Tag: finance

The independent Turkish news source Ahval along investigative journalists on the ground in Syria and Libya have picked up on a disturbing trend: many among the reported thousands of Syrian ‘rebel’ mercenaries being transferred to Tripoli to fight on behalf of the UN-backed government there against pro-Haftar forces believe they are being sent “to fight the Russians”. Ahval news reports the following: 

To boost motivation, Turkey is telling Syrian rebels it is sending to Libya they will fight Russians, the Investigative Journal said on Wednesday, citing sources in Turkish-backed Syrian National Army. 

“There are Russians here,” said a 21-year-old Syrian mercenary from Kafr Nabl, a town in Syria’s Idlib province. “The Turks confirmed this to us. I wouldn’t even hurt a Libyan here. But if I find a Russian, I will put a stick up his ass.”

Since last month Ankara has confirmed that Turkish-backed Free Syrian Army fighters are being flown into Tripoli to back the Government of National Accord, busy defending the Libyan capital from a months-long offensive by Gen. Khalifa Haftar’s Libyan National Army (LNA). 

“With the help of the Turkish forces and their equipment, we will defeat the Russians,” one Syrian militant said. It’s apparently become a widespread running joke that the mercenaries being sent to Libya blindly “believe whatever Turkey tells them”. 

“Of course there are no Russian soldiers there. If the Turks tell them there are Russian troops in Libya, and that the [TFSA] will get fight them, they believe they are fighting the same enemy that is destroying their cities in Syria,” another local Syrian commander told investigative reporter Lindsey Snell. “But of course, this is a lie, and Libya is not Syria. But these mercenaries believe whatever Turkey tells them.”

The Ahval report says that some 4,700 Turkey-backed Syrian mercenaries have been transferred to Libya over the past month, which reportedly began happening even before the Turkish government last month ago voted to send military assistance and national army troops to assist and advise Tripoli forces. 

Meanwhile, Moscow has been considered a significant political backer to Gen. Haftar, but most of the LNA’s military support comes from the UAE. There’s been no reporting or suggestion that any Russian national forces or advisers are inside Libya, other than possibly private contractors. 

Last September it was widely reported that some one hundred Russian mercenaries from the Wagner group have been bolstering pro-Haftar forces. 

Authored by Soeren Kern via The Gatestone Institute,

British Prime Minister Boris Johnson has vowed to toughen sentencing guidelines for convicted terrorists after a newly-released prisoner carried out a jihadist attack in London.

On February 2, Sudesh Amman, a 20-year-old jihadist from Harrow in north-west London, stabbed two people in a knife rampage on Streatham High Road before he was shot dead by police. He had been released from prison just days earlier after serving less than half of his sentence for terrorism offenses.

Amman, who was carrying a 10-inch kitchen knife, wearing a fake suicide bomber vest, and shouting “Allahu Akbar” (“Allah is the Greatest”), had been under active police surveillance at the time of the attack, which London police described as an “Islamist-related terrorist incident.”

In December 2018, Amman was sentenced to three years and four months in prison after pleading guilty to 13 counts of expressing support for Islamist terrorism and possessing and sharing Islamic State and al-Qaeda propaganda. He was 18 years old at the time.

Amman was arrested in May 2018 after posting Islamist propaganda online. At the time, police said that he had expressed support for the Islamic State, sent beheading videos to his girlfriend, and asked her to kill her “kuffar” (non-Muslim) parents. He also wrote about carrying out a jihadist attack:

“If you can’t make a bomb because family, friends or spies are watching or suspecting you, take a knife, Molotov [cocktail], sound bombs or a car at night and attack the crusaders, police and soldiers of taghut [idolatry], or western embassies in every country you are in this planet.”

In a search of Amman’s computer, police found documents titled, “How to Make a Bomb in the Kitchen of Your Mom”, “U.S. Army Knife Fighting Manual Techniques” and “Bloody Brazilian Knife Fighting Techniques.”

During Amman’s trial, police noted that he had a “fierce interest in violence and martyrdom.” Acting Commander Alexis Boon, then head of the Metropolitan police counter terrorism command, explained:

“His fascination with dying in the name of terrorism was clear in a notepad we recovered from his home. Amman had scrawled his ‘life goals’ in the notepad and top of the list, above family activities, was dying a martyr and going to ‘Jannah‘ — the afterlife.”

“It’s not clear how Amman became radicalized, but it is apparent from his messages that it had been at least a year in development. Whatever the circumstances, this case is a reminder of the need to be vigilant to signs of radicalization and report it.”

Amman’s attack is the second one in the British capital in the past three months. On November 29, 2019, Usman Khan, a 28-year-old jihadist from Stoke-on-Trent, stabbed and killed two people in a knife rampage near London Bridge. Like Amman, Khan had also been released early from prison.

A day after Khan’s attack, Boris Johnson announced a review into the license (parole) conditions of 74 terrorists who had been released from prison early. He also vowed to end the practice of automatically releasing serious offenders from prison before the end of their terms:

“The terrorist who attacked yesterday was sentenced 11 years ago under laws passed in 2008 which established automatic early release.

“This system has got to end. I repeat, this has got to end…. If you are convicted of a serious terrorist offense, there should be a mandatory minimum sentence of 14 years — and some should never be released.

“Further, for all terrorism and extremist offenses, the sentence announced by the judge must be the time actually served — these criminals must serve every day of their sentence, with no exceptions.”

A Sentencing Bill included in the Queen’s Speech in October 2019 would have changed the automatic release point from halfway to two-thirds for adult offenders serving sentences of four years or more for serious violence or sexual offenses. The bill, however, stalled due to a hung parliament, and was shelved later that month when new elections were called.

The latest attack sparked considerable anger. In an interview with Sky News, the editor of Spiked magazine, Brendan O’Neill, spoke for many when he said:

“The Streatham terror stabbing is a scandal. This man was an Islamist maniac. He was devoted to ISIS and he had planned to kill non-believers. And yet he was let out of jail after just 18 months. We’ve got to start taking Islamic terrorism more seriously.”

Paul Stott, a terrorism researcher with the London-based Henry Jackson Society, added:

“We need an immediate moratorium on the release of terrorist prisoners, whilst the government reviews each individual case.”

In an interview with the Daily Mail, an unidentified government source said that according to British law, Amman had to be released from prison early, despite the threat he posed to society:

“There had been concerns when he [Amman] was in prison but there were no powers for any authority to keep him behind bars.

“There was nothing that could be done to keep him behind bars under existing laws, hence why he was under surveillance and strict licensing conditions.

“He had served half of his sentence, which was more than three years, so he had to be released despite concerns over his conduct.

“The public will look at this case and say why was this individual not kept behind bars and the Prime Minister shares that view.”

After the latest attack, Johnson promised “fundamental changes” to the system for dealing with convicted terrorists. He said that terrorists currently in prison will lose their right to automatic early release halfway through their sentences. Johnson stressed that the legal concept of automatic early release for people “who obviously continue to pose a threat to the public has come to the end of its useful life.”

On February 3, Secretary of State for Justice Robert Buckland announced that the government would introduce emergency legislation — The Counterterrorism Bill — to end the automatic early release from prison of terror offenders:

“We cannot have the situation, as we saw tragically in yesterday’s case, where an offender — a known risk to innocent members of the public — is released early by automatic process of law without any oversight by the Parole Board.

“We will, therefore, introduce emergency legislation to ensure an end to terrorist offenders getting released automatically having served half of their sentence with no check or review.”

Buckland added that the changes would be retroactive and apply to jihadists currently in prison:

“We face an unprecedented situation of severe gravity and, as such, it demands that the government responds immediately and that this legislation will therefore also apply to serving prisoners.

“The earliest point at which the offenders will now be considered for release will be once they have served two-thirds of their sentence and, crucially, we will introduce a requirement that no terrorist offender will be released before the end of their full custodial term unless the Parole Board agrees.”

A total of 353 convicted and suspected Islamist terrorists were released from prison between June 2012 and June 2019, according to Home Office statistics cited by the Daily Mail.

In October 2018, the Islamist firebrand preacher Anjem Choudary, described as Britain’s “most dangerous extremist,” was released from prison after serving only half of the five-and-a-half-year sentence he received in 2016 for pledging allegiance to the Islamic State.

Prison authorities could not prevent his release: under British sentencing guidelines, prisoners — even those who are still a risk to the public — automatically become eligible for release under license (parole) after serving half their terms.

In an essay published by the Daily Mail, Philip Flower, a former chief superintendent with the Metropolitan Police, warned that the fight against violent Islamism in Britain was being hampered by political correctness:

“As a retired senior police officer involved in containing terrorist and other threats during a 40-year career, I want to tell you of the intense frustrations that will be felt today across British policing. They will feel utterly let down by the judicial system.

“When I was a constable, I could arrest and process a suspect in an hour, maximum. Today, it takes a day or more.

“The police are mired in bureaucracy, while the judicial system has become an institutional cloud-cuckoo land.

“As a society, we have to decide how to deal with terrorist suspects. It takes around 32 police officers to maintain around-the-clock surveillance of a single terror suspect.

“It is insane to attempt to maintain this level of supervision of the thousands of individuals known to be of interest to the security services and counter-terrorism police. It seems as though the Streatham perpetrator was being watched by armed police, yet still he managed to stab shoppers….

“If we are to release convicted terrorists from jail early, then we would have to recruit thousands and thousands more police to oversee them, which of course will never happen because there is not enough money and we would find that level of intrusion unacceptable in a free society.

“There is a wider problem of maintaining the morale of the officers charged with keeping the public safe from fanatics.

“Bluntly, how would you feel if you were told to keep track of known terrorists who have been released from prison to satisfy the politically correct assumptions of our justice system?”

Ian Acheson, a veteran prison officer who in 2015 led an independent review of Islamist extremism in British prisons, told the BBC’s Today program that the UK’s risk-management system is fundamentally broken:

“We are going to have to accept that we have to be much more skeptical and robust about dealing with the risk of harm.

“We may need to accept that there are certain people who are so dangerous they must be kept in prison indefinitely….

“I am still unconvinced that the prison service itself has the aptitude or the attitude to assertively manage terrorist offenders.”

Authored by Peter Hasson, op-ed via WashingtonExaminer.com,

For better or worse, social media is the new public square. Of adults, 68% use Facebook, 73% use YouTube, and a quarter use Twitter. The numbers are much higher for adults under 50. Two-thirds of adults and roughly 4 in 5 under 50 use social media to consume news. Three-quarters of Facebook users are on the site every day, and Twitter users have a disproportionate influence on the media because so many journalists are on the service.

The size and scale of social media companies exploded primarily because they presented themselves as open platforms — blank slates. Google, Facebook, and Twitter all characterized their products as engines for social improvement. “We think of Twitter as the global town hall,” said former Twitter CEO Dick Costolo. “We are the free speech wing of the free speech party.”

Costolo was Twitter’s chief executive from 2010 until 2015 and the immediate predecessor of current CEO Jack Dorsey. Twitter’s general manager in the United Kingdom, Andy Yang, likewise described Twitter as the “free speech wing of the free speech party” in March 2012. Google became a multibillion-dollar company by offering a portal for free, unrestricted information to anyone with access to the internet; famously, its original motto was “Don’t be evil.” An internal Facebook memo circulated in June 2016 stated that at Facebook, “we believe in connecting people so deeply that anything that allows us to connect more people more often is de facto good.”

The public has given these three tech companies (and others) enormous power to select the information we read, share, and discuss with our neighbors and friends. We’ve gotten so accustomed to the role they play in our lives that we fail to notice that Big Tech is sifting through the available information and narrowing, and prioritizing, our choices. Although Facebook, Google, and Twitter once touted themselves as bastions of democracy and free speech, they are now openly moving toward direct censorship and media manipulation – and specifically targeting conservative ideas and personalities.

They have already acquiesced to their new censorship fetish. In March 2018, Google circulated an internal memo that instructed employees on the benefits of censorship. In the memo, which was titled “The Good Censor,” Google conceded that while the internet was “founded upon utopian principles of free speech,” free speech is no longer en vogue. “Tech companies are adapting their stance towards censorship” in direct response to “the anxiety of users and governments.” The memo said that “tech firms have gradually shifted away from unmediated free speech and towards censorship and moderation” but framed that shift as a positive development. One major way that tech companies are “stepping into the role of moderator” is by “significantly amping up the number of moderators they employ — in YouTube’s case increasing the number of people on the lookout for inappropriate content to more than 10,000.” It argued that censorship was necessary partly because of users “behaving badly.”

The most alarming part of the missive, however, was that it spoke approvingly of foreign governments that were censoring online speech. Google framed the acts as “taking steps to make online spaces safer, more regulated, and more similar to their offline laws. Protected from hate speech on the street? Now you are on the net too …” Twitter has completely and publicly abandoned its brand as the “free speech wing of the free speech party,” with Dorsey claiming the whole “free speech wing” thing was one giant “joke.” His company, once seemingly devoted to the free expression of its users, now says it is prioritizing making users feel safe from others’ speech. Facebook, too, is openly rebranding itself as a benevolent censor. Here’s what Facebook CEO Mark Zuckerberg told the Senate Commerce and Judiciary committees in April 2018 (emphasis added):

Overall, I would say that we’re going through a broader philosophical shift in how we approach our responsibility as a company. For the first 10 or 12 years of the company, I viewed our responsibility as primarily building tools that, if we could put those tools in people’s hands, then that would empower people to do good things. What I think we’ve learned now across a number of issues, not just data privacy, but also fake news and foreign interference in elections, is that we need to take a more proactive role and a broader view of our responsibility. It’s not enough to just build tools. We need to make sure that they’re used for good. And that means that we need to now take a more active view in policing the ecosystem and in watching and kind of looking out and making sure that all of the members in our community are using these tools in a way that’s going to be good and healthy.

Three forces are driving Big Tech’s online censorship.

• Two are external and related: market pressures and de-platforming campaigns by liberal activists and journalists.

• The third pressure is internal: Silicon Valley is staggeringly one-sided politically.

Profit margins and market pressures are crucial levers that left-wing ideologues use to pull tech giants and other corporations in the direction of censorship. Companies want to avoid controversy, and, in the era of outrage mobs, that means avoiding offending the Left, which controls most of the cultural institutions in America. That’s part of the reason why massive companies are embracing left-wing politics in advertising, such as what Gillette did with its “toxic masculinity” ad. Left-wing activists amplify those pressures with smear campaigns and boycotts intended to rattle advertisers and investors, forcing the hands of tech companies. If you convince corporate marketing agencies that advertising on Facebook is risky, you can be certain that Facebook will take some form of action to shed controversy and reassure investors.

The external pressures of left-wing activists are compounded by the internal pressures of the companies’ employees, who want Big Tech to embrace censorship against nonliberal opinions as a moral and political necessity. The internal office cultures at Facebook, Google, and Twitter have always been overwhelmingly left-leaning, but the election of Donald Trump as president has made them far more radical. I told one Silicon Valley insider that I thought tech culture now resembled the left-wing, activist culture on college campuses. He replied, “They’re the exact same people.” Their political opinions are certainly monochromatic. Of the $8.1 million that tech industry workers donated to presidential candidates during the 2016 campaign, 95% of it went to Hillary Clinton. Among donations from the Silicon Valley area specifically, 99% went to Clinton.

So, maybe it’s not surprising that Google, Facebook, and Twitter have all become vehicles for left-wing activism. The companies encourage employees to bring their “authentic selves” to work. One Silicon Valley executive told me, “We want people to … bring their entire perspective and all their values to work, and in the positive sense, that means getting rid of a huge distinction between my professional life and my personal life.” For left-wing activists in Silicon Valley, their professional, personal, and political lives are all one. That’s why Twitter launched an “intersectionality” initiative for its employees and Google gives millions to left-wing causes — to signal its allegiance to the tribe.

In 2017, the nonprofit Lincoln Network conducted a survey of tech workers in Silicon Valley, including those employed at Google, Facebook, Apple, Amazon, and Microsoft. The political leanings of those surveyed were more politically diverse than Silicon Valley’s overall population: 29% were liberal, 24% were libertarian, 22% were conservative, and 16% were centrist. But on one thing, they agreed: 75% of the liberals and 70% of the conservatives characterized their workplace as either “liberal” or “very liberal” and fewer than 2% of the survey-takers said their places of work were conservative.

Even some of the liberal respondents thought that left-wing intolerance had gone too far. One liberal tech worker said, “I witnessed repeated calls from managers and nonmanagers alike for people to be fired for the political views they expressed.” Another liberal employee said, “There are people who are looking for a reason to be offended, and any sort of disagreement would make them wonder if I’m a secret Trump supporter. The idea of ‘I agree with you 90%’ is not enough.” One self-identified libertarian said, “I have lost multiple talented colleagues who resigned rather than continue in the face of an increasingly extreme, narrow-minded, and regressive environment here at Google. It’s terrifying here. A real horror show. Every day could be my last.”

Eighty-nine percent of respondents who identified as “very conservative” said they didn’t feel comfortable expressing their opinions at work. “It’s a postmodern, secularist Silicon Valley viewpoint. Highly liberal. It’s motivated by changing the world masquerading as intellectualism,” said one conservative tech employee. A libertarian said “there were many groups devoted to identity politics” in his company, and every one of them was leftist. “If you’re not part of the liberal Democrat crowd, you’re an outsider. Talks are often politicized, whether overtly or not. The entire executive team leans in a certain direction, and you don’t want to be the odd one out for fear of being ostracized … Nobody who didn’t fit the company’s mold talked about their political views. The company was very homogenous in that sense.” One conservative employee said, “There is overwhelming internal support for leftist political candidates, policies, and ideas, and they are frequently expressed … There are zero to very few senior people who dare to speak up or represent an alternative (more conservative) point of view in company debates or policy decisions.”

This groupthink affects everything that Big Tech does, every decision it makes, every program it releases. As a former Google engineer noted, Google’s algorithms reflect the assumptions and biases of their creators. The discussion about tech platforms and political bias often (and understandably) centers on what is or isn’t allowed on Google, YouTube, Facebook, and Twitter, but the other half of the picture is what is and isn’t prioritized on a platform. Broadly speaking, tech companies censor users and content in two ways.

• The first, which we’ll call “hard censorship,” is pretty straightforward: deleting content or suspending users.

• The second method, which we’ll call “soft censorship,” involves tech companies making content harder to find.

Hard censorship is tearing down a roadside billboard; soft censorship is making the billboard difficult to see by erecting other billboards in front of it. Soft censorship by tech companies can be just as effective as hard censorship. Studies show that people rarely click past the first page of Google or YouTube results. Even fewer click past the second or third page. So, pushing a link off the first page (or two or three) of Google is nearly the same as removing it from Google results altogether. The same is true with your Facebook and Twitter feeds: Companies don’t have to delete content to make sure you don’t see it.

Since 2016, every major tech company, including Facebook, Google, YouTube, and Twitter, has been busy retooling algorithms or news feeds or monetization standards in ways that benefit liberals and sideline conservatives. Big Tech also partners with left-wing groups such as the Southern Poverty Law Center to “flag” supposedly problematic content. The group falsely labels individual conservatives as “extremists” and conservative organizations as “hate groups” and then promotes more restrictive content policies against alleged “hate speech.”

To give you some idea of the advocacy group’s standards, it once accused Ben Carson of being an “extremist” for stating his belief that marriage is between a man and a woman. Immersed in scandals of its own, the organization has been widely discredited. But it still works closely with Google engineers who design the digital tools and algorithms to police hate speech on YouTube as part of Google’s “Trusted Flaggers” program. Google kept its collaboration with the Southern Poverty Law Center a secret, hidden behind a confidentiality agreement, and the group only admitted the partnership after I broke the story. All of these partnerships are occurring while the advocacy group publicly keeps pressure on Facebook, Google, and Twitter, calling for them to do more to combat “hate speech” on their platforms, which invariably means giving the organization more power in its private dealings with the companies. The Southern Poverty Law Center led five other left-wing groups in forming a coalition called “Change the Terms” that aims to pressure all major technology service providers into setting speech codes governing what their clients say both on and off their platforms.

The coalition demands that each company agree to implement a specific set of policies already drafted by the activists. Among the required changes: empowering third-party organizations (such as, say, the Southern Poverty Law Center) to flag “hateful” actors. The activists’ targets aren’t limited to Facebook, Google, and Twitter (although those companies are certainly on the list) but also include credit card companies and crowdfunding sites. Once a company caves to the pressure and agrees to adopt the left-wing contract, it has essentially deputized the coalition to decide who can stay on its platform or use its services and who must leave. Once the contract is official, the activists immediately shift gears to identify the users or customers the company is now required to ban from its platform. Left-wingers’ plan for weaponizing tech platforms bears a resemblance to the “social credit score” system adopted by the Chinese government. Only instead of the government monitoring your private behavior and limiting your access to society as a result, it’s a collective of left-wing advocacy groups partnered with multinational corporations.

First Amendment rights do not protect you from private organizations’ limitations on speech. It’s a devious strategy, and it’s working. Media Matters is a left-wing political group devoted to silencing conservative viewpoints in the media. For much of its history, it focused on attacking Fox News, but in recent years, it targeted conservative voices online as well. Media Matters presented a 44-page memo to liberal donors at a January 2017 summit that bragged about its plans to work with Facebook and Google to destroy nonliberal media outlets. The memo argued that enlisting Big Tech in the left-wing campaign to eliminate conservative media is essential if liberals hope to defeat Trump in 2020. Media Matters promised to accomplish exactly that. “Key right-wing targets will see their influence diminished as a result of our work,” it promised.

Leftists don’t need to banish every conservative from social media; they only need to dominate social media the way they dominate the mainstream media. They’re OK with discussion that takes place within boundaries they set (as on MSNBC) and so long as they win the elections that matter to them (such as the White House). Since Nov. 8, 2016, they have shifted the digital landscape against conservative voices. By Nov. 3, 2020, they will have transformed (or rigged) social media in ways that will have far-reaching implications for America.

The initial major rationale and justification the US administration offered for the drone assassination of IRGC Gen. Qassem Soleimani and commander of Iraq’s Popular Mobilization Forces Abu Mahdi al-Muhandis was the Dec.27 rocket attack on K1 camp in Kirkuk, which houses coalition forces. 

That attack involving surface-to-surface missile strikes killed an American contractor and reportedly wounded several US troops. Washington immediately blamed the Iran-backed Iraqi paramilitary group Khataib Hezbollah, with Mike Pompeo saying of the attack: “We will not stand for the Islamic Republic of Iran to take actions that put American men and women in jeopardy,” after he briefed President Trump. But top Iraqi military and intelligence officials are now calling this entire narrative into question.

A new lengthy New York Times investigative report cites multiple top Iraqi officials who go on record to say of their analysis of the Dec.27 Kirkuk incident: “These facts all point to the Islamic State, Iraqi officials say.”

The Pentagon says it has evidence decisively pinning it on Khataib Hezbollah, known for its closeness to Tehran; however, the paramilitary group itself has denied that it was behind the operation. US officials have from the start been scant on details and have not made public any evidence or intelligence.

This led some analysts in the days after the attack to question whether ISIS cells, still known to be active in the area, might have been behind it — given also it would be to the Sunni terrorist group’s benefit to sow a major rift between US and local Iraqi Shia forces, which is precisely what happened (Trump has recently gone so far as to threaten “very big sanctions” on Baghdad if US forces are kicked out). Alternately the White House perhaps appeared ready to manufacture a justification to take out Soleimani.

Further, as detailed in the Times report, the white Kia pick-up from which the rockets were launched was found near a known ISIS execution site, in a heavily Sunni area not known to have had a Shia paramilitary presence since 2014:

But Iraqi military and intelligence officials have raised doubts about who fired the rockets that started the spiral of events, saying they believe it is unlikely that the militia the United States blamed for the attack, Khataib Hezbollah, carried it out.

…Iraqi officials say their doubts are based on circumstantial evidence and long experience in the area where the attack took place.

The rockets were launched from a Sunni Muslim part of Kirkuk Province notorious for attacks by the Islamic State, a Sunni terrorist group, which would have made the area hostile territory for a Shiite militia like Khataib Hezbollah.

Khataib Hezbollah has not had a presence in Kirkuk Province since 2014.

The Islamic State, however, had carried out three attacks relatively close to the base in the 10 days before the attack on K-1. Iraqi intelligence officials sent reports to the Americans in November and December warning that ISIS intended to target K-1, an Iraqi air base in Kirkuk Province that is also used by American forces.

And the abandoned Kia pickup was found was less than 1,000 feet from the site of an ISIS execution in September of five Shiite buffalo herders.

The NYT further says this single event set off “a chain of events that brought the United States and Iran to the brink of war” which President Trump confided at a private luncheon this week was “closer than you thought”.

The attack that provoked the Soleimani killing may have been an ISIS false flag. It wouldn’t be the first time unfortunately that the US has been manipulated by Sunnis Islamists to do their bidding. Also can’t rule out US intelligence itself having known. https://t.co/ryJg3dW5Nb pic.twitter.com/3QRb779ivL

— Richard Hanania (@RichardHanania) February 6, 2020

Brig. General Ahmed Adnan, the Iraqi chief of intelligence for the federal police at K-1, told the NYT: “All the indications are that it was Daesh.” He said further: “I told you about the three incidents in the days just before in the area — we know Daesh’s movements.”

“We as Iraqi forces cannot even come to this area unless we have a large force because it is not secure. How could it be that someone who doesn’t know the area could come here and find that firing position and launch an attack?” he questioned.

Anonymous US officials, however, claim that evidence from within the Kia pickup points to Khataib Hezbollah, and also cited “multiple strains of intelligence” though without making it known.

Interestingly, amid a general breakdown in trust between Baghdad and Washington, a top Iraqi general has said the US side hasn’t even shared its claimed evidence that Khataib Hezbollah was behind the Kirkuk attack:

“We have requested the American side to share with us any information, any evidence, but they have not sent us any information,” Lt. Gen. Muhammad al-Bayati, the chief of staff for former Prime Minister Adel Abdul Mahdi, said in an interview.

The director general of Iraqi Intelligence and Counterterrorism, Abu Ali al-Basri, said the United States did not consult Iraq before carrying out the Dec. 29 counterattacks on Khataib Hezbollah.

“They did not ask for my analysis of what happened in Kirkuk and neither did they share any of their information,” he said. “Usually, they would do both.”

The bombshell NYT report further collects eyewitness accounts and other Iraqi official statements, all of which strongly suggests the chain of events which led to Soleimani’s Jan.3 killing, which in turn led to an Iranian ‘revenge’ attack with ballistic missiles on Ain al-Asad Air Base, wounding scores of troops (we later found out as part of an ever growing number of solders with ‘Traumatic Brain Injury’ from the blasts), was a possible ‘false flag’ event undertaken by ISIS meant to be pinned on the Islamic State’s Shia enemies backed by Iran.

As Northeastern University counter-terrorism expert Max Abrahms observes: “Let’s recap. Pompeo said Soleimani was killed because he was an imminent threat, a claim he couldn’t substantiate even in private settings.”

Abrahms said further on Twitter: “The escalation began with a Shia militia attack in which the best evidence indicates the perpetrators were actually ISIS, Soleimani’s enemy.”

The White House wanted to kill Soleimani. So, they manufactured a narrative to justify the decision. https://t.co/sMiOVA0b9H

— Max Abrahms (@MaxAbrahms) February 6, 2020

Ultimately, the United States stood on the brink of major war with Iran which could have spiraled into a World War 3 scenario — all of which was potentially initiated by an ISIS false flag event designed to unleash more regional chaos.

Authored by Andre Vltcheck via Off-Guardian.org,

There are obviously some serious linguistic issues and disagreements between the West and the rest of the world. Essential terms like “freedom”, “democracy”, “liberation”, even “terrorism”, are all mixed up and confused; they mean something absolutely different in New York, London, Berlin, and in the rest of the world.

Before we begin analyzing, let us recall that countries such as the United Kingdom, France, Germany and the United States, as well as other Western nations, have been spreading colonialist terror to basically all corners of the world.

And in the process, they developed effective terminology and propaganda, which has been justifying, even glorifying acts such as looting, torture, rape and genocides. Basically, first Europe, and later North America literally “got away with everything, including mass murder”.

The native people of Americas, Africa and Asia have been massacred, their voices silenced. Slaves were imported from Africa. Great Asian nations, such as China, what is now “India” and Indonesia, got occupied, divided and thoroughly plundered.

And all was done in the name of spreading religion, “liberating” people from themselves, as well as “civilizing them”.

Nothing has really changed.

To date, people of great nations with thousands of years of culture, are treated like infants; humiliated, and as if they were still in kindergarten, told how to behave, and how to think.

Sometimes if they “misbehave”, they get slapped. Periodically they get slapped so hard, that it takes them decades, even centuries, to get back to their feet. It took China decades to recover from the period of “humiliation”. India and Indonesia are presently trying to recuperate, from the colonial barbarity, and from, in the case of Indonesia, the 1965 U.S.-administered fascist coup.

But if you go back to the archives in London, Brussels or Berlin, all the monstrous acts of colonialism, are justified by lofty terms. Western powers are always “fighting for justice”; they are “enlightening” and “liberating”. No regrets, no shame and no second thoughts. They are always correct!

Like now; precisely as it is these days.

Presently, the West is trying to overthrow governments in several independent countries, on different continents. From Bolivia (the country has been already destroyed) to Venezuela, from Iraq to Iran, to China and Russia. The more successful these countries get, the better they serve their people, the more vicious the attacks from abroad are, the tougher the embargos and sanctions imposed on them are. The happier the citizens are, the more grotesque the propaganda disseminated from the West gets.

In Hong Kong, some young people, out of financial interest, or out of ignorance, keep shouting: “President Trump, Please Liberate Us!” Or similar, but equally treasonous slogans. They are waving U.S., U.K. and German flags. They beat up people who try to argue with them, including their own Police Force.

So, let us see, how the United States really “liberates” countries, in various pockets of the world.

Let us visit Iran, a country which (you’d never guess it if consuming only Western mass media) is, despite the vicious embargos and sanctions, on the verge of the “highest human development index bracket” (UNDP). How is it possible? Simple. Because Iran is a socialist country (socialism with the Iranian characteristics). It is also an internationalist nation which is fighting against Western imperialism. It helps many occupied and attacked states on our planet, including Venezuela, Cuba, Bolivia (before), Syria, Yemen, Palestine, Lebanon, Afghanistan and Iraq, to name just a few.

So, what is the West doing? It is trying to ruin it, by all means; ruin all good will and progress. It is starving Iran through sanctions, it finances and encourages its “opposition”, as it does in China, Russia and Latin America. It is trying to destroy it.

Then, it just bombs their convoy in neighboring Iraq, killing its brave commander, General Soleimani. And, as if it was not horrid enough, it turns the tables around, and starts threatening Teheran with more sanctions, more attacks, and even with the destruction of its cultural sites.

Iran, under attack, confused, shot down, by mistake, a Ukrainian passenger jet. It immediately apologized, in horror, offering compensation. The U.S. straightway began digging into the wound. It started to provoke (like in Hong Kong) young people. The British ambassador, too, got involved!

As if Iran and the rest of the world should suddenly forget that during its attack on Iraq, more than 3 decades ago, Washington actually shot down an Iranian wide-body passenger plane (Iran Air flight 655, an Airbus-300), on a routine flight from Bandar Abbas to Dubai. In an “accident”, 290 people, among them 66 children, lost their lives. That was considered “war collateral”.

Iranian leaders then did not demand “regime change” in Washington. They were not paying for riots in New York or Chicago.

As China is not doing anything of that nature, now.

The “Liberation” of Iraq (in fact, brutal sanctions, bombing, invasion and occupation) took more than a million Iraqi lives, most of them, those of women and children. Presently, Iraq has been plundered, broken into pieces, and on its knees.

Is this the kind of “liberation” that some of the Hong Kong youngsters really want?

No? But if not, is there any other performed by the West, in modern history?

Washington is getting more and more aggressive, in all parts of the world.

It also pays more and more for collaboration.

And it is not shy to inject terrorist tactics into allied troops, organizations and non-governmental organizations. Hong Kong is no exception.

Iran, Iraq, Syria, Russia, China, Venezuela, but also many other countries, should be carefully watching and analyzing each and every move made by the United States. The West is perfecting tactics on how to liquidate all opposition to its dictates.

It is not called a “war”, yet. But it is. People are dying. The lives of millions are being ruined.

*  *  *

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We noted on Wednesday night, two-thirds of the Chinese economy has effectively shut down much of its production capacity, crippling supply chains critical to keep not only the second-largest economy in the world humming, but the entire world. 

Former Morgan Stanley Asia chairman Stephen Roach warned last week that the global economy could already be in a period of vulnerability, where an exogenous shock, such as the coronavirus, could be the trigger for the next worldwide recession.

Goldman Sachs has warned that virus outbreak could reduce Chinese GDP growth in 1Q by 1.6% in year-over-year terms, or 6.4% in quarter-on-quarter annual rate terms, resulting in a sub-5% GDP 1Q print. A growth shock in China will be felt across the world as the virus has severed supply chains.

As growth expectations for China and the world come down, stocks are due for a repricing event. 

S&P 500 companies generate 60.5% of their revenue from the US and the rest international. 

Refinitiv data shows S&P 500 firms derive 6.2% of revenue from China and Hong Kong.

The semiconductors and semiconductor equipment industry group have about 30% of revenue exposure to China and Hong Kong, which is the most exposed industry. 

A great deal of Apple’s supply chain is based in China. We noted earlier this week that much of its iPhone manufacturing plants are closed but expected to open next week. But if the plants remain closed after Monday/Tuesday, then Apple could experience iPhone shortages in the month ahead. 

Dozens of companies have already announced factory shutdowns and retail shuttering in the last several weeks. The expectation is to bring everything online next week, but as per a new Nikkei report on Thursday, it seems that companies, like Honda, are already starting to postpone plant openings. 

The Telegraph’s Ambrose Evans-Pritchard wrote Thursday that the scale of supply chain disruptions in China and aboard is absolutely “staggering.”

We noted on Tuesday that Hyundai Motor Co. and its sister Kia Motors Corp. suspended production lines in South Korea after it was hit with a parts shortage from China.

Volkswagen, Toyota, General Motors, and Tesla have all closed their Chinese plants, as has Foxconn closed all plants making iPhones in the country.

The supply chain chaos is pushing out from China now could soon be realized in Europe.

Fiat-Chrysler might be forced to halt production at one of its European plants if the virus doesn’t clear up within the next week or two. The company is already struggling to source parts from China.

Evans-Pritchard also warned that the collapse in Chinese oil consumption is “the biggest shock to oil markets since the Lehman crisis.”

Two-thirds of China’s economy was shut down overnight and has led to a collapse in energy demand, which now poses a significant threat to corporate bond markets across the world. 

Coronavirus isn’t just infecting people and killing them, it’s also creating havoc and disrupting complex supply chains that will lead many companies to revise their earnings down in 1H20.

Mohamed El-Erian, the chief economic adviser to the insurance company Allianz, said the economic damage caused by coronavirus would play this year.

El-Erian said the economic shock to Wuhan and the surrounding manufacturing hubs is happening at a time when the global economy is slowing and interest rates among central banks are near zero.

He asks: Could coronavirus be a black swan for the global economy? 

Authored by Simon Watkins via OilPrice.com,

As the deadline for the U.S. to renew its waiver on Iraq importing gas and electricity from Iran approaches later this month, the three key players in this ongoing geopolitical saga have been preparing for all possible outcomes. As always in the global hydrocarbons markets, particularly in the Middle East, nothing is what it seems on first sight, with each of the main countries involved looking at outcomes that go way beyond mere gas sales.

The positioning began in earnest last week with a virtue-signalling comment from the Trade Bank of Iraq’s chairman, Faisal al-Haimus, that the bank – the main vehicle through which Iraq pays for these Iranian imports – would stop processing payments if the U.S. does not renew the relevant waiver at this end of this month. This would affect the payments for the entire 1,400 megawatts (MW) of electricity and 28 million cubic metres (mcm) of gas from Iran that Iraq requires to keep its key infrastructure in power, for some of the time at least.

In this context, peak summer power demand in Iraq perennially exceeds domestic generation capabilities, made worse by its capacity to cause major civilian unrest in the country. The relatively recent widespread protests across Iraq – including in the major oil hub of Basra – were widely seen as being prompted in part by chronic electricity outages. The situation also promises to become much worse as, according to the International Energy Agency (IEA), Iraq’s population is growing at a rate of over one million per year, with electricity demand set to double by 2030, reaching about 17.5 gigawatts (GW) average throughout the year.

Ahead of the waiver renewal point this month, then, Iraq has been playing both the U.S. and Iran, as part of the ongoing tightrope act in which it has been engaged since the fall of Saddam Hussein in 2003. On the one hand, a senior oil and gas industry figure who works closely with Iran’s Petroleum Ministry exclusively told OilPrice.com last week, Iraq has repeatedly stressed to the U.S. that it cannot effectively function – including at its oil fields – without Iranian gas and electricity supplies until a realistic alternative is up and running.

This is aimed, said the source, at extracting more investment from the U.S. both directly and indirectly, including expediting deals tentatively and firmly agreed with the U.S. before the attacks on U.S. bases in Iraq occurred. The key deal remains an integral part of Iraq’s longstanding rhetoric about reducing the epic squandering of its enormous gas natural resources through flaring. This deal, involving the signing of a memorandum of understanding with a U.S. consortium led by Honeywell, would reduce Iraq’s current level of gas flaring by nearly 20%.

Specifically, Honeywell, partnering with another U.S. heavyweight, Bechtel, and Iraq’s state-owned South Gas, would build the Ratawi gas hub. This, in its first stage would process up to 300 million standard cubic feet per day (scf/d) of ‘associated gas’ (generated as a by-product of crude oil production) at five southern Iraqi oil fields: Majnoon, Gharib al-Qurna, al-lhiss, al-Tubba, and al-Siba. “Moqtada al-Sadr [the effective leader of Iraq] knows that every time there is a hint that Iraq will continue with its historically close relationship with Iran, the U.S. comes in to offer the services of its companies at beneficial terms to Iraq,” the Iran source said.

In addition to this, Iraq has two natural hedge positions against the U.S. not extending its next waiver, and leaving Iraq supposedly without Iranian gas and electricity in the very short-term before U.S. investment and deals can actually put power on the ground in Iraq.

• The first of these hedges is that Iraq will just keep the money that it already owes Iran for previous supplies. According to a comment last week from Hamid Hosseini, a spokesman for the Iranian Oil, Gas and Petrochemical Products Exporters’ Association, up to US$5 billion in payments from Iraq to Iran for past gas and electricity supplies is sitting in an escrow account at the Central Bank of Iraq, but Iran cannot touch it because of the U.S. sanctions. In fact, according to the Iran source spoken to by OilPrice.com last week, the figure is US$6.1 billion, which, if the U.S. does not extend the waiver later this month, Iraq will just keep. 

• The second of Iraq’s hedges against the U.S. not extending the waiver on these imports from Iran at the end of this month is just to keep importing them anyway. Iraq has a very long porous border with Iran and an even longer history of using it – and shared facilities – to circumvent oil and gas sanctions, and there is no reason to assume that this will suddenly cease.

The question then naturally arises as to why Iran would agree to continue to supply Iraq with gas and other commodities if it cannot draw out money owed to it from the Iraq escrow account.

The answer is twofold:

First, Iran is working in a number of areas on essentially a barter-based business methodology, according to the Iran source. “It offers oil and gas resources to China and Russia and others which, in turn, offer Iran items it needs, such as technology items, chemicals, agricultural sector goods, and finance facilities, for example, so there are ways in which Iraq could pay Iran in currency of one sort or another,” he said.

The second option for Iran, and an idea of the assassinated Islamic Revolutionary Guard Corps (IRGC) commander, Major General Qassem Soleimani, is that Iraq assigns leases and ownership to Iran through a wide range of IRGC-related entities to commercial real estate and businesses in the Shia-dominated areas of Iraq. This transfer of ownership on a limited scale has been taking place on an intermittent basis for a number of years, especially around Karbala, Najaf, and Nasiriyah, according to the source.

“It suits the Iranians well enough, as it is a way of cementing Iranian control across the Shia population of Iran, and it suits Iraq as well as it means it doesn’t have to part with any money, which is always a strain on the already strained budget, and it means that it can leave it to Iran to control the radical Shia elements in and around those regions,” he added.

Finally, the U.S. cannot lose either way. If it extends the waiver, it keeps the door open to Iran coming back to the table to renegotiate the Joint Comprehensive Plan of Action nuclear deal whilst also keeping Iraq on side for future U.S. energy projects and keeping it from fully defecting to the Iran-Russia-China sphere of influence. If it does not extend the waiver then a relatively large non-Shia section of Iraq will keep the government in the state of flux that it has been since the fall of Hussein, which also benefits the U.S.

This strategy was previously known as the ‘Kissinger Doctrine’ of foreign policy – analysed in depth in my new book on the global oil market – in which the U.S. attempts to keep power in balance across a broad region through individual states fighting amongst each other, usually based on exploiting factional and or tribal and/or religious differences between groups.

Following a blockbuster ADP private payrolls print of 291K, the highest in nearly 5 years, analysts expect the pace of official, BLS payroll growth to pick up (160k expected, up from 145K in January), though remain beneath recent trend rates; yet despite the ADP strength, which in the past has been a loud contrarian indicator, analysts offer the usual caveats: business surveys continue to point to payrolls growth, though the pace of growth cooled in the non-manufacturing survey. Weekly jobless claims data has stabilized near lows. Meanwhile, consumer confidence surveys bode well, with consumers expecting to see more jobs in the months ahead, though their view on wage gains pared very slightly.

Also of note, tomorrow’s report will be accompanied by the annual benchmark revision to the establishment survey, as well as the annual introduction of new population controls in the household survey. The BLS’s preliminary estimate of the establishment survey revision suggested a large downward adjustment of 501k to the level of March 2019 employment. This would imply a 42k slower pace of monthly job growth on average from April 2018 to March 2019 (+168k vs. +210k as currently reported). Revisions in the preliminary report were fairly evenly split between retail (-146k), professional services (-163k), and leisure (-175k), and focus on the BLS’ erroneous birth-death adjustments.

Courtesy of RanSquawk, here is what Wall Street expects:

• Non-farm Payrolls: Exp. 160k, Prev. 145k.
• Unemployment Rate: Exp. 3.5%, Prev. 3.5%. (FOMC currently projects 3.5% at end-2019, and 4.1% in the long run).
• Avg. Earnings M/M: Exp. 0.3%, Prev. 0.1%.
• Avg. Earnings Y/Y: Exp. 3.0%, Prev. 2.9%.
• Avg. Work Week Hours: Exp. 34.3hrs, Prev. 34.3hrs.
• Private Payrolls: Exp. 150k, Prev. 139k.
• Manufacturing Payrolls: Exp. -5k, Prev. -12k.
• Government Payrolls: Prev. 6.0k.
• U6 Unemployment Rate: Prev. 6.7%.
• Labour Force Participation: Exp. 63.1%, Prev. 63.2%.

TREND RATES:

The pace of payroll additions has eased, after the sub-trend 145k added in December. Currently, the 3-month average is 184k, running a touch beneath the 6-month pace at 189k, though both still remain above the 12-month average at 176k. Goldman estimates payrolls increased 190k in January, higher than consensus, and does not expect a significant impact
from Census employment in tomorrow’s report. Wells Fargo’s analysts argue that slower growth in the labor supply during this expansion has reduced the ‘breakeven’ number for job growth (the amount of new jobs needed to reduce the jobless rate from trend). Wells says that the weaker pace of job growth in 2019 generated little cause for concern that fundamentals in the labor market were deteriorating meaningfully. It estimates that a pace of around 85-130k monthly job additions would be required to put downward pressure on the unemployment rate, due primarily to strong labor participation trends. Trump, in his State of the Union address Tuesday, highlighted numbers such as 7 million jobs created since his election and the lowest recorded unemployment levels for African Americans, Hispanics and Asian Americans.

INITIAL JOBLESS CLAIMS:

Weekly data for the payroll survey period came in at 223k (four-week average was 216.25k) compared to the 235k in the December reference period (four-week average then was 225.75k), auguring well for January’s report. After the data’s release, Pantheon Macroeconomics suggested that the underlying trend in claims was not rising, and might, perhaps, be falling again. “All the slowdown in payroll growth from the 2018 peak has been due to slower gross hiring, not rising layoffs. The spike in late December, which triggered a degree of consternation among some investors, has now reversed.”

REVISIONS:

Revisions may show “the past wasn’t as rosy as we thought,” said Ward McCarthy, chief financial economist at Jefferies LLC. “That’s again another reason to think that the deceleration in payroll growth is something we’re going to be living with going forward.” Yet even a big downward revision to payrolls won’t change the overall picture of labor-market tightness. The participation rate for prime-age workers, or those ages 25 to 54, is the highest in a decade according to Bloomberg. Fed Chair Jerome Powell has reiterated his desire to sustain the expansion “so that the strong job market reaches more of those left behind.” Companies complain about finding qualified workers, and job openings, though declining, still outnumber the unemployed. “You can’t change that story at all with revisions,” said Jennifer Lee, a senior economist at BMO Capital Markets. “Just perhaps the pace.”

ADP PAYROLLS:

The ADP’s gauge of payrolls surprised to the upside in January, printing 291k against an expected 156k. Analysts provided the usual caveats about how, although the better-than-expected data will bolster expectations of a beat in the official NFP data on Friday, the accuracy and exact correlation of the two data sets gives reasons to be cautious. Capital Economics explains that this scepticism is doubled every January, because firms tend to purge names from the payroll at the start of the year – even though those people may not have done any paid work for that firm for several months. “That distortion occasionally used to generate very weak readings at the start of the year but, in this case, it looks like the ADP could have over-compensated with an adjustment,” CapEco says. Meanwhile, the ADP itself suggested that mild winter weather provided a significant boost to the January employment gain, and adds that underlying job growth is close to +125k monthly pace, which is consistent with low and stable unemployment.

BUSINESS SURVEYS:

The manufacturing ISM report in January noted that labour was reported to be in short supply, and panellist comments were generally positive regarding future employment potential. The manufacturing employment sub-index, however, rose to 46.6 from December’s 45.2. Meanwhile, the non-manufacturing ISM report saw the employment sub-component fall a touch to 53.1 from a revised down 54.8; the non-manufacturing gauge also noted that respondents continued to have difficulty with labour resources, and was impacting capacity and pushing up costs.

CONSUMER CONFIDENCE:

The Street expects the jobless rate to remain at 3.5%, a rate which the Fed’s January projections had penciled in for the end of 2020. In terms of wage growth, the Street looks for a pick-up to 0.3% M/M in January from a pace of 0.1% in December, while the Y/Y rate is seen rising to 3.0% in January after falling to 2.9% (from 3.1%) in December. Within the Conference Board’s consumer confidence report, the differential between jobs ‘plentiful’ and jobs ‘hard to get’ rose sharply to 37.4 in Jan (prev. 33.9 in December, and 31.6 in November), which bodes well for the jobless rate. Additionally, consumers’ outlook for the labour market was also more upbeat, with the proportion expecting more jobs in the months ahead increased from 15.5 to 17.2, while those anticipating fewer jobs declined from 13.9 to 13.4. And regarding their short-term income prospects, there was a small decline in consumers expectations, from 22.7 to 22.0 percent, while the proportion expecting a decrease was virtually unchanged at 7.7.

JOB CUTS:

January Challenger job cuts jumped to 67,735, the highest monthly total since February 2019, and rising from 32,843 in the previous report. Challenger said that technology companies led in announced job cuts last month as they pivot to new products or services. But Tech was not the only industry embarking on this kind of restructuring. Companies across all industries are re-examining their hierarchies, particularly in Automotive and Retail, where innovations in technology are changing the landscape

ARGUING FOR A STRONGER REPORT:

• Jobless claims. Initial jobless claims decreased in the five weeks between the payroll reference periods, averaging 218k (vs. 226k in the December payroll month). Continuing claims declined 20k from survey week to survey week, this likely understates the improvement given the winter seasonal bias: Goldman’s model predicted a ~100k rebound in continuing claims this winter, even if underlying labor market conditions remain stable. Overall, jobless claims data remain consistent with a subdued pace of layoff activity.
• Winter weather. Unseasonably dry weather in the Northeast and Ohio Valley likely boosted job growth in tomorrow’s report. While a population-weighted snowfall dataset was slightly above average over the survey week as a whole, this reflected snowstorms on Saturday that were probably too late to significantly affect the report (workers are counted as employed as long as they work at least one hour during the reference period). As shown in Exhibit 1, snowfall in the Northeast and Midwest was negligible (on average) from Monday to Friday of the survey week and was also quite modest in the prior week. Previous such instances coincided with strong or very strong January job growth (+355k in 2012, +195k in 2013, and +312k in 2019). While the impact is uncertain, a weather boost of 20k-30k in the January report is possible.
• Labor market slack. With the labor market somewhat beyond full employment, the dwindling availability of workers is a factor weighing on job growth this year. However, as shown in Exhibit 2, first-print January job growth tends to be strong when the labor market is tight—for example in 1989, 1997-2000, 2006, and in two of the last three years. Labor supply constraints likely led firms to implement fewer end-of-year layoffs in these instances (anticipating a shortage of applicants in the coming year).
• ADP. The payroll-processing firm ADP reported a 291k increase in January private employment, 134k above consensus and also 134k above the +157k average pace  of the previous three months. While the inputs to the ADP model argued for a solid reading, the strength was larger than expected, consistent with a solid underlying pace of employment growth and a strong reading tomorrow.

ARGUING FOR A WEAKER REPORT:

• Employer surveys. Business activity surveys were firm on net in January, and while the employment components  exhibited similar patterns, with improvement in the manufacturing sector (tracker +0.9pt to 52.9) there was a slight decline in the much larger nonmanufacturing sector (tracker -0.3pt to 52.7, see composite in Exhibit 3). Service-sector job growth was +140k in December and averaged 164k over the last six months, while manufacturing payroll employment declined by 12k in December and has averaged +2k over the last six months.
• Job cuts. Announced layoffs reported by Challenger, Gray & Christmas increased by 15k in January to 53k (SA by GS), and were 12k above their January 2019 level. The month-over-month rise was driven by increases in announced layoffs in the technology sector (+11k) industry

Authored by Doug Casey via InternationalMan.com,

“The only element in the universe more common than hydrogen is stupidity.”

– Einstein

I’m not a fortune teller. In fact, the only things anybody knows about predicting – even if you gussy the concept up by calling it “forecasting” – are 1.) Predict often and 2.) Never give both the time and the event.

The worst offenders are those who pretend they know where the economy’s headed.

Statistics – so often the basis of conjecture with regard to the economy – are so subject to interpretation, and so easy to take out of context, that most of the time they’re best used as fodder for cocktail party conversations.

Still, as potentially wrong-headed and tendentious as the subject is, “the economy” is occasionally worth talking about simply to establish a clear point of view.

In fact, I place the phrase “the economy” in quotes because I don’t even accept the validity of the concept, nor that of “the GDP”; they’re both chimeras.

The idea of GDP gives the impression that it is not individuals that produce goods and services, but rather a machine called “the economy.” This leaves the door open to all manner of nonsense, like the assertion that what may be good for individuals may not be good for the economy, and vice-versa.

For instance, an advance in the GDP doesn’t necessarily mean increased prosperity: What if the government embarked on a massive pyramid building program, an archetypical example of public works? GDP might rise, but it would add absolutely nothing to the well-being of individuals. To the contrary, the building of the pyramid would only divert capital from wealth-generating activities.

On the other hand, if a scientific breakthrough was made which cut energy consumption by 80% for the same net output, or magically eliminated all disease, the GDP would collapse because it would bankrupt the energy and health industries.

But people would be vastly better off.

Entirely apart from that, the whole idea of GDP gives the impression that there actually is such a thing as the national output.

In the real world, however, wealth is produced by someone and belongs to somebody. We’re not ants or bees working for the hive. The whole idea of a GDP just allows the “authorities” to bamboozle people into believing they can actually control “the economy,” as if it were some giant machine.

The officials pretend to be the Wizard of Oz, and Boobus americanus is trained to think they’re omniscient. Thus whenever the rate of growth slips “too low,” officials are expected to give “the economy” a suitable push. Conversely, whenever “the economy” is growing too fast, the officials are supposed to step in to “cool” it.

It’s all an embarrassing and destructive charade.

Nonetheless…

I remain of the opinion that we’re headed into the biggest economic smashup in history.

That’s an outrageous statement, and it’s always dangerous to say something like that. After all, the longest trend in motion is the Ascent of Man, and that trend is unlikely to change; indeed, it’s likely to accelerate. And it’s usually a mistake to bet against an established trend.

Furthermore, science and technology will continue advancing, people will continue working and saving, entrepreneurs will continue to create. And downturns in the economy have always been brief. There’s a good case for staying bullish.

Even most of those who talk of a recession tend to write it off as either a simple reversal of recent “irrational exuberance,” or a passing change in people’s psychology, or a temporary shock. Unfortunately, it goes much deeper than that. Those things have very little to do with what recessions are all about.

A recession, according to the conventional parlance, is a period when economic activity declines for two or more quarters. That’s a description of what happens, but it’s really not very helpful, much like saying a fever is a period during which your temperature is above 98.6 F. A better definition of a fever might be a period when the body’s temperature is elevated as a consequence of fighting an infection, in that it gives you some insight into the cause as well as the effect.

That’s why I prefer to say a recession is “a period of time when distortions and misallocations of capital caused by the business cycle are liquidated.”

What causes the business cycle? Excess creation of credit by a central bank (e.g., the Fed). The injection of artificially created money and credit into a country’s economy gives both producers and consumers false signals, causing them to do things which they otherwise would not do. The longer the upswing of a business cycle continues, the longer and more severe the down cycle will be.

A depression is just a really bad recession.

One thing that – contrary to popular opinion – can help get an economy out of a recession is a large pool of savings; savings give people the money to invest in new production, as well as the money to buy that production.

That’s why it’s the height of idiocy for pundits to talk about how patriotic it is to go out and shop. It can only deplete the capital that will be needed in the future, and deepen the bottom with more bankruptcies, stealing consumption from the future.

That’s why the Fed’s artificially low interest rates is such a bad idea; it encourages people to save less and borrow more. This engineered decline may well, after a certain lag time, cause a cyclical upturn – but it will only aggravate the underlying problem, guaranteeing yet a bigger bust.

This isn’t just an American problem, because the U.S. is truly the engine of the world’s economy. But a lot of the drive behind the engine is the gigantic trade deficit. The hundreds of billions the U.S. sent abroad in the last year alone, after over a decade of increasing deficits, has caused a lot of capital investment that will become uneconomic, and created a lot of economic activity that will come to a screeching halt when that deficit inevitably reverses.

The whole world is levered on what happens in the U.S.

The effect in economies around the world will be devastating. The Smoot Hawley tariff of 1930, which acted to collapse world trade, greatly exacerbated the last depression. It could be that economic conditions in the U.S. alone could do it this time, without the overt “assistance” of the government.

I don’t believe we’re looking at just another cyclical downturn this time. We could be – but I don’t think so.

Of course, since the dollar is by far the biggest market in the world, constituting the reserves of almost every government on the planet, the de facto currency of probably 50 countries, and the savings of hundreds of millions of people around the world, when it collapses, it will cause a financial earthquake, Magnitude 10.

Use any rallies as selling opportunities. Diversify your assets out of the U.S. Build a good position in gold. Buy gold stocks with speculative capital. Get your debt, if any, down to comfortable levels.

*  *  *

Unfortunately there’s little any individual can practically do to change the trajectory of this trend in motion. The best you can and should do is to stay informed so that you can protect yourself in the best way possible, and even profit from the situation. That’s exactly why New York Times bestselling author Doug Casey and his team just released an urgent new report titled Doug Casey’s Top 7 Predictions for the Raging 2020s.

Click here to download the free PDF now.

Thursday evening President Trump announced the death of al-Qaeda’s chief in Yemen by a US drone strike. The New York Times first reported last week the likely death of Qasim al-Rimi, the founder and leader of al-Qaeda in the Arabian Peninsula (AQAP) in a US airstrike, which the president has now confirmed. Days ago Saudi media also began reporting his death.

“Under Rimi, AQAP committed unconscionable violence against civilians in Yemen and sought to conduct and inspire numerous attacks against the United States and our forces,” Trump said in a White House official statement. “His death further degrades AQAP and the global al-Qa’ida movement, and it brings us closer to eliminating the threats these groups pose to our national security.”

The successful counter-terror operation also reportedly killed an unspecified deputy of al-Qaeda leader Ayman al-Zawahiri. This other top al-Qaeda operative’s name was not immediately given. 

The State Department had issued a $10 million reward for information leading to Rimi’s capture. Interestingly, he’s alleged to have directly threatened attack on President Trump.

According to the Rewards for Justice statement:

On February 5, 2017, al-Rimi released an audiotape in which he threatened U.S. President Donald Trump. In a May 7, 2017 video, he urged supporters living in Western countries to conduct “easy and simple” attacks and praised Omar Mateen, who killed 49 people in a June 2016 mass shooting at a nightclub in Orlando Florida.

US intelligence had also linked him to a 2008 attack on the US Embassy in Yemen, and to the 2009 “underwear bomber” plot to blow up a US-bound airliner.

The State Department’s brief bio information indicates Rimi was active in Sunni jihadist activities and leadership going back to the 1990’s:

Qasim al-Rimi was named emir of AQAP in June 2015, immediately after he swore allegiance to al-Qa’ida leader Ayman al-Zawahiri and called for renewed attacks against the United States. Al-Rimi trained terrorists at an al-Qa’ida camp in Afghanistan in the 1990’s, and subsequently returned to Yemen and became an AQAP military commander.

His death marks the third designated terrorist killed by the US in recent months, following IRGC Quds Force chief Qassem Soleimani and more significantly ISIS leader Abu Bakr al-Baghdadi.

According to CNN, Rimi had long been at the top of Trump’s list of desired kills or captures: “Rimi was a target of a January 2017 raid on an al Qaeda compound in Yemen that led to the first US military combat death under the President, a senior US military official told CNN at the time.”

Days after the raid Rimi had released an audio message calling Trump “the new fool of the White House received a painful slap across his face.”

But clearly it’s America’s Commander-in-Chief who had the last laugh.