Tag: news

Ten years after the collapse of Lehman Brothers, banks are once again taking bets on the same type of loans that nearly collapsed the economy amid a flurry of emergency bailouts and unprecedented consolidations. 

Bank of America has backed a $10 billion program from Boston-based brokerage Neighborhood Assistance Corporation of America (NACA), to offer zero-down mortgages to low-income borrowers with poor credit scores, according to CNBC. NACA has been conducting four-day events in cities across America to educate subprime borrowers and then lend them money – with a 90% approval rate and interest rates around 4.5%. 

“It’s total upside,” said AJ Barkley, senior vice president of consumer lending at BofA. “We have seen significant wins in this partnership. Just to be clear, when we get those loans with all the heavy lifting here, we’re over a 90 percent approval, meaning 90 percent of the people who go through this program that we actually underwrite the loans.”

Borrowers can have low credit scores, but have to go through an education session about the program and submit all necessary documents, from income statements to phone bills. Then they go through counseling to understand their monthly budget and ensure they can afford the mortgage payment. The loans are 15- or 30-year fixed with interest rates below market, about 4.5 percent. –CNBC

“That’s what’s going to help people who’ve been locked out of homeownership to really become homeowners and to build wealth,” said Bruce Marks, CEO of NACA. “It’s a national disgrace about the low amount of homeownership, mortgages for low- and moderate-income people and for minority homebuyers.” 

To participate in the NACA lending scheme, borrowers can  have credit scores – but will need to go through the education course and submit all necessary documents, “from income statements to phone bills,” reports CNBC. Then they undergo budget counseling to ensure they can afford the mortgage. 

Following the financial crisis, lenders locked up, requiring much higher credit scores and at least 3 percent down payments. The subprime mortgage crisis was precipitated by lenders offering no-down payment loans with short-term “teaser” rates as low as zero. They asked for no documentation, and sometimes tacked interest onto later years of the loan, so-called, negative amortization loans. The NACA loans are all fixed rate with full documentation. –CNBC

The NACA / BofA subprime roadshow is nothing new to Marks, who held mass mortgage modification events across America during the financial crisis in order to help financially strained borrowers try to salvage their real estate. 

Critics argue that without a down payment, borrowers can simply toss a financial grenade at the bank and walk away from their obligations – which is exactly what happened a decade ago. Marks argues back that the only people walking away from mortgages are real estate investors who “look to homeownership as an investment, just like buying stocks and bonds,” and that people participating in his program must actually live in the homes. 

Lining up around the block

So far there have been over 10,000 potential borrowers who have attended NACA events in cities such as North Carolina, Atlanta and Charlotte, according to Marks, who has more events planned. NACA receives a $3,000 commission per loan issued. 

While the Veterans Administration offers a similar no-down payment loan to veterans and their families, there aren’t many other programs available to the general public like the one NACA offers. 

Across the pond

While subprime loans are once again becoming all the rage in the United States, UK mortgage lender, Belmont Green, has closed on over $1.3 billion of mortgages to investors with high risk appetites – and there’s a Lehman connection. 

Those linked to this effort have included former bosses from failed bank Northern Rock, Adam Applegarth, and Lesley Sewell. Guy Batchelor, former senior vice president at Lehman’s european mortgage division, is also now director of sales and marketing for Vida Homeloans, the trading name of Belmont. The lender is controlled by US private equity firm Pine Brook. –Telegraph

Vida bills itself as “the modern mortgage lender” for “customers who may not fit the criteria currently demanded by high street banks.” 

What could possibly go wrong?

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Authored by Chris Wood via Grizzle.com,

There have recently been some dramatic moves in America’s bond market where the US Treasury bond market broke through a 37-year trend line on the upside in yield terms when the 10-year Treasury bond yield rose above the 3% level (see following chart). It is now 3.16%.

US 10-YEAR TREASURY BOND YIELD (LOG SCALE)

Source: Bloomberg

The ostensible trigger for the bond sell-off was a strong non-manufacturing ISM number which rose to the highest level since 1997.

But whatever the precise catalyst, the bond sell-off is potentially of enormous significance since the breaking of a trend line of declining Treasury bond yields in place since 1981 is, on the face of it, marking the end of an extremely benign era for financial assets.

THE STEEPENING US YIELD CURVE POINTS TO FED RATE HIKES

From a more near-term perspective, the renewed steepening of the US yield curve also raises the potential for a greater number of Fed rate hikes than currently envisaged by the markets. The spread between the 10-year and 2-year Treasury bond yields has risen from a recent low of 19bp reached in late August to 31bp (see following chart). That, in turn, raises the probability of more casualties in Asia and emerging markets from the current Fed tightening cycle. Oil’s continuing strength also means that, in many respects, Asian economies are more vulnerable as oil consumers than many other parts of the emerging world.

US YIELD CURVE (10Y-2Y TREASURY BOND YIELD SPREAD)

Source: Bloomberg

DECLINING MONEY SUPPLY

The impact of this US monetary tightening, which combines both rising interest rates and ongoing Federal Reserve balance sheet contraction, can be seen clearly in declining money-supply growth in America.

US M2 growth has slowed from 7.5%YoY in October 2016 to 4%YoY in September (see following chart). Still, there is considerable evidence that the squeeze on US-dollar funding has been much greater offshore than in America because of another bullish consequence of tax reform for American corporates and indeed for the American economy and stock market this year. That is the increased incentive provided by the Trump administration’s tax reform to repatriate the estimated US$3 trillion held by US corporates offshore.

US M2 GROWTH

Source: Federal Reserve

There is no precise way of measuring this inflow, but the data suggests significant repatriation has taken place this year. The latest American balance of payments data provides some interesting insight on this point. It shows that US corporates’ direct investment dividend income receipts, which measure earnings of foreign affiliates repatriated to the parent company in America in the form of dividends, surged from US$82 billion in 2H17 to US$464 billion in 1H18.

While reinvested earnings in foreign affiliates declined from US$167 billion in 2H17 to a negative US$210 billion in 1H18, meaning repatriation of dividends has exceeded current-period earnings (see following chart). To make the repatriation point crystal clear, the Bureau of Economic Analysis stated in its balance of payments announcement in September:

The large magnitudes for dividends and withdrawals and the negative reinvested earnings reflect the repatriation of accumulated earnings by foreign affiliates of US multinational enterprises to their parent companies in the United States in response to the 2017 Tax Cuts and Jobs Act (TCJA).

US DIRECT INVESTMENT INCOME RECEIPTS: DIVIDENDS AND REINVESTED EARNINGS

Source: US Bureau of Economic Analysis – International Transactions Accounts

REPATRIATION AND SHARE BUYBACKS

The same repatriation effect is also suggested by the decline in Treasury bond holdings in low-tax jurisdictions such as Ireland, Switzerland, the Netherlands, Bermuda, and Bahamas. Thus, Treasury securities holdings in these jurisdictions have declined by US$52 billion in the first seven months of this year, according to the Treasury Department’s Treasury International Capital (TIC) System data (see following chart).

Repatriation is also suggested by the continuing surge in American corporates’ share buybacks which some Wall Street pundits are now suggesting could reach as much as US$1 trillion this year. S&P500 companies’ actual share buybacks surged by 59%YoY to a record US$190.6 billion in 2Q18, following US$189 billion of buybacks in 1Q18 (see following chart).

HOLDINGS OF US TREASURY SECURITIES BY LOW TAX JURISDICTIONS

Note: Include Ireland, Switzerland, the Netherlands, Bermuda and Bahamas. Source: US Treasury – Treasury International Capital (TIC) System

S&P500 SHARE BUYBACKS

Source: S&P Dow Jones Indices

So far the market reaction to this US monetary tightening cycle has been classic in the sense that the fringe areas have succumbed first, starting with cryptocurrencies and then moving into emerging markets and Asia. The obvious risk at this juncture, with the Fed still committed to tightening and with money markets still assuming 75bp more of rate hikes in this cycle, is that the American stock market looks increasingly like the “last man standing”.

And indeed it has now begun to correct, with the S&P500 declining by 7.2% from its peak as of 11 October (see following chart). Certainly American equity valuations are the highest among major regions in the world, though forward multiples have reduced from last year as a result of the tax-driven earnings surge. The S&P500 12-month forward PE has declined from a peak of 18.8x in January to 16x (see following chart).

S&P500

Source: Bloomberg

S&P500 12-MONTH FORWARD PE

Source: Datastream, IBES

THE BOTTOM LINE FOR THE US ECONOMY

The issue now remains whether US cyclical momentum, in terms of both earnings and GDP growth, is peaking. The base case here remains that cyclical momentum has probably peaked, but that America is more likely to slow back to the trend real GDP growth rate of 2.2% prevailing since 2009 prior to the tax cut than enter an outright recession. And that any such renewed slowdown is likely to lead to a stepped-up effort by Donald Trump to implement his infrastructure agenda in the second half of his administration; though the practical ability to do that will be influenced significantly by the outcome of the November mid-term elections.

Meanwhile, America is unlikely to face an outright recession, as opposed to a slowdown to trend growth, without the negative catalyst of a financial shock. And this financial shock will need to be reflected in a surge in credit spreads. In this respect, anyone investing in equities by tracking money supply growth will have sold too early, since US money supply measures have been trending down since 4Q16. Rising credit spreads, however, are the signal that monetary tightening is hitting the real world and that it has become time to sell. And the more the Fed tightens, the bigger the risk of such a shock.

This raises the question of where the private-sector borrowing has been in this cycle. The answer at the macro level is that the US corporate sector has increased debt while the household sector has reduced it, relative to GDP. Thus, nonfinancial corporate debt as a percentage of GDP has risen from a low of 39.7% at the end of 2010 to a record 46.2% in 2Q18, while the household debt to GDP ratio has declined from a peak of 98.4% in 1Q08 to 75.4% in 2Q18, the lowest level since 2Q02 (see following chart).

US NON-FINANCIAL CORPORATE DEBT AND HOUSEHOLD DEBT AS % OF GDP

Source: CLSA, Bureau of Economic Analysis, Federal Reserve

It is also the case that much of this corporate debt has been extended in this cycle outside the highly regulated banking system, as can be seen in the continuing relatively sluggish growth in American banks’ commercial and industrial (C&I) loans.

C&I loan growth was 5.2%YoY in early October. Still, that does not mean that there has been no borrowing. There are estimates of around US$3 trillion of speculative-grade floating rate corporate debt in America of which over US$1 trillion are so-called “leveraged loans”, many of them “covenant-lite” loans.

Many of these loans have been pooled together in tranches and bought by so-called credit funds, which are the fixed-income appendage of the booming private-equity fund industry.

US BANKS’ COMMERCIAL AND INDUSTRIAL (C&I) LOAN GROWTH

Source: Federal Reserve

A problem in the above area or another one is the sort of shock that can trigger a risk-off move in markets and a Fed U-turn, in terms of monetary policy. This is because surging credit spreads raise the risk of an asset deflation cycle since they indicate forced deleveraging. And it is a decline in asset prices, not conventional “overheating” concerns, which is the biggest risk to the American economy and indeed the world economy, given that asset inflation has been the prime driver of growth in the developed world since the global financial crisis 10 years ago on the back of such a long period of ultra-easy monetary policy.

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The main takeaway from the IMF and World Bank Group annual meeting in Bali, which hosted financial ministers and central bank governors from around the world this weekend, was that global trade tensions were having a profound effect on global growth and need to be solved.

Most of the participants – save for China and Mexico – seemed united and in agreement that trade talks have to continue. Bank of Japan Governor Haruhiko Kuroda stated that it was essential to have dialogue on trade while at the same time, the president of Brazil’s central bank, Ilan Goldfajn, noted that the trade wars were one of the biggest threats to emerging markets. Indonesia’s president Jokowi Widodo said starkly that “winter is coming” for the global economy if there is no solution on trade.

However, not everybody was prepared to find a solution at any cost. Bank of China governor Yi Gang stated that he was preparing for the worst, despite still seeking a constructive resolution to the problem. Gang stated at the meeting: “You see a lot of people in China now preparing for this trade tension to be a prolonged situation. The downside risks from trade tensions are significant.”

Mexico also stepped in to voice its support for China. Former Mexican president Ernesto Zedillo told China that they should follow the example set by Mexico and Canada during their negotiations with the United States, because they both were able to secure the terms that they wanted, even though some may disagree violently with this hot take.

Zedillo said, “Mexico and Canada made clear that they’d rather not have Nafta than having the deal that the U.S. wanted. In the end, Mexico and Canada got their way in every single issue that had been drawn as a red line. So I hope China doesn’t blink.”

In any case, IMF managing director Christine Lagarde made it clear in an interview with Bloomberg  following the meetings what the key priority is: “Our message was very clear: de-escalate the tensions.”

The International Monetary and Financial Committee which advises the IMF on policy, concluded that even though the global economy seemed strong, the outlook is definitely being clouded by “heightened trade tensions and ongoing geopolitical concerns, with tighter financial conditions particularly affecting many emerging market in developing countries”.

Rising interest rates were also a topic of discussion. Emerging market economies made note of the fact that rising rates in the US were “causing pain”. Officials representing Colombia and Mexico echoed the sentiment of Indonesia central bank governor Perry Warjiyo, who called for better synchronization amongst global monetary policy and a multilateral response to protectionist headwinds.

There seemed to be very little chance of a resolution between the US and China when the meeting wrapped up on Sunday, so  representatives from Brazil and France were forced to start taking more of a longer-term view. They both acknowledged that short-term volatility as a result of tensions may lead to longer term stability. Brazil’s representative said that emerging markets shouldn’t complain because normalization now may help prevent sudden changes at later dates.

Bank of France Governor Francois Villeroy de Galhau concluded: “We are moving from synchronized growth to economic divergence.”

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Via WSWS.org,

Media outlets removed by Facebook on Thursday, in a massive purge of 800 accounts and pages, had previously been targeted in a blacklist of oppositional sites promoted by the Washington Post in November 2016.

The organizations censored by Facebook include The Anti-Media, with 2.1 million followers, The Free Thought Project, with 3.1 million followers, and Counter Current News, with 500,000 followers. All three of these groups had been on the blacklist.

In November 2016, the Washington Post published a puff-piece on a shadowy and up to then largely unknown organization called PropOrNot, which had compiled a list of organizations it claimed were part of a “sophisticated Russian propaganda campaign.”

The Post said the report “identifies more than 200 websites as routine peddlers of Russian propaganda during the election season, with combined audiences of at least 15 million Americans.”

The publication of the blacklist drew widespread media condemnation, including from journalists Matt Taibbi and Glenn Greenwald, forcing the Post to publish a partial retraction. The newspaper declared that it “does not itself vouch for the validity of PropOrNot’s findings regarding any individual media outlet.”

While the individuals behind PropOrNot have not identified themselves, the Washington Post said the group was a “collection of researchers with foreign policy, military and technology backgrounds.”

PropOrNot, which remains active on Twitter, publicly gloated about Facebook’s removal of the pages on Thursday. “Russian propaganda is VERY VERY MAD about their various front outlets & fellow travellers getting suspended by @Facebook &/or @Twitter,” it wrote. The tweet tagged The Anti Media and The Free Thought Project, and included a Russian flag emoji next to an emoji depicting feces.

PropOrNot did not attempt to reconcile its own narrative that the targeted organizations were front groups for the Kremlin with Facebook’s official claim that they operated independently of any government but sought to “stir up political debate” for financial motives. This is because both accusations are hollow pretexts for political censorship.

In a separate post, PropOrNot added: “Well, look at that… @Facebook removed some of the most important gray/black Russian propaganda outlets from their platform! Bravo @Facebook – better late than never, so a BIG thank you for this.”

It added, ominously: “All of these [organizations] are cross platform & have websites, but one thing at a time.”

These comments by PropOrNot make clear where the censorship measures supervised by the US government and implemented by the internet companies are going. While these organizations still “have websites,” the authorities are handling “one thing at a time.”

The clear implication is that censorship will not end with Google’s manipulation of its search platform or the removal of accounts by Facebook and Twitter. The ultimate aim is the total banning of oppositional news web sites.

The publication of the PropOrNot blacklist and its promotion by the Washington Post helped trigger a wave of censorship measures against oppositional news sites by the major technology companies, working at the instigation of the US intelligence agencies and leading politicians.

Last year, the World Socialist Web Site reported that it an other sites, including Global Research, Counterpunch, Consortium News, WikiLeaks and Truthout,saw their search traffic plunge after search giant Google implemented a change to its search ranking algorithm.

In the subsequent period, search traffic to these sites has fallen even further. Search traffic to Counterpunch has fallen by 39 percent, and Consortium Newshas fallen by 51 percent.

These developments confirm the analysis made by the World Socialist Web Site in its open letter to Google alleging that it was censoring left-wing, anti-war and socialist websites.

“Censorship on this scale is political blacklisting,” the letter declared.

“The obvious intent of Google’s censorship algorithm is to block news that your company does not want reported and to suppress opinions with which you do not agree. Political blacklisting is not a legitimate exercise of whatever may be Google’s prerogatives as a commercial enterprise. It is a gross abuse of monopolistic power. What you are doing is an attack on freedom of speech.”

On Tuesday, Google admitted in an internal document that it and other technology companies had “gradually shifted away from unmediated free speech and towards censorship and moderation.” The document stated that an aim of the censorship was to “increase revenues” under conditions of growing government and commercial pressure.

The document acknowledged that such actions constitute a break with the “American tradition that prioritizes free speech for democracy.”

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Actor Alec Baldwin has achieved a newfound relevance by playing President Trump on Saturday Night Live, the most popular sketch comedy show on network TV. And apparently, the aging actor (whose long history of public tantrums would make for some interesting oppo fodder in 2020) is entertaining ambitions of becoming the second NBC celebrity to lock up the American presidency.

Or why else would Baldwin, who has long been a vocal political activist, leave immediately after the Saturday taping of his latest SNL bit to schlep all the way up to Manchester, New Hampshire to speak before a crowd of 700 Democratic donors? And lest the press miss what appeared to be his first step toward a 2020 bid, the actor made sure to sprinkle his speech with controversial comments, virtually ensuring that reporters would allot him some richly deserved attention.

Adding to a stream of increasingly threatening comments by leftist politicians and commentators, Baldwin said during his speech that responsible US citizens must band together and “overthrow the government of Donald Trump,” rhetoric that bears distinct echoes of Karl Marx, before clarifying that Americans must do so “in an orderly and lawful way.”

“We have a method for changing governments here in the United States,” Baldwin said. “We must in an orderly and lawful way overthrow the government of Donald Trump.”

“Let’s ‘Make America Great Again’ by making Donald Trump a failed casino operator again,” Baldwin said in a mic-drop-moment ending to his speech.

While Baldwin probably sees himself as one of the president’s preeminent critics thanks to his work on SNL, the content of his speech is the latest example of how even Trump’s political enemies have started to emulate him. Perhaps the best example of this trend is Michael Avenatti, the LA lawyer who made his name representing Stormy Daniels in her quest to share intimate details about Trump’s “mushroom penis” with the world. Avenatti has established himself as a contender for the Democratic nomination in 2020 by relying on the same attention-seeking affinity for bombast that helped Trump cement his grip on the nomination back in 2016.

Even if Baldwin’s star were to fade before primary season, it wouldn’t change the fact that traditional politicians like Cory Booker and Kirsten Gillibrand are facing an uphill battle as Americans have developed an appetite for “non-politician” political leaders, a trend that will only benefit fringe contenders like Oprah Winfrey, Avenatti and Baldwin.

Alec Baldwin: “We need to overthrow the government of the United States under Donald Trump.” pic.twitter.com/J332cZA7rf

— NBC News (@NBCNews) October 15, 2018

After his speech, Baldwin reiterated to reporters that his call for the “overthrow of the Trump government” was intended to be a nonviolent call for voters to vote. However, the trend toward violent rhetoric is difficult to miss. After all, Baldwin’s remarks followed Hillary Clinton’s warning last week that Democrats “cannot be civil” towards the GOP, and former Obama administration Attorney General Eric Holder’s rallying cry that “When they go low–we kick ’em!”.

Ahead of Baldwin’s remarks, New Hampshire GOP Chairman Wayne MacDonald released a statement asking “surely, with a Democrat field as talented for 2020 as the Democrats claim, a better, less controversial, speaker could have been arranged.”

And while that’s probably true, what’s one more speech from Corey Booker when you can listen to the eldest Baldwin Brother rage about the need for an armed insurrection? We imagine it made for a more exciting keynote address at the NH Democratic Party’s fall fundraiser dinner, a typically staid affair.

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Authored by Simon Black via SovereignMan.com,

On June 15, 1215, King John sat in a field in Runnymede, England, surrounded by angry nobles.

His Barons – the big landowners throughout England – had rebelled and seized London, forcing King John to sign an agreement guaranteeing certain rights to the people of England… and restrictions of his power.

This agreement was called the Magna Carta. And it would become one of the most important documents in history.

Centuries later in 1678, Charles II was King of England. Like many kings, Charles was terrible with money.

And when he ran out of it, he started demanding extra taxes from his knights, and imprisoning those who refused to pay.

The King was once again surrounded by angry nobles, this time in the Parliament building. There he signed the writ of Habeas Corpus in exchange for more money.

Best tax dollars ever spent. Habeas Corpus said that government officials could not imprison people for no good reason. Prisoners had the right to go before a judge to determine if their imprisonment was justified.

Just because the government accused you of something didn’t mean they could do whatever they wanted to you.

About a hundred years later, American colonists got fed up with the King of England once again.

The government exists to serve the people, they said. If the government wants to accuse, search, or arrest you, they better have a good reason. And they better allow you every opportunity to clear your name.

In 1791, the Bill of Rights enshrined into law the right to speak out against officials, the right to be considered innocent until proven guilty, and to be secure against unreasonable search and seizure.

These concepts of individual rights were shaped in the UK and US. But they apply universally.

Unfortunately, some governments seem determined to erase all this progress.

If you’re traveling to New Zealand, you should be aware of the Customs and Excise Act of 2018. It just went into effect at the beginning of October.

New Zealand Customs and Border agents can now demand passwords for any electronic devices you bring into the country. They can download the entire contents of your phone or laptop, and search through it for evidence of a crime.

Agents could always search phones and laptops at the border. But now they can fine you up to $5,000 ($3,300 USD) for refusing to hand over the passwords, codes, and encryption keys to your devices.

The new law also allows Customs agents to collect biometric data from anyone entering the country. That means they can take your fingerprints, photo, or iris scans, store them, and share them.

And even worse, New Zealand’s Customs website explains:

“Making an arrest without a warrant can now be done with no limitation to timeframe.”

So now you officially have no rights at the New Zealand border.

Agents can search your electronics without cause, and fine you for refusing to give out your password. They can collect, store, and share any of your biometric data they want.

They can arrest you without a court order, and hold you for as long as they like.

It’s not like New Zealand is some third world country… They actually adopted the Habeas Corpus Act in 1881 while under British rule.

Along with the the UK, USA, Australia, and Canada, New Zealand’s legal system is part of the Western tradition. This is the legal basis, starting with the Magna Carta, that protects common people’s rights against overreaching authorities.

These countries also make up the Five Eyes intelligence alliance… They have all agreed to share secrets from their spy agencies with one another.

For a visualization of the Five Eyes Alliance, just look at a map of Oceania from George Orwell’s 1984—the dystopian classic portraying the ultimate authoritarian police state.

And unfortunately, New Zealand isn’t the only Five Eyes government acting like Big Brother—the embodiment of the omnipresent surveillance state in 1984.

Since 9/11 the US has also been searching travelers’ electronics at the border. But they kept the practice small scale for a while.

With the 9/11 terrorist attacks fresh, it didn’t really bother anyone. Anything in the name of national security…

But by 2015 Customs and Border Protection searched the electronic devices of 8,503 airline passengers throughout the year.

In 2016 it escalated to 19,033 searches.

And in 2017 Customs Agents searched the phones and laptops of 30,200 travelers.

Just like in New Zealand, agents didn’t get warrants for these searches. They didn’t even require probable cause.

In January of this year, US Customs sent out new guidance about phone and laptop searches at the border.

It says they can search anyone’s electronic devices “with or without suspicion.”

It says passengers are “obligated” to turn over their devices as well as passcodes for examination. If you refuse agents can seize the device.

That is all considered a “basic search.” No suspicion needed.

To add insult to injury, the January guidance starts, “CBP will protect the rights of individuals against unreasonable search and seizure and ensure privacy protection while accomplishing its enforcement mission.”

This is another page taken from Orwell. Doublethink. They want us to believe two contradictory ideas at the same time.

They treat everyone like a criminal, they say, to protect the innocent.

They search the innocent to protect their rights.

Habeas Corpus, the right to be secure against unreasonable search and seizure, the rights of the accused… these are quickly becoming lost to the memory hole of history.

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There are not one, not two, but three ‘weapons’ on the “nuclear option” menu for Saudi Arabia to strike back at any US sanctions stemming from its alleged murder and dismemberment of dissident journalist Jamal Khashoggi in what is now being reported as a “botched interrogation.”

The first is simple and well known – “oil” – cutting off its own supply “nose” to send prices to $100, $200, or $400 may end up spiting its own face however.

So let’s take a look at some other options.

The second, and relatively well known, potential course for retaliation is in its choice of who to buy its weapons from…

President Trump has so far stated his unwillingness to impose any kind of punishment on Saudi Arabia, and as Statista’s Martin Armstrong notes, this could be why – the U.S. is the world’s biggest exporter of arms and according to data from the Stockholm International Peace Research Institute, the biggest importer from the country in 2017 was Saudi Arabia.

You will find more infographics at Statista

This infographic uses the Stockholm International Peace Research Institute’s “trend-indicator values” (TIV). These are based on the known unit production costs of weapons and represent the transfer of military resources rather than the financial value of the transfer.

As Trump himself warned, there are plenty more “sellers” of deadly weapons in the world.

However, there is a third – potentially most existentially challenging option that the Saudis could unleash would be ‘dumping its Treasury Holdings’.

Since the start of 2014, with only one small blip in 2014/15 as oil prices collapsed, the Saudis have been generous buyers of US Treasurys – recycling their petrodollars in this virtuous relationship…

Notably, in the last two years, they have been a notable outlier with Russia, China, and Japan all selling down (or completely dumping) their Treasury holdings.

So – could the Saudis unwind their Treasury book? Or even stop recycling those petrodollars anytime soon? The answer is yes, especially given the impacts that tyrannical hegemonic actions of Washington in recent years have had on the rest of the world, increasingly pushing them all away from the dollar-centric world payments systems.

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Authored by Daisy Luther via The Organic Prepper blog,

Last week, Mark Zuckerberg made the media rounds to give a rather shady explanation of why Facebook suddenly closed hundreds of incredibly popular pages in what’s being called The Alternative Media Purge. Zuckerberg accused the closed pages, many of which had millions of fans, of spreading “political spam.”

Ironically, many of the pages that were shut down had absolutely nothing to do with politics or elections, unless you include the fact that they recommended skipping the entire circus. None of these pages were accused of being “the Russians,” who were the scapegoat of the last surprise presidential election results. A couple of the things that many of the pages did have in common, incidentally, were an anti-war outlook and a police watchdog mentality.

But as far as making the election more resistant to interference, the result of the Alternative Media Purge is the diametric opposite. People will now only get one side of the story.

The alternative media changed everything during the last presidential election.

When Donald Trump announced his candidacy for president, much of the world snickered. Who was this reality television star to take on part of the Clinton Empire? There was no way, people scoffed, that Trump could possibly win.

It’s a proven fact that Hillary Clinton was in cahoots with the mainstream media throughout her candidacy. And the reason it’s proven is that organizations like Wikileaks released the evidence of it in a series of emails with her campaign manager and people like Donna Brazile of CNN. Brazile finally publically admitted that she’d done so and that it was her “job to make all our Democratic candidates look good.”

The alternative media jumped on this story, as well as many other questionable emails that were divulged by Wikileaks, while the mainstream pretended that none of this was happening. And the mainstream did very little to cover the Democratic National Convention, during which the nomination was stolen from Bernie Sanders, who – if we’re being honest – probably would have had a much better chance of beating Trump than the notoriously unlikable Clinton. Here’s my coverage of it at the time.

The alternative media, never a fan of the goings-on in Clintonland, from the Haiti scandal all the way back to the “suicide” of Vince Foster in Arkansas, jumped on these stories as well as stories about her debatable health.

The fact that we had a robust alternative media at the time meant that these stories were heard. At the same time, the mainstream media was busy painting Donald Trump as a neo-Nazi fascist who hated minorities and would nuke somebody the day he got into office.

Now, imagine there had been no alternative media during that election.

If we hadn’t have had an alternative media telling other stories – enough stories that people were able to get a fuller picture of who both of these candidates really were – things might have turned out entirely differently. And while that would be all right with any number of people who loathe Donald Trump, would it have been a “fair” election?

Let’s look back even further at the candidacy of Congressman Ron Paul back in 2012. Dr. Paul was an incredible candidate with a glowing political resume, but he didn’t get the time of day. There was a media blackout on his candidacy and finally, he was forced to withdraw from the race. Many of us were budding alternative journalists at that time learned a valuable lesson during that election – what we were doing was important. There needed to be an option instead of letting the mainstream media present the only options and information to people.

By the time the 2016 election rolled around, those disappointed in how Dr. Paul was treated were determined that it would not happen again. That a candidate with a background full of sordid scandals would not get through an election cycle unscathed, painted as a glowing Madonna who would save us all.

So…during the fierce battle between Clinton and Trump, both sides of the story were told and told loudly.

Alternative journalists engaged the power of social media to connect with people who wanted to know more and they did it to such a degree that everything changed. Clinton, originally the front-runner, was suddenly in the fight of her life against a candidate that most people had considered a joke.

And that’s when everyone started blaming the Russians.

In a shocking article, the Washington Post printed a long list of websites that they claimed were run by “the Russians.” Many of these sites were run by folks I know personally who are decidedly not Russians, but simply bloggers who wanted to share the truth as they identified it. (This article was removed from WaPo – I’m guessing due to threats about legal action by many of the site owners accused of working for Russia.)

Although investigation after investigation has been undertaken, there’s still no proof that Russia tampered with the election, nor that they colluded with Donald Trump.

Years later, the Washington Post sticks to their story with headlines like “Without the Russians, Trump Wouldn’t Have Won.” In the piece, they admitted that there isn’t any official proof and they cited Buzzfeed.

While the intelligence agencies are silent on the impact of Russia’s attack, outside experts who have examined the Kremlin campaign — which included stealing and sharing Democratic Party emails, spreading propaganda online and hacking state voter rolls — have concluded that it did affect an extremely close election decided by fewer than 80,000 votes in three states. Clint Watts, a former FBI agent, writes in his recent book, “Messing with the Enemy,” that “Russia absolutely influenced the U.S. presidential election,” especially in Michigan and Wisconsin, where Trump’s winning margin was less than 1 percent in each state.

We still don’t know the full extent of the Russian interference, but we know its propaganda reached 126 million people via Facebook alone. A BuzzFeed analysis found that fake news stories on Facebook generated more social engagement in the last three months of the campaign than did legitimate articles: The “20 top-performing false election stories from hoax sites and hyperpartisan blogs generated 8,711,000 shares, reactions, and comments on Facebook.” Almost all of this “fake news” was either started or spread by Russian bots, including claims that the pope had endorsed Trump and that Hillary Clinton had sold weapons to the Islamic State. (source)

Buzzfeed? Isn’t that where you go to take a quiz to find out what kind of potato you are?

That leads us to Facebook’s potential election interference

Last week, as I mentioned, hundreds of Facebook pages were shut down without warning. Many of these sites also lost their Twitter accounts on the same day. This is reminiscent of last month’s attack on Alex Jones.

Anyone who disagrees with the establishment is being abruptly silenced.

Zuckerberg and friends are saying that this is so that we can be sure we don’t have election interference in the midterms…but what they’re really doing is interfering in the elections themselves.

They’ve gloated about everything from “featuring Facebook pages that spread disinformation less prominently so that fewer people potentially see them” to “559 politically oriented pages and 251 accounts, all of American origin, for consistently breaking its rules against “spam and coordinated inauthentic behavior”.

The pages which have been removed or shadowbanned have run the gamut of political philosophies, but the fact is, people like Mark Zuckerberg, the folks at Google, and Jack Dorsey of Twitter are deciding which information gets to be seen. They’re deciding whether something is “disinformation” or truth. They’re deciding if people who have spent years building a following get to still reach the people who opted to follow them.

Because Facebook reaches more than 2 billion people each day, this is a problem of epic proportions.

I believe that it is Facebook itself that is tampering with the election by manipulating what they want people to see.  If the alternative media changed everything in the 2016 election due to the availability of more information, Facebook will change future elections due to their manipulation of the information users are allowed to see.

If you are conservative or antiwar or anti-overreaching-government or libertarian, you’re now persona non grata. Even if you aren’t in the minority, you’ll be made to feel like you are in the giant echo chamber of “approved media.” If you support a different candidate than Big Tech, prepare to be marginalized, silenced, and ignored. That holds true whether you opt for anyone other than their “choice.” They WILL control the outcome of the presidential election the next time around.

If you really want to see what election interference looks like, you’re getting a live demonstration right now.

via RSS https://ift.tt/2AbQZNA Tyler Durden

Since stepping back from day-to-day management of Bridgewater Associates and its $160 billion AUM, Ray Dalio has been focusing his energies on the role of doomsayer, telling seemingly anybody who would listen (and plenty of financial journalists have) about why the modern geopolitical climate is eerily similar to that of the late 1930s.

However, Dalio has been careful to preface his pessimism with the warning that the looming debt crisis is still a ways off. In fact, he expects the good times to persist for at least another 18 months or so as President Trump’s tax cuts and regulatory reforms continue to work their magic. Eventually, the pain will follow, he says – but for now, we’re still in the seventh inning of the current economic cycle (and what a long inning it has been).

But while Dalio has preferred to keep his projections vague, focusing more on his analysis of the mechanics behind debt crises, in an interview with the Financial Times, Bridgewater co-CIO Bob Prince offered a more pessimistic outlook, suggesting that the market has arrived at an inflection point, and that last week’s market turmoil was just the latest indication that investors are coming around to the idea that earnings growth, one of the bull market’s last supporting pillars, may has peaked. And as company will soon be facing difficult yoy comps, it’s difficult to imagine how the strong corporate earnings narrative will survive.

“A lot of optimism about future earnings growth has been baked into equity valuations. But we are at a potential inflection point where the economy is moving from hot to mediocre,” Mr Prince said in an interview.

And while Prince doesn’t foresee monetary tightening leading to “bombs going off” in the immediate future, he expects that there will be “pressure” ahead, as major central banks continue “turning the screws” on the global economy.

Mr Prince, who manages Bridgewater’s $160bn of assets alongside founder Ray Dalio and co-CIO Greg Jensen, said: “We are now approaching the stage where monetary tightening could produce, perhaps not a big downturn, but more pressure.”

Most bourses regained their footing on Friday, and US Treasury yields have fallen from the seven-year highs they touched at the peak of the bond rout. But Mr Prince cautioned that more turbulence was likely, given how major central banks, led by the Fed, were turning the screws on monetary policy.

Once the selloff has begun in earnest, nobody will remember the events of last week.

“This week could fade into history and we won’t remember it, but we are clearly shifting from an era of monetary easing to monetary tightening,” he said. “If that [a growth inflection point] is what is happening, then this won’t be a one-week event.”

And while his boss might disagree, Prince said the US economy will likely avoid a sharp downturn like the one we saw ten years ago. Instead, investors should expect a slow grinding downturn followed by a tepid recovery as neither the federal government nor the Federal Reserve will have the tools available to try and ease the economy out of its tailspin.

“The risks of a sharp downturn are somewhat mitigated by the fact that we’re not overleveraged, but the risks of a prolonged downturn are greater,” Mr Prince said. “What will pull us out of it?”

Assuming developments in the geopolitical realm continue progressing along their current path, maybe Prince’s boss’s ‘1937’ thesis will be proven correct.

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The Judge has dismissed porn actress and stripper Stephanie Clifford’s lawsuit against President Trump, according to one of Trump’s attorneys. The judge says that Trump is entitled to legal fees from Daniels, which Trump’s legal team says will be determined at a later date. 

Breaking: Federal judge dismisses Stormy Daniels’ defamation lawsuit against Donald Trump. pic.twitter.com/wkbcbd6gwe

— Chris Geidner (@chrisgeidner) October 15, 2018

A statement from Trump’s legal team reads:  

United States District Judge S. James Otero issued an order and ruling today dismissing Stormy Daniels’ defamation lawsuit against President Trump. The ruling also states that the President is entitled to an award of his attorneys’ fees against Stormy Daniels. A copy of the ruling is attached. No amount of spin or commentary by Stormy Daniels or her lawyer, Mr. Avenatti, can truthfully characterize today’s ruling in any way other than total victory for President Trump and total defeat for Stormy Daniels. The amount of the award for President Trump’s attorneys’ fees will be determined at a later date.

Last week Trump’s legal team argued that it made no sense for them to keep fighting in court over a $130,000 hush payment received by Clifford, also known as Stormy Daniels, as she invalidated the non-disclosure agreement she signed with Trump’s longtime fixer and lawyer, Michael Cohen. 

Developing…

 

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