Tag: finance

Authored by Charles “Sam” Faddis via AndMagazine.com,

The Hidden Hand

The essence of a coup, which some might refer to as covert action, is the hidden hand.  One does not announce that a foreign power is overthrowing the government and installing a new government.  One pulls strings as if from behind a curtain, making events that are all part of a carefully orchestrated plan appear disconnected, spontaneous and serendipitous.

As I read through the recently released IG report for the second time, as someone with a great deal of experience in military and intelligence matters, I see that hand everywhere.

Per the IG report, a single report is delivered to the FBI in the summer of 2016.  It concerns a meeting between a cooperative contact of a foreign intelligence service and a junior level employee of the Trump campaign, George Papadopoulos.  The report relates what are frankly very amorphous comments by Papadopoulos concerning the Russian government and its alleged possession of information on Hillary Clinton.

On any other day this report would command no attention whatsoever.  The source in question has no track record of any kind with the FBI. Papadopoulos has been employed by the Trump campaign for perhaps 90 days at this point, and there is no reason to believe he has contacts of significance in the Kremlin.

Not on this occasion.  This one report from a foreign intelligence service goes directly to the top of the FBI.  The Director himself, James Comey is briefed.  A full investigation is launched.  Multiple confidential human sources are tasked.  Wiretaps are ordered.  A task force is organized. Crossfire Hurricane is born.

There is a problem, though.  This hand, perhaps because it is controlled by individuals who have made their bones riding desks in Washington, DC and not in the field running actual operations, is clumsy.  The information regarding Papadopoulos provided the needed pretext to start an investigation, but most of the people who will now form the investigative team are not in on the plot.  They will have to be led to the pre-ordained conclusion, so that it appears that they did so without outside interference.

And these investigators have a pesky habit of actually doing their jobs.

Almost immediately these investigators demonstrate that Papadopoulos does not have the access within the Trump campaign necessary for the suspected Russian connections.  If there is a conduit, Papadopoulos cannot be it.

Suddenly, Carter Page is shoved forward as the new focus of the investigation.  His contacts with Russians are long-standing and well-known.  He will serve well as the new target.  Human sources are mobilized.  Wiretaps are ordered.

But, there is another problem.  Those wielding the clumsy hidden hand have forgotten the first rule of real operational personnel.  Never move against a target until you have run “traces.” until you have run the individual’s name through our databases, checked the records and found out what we already know about him.  Maybe the conspirators really don’t know that.  Maybe they just don’t dare do so, because it will mean involving working-level personnel who are not in on the joke.

In any event, they apparently did not run “traces” and as a consequence they clearly do not know that, yes, Mr. Page has extensive Russian contacts and, yes, he has been reporting to “another government agency” for many years on those contacts.  Page is a source.  Our source.

This is problem.  It is a huge, never fully resolved problem for the conspirators.  The “other government agency” sends a formal memo documenting the fact that Page is a source.  The hidden hand tries hiding that.  Any mention of it is removed from applications for FISA warrants, and it is never mentioned in renewal applications either.

But, again, as new FBI personnel, unwitting of the plot are assigned to the investigation they keep doing their jobs.  Already they have determined that the only evidence they can develop is exculpatory.  Already they have established that there is no basis to believe any of the allegations against Donald Trump and his campaign.  Now, they circle back to the issue of Page.

Are they, in effect, focusing investigative resources on a man, Page, who has been cooperating with American intelligence for years?  If so, this is the definition of “crossing lines.”  Inquiries are made.  A second memorandum is sent by the “other government agency.”  This one spells out in excruciating detail Page’s relationship with that agency.

The conspirators, behind their curtain, are now desperate.  What was supposed to be an elegant plot is now in danger of collapsing.  The hand directs crude measures.  An attorney assigned to the investigation materially alters the memorandum inserting words not found in the original and making it appear to say exactly the opposite of what it said, in plain English, originally.  The trail is covered, temporarily, but there is now hard, physical evidence of the conspirators intervention.  The “other government agency” retains the memorandum in its original form, waiting to be discovered by investigators scrutinizing the record at a later date.

This pattern of often clumsy manipulation of the Crossfire Hurricane investigation is everywhere in the record.  It is at the heart, for instance, of the entire Christopher Steele narrative.

Shortly after Crossfire Hurricane is initiated, Steele, a former British intelligence officer, appears to provide a dossier, actually multiple files, concerning alleged connections between Donald Trump and his campaign and the Kremlin.  The dossier also includes a number of gratuitously salacious allegations concerning President Trump and Russian prostitutes, which likely says more about Steele and the way his mind works than anything else.

Steele is working for a law firm employed by Fusion GPS, which is in effect, an extension of Hillary Clinton’s campaign.  He is in Washington, DC frequently.  He has a wide range of contacts at senior levels on multiple continents.  He has had contact of some kind with the FBI for years.

Yet, when Steele appears to deliver his information he chooses to pass that information to a junior FBI agent working for an FBI Legal Attache (Legatt) in a European city and then rely on this individual to get the “intelligence” to the right people.  Why?  Because in the minds of those individuals masterminding this operation this will make the information more “organic.”  It will not arrive on the desks of the special agents working Crossfire Hurricane as if hand delivered.  It will not appear to be too neatly packaged and perhaps arouse suspicion.  It will seem to the people working the investigation, most of whom of necessity can never know what is really happening, that this information was developed in the field and therefore is more credible and to be afforded more weight.

But, again, the hand is clumsy.  Steele is a loose cannon.  He talks to the press.  He discusses his contact with the FBI.  This is discovered.  Formal contact with Steele is shut down.  He is no longer an FBI source.

As with the alteration of the memo from the “other government agency” the conspirators must become more forceful and more visible.  If Steele’s “intelligence” cannot continue to be fed into the investigation there is no plot.  There is no way to lead the investigators in the desired direction and ensure the desired result.  The entire operation is in danger of collapsing.

Again, per the IG report, Bruce Ohr, a senior Department of Justice lawyer with no role of any kind in the investigation, but a wife who works for Fusion GPS, suddenly appears and makes himself a conduit between Steele and the FBI.  Beyond that, in fact, he meets directly with the head of Fusion GPS, Glenn Simpson, obtains at least one thumb drive full of Steele’s reports and ferries those to the FBI. The pipeline is reestablished.

No one in the Department of Justice or FBI has asked Ohr to play this role.  It is, in fact, in direct conflict with his status as an attorney.  Ohr actively hides his actions from his superiors.  His behavior is transparent and without justification.  It is almost certain to attract attention.  This is not all the way covert action should work, but the conspirators, backed into a corner by the FBI’s refusal to meet Steele directly have no choice.  It is the files compiled by Steele, which are the key to their efforts to delegitimize and destroy Donald Trump.

The IG report on the Crossfire Hurricane investigation runs to hundreds of pages, and it contains a wealth of information.  It is the product of what can only have been a massive amount of investigative work by a team of dedicated professionals and is a huge resource for those attempting to understand the origins of the Russian collusion hoax.  Yet, at the same time it misses the essence of what just transpired.  It is like reading a description of the actions and motivations of a troupe of marionettes in a stage play and missing the fact that they are all simply doing what those pulling the strings make them do.

The FBI did not conduct an investigation of Donald Trump and his associates that ultimately proved to be based on false information and continue that investigation long past the time it should have been shut down simply because some people made some errors in judgment or some procedures need to be changed.  That investigation was simply the most visible piece of a deliberate, covert attempt to overthrow the democratic process.  The perpetrators of that crime have yet to be brought to justice and identified. 

Let’s hope that happens soon.

Time for the hidden hand to be revealed.

A team of Deutsche Bank macro analysts led by Oliver Harvey has produced its latest note economic note about Brexit expounding on the bank’s near-to-medium-term view on the outlook for British markets.

The bulk of the note is an examination of how the Conservative policy manifesto stacks up against Labour, while also examining how each party’s platform might impact longstanding economic trends in Britannia, including weak productivity (since the crisis, the UK has exhibited the most tepid productivity performance of any major economy, according to the OECD’s data)…

…and a standard of living that hasn’t yet recovered to surpass its pre-crisis peak.

And let’s not forget about taxes. Labour hopes to hike the capital gains tax on investment income, while also raising the inheritance tax and several other levies.

Looking further down the road, DB’s team said they “find it difficult to be bullish sterling until more detail is provided on Brexit outcome.” Strategists are increasingly expressing trepidation about Boris Johnson’s insistence that the Conservatives won’t allow an extension of the next meaningful Brexit deadline (that is, the Dec. 31, 2020 deadline to finish trade-deal talks)

In the near term, the biggest risks are related to the outcome of Thursday’s vote. Conservatives are ahead in the polls, but it’s likely they won’t win an outright majority. So, the first question is what kind of coalition will they form? Two possible iterations are: an alliance with the DUP and/or Brexit Party, or a minority government with the support of the Liberal Democrats. In the event of the former we would be very negative on the pound and bullish UK rates.

Neither route is free of problems for the Tories. The DUP (Democratic Unionist Party) has been a persistent thorn in No. 10’s side since last summer, and both they and the Brexit Party have criticized Johnson’s deal. If they win enough seats, they could try to force Johnson to scrap the deal and push for another round of negotiations, which would probably infuriate both the EU27 and the British public. If the Conservatives end up partnering with the Lib Dems, they might need to commit to a second Brexit referendum in order to pass Johnson’s deal. In the short term, at least, this would present a more optimistic outlook for the pound and UK markets more broadly.

In terms of growth, a Conservative majority followed by implementation of the government’s Brexit deal in January could trigger a bounce in consumer sentiment, in turn lifting growth in the short term. It probably goes without saying, but however the Tories choose to handle the situation, the composition of the governing coalition will be of critical importance to markets.

For example, DB’s team believes business investment would rise if the government (presuming a Tory plurality) agrees to extend the Dec. 2020 deadline, thereby increasing the chances of a lasting trade deal that’s agreeable to both sides.

Polls have consistently shown Conservatives with a sizable lead. But as DB shows, there’s not much of a relationship between the percentage of the vote and number of seats won.

Still, Labour’s program of massive public spending hikes is attractive to the average Joe who is tired of austerity and eager for better broadband access.

Labour’s party manifesto is ambitious, and includes nationalizing the broadband arm of BT Group (formerly British Telecom) to bring free broadband to all of Britain before 2030. The manifesto also calls for much higher regional investment to help smooth out the stark economic inequalities between various regions.

Johnson’s Conservatives are way ahead in the polls. But as investors learned during the Brexit referendum, polls can’t always be trusted.

And anybody who agrees with DB’s long-term skepticism about the pound can probably pick up some OTM puts for a reasonable price. 

Authored by Ryan McMaken via The Mises Institute,

Artwork Made from Old Bananas Shows Value Is Subjective

Last week, Miami art gallery Art Basel sold, for $120,000, a piece of art composed of a banana duct taped to a wall. At least one other identical piece sold for a similar amount. A third piece was priced at $150,000. The banana used in the display is a real banana, and on Saturday, a performance artist named David Datuna ate some of it.

Datuna’s stunt merely illustrated what everyone should have already known: the value of the artwork had almost nothing to do with the banana itself. Its value came not from the amount of labor that went into it or from the cost of the physical materials involved. A spokeswoman for the museum summed up the real source of the item’s value, noting, “He [Datuna] did not destroy the artwork. The banana is the idea.”

In other words, the people who purchased the art weren’t actually purchasing a banana and tape. The person who purchased the art was buying the opportunity to communicate to peers that he or she was rich enough to throw around $120,000 on a work of art that would soon cease to exist. This was a transaction that involved purchasing status in exchange for money. The banana was only a tiny part of the exchange.

Moreover, the transaction offered the opportunity for the gallery, the art seller, and the art buyer to all further increase their status by being the topic of discussion in countless news articles and discussions in social media. As was surely anticipated by the artists and everyone else in the banana sale, the media could be counted on to act as if this art was something new, outrageous, or exciting. “Art world gone mad,” the New York Post announced on its front page. Hundreds of thousands of commentators in various social media forums chimed in to comment on the matter.

One wonders, however, how many times this shtick can be repeated over and over until people lose interest. Apparently: many times. After all, this sort of art is not a new thing. For decades, avant-garde artists have been using garbage and other found objects to create art. And people with a lot of disposable income have been willing to pay a lot of money for it. It’s all basically an inside joke among rich people. And regular people have the same reaction over and over again.

But there’s absolutely nothing at all that’s shocking, confusing, or incomprehensible from the point of view of sound economics. Transactions like these should only surprise us if we’re still in the thrall of faulty theories of value, such as the idea that goods and services are valued based on how much labor and materials went into them. That’s not true of any good or service. And it’s certainly not true of art.

Is It Garbage or Is It Art?

In fact, two identical items can be valued in two completely different ways simply if the context and description of the objects changes.

According to the Daily Mail, a 2016 study suggests that people value ordinary objects differently depending on what they are told about the objects:

“According to the new research, being told that something is art automatically changes our response to it, both on a neural and a behavioural level.”

In this case, researchers in Rotterdam, the Netherlands, told subjects to rate how they valued objects in photographs. When told that those objects were “art” people valued them differently. 

In other words, the perceived value of objects could change without any additional labor being added to them, and without any physical changes at all. 

The value, it seems, is determined by the viewer, and we’re reminded of Carl Menger’s trailblazing observations about value: 

Value is a judgment economizing men make about the importance of the goods at their disposal for the maintenance of their lives and well-being. Hence value does not exist outside the consciousness of men.

One moment the viewer may think he’s looking at garbage, which he has likely learned is of little value. When told that said junk is really “art,” the entire situation changes. (Of course, we would need to see their preferences put into real action via economic exchange to know their preferences for sure.)

The change, as both Menger and Mises understood it, is brought about not by changes to the object itself, but by changes in context and in the subjective valuation of the viewer. 

A glass of water’s value in a parched desert is different from that of a glass next to a clean river. Indeed, a glass of water displayed in a museum as art — as in the case of Michael Craig-Martin’s “An Oak Tree” — is different from water found in both deserts and along rivers. Similarly, the value of a urinal displayed in a museum as art — as with Marcel Duchamp’s “Fountain” — is different from a physically identical urinal in a restroom. 

The Daily Mail article attempts to tie the researchers’ observations to the theories of Immanuel Kant on aesthetics. But, one need know nothing about aesthetics at all to see how this study simply shows us something about economic value: it is, to paraphrase Menger, found in the “consciousness of men.” 

And it is largely due to this fact that centrally planning an economy is so impossible. How can a central planner account for enormous changes in perceived value based on little more than being told something is art? 

Is a glass of water best utilized on a shelf in a museum, or is it best used for drinking? Maybe water is best used for hydroelectric power? Exactly how much should be used for each purpose? 

When discussing the problems of economic calculation in socialism, Mises observed that without the price system, there simply is no way to say that a specific amount of water is best used for drinking instead of being used for modern-art displays. Nor is the fact that people need water for drinking the key to determining the value of water. (See the diamond-water paradox.)

In a functioning market, consumers will engage in exchanges involving water in a way that reflects how much they prefer each use of water to other uses. At some moments, some consumers may prefer to drink it. At other moments, they may prefer to water plants with it. At still other moments, they may want to contemplate an art display composed of little more than a glass of water. The price of water at each time and place will reflect these activities. 

Without these price signals, attempting to create a central plan for how each ounce of water should be used is an impossible task.

Do we need to know why people change their views of object when told they are art? We do not. Indeed, were he here, Mises would perhaps be among the first to remind us that economics need not tell us the mental processes that lead to people preferring different uses for different objects, although we can certainly hazard a guess. It’s unlikely that the buyer of the taped banana bought it because he or she planned to eat it.

But even if we are wrong about the buyer’s motivation, the fact remains that the buyer valued the banana at $120,000 for some reason — and the value was subjective to the buyer.

Similarly, we can’t know for sure why each individual values water for drinking over “art water” or vice versa. And a government planner or regulator — it should be noted — can’t know this either.

As the global economy continues to decelerate into year-end, the International Air Transport Association (IATA) is out with a new report warning that airline profits are expected to fall much faster than thought in 2019, with slowing likely to continue through 2020. 

IATA placed most of the blame for the slowdown on the trade wars that have stymied global growth and led to investment uncertainties. 

Reuters noted that IATA slashed its 2019 net profit forecast to $25.9 billion, a 5.1% drop from 2018. 

IATA warned that the global airline industry could see a trough, but that was contingent on whether “trade optimism” continued. 

IATA slashed its 2019 revenue forecast to $838 billion from the $899 billion and said it could see an improvement to $872 billion for 2020. Still, again, the optimism was contingent on a trade resolution between the US and China. 

“Slowing economic growth, trade wars, geopolitical tensions, and social unrest, plus continuing uncertainty over Brexit, all came together to create a tougher than anticipated business environment for airlines. Yet the industry managed to achieve a decade in the black, as restructuring and cost-cutting continued to pay dividends,” said Alexandre de Juniac, IATA’s Director General and CEO.

De Juniac stated that he believes the global economy will bottom in the near term, and 2020 could be a brighter year. Though he might be mistaken, betting on an economic rebound based on “trade optimism” — considering structural declines in the global economy were present several quarters before the trade war started. With China’s credit impulse failing to turn up significantly, we don’t dispute the idea that stabilization could be seen in the global economy in 2020. Still, the bet of a massive rebound seems far fetched at the moment. 

“It appears that 2019 will be the bottom of the current economic cycle, and the forecast for 2020 is somewhat brighter. The big question for 2020 is how capacity will develop, particularly when, as expected, the grounded 737 MAX aircraft returned to service and delayed deliveries arrive,” said De Juniac.

IATA said airlines’ net profit per passenger dropped to $5.70 this year from $6.22 in 2018, with the industry’s overall net profit margin expected to slide to 3.1% this year from 3.4% in 2018.

The report noted that the sharpest contractions in the industry came from air freight, where a 3.3% decline in freight demand over the year was the most significant decline since the financial crisis. 

The OECD has recently warned that the global economy is rapidly decelerating at a pace not seen since the financial crisis as monetary policy via central banks becomes ineffective so far to spark growth. 

The world economy could slow by as much as 2.9% this year and next, the OECD said. It added that growth could turn up to 3% in 2021. 

The consolidation of the global airline industry is underway. A bankruptcy wave has been spreading across the industry at a pace never seen before.

Airline bankruptcies generally start to gain pace right before an economic downturn, and during a recession, which means the latest surge in bankruptcies, from companies like India’s Jet Airways, British travel group Thomas Cook and Avianca of Brazil, suggests 2020 could be a challenging year for the global economy. 

The International Bureau of Aviation (IBA) warned: “2019 has seen the fastest growth in airline failure in history,” with about 17 carriers filing for bankruptcy protection as of Sept.

The Reuters Global Airline Index peaked when the global economy started to slow in 4Q17.

The S&P500 Airlines Index shows resistance in the possible form of a double top.

Authored by John Whitehead via The Rutherford Institute,

“Of all tyrannies, a tyranny sincerely exercised for the good of its victim may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated, but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.”

– C.S. Lewis

“Taxman,” the only song written by George Harrison to open one of the Beatles’ albums (it featured on the band’s 1966 Revolver album), is a snarling, biting, angry commentary on government greed and how little control “we the taxpayers” have over our lives and our money.

If you drive a car, I’ll tax the street,

If you try to sit, I’ll tax your seat.

If you get too cold I’ll tax the heat,

If you take a walk, I’ll tax your feet.

Don’t ask me what I want it for

If you don’t want to pay some more

‘Cause I’m the taxman, yeah, I’m the taxman.

When the Beatles finally started earning enough money from their music to place them in the top tax bracket, they found the British government only-too-eager to levy a supertax on them of more than 90%.

Here in America, things aren’t much better.

More than two centuries after our ancestors went to war over their abused property rights, we’re once again being subjected to taxation without any real representation, all the while the government continues to do whatever it likes—levy taxes, rack up debt, spend outrageously and irresponsibly—with little concern for the plight of its citizens.

Because the government’s voracious appetite for money, power and domination has grown out of control, its agents have devised other means of funding its excesses and adding to its largesse through taxes disguised as fines, taxes disguised as fees, and taxes disguised as tolls, speeding tickets and penalties.

With every new tax, fine, fee and law adopted by our so-called representatives, the yoke around the neck of the average American seems to tighten just a little bit more.

Everywhere you go, everything you do, and every which way you look, we’re getting swindled, cheated, conned, robbed, raided, pickpocketed, mugged, deceived, defrauded, double-crossed and fleeced by governmental and corporate shareholders of the American police state out to make a profit at taxpayer expense.

We have no real say in how the government runs, or how our taxpayer funds are used, and no real property rights, but that doesn’t prevent the government from fleecing us at every turn.

Think about it.

Everything you own can be seized by the government under one pretext or another (civil asset forfeiture, unpaid taxes, eminent domain, so-called public interest, etc.).

That house you live in, the car you drive, the small (or not so small) acreage of land that has been passed down through your family or that you scrimped and saved to acquire, whatever money you manage to keep in your bank account after the government and its cronies have taken their first and second and third cut…none of it is safe from the government’s greedy grasp.

And then you have all of those high-handed, outrageously manipulative government programs sold to the public as a means of forcing compliance and discouraging unhealthy behavior by way of taxes, fines, fees and programs for the “better” good.

Surveillance cameras, government agents listening in on your phone calls, reading your emails and text messages and monitoring your spending, mandatory health care, sugary soda bans, anti-bullying laws, zero tolerance policies, political correctness: these are all outward signs of a government—i.e., a societal elite—that believes it knows what is best for you and can do a better job of managing your life than you can.

This is tyranny disguised as “the better good.”

Indeed, this is the tyranny of the Nanny State: marketed as benevolence, enforced with armed police, and inflicted on all those who do not belong to the elite ruling class that gets to call the shots.

So-called “sin taxes” have become a particularly popular technique used by the Nanny State to supposedly discourage the populace from engaging in activities that don’t align with the government’s priorities (consuming sugary drinks, smoking, drinking, etc.).

Personally, I don’t think the government really cares how its citizens live or die: they just want more of the taxpayers’ money, and they figure they can rake it in by using sin taxes to appeal to that self-righteous segment of every society that sees nothing wrong with imposing their belief systems on the rest of the populace.

Examples abound.

For instance, a growing number of cities and states (Washington DC, Philadelphia, San Francisco, and Seattle, among others) have adopted or considered imposing taxes on sugary drinks, as much as a dollar more for a two-liter bottle of soda, supposedly in the hopes of forcing lower-income communities that struggle with obesity and diabetes to make healthier dietary choices by making the drinks more expensive.

The faulty logic behind these sin taxes seems to be that if you make it cost-prohibitive for poor people to pursue unhealthy lifestyle choices, they’ll stop doing it.

Except it doesn’t really work out that way.

Study after study shows that while sales of sugary drinks decreased sharply in cities with a soda tax, sales figures spiked at stores located outside the city. In other words, people just shopped elsewhere.

You won’t convince former New York mayor Michael Bloomberg of this, however. Bloomberg, a 2020 Democratic presidential hopeful, believes the government needs even greater tax powers in order to force Americans—especially poor people—to make smarter lifestyle choices. “When we raise taxes on the poor, it’s good because then the poor will live longer because they can’t afford as many things that kill them,” stated Bloomberg.

Folks, this right here is everything that is wrong with the power-hungry jackals that aspire to run the government today: by hook or by crook, they’re working hard to frogmarch the citizenry into complying with their dictates, because they believe that only they know what’s best for you.

It’s this same oppressive mindset that’s been pushing social credit systems (here and in China) that reward behavior deemed “acceptable” and punish behavior the government and its corporate allies find offensive, illegal or inappropriate.

It’s the same mindset that supports the government’s efforts to compile a growing list—shared with fusion centers and law enforcement agencies—of ideologies, behaviors, affiliations and other characteristics that could flag someone as suspicious and result in their being labeled potential enemies of the state.

It’s the same mindset that has government agents spinning a sticky spider-web of threat assessments, behavioral sensing warnings, flagged “words,” and “suspicious” activity reports using AI eyes and ears, social media, behavior sensing software, and citizen spies to identify potential threats.

It’s the mindset behind the red flag gun laws, growing in popularity as a legislative means by which to seize guns from individuals viewed as a danger to themselves or others. “We need to stop dangerous people before they act”: that’s the rationale behind the NRA’s support of these red flag laws, and at first glance, it appears to be perfectly reasonable to want to disarm individuals who are clearly suicidal and/or pose an “immediate danger” to themselves or others.

And it’s the same mindset that allows squadrons of AI censors to shadowban individuals for expressing their unfiltered, politically incorrect opinions and beliefs on social media: all in an effort to keep them in line.

Rounding out this dystopian campaign to impose a chokehold on the populace is a technology sector that has been colluding with the government to create a Big Brother that is all-knowing, all-seeing and inescapable. It’s not just the drones, fusion centers, license plate readers, stingray devices and the NSA that you have to worry about. You’re also being tracked by the black boxes in your cars, your cell phone, smart devices in your home, grocery loyalty cards, social media accounts, credit cards, streaming services such as Netflix, Amazon, and e-book reader accounts.

Clearly, those helping to erect the prison walls that now enclose us purportedly for our own good are not people that understand the concept of freedom or individual rights.

Unfortunately, this is what happens when you empower the government and its various agencies, agents and corporate partners to act in loco parentis for an entire nation.

All of the incremental bricks that have been laid over the years as part of the police state’s prison wall—the invasive surveillance, the extremism reports, the civil unrest, the protests, the shootings, the bombings, the military exercises and active shooter drills, the color-coded alerts and threat assessments, the fusion centers, the transformation of local police into extensions of the military, the distribution of military equipment and weapons to local police forces, the government databases containing the names of dissidents and potential troublemakers—have helped to acclimate us slowly to a life in prison.

Funded with our taxpayer dollars and carried out in broad daylight without so much as a general outcry from the citizenry, these prison walls have been sold to us as a means of keeping us safe  behind bars and out of reach of danger.

Having allowed our fears to be codified and our actions criminalized, we now find ourselves in a strange new world where just about everything we do is criminalized.

Even so, how did we go from enacting laws to make our world safer to being saddled with a government that polices our social decisions? As with most of the problems plaguing us in the American police state, we are the source of our greatest problems.

As journalist Gracy Olmstead recognizes, the problem arose when we looked “first to the State to care for the situation, rather than exercising any sort of personal involvement… These actions reveal a more passive, isolated attitude. But here, again, we see the result of breakdown in modern American community—without a sense of communal closeness or responsibility, we act as bystanders rather than as stewards.”

Olmstead continues:

[Communitarian libertarian Robert] Nisbet predicted that, in a society without strong private associations, the State would take their place — assuming the role of the church, the schoolroom, and the family, asserting a “primacy of claim” upon our children. “It is hard to overlook the fact,” he wrote, “that the State and politics have become suffused by qualities formerly inherent only in the family or the church.” In this world, the term “nanny state” takes on a very literal meaning.

Unfortunately, even in the face of outright corruption and incompetency on the part of our elected officials, Americans in general remain relatively gullible, eager to be persuaded that the government can solve the problems that plague us, whether it be terrorism, an economic depression, an environmental disaster, how or what we eat or even keeping our children safe.

We have relinquished control over the most intimate aspects of our lives to government officials who, while they may occupy seats of authority, are neither wiser, smarter, more in tune with our needs, more knowledgeable about our problems, nor more aware of what is really in our best interests.

Yet having bought into the false notion that the government does indeed know what’s best for us and can ensure not only our safety but our happiness and will take care of us from cradle to grave—that is, from daycare centers to nursing homes—we have in actuality allowed ourselves to be bridled and turned into slaves at the bidding of a government that cares little for our freedoms or our happiness.

The lesson is this: once a free people allows the government inroads into their freedoms or uses those same freedoms as bargaining chips for security, it quickly becomes a slippery slope to outright tyranny.

Nor does it seem to matter whether it’s a Democrat or a Republican at the helm anymore, because the bureaucratic mindset on both sides of the aisle now seems to embody the same philosophy of authoritarian government, whose priorities are to remain in control and in power. 

Modern government in general—ranging from the militarized police in SWAT team gear crashing through our doors to the rash of innocent citizens being gunned down by police to the invasive spying on everything we do—is acting illogically, even psychopathically.

When our own government no longer sees us as human beings with dignity and worth but as things to be manipulated, maneuvered, mined for data, manhandled by police, conned into believing it has our best interests at heart, mistreated, and then jails us if we dare step out of line, punishes us unjustly without remorse, and refuses to own up to its failings, we are no longer operating under a constitutional republic.

Instead, what we are experiencing is a pathocracy: tyranny at the hands of a psychopathic government, which “operates against the interests of its own people except for favoring certain groups.”

So where does that leave us?

Having allowed the government to expand and exceed our reach, we find ourselves on the losing end of a tug-of-war over control of our country and our lives. And for as long as we let them, government officials will continue to trample on our rights, always justifying their actions as being for the good of the people.

Yet the government can only go as far as “we the people” allow.

Therein lies the problem: we have suspended our moral consciences in favor of the police state.

The choice before us is clear, and it is a moral choice. It is the choice between tyranny and freedom, dictatorship and autonomy, peaceful slavery and dangerous freedom, and manufactured pipedreams of what America used to be versus the gritty reality of what she is today.

Most of all, perhaps, the choice before us is that of being a child or a parent, of obeying blindly, never questioning, and marching in lockstep with the police state or growing up, challenging injustice, standing up to tyranny, and owning up to our responsibilities as citizens, no matter how painful, risky or uncomfortable.

As author Erich Fromm warned in his book On Disobedience, “At this point in history, the capacity to doubt, to criticize and to disobey may be all that stands between a future for mankind and the end of civilization.”

As I make clear in my book Battlefield America: The War on the American People, if you have no choice, no voice, and no real options when it comes to the government’s claims on your life, your movements, your property and your money, you’re not free.

Personally, I’d rather die a free man having lived according to my own dictates (within the bounds of reasonable laws) than live as a slave chained up in a government prison.

The unprecedented expansion of cannabis across North America took the investment world by storm, as investors raced to cash in on the “green rush”.

Yet, as Visual Capitalist’s Imam Ghosh details below, even as changing regulations unlock new opportunities, it seems as though the cannabis stock bubble has already burst – at least temporarily.

Today’s visualization dives into the roller coaster of cannabis company stock valuations over the past few years, and which companies remain standing in this hazy market.

A Wild Ride for Cannabis Stocks

The North American Marijuana Index tracks the equally-weighted stocks of leading companies operating in the legal cannabis industry in U.S. and Canada. Companies listed on the index must have at least 50% of their business strategy focused on the legal industry, including ancillary operations that support companies and consumers.

At the tail-end of 2017, the promise of upcoming legalization in two immense markets—California state and Canada—had investors all fired up. The index’s low (105.31 on June 27th, 2017) shot up almost three times to 358.93 by January 8th, 2018.

Things took a sharp turn in the second quarter of 2019, as the expectations for cannabis company stocks encountered a harsh reality post-legalization.

What are the reasons behind such a nosedive? Could the cannabis industry still make a comeback in 2020? We look at some opposing perspectives to answer these questions.

So Much For the Green Rush

The cannabis industry is experiencing significant challenges. In the U.S., legal cannabis faces high taxes—come the new year, consumers in California will see an 80% mark-up on their cannabis at checkout, up from 60%.

North of the border, federal legalization led to immense consumer demand for Canadian cannabis—but supply can’t keep up. To make matters worse, retail stores are slow to roll out, which means Canada is feeling the crunch.

Steep prices, and difficulty purchasing products post-legalization, allow the black market to thrive. It’s clear many cannabis companies have taken a big hit as a result.

According to the Marijuana Index, here are the 10 biggest companies in the space now:

Only one company outside of North America—and even the cannabis sector—lands on this list. The UK-based Big Pharma company GW Pharmaceuticals is steadily growing its industry presence, as it currently holds 41 cannabis patents in the U.S. and Canada combined.

Still, even these big players have seen their valuations drop since the industry was at its peak. Unless the aforementioned issues are ironed out, investors may continue to pull their dollars from the cannabis industry.

A psychological shift has taken place from everyone wanting to own (cannabis) to everyone involved now feeling burned. I think many investors are now over it.

– Chris Kerlow, portfolio manager at Richardson GMP

On the flip side, some investors aren’t calling it quits quite yet.

Long-Term Prospects Are High

While cannabis seems plagued with issues, some argue that these are simply short-term growing pains and will be solved as the industry matures.

Particularly in the U.S., experts predict that cannabis sales could reach immense heights in the next decade:

1. $30 billion by 2025 (New Frontier Data)

2. $50 billion by 2029 (Jefferies Group LLC)

3. $75 billion by 2030 (Cowen Inc.)

4. $100 billion by 2029 (Stifel Financial Corp)

Compared to a benchmark of $13.6 billion today, these numbers may seem ambitious—but they’re backed by major industry trends. 2020 could well be the year the market stabilizes, as consumers explore an array of retail options and vote with their wallets.

What’s more, key players in consumer industries—from alcohol and tobacco to beauty and fitness—are making big bets in cannabis and CBD-infused products. A higher number of partnerships could spark the next uptick for the industry’s potential.

The marijuana business is not for the faint of heart. But this is a big long-term game.

– Mark Zekulin, CEO of Canopy Growth Corp.

An Eye on What’s to Come

It’s clear there are differing viewpoints on the future of cannabis companies and their respective investors. As this snapshot of cannabis stocks unfolds and transforms in 2020 and beyond, could companies potentially buck the current trend and bounce back? Or will stocks continue to go up in smoke?

Authored by Paul Joseph Watson via Summit News,

The parents of a 15-year-old Finnish girl lost custody of their daughter after refusing to allow her to undergo a sex change.

According to a report by Svenska Yle, the parents prevented the girl from starting hormone treatments to “correct her gender.”

The names of the individuals involved were changed and the EU country in which the events happened were removed from the article to protect the identity of the family.

However, what we do know is that two summers ago after the family moved abroad, their daughter Nea met a new friend group.

She went from acting and dressing very feminine to dressing like a boy and claiming she was born into the wrong body.

Nea then demanded that her parents Kari and Niina allow her to begin hormone therapy and eventually breast removal surgery.

The request was denied and Nea became increasingly angry before one of her friends contacted the police and filed a criminal report against the parents.

Documents show that Nea’s friends were encouraging her to “break contact with her parents” from the beginning.

Nea was taken by authorities and spent a few months in an orphanage before being allowed to return home to her parents, who then planned to move back to Finland.

Nea later returned to the police station with a local transgender activist and a decision to allow her to begin hormone treatment was made without the parents even being consulted.

Nea’s parents eventually gave up on trying to regain full custody of her and now say that she hardly speaks to them.

Her parents watched a video of the girl talking into a camera and saying, “This is how I sound six months after I started taking testosterone.”

She has apparently developed a deeper voice, put on weight and grown more hair, changes that are “irreversible.”

“Without over-dramatizing, you can say that as the voice, appearance and personality change, it is as if they had killed our child,” said the girl’s mother.

As we previously highlighted, the number of children wanting to undergo sex change treatment has exploded since the media and the culture began hyping transgender identity politics.

Earlier this year, it was revealed that five people working at Britain’s only NHS transgender clinic had quit after children as young as three were being through unnecessary gender reassignment treatment.

“Referrals to the clinic risen in recent years, with 94 in 2010, rising to 2,519 by last year, with the youngest patient aged just three,” reported the Daily Mail.

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While Pope Francis has long preached about the ills of economic inequality and sins of capitalism, the Catholic church has been robbing Peter’s Pence to the tune of over $50 million annually to plug holes in their out-of-control budget – after paying over $3 billion in pedophile priest settlements around the world.

According to the Wall Street Journal, most of the roughly $55 million the church takes in annually goes towards “plugging the hole in the Vatican’s own administrative budget, while as little as 10% is spent on charitable works.”

The little-publicized breakdown of how the Holy See spends Peter’s Pence, known only among senior Vatican officials, is raising concern among some Catholic Church leaders that the faithful are being misled about the use of their donations, which could further hurt the credibility of the Vatican’s financial management under Pope Francis. –Wall Street Journal

Of note, Peter’s Pence is an annual collection event held every June, billed as a fundraising event for the needy. It is described as a “gesture of charity, a way of supporting the activity of the Pope and the universal Church in favoring especially the poorest and Churches in difficulty. It is also an invitation to pay attention and be near to new forms of poverty and fragility.”

A section of the website dedicated to “works realized” describes individual grants, such as €100,000 in relief aid to survivors of last month’s earthquake in Albania or €150,000 for those affected by cyclone Idai in southeastern Africa in March. -WSJ

“The purpose of the Peter’s Pence Collection is to provide the Holy Father with the financial means to respond to those who are suffering as a result of war, oppression, natural disaster and disease,” according to the website of the US Conference of Catholic Bishops.

Except that for at least the past five years, just 10% of the money collected (over $55 million in 2018) – actually goes towards the types of charitable causes advertised for the collection, according to ‘people familiar with the matter,’ who added that approximately 2/3 of the funds have been used to help plug the budget shortfall at the Holy See – which consists of the central administration of the Catholic Church as well as the global papal diplomatic network.

Last year, the budget deficit reached around $78 million on total spending of around $334 million.

The ‘reallocation’ of charitable donations comes as the Holy See is facing a ballooning budget deficit which the pope has warned cardinals could have a “grave impact” on the economic future of the church. Francis was elected in 2013 with a mandate to overhaul the Vatican’s finances following allegations of corruption, waste and incompetence, according to the report.

News of the Vatican’s financial mismanagement couldn’t come at a worse time – as the church grapples with a scandal over dodgy London real estate investments which led to the dismissal of its chief financial regulator, René Brülhart, in November. First revealed in October, the latest scandal centered on the Holy See’s attempts to secure an €100 million ($110 million) loan to acquire luxury property in London’s Chelsea neighborhood.

Church law allows the pope to use donations as he sees fit, including to support his administration. According to the collection’s website, “Peter’s Pence also contributes to the support of the Apostolic See and the activities of the Holy See,” emphasizing activities that help “populations, individuals and families in precarious conditions.”

And now we find out, it contributes a lot.

The assets of Peter’s Pence now total about €600 million, down from about €700 million early in the current pontificate, largely on account of unsuccessful investments, said the people familiar with the funds’ use.

The use of Peter’s Pence donations mostly to plug the budget deficit is particularly sensitive for Pope Francis, who began his pontificate by calling for a “poor church for the poor,” and has continually emphasized the church’s mission to care for and advocate on behalf of the most vulnerable. –Wall Street Journal

Last month, Pope Francis said: “When the money from Peter’s Pence arrives, what do I do? I put it in a drawer? No. This is bad administration. I try to make an investment and when I need to give, when there is a need, throughout the year, the money is taken and that capital does not devalue, it stays the same or it increases a bit.”

He forgot to include that he uses it to pad the budget.

Authored by Ted Dabrowski and John Klingner via Wirepoints.org,

Moody’s says 23 of the nation’s 25 largest cities are ready for a recession. Two aren’t. They are Detroit and Chicago. Both cities are junk-rated by Moody’s.

Moody’s analyzed four key factors to determine which cities are ready for a recession: fiscal volatility, reserve coverage, financial flexibility and pension risk. The top cities in preparedness were Boston, Charlotte, Denver, San Antonio, San Francisco and Seattle. They scored “stronger” in Moody’s recession preparedness measure, while Chicago and Detroit scored “weaker.” 

Moody’s message should be particularly worrisome given that the city’s firefighter pensions are just 18 percent funded, while the police and municipal funds are less than 25 percent funded. They are among the worst-funded pension plans in the country.

The rating’s agency highlighted Chicago’s poor condition in its report, saying: 

“…both direct city obligations and those of overlapping units of government – continue to weigh heavily on its credit profile. In this scenario analysis, Chicago’s extraordinarily high fixed costs, coupled with its escalating pension liabilities, make it one of the cities least prepared for a near-term recession.”

At Wirepoints, we’ve highlighted those overlapping debts in our recent report, “Wealthy” Chicago households on the hook for up to $2 million in debt each under progressive approach to pension crisis and in an accompanying video.

Chicagoans’ overlapping state and local retirement debts total over $150 billion based on Moody’s pension calculations. That’s the equivalent of a $400,000 “hidden mortgage” on the Chicago households with the means to pay down that debt over time – those earning more than $75,000 annually.

But if the city and state want to take a “progressive approach” to paying down that $150 billion over the next two to three decades – by targeting only those making over $200,000 annually – then the hidden mortgage on those households totals nearly $2 million.

Moody’s added in its report, “Houston, Chicago and Fort Worth stand out as negative outliers in terms of fixed costs, with Chicago and Fort Worth particularly burdened by rising pension contributions.”

Which makes it all the more amazing that neither Gov. J.B. Pritzker nor Chicago Mayor Lori Lightfoot will endorse an amendment to the Illinois Constitution’s pension protection clause.

They shouldn’t wait until a recession comes. By then, it might be too late to save Chicago’s city worker pensions. The city’s population is already shrinking and as that hidden mortgage increases, expect more Chicagoans to flee.

Read more about Chicago’s fiscal crisis:

• Expect property tax hikes to hit Chicago’s stagnant home prices hard

• Lightfoot’s budget won’t stop Chicago’s downward spiral

• Why Chicago’s Lightfoot should push for a pension amendment, not tax hikes

• Chicago Public Schools offers CTU record contract even as enrollment shrinks by another 6,000 students

• US stock markets up 200%, yet Chicago pension hole deepens 140%

 

It wasn’t so long ago that Jeffrey Gundlach, founder of DoubleLine Capital, said he would never again appear on CNBC, after a particularly contentious interview last year that led to some brief drama between him and Jim Cramer.

But on Wednesday afternoon, Gundlach invited “the Judge” – CNBC’s Scott Wapner – to his company’s offices for an hour-long interview where Gundlach explained his relatively recent turn toward bullishness on the US economy and equity market – even though he still has all the long-term gripes about the Fed and monetary policy that he’s shared with business journalists for years.

Gundlach started off by saying that “one of the most important statements that has gotten less play than it should is Jay Powell said in late October that we would have to see a ‘significant’ rise in inflation that is persistent to even consider raising interest rates to fight inflation.”

To Gundlach, it’s evidence that the Fed wants to keep benchmark rates below the rate of inflation to keep negative real rates in effect for the US economy. He also claimed that the Fed “knows we have a debt problem” and probably wants to push the day of reckoning as far into the future as possible.

“So the Fed wants inflation to be higher, actually, and they’ve contextualized this by saying ‘well, 2% was our target for many years and we fell short, so now we need to fill the gap’, which makes no sense to me whatsoever. I think it’s cover for wanting interest rates to basically be below the inflation rate, which seems to be the game plan for central banks in developed countries around the world.”

“So now we have the 10-year Treasury yield is below the inflation rate and CPI is up at 2%, core CPI is up higher than 2%, and yet the interest rates are being kept below that. The Fed knows that we have a debt problem in the United States and that the way to push the day of reckoning out into the future is to keep interest rates below the inflation rate.”

Overall, Gundlach’s comments about Jay Powell were largely negative, though he appears to disagree with President Trump about the need for rate cuts last year.

“Its difficult to give him a lot of credibility...instead of raising rates, we’ve cut rates.”

But Powell has one redeeming quality.

“One reason I’d give him a C- and not a D is he has said that to fight the next recession, negative interest rates won’t happen in the United States.”

Looking ahead, whenever the next recession arrives, the Fed will be ill-equipped to defend the economy from its ill-effects. And markets, as the round-trip we’ve taken over the past year or so shows, are in sync with the central bank.

“Now the market is completely in sync with the Fed. What Jay Powell has done is he raised rates four times in 2018 and cut rates three times in 2019 we’ve been on a wild ride,” Gundlach said.

Convincing the Fed to hike rates at this point would be extremely difficult, Gundlach said. Even if inflation made a comeback, “it will need to be pretty remarkable,” he said.

“The Federal Reserve has turned into a body that’s essentially following the market. And now the bond market is saying there’s no purpose in raising rates, there’s no purpose in cutting rates, we’ll probably be unchanged with interest rates until the third quarter of next year.”

Moving on to a discussion of the labor market, Gundlach offered an insightful explanation for why the economy ‘feels’ better today than it did under Obama.

“People keep talking about how good the labor market is and, yes, it’s good – for sure. But the jobs growth under Trump has actually been lower than Obama…what’s better is people aren’t getting laid off. Weekly unemployment claims are really low…they’re down about 30% from the last three years of Obama. That, I think, is why the economy is perceived to be better on the jobs market because the labor market participation has increased.”

Whatever happens in the coming months, Gundlach is convinced that there won’t be a recession before the end of 2020. He insisted that there haven’t been enough ‘leading indicators’ going off.

“I think there’s unlikely to be a recession…the odds are there won’t be a recession before the end of 2020.”

Still, people are definitely spooked, and one wouldn’t be wrong to call last summer a period of paranoia for the Street.

“In the summer, there were white papers circulating on Wall Street calling on the Fed to make a 50 basis point emergency cut thanks to some of the global manufacturing data out there.”

As for Trump’s ‘Phase One’ trade deal, Gundlach believes it’s mostly a sham, concocted to give off the illusion that progress is being made with China, even though there’s no evidence of that. Going even further, Gundlach said the press conference where Trump and Liu He unveiled he ‘agreement’ was perhaps the low point in Trump’s presidency.

“I don’t think there will be a substantive deal before the election, I’ve thought that all year,” Gundlach said.

Finally, Gundlach offered some thoughts about the political situation. He said his ‘base case’ for the 2020 election is a Trump victory, though he also said the market is under-pricing the risk of Elizabeth Warren, Bernie Sanders and the impact of the resurgent left.

He likes Pete Buttigieg, but fears he’s “way too young” to be president, especially after only ever having run the city of South Bend.

Soon, CNBC asked Gundlach to explain the blowup in repo markets that began in September came about, and the Fed’s role in causing the panic in money markets.

Gundlach said the fact that there weren’t buyers for o/n money is a sign that the Fed is keeping interest rates at artificially manipulated levels.

“What’s interesting about that is the overnight repo market had been struggling to stay in lines with the Fed funds rate but that day Sept. 17 it just blew out and the Fed had to panic and come to the rescue and add reserves to the system…that to me is a worrisome development because it suggests that the market doesn’t ratify the Fed funds rate. The Fed funds rate is at a level that really isn’t clearing the market…that corroborates my viewpoint, which I think is a minority opinion.”

“It’s really telling that you can’t find buyers for overnight money in excess of a 2% interest rate and yet the 10-year Treasury is below 2% with inflation at 2% and higher. It tells you that the inflation levels being maintained by the Fed aren’t market levels…they’re manipulated levels.”

Watch the full interview below: