor.

Material prices now rival labor shortages as builders’ main concerns, a National Association of Home Builders survey showed in January. Prices for common building varieties like spruce and southern pine are at or near records, according to price-tracking publication Random Lengths.

Homebuilders

Like all commodity producers and distributors, lumber suppliers have been struggling with higher transportation costs due to a shortage of drivers and, for major freight railroads, a shortage of cars and routes.

Pricing

Some lumber wholesalers, as well as market analysts, have described the situation as a supply-side “crisis.”

“We are in a lumber supply crisis,” said Stinson Dean, a broker in Kansas City, Mo., who ships wood from sawmills to lumber yards, in a note to clients. “None of us have experienced a market like this.”

…

Forestry company Canfor Corp. CFPZF -0.30% said lumber shipments fell almost 10% in the final quarter of 2017, partly due to bad weather in western Canada. The transportation bottlenecks have caused weeks of delays, frustrating customers already paying record prices.

 

“People are screaming for their wood,” said Russell Taylor, managing director for Canada at analysis firm Forest Economic Advisors LLC.

…

Franklin Building Supply in Boise, Idaho, ran out of a type of lumber used in walls, flooring and roofs one day in February for the first time in years. Rick Lierz, who runs the supplier, said one shipment of wood he was waiting for was stuck on a railcar just 20 miles away.

His employees drove to local Home Depot Inc. stores to buy the lumber needed to fill orders to local builders due that day. Home Depot recently told investors that rising lumber sales and prices contributed to higher earnings in the fourth quarter of 2017.

“The cardinal rule when you’re a supplier is you don’t run out of what you need to supply,” Mr. Lierz said. “It’s like an ice cream shop running out of chocolate.”

 

Prices are rising as lumber yards try to stock up ahead of what looks likely to be a busy building season this spring. A strong economy and tight supply of houses are heating up the home-building market. The number of new units under construction in the U.S. rose almost 10% in January, the Commerce Department said, as strong demand kept builders working through the winter. Permits for new homes, a sign of anticipated construction, also rose.

 

Additional lumber costs are nearing $10,000 for many mid-sized homes.

Marc Towne of Classic Homes, which builds midrange to high-end houses in Colorado Springs, Colo., said he is spending $8,500 more on lumber for a typical home than a year ago, an increase of almost 40%. The company’s passing on about half the cost to buyers for now while it waits to see if lumber prices fall.

“We hate to give large increases all at once because it can freeze your market,” Mr. Towne said. High lumber costs added about $3,000 to the price of a home he purchased himself in Castle Rock, Colo., late last year.

To be sure, lumber is only part of the US-Canada trade tensions.

At least two more disputes are ongoing: Trump wants Canada to open its market to dairy products, and a spat has erupted over groundwood paper, which is used in the production of newspapers and magazines.

And after announcing Thursday that he will soon slap tariffs on steel and aluminum imports – eliciting a strongly worded response from Canada – it’s doubtful these disagreements will be resolved any time soon.

via Zero Hedge http://ift.tt/2GV8jH6 Tyler Durden

Jim Rickards Warns “This Is Completely Unprecedented”

Authored by James Rickards via The Daily Reckoning,

Remember the “tea party” revolt in 2009–2010 against government bailouts and government spending?

Remember the “fiscal cliff” drama of Dec. 31, 2012, when Congress raised taxes and cut spending to avoid a debt default and government shutdown?

Remember the actual government shutdown in October 2013 as Republicans held the line against more government spending?

Well, congratulations if you do, because everyone else seems to have forgotten.

The days of caring about debt and deficits are over. In just the past two months, Republicans passed the Trump tax cuts that will increase the deficit by $1.5 trillion on a conservative estimate, and probably much more.

Then Republicans and Democrats “compromised” on eliminating caps on defense spending and domestic spending by agreeing to more of both. That repeal of the so-called “sequester” will add over $300 billion to the deficit over the next two years.

Then there’s a tsunami of student loan debts in default that the Treasury has guaranteed and will have to pay off. Finally, the higher interest rates from this debt will add $210 billion to the annual deficit for every 1% increase in average federal debt funding costs.

Today we are looking at $1 trillion-plus deficits as far as the eye can see.

That’s extraordinary enough. What is more extraordinary is that no one cares! Democrats, Republicans, the White House and everyday Americans are all united in totally ignoring the fact that America is going broke.

This euphoric mood in response to more spending won’t last. The growth is not there to pay for the tax cuts, and the economy is not even growing fast enough to keep up with the growth in the debt.

Credit rating agencies are preparing reviews that will likely lead to a downgrade in the U.S. credit rating and higher interest costs for the Treasury. When the crisis of confidence in the dollar and related inflation arrive, there will be no particular party to blame.

The entire system is turning a blind eye to debt, and the entire system will have to bear some part of the blame.

Meanwhile, the Fed is on track for four rate hikes this year.

On top of this, the Fed is creating financial and economic headwinds by reducing the money supply through its new program of quantitative tightening, or QT. You shouldn’t expect any dramatic change under new Fed Chairman, Jerome Powell, who indicated this week he believes the economy is strong. Many observers interpreted his comments to mean he could raise rates four times this year.

Many mainstream analysts think inflation is becoming a concern. But the Fed’s main inflation indicator, the core personal consumption expenditure (PCE) year-over-year, was 1.5% in January and 1.5% in December. Not much change.

Some analysts are looking at the quarter-over-quarter change, which is a bit hotter, but not much. None of this data is near the Fed’s goal of 2% PCE core inflation. As a reminder, core inflation excludes items subject to greater short-term swings, like food and energy.

The non-core data is at 2%, but if the Fed reacts to the non-core data, it’s like moving the goalposts.

Last month’s employment report was much touted because it showed a 2.9% year-over-year gain in average hourly earnings. That gain is a positive, but most analysts failed to note that the gain is nominal — not real. To get to real hourly earnings gains, you have to deduct 2% for non-core consumer inflation.

That reduces the real gain to 0.9%, which is far less than the 3% real gains typically associated with a strong economy.

The employment report also showed that labor force participation was unchanged at 62.7%, an historically low rate. Average weekly earnings declined slightly, another bad sign for the typical worker.

In the absence of inflation, the Fed’s planned rate hikes will raise real interest rates, slow the economy, and encourage disinflation. This is a headwind.

Analysts also point to increasing growth to justify rate hikes.

But GDP growth for all of 2017 was just 2.3%, only slightly better than the 2.13% cumulative growth since 2009. And worse than the 2.9% growth rate in 2015 and the 2.6% rate in 2014.

Where’s all this growth?

But what about the tax cuts? Many believe they’ll boost consumption. But the situation reminds me of what we saw in late 2014 when oil prices went down.

Analysts expected more consumption in 2015 as a result. But it didn’t happen because people saved the money from lower gas prices. They’re saving the money from tax cuts also. This is consistent with a deflationary mentality and definitely slows velocity.

We’re on a treadmill. The economy shows strength and the Fed tightens. The tightness slows the economy. Then the Fed eases in response to the slow down. Then the economy picks up steam and the Fed tightens again.

Wash, rinse, and repeat.

This has happened nine times since the taper talk in 2013. It’s happening again.

A rate hike in March seems certain unless the stock market falls another 10% in the next couple of weeks.

I expect inflation to moderate by mid-year and the Fed to ease (by not raising rates) later this year. But, for now, higher rates are in the forecast.

Let me reiterate the position I’ve made many times:

The Fed isn’t raising rates because the economy is strong or they’re trying to get out ahead of inflation.

The Fed is raising rates is because it’s desperate to get interest rates up to around 3–3.5%. That will allow it to prepare for the next recession.

Historically speaking, it takes 300 or 400 basis points of rate cuts to lift the economy out of recession. That means interest rates would have to be between 3% and 4% to effectively address it. Right now rates are 1.5%.

How do you cut rates 3.5% when they’re only at 1.5%?

The answer is you can’t. You run out of runway fairly quickly. That’s why the Fed is so eager to raise rates to about 3.5% and will use almost any excuse to do so. An 11% stock market correction like we recently experienced isn’t enough to dissuade it.

On top of it all, the Fed is undertaking quantitative tightening, the opposite of quantitative easing. The Fed is destroying money. It’s like the Fed is throwing money into a furnace and burning it. By the end of 2018 alone, the Fed is projected to destroy hundreds of billions.

So on top of the rate hikes, the Fed is destroying money. We’re getting a double dose of monetary tightening.

And let me once again repeat what I’ve said before: This has never happened before. This is completely unprecedented.

This double tightening isn’t something the market has fully absorbed yet, although what happened in early February was an early warning sign. If all that money inflated the stock market, it’s only logical that taking it away will deflate the stock market.

You can’t have it both ways, as Jerome Powell will likely find out soon enough.

via Zero Hedge http://ift.tt/2FNvN1B Tyler Durden

A Hypersonic ‘Arms-Race’ Erupts As DARPA Director Demands More Funding To Counter Russia

Moments after President Vladimir Putin used his state-of-the-nation speech on Thursday to deliver a warning directed at the United States that Russia’s latest hypersonic missile can penetrate U.S. missile shields, the director of the Defense Advanced Research Projects Agency (DARPA) frantically informed members of the press that his agency is aggressively pursuing similar capabilities.

“Efforts to contain Russia have failed – face it,” Putin declared in a two-hour speech at his annual state of the nation address in Moscow, Russia, which included computer simulations of a new intercontinental missile called Avangard that can fly at speeds of Mach 20 (15,345.4 Miles per hour), detailed a report by Sputnik News. Putin also announced the deployment of the Kinzhal hypersonic missile, capable of delivering a payload of hell at Mach 10 (7,672.69 Miles per hour) with a range of 1,250 miles.

Did Putin’s bombshell developments on hypersonics catch America’s military-industrial complex with their pants down?

“China and Russia are active in the area of hypersonics [and] have been developing capabilities,” DARPA Director Steven Walker said March 01 during a press briefing with reporters in Washington, D.C.

“We do need an infusion of dollars in our infrastructure to do hypersonics,” he said.

According to the National Defense Magazine, last year, DARPA officials informed the Defense Department that the United States is entering into an era of hypersonics, where the race for hypersonic technologies has flourished among global superpowers.

Government officials “laid out where we thought the U.S. was in hypersonics and where we thought some of our peer competitors were in hypersonics, and really tried to convince the department that we need a national initiative in this area,” said Walker.

The Pentagon allotted more funding to DARPA and other military services for hypersonic development in the fiscal year 2019 budget request, he noted. “I don’t think we got everything we wanted but it was a good first step.” The fiscal year 2019 budget request calls for a 136 percent increase over 2018 request in hypersonic efforts at DARPA’s laboratories, according to an agency spokesman.

Walker said the additional funds would go towards additional test flights and “getting some of our offensive capability further down the line into operational prototypes.”

Over the last five years, the agency has partnered with multiple military branches and other government entities to further hypersonic technologies.

In particular, DARPA has worked with the Air Force Research Laboratory to develop air-launched hypersonic missiles.

“The tactical boost-glide and hypersonic air-breathing weapons concept programs are moving forward, and flight testing is expected to ramp up next year,” Walker said.

“These will be systems that are very capable,” he said.

“The speed provides you a lot of range so you can use them from standoff” distances, he added.

DARPA’s expertise in hypersonics enabled the Air Force to increase their program size in the 2019 budget request on the “effort for tactical boost-glide systems that could lead to operational prototypes,” he said.

Nevertheless, DARPA has started a new partnership with the Army called “op fires. Walker stated, “focus will be on increasing the capabilities of the service’s long-range fires systems.”

Additionally, DARPA has plans to partner with the Navy on hypersonic technologies including “hypersonic air-breathing weapon program and a follow-on effort,” he noted.

The agency even has plans on working with NASA to develop a full-range hypersonic engine which uses a combined cycle propulsion system. Walk said the engine could enable an aerial vehicle with proper aerodynamics to fly at speeds of Mach 6 (4,603.61 Miles per hour). Ground testing of the hypersonic engines expected in 2019 or 2020 period.

Walker noted that hypersonics is a top priority of new Undersecretary of Defense for Research and Engineering Michael Griffin, while the allotment of funds in the 2019 budget request is desirable, there will be an even more significant request for funds in the years ahead.

“If you look at some of our peer competitors — China being one — and you look at the number of facilities they’ve built to do hypersonics, it surpasses the number we have in this country and is quickly surpassing it by [a factor of] two or three,” he said. “It is very clear that China has a focus on hypersonics and are making it one of their national priorities, and I think we need to do the same.”

“We were called in … to help inform them on what this hypersonics thing is all about,” Walker said.

Putin told the audience that Russia started working on hypersonic weapons to counter America’s missile defense systems, as early as 2004, but he said that Washington ignored our warning.

Now “you will listen to us,” he declared.

Well, it seems as the director of DARPA has certainly listened this time to Putin’s hypersonic missile threat, after all, computer simulations depicting hypersonic missiles barreling down towards Florida has certainly put America’s military-industrial complex on edge.

 

via Zero Hedge http://ift.tt/2CU18wC Tyler Durden