Utah State Sen. Mark Madsen Switching Parties from Republican to Libertarian, Endorsing Gary Johnson for President

At a press conference at 1:30 this afternoon in Salt Lake City, sitting state Sen. Mark Madsen, a Republican in Utah, will be announcing that he’s switching his Party affiliation to Libertarian and endorsing Gary Johnson for president.

In an emailed press release announcing the planned press conference, Madsen is described as “a sitting two term state senator and former city council member from Eagle Mountain. His legislative record bears out his dedication to individual liberty. He has observed that the interests of bureaucratic agencies and the people rarely align. He believes in choice in health care and education. He is a champion of free trade and free market solutions.”

At the press conference, the release says, Madsen will “discuss his experience at the GOP convention, his goals and priorities now, and his support for Libertarian nominees for president and Vice President, Governors Gary Johnson and Bill Weld.”

More on this story as it develops.

Matt Welch reported earlier today on the defection of two sitting Republican state representatives from Montana, not to the Libertarian Party per se, but to endorsement of that Party’s candidates, Gary Johnson and William Weld. They are “Daniel Zolnikov (R-Billings), a 29-year-old two-term state representative known for his civil libertarian work on surveillance and free speech” and “fellow State Rep. Nicholas Schwaderer (R-Mineral County).”

Welch with a complete list of known sitting legislators, Libertarian and Republican, publicly for Johnson/Weld. Madsen will now be the third sitting state legislature who switched Party affiliation in office to Libertarian, after Nevada’s John Moore and Nebraska’s Laura Ebke.

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Was Trump Right? Leaked DNC Email Shines Unexpected Light On Cruz’s “Militant” Father

In yet another awkward moment for Democratic talking-point-providers and Trump-deniers, Wikileaks' leaked DNC emails turned up an interesting factual confirmation of Trump's 'conspiracy theory' questions about Ted Cruz's father's background… "I will note that Cruz's father was in fact a militant who fought the Batista regime (which Fidel Castro defeated) and it would not be unusual for him to be caught up in the ugly web of Cuban militants with questionable histories."

 

 

Here is Luis Miranda – DNC Communications Director – reflecting on Trump's various conspiracies, confirming Cruz's father's connections…

While I will note that Cruz's father was in fact a militant who fought the Batista regime (which Fidel Castro defeated) and it would not be unusual for him to be caught up in the ugly web of Cuban militants with questionable histories (just look at the cabinet in the basement, one of the Watergate burglars was…Cuban)…

 

…with plenty of other examples including a guy who blew up a plane and was basically given safe refuge in Texas

 

…not to mention those who were involved in the ugly Central American wars in the 80s… I think this is a fun hit.

Source email here:

(Source)

While not the JFK smoking gun, it appears – despite all outward-facing bloviation – that The DNC agrees with Trump and there goes another conspiracy theory…

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Is Being Unemployed Just “Bad Luck”? (Spoiler Alert: Don’t Be Stupid!)

Submitted by Michael Shedlock via MishTalk.com,

Washington Post writer Matt O’Brien proposes Getting Stuck Without a Job is Mostly a Matter of Bad Luck.

That notion is ridiculous.

While there may be instances of “bad luck”, in general, the employees with the weakest skills were the first to be let go and the last to be rehired.

 

O’Brien did post some interesting charts about the length and strengths of recessions vs. long term unemployment.

WP Long Term Unemployment

That chart is interesting, but all it really does is quantify what should be inherently obvious.

Musical Chairs

O’Brien states “When there are a lot more unemployed people than there are job openings—or six times more, to be exact, like there were in 2009—then a lot of people will get left behind. Think of it as a particularly high-stakes game of musical chairs.”

WP Long Term Unemployment2

The above chart got me thinking. Here are two charts that I produced along the same lines.

Job Openings vs. Unemployment Level

Job Openings vs unemployment level

The problem with the above chart is the same one in O’Brien’s  chart that preceded it: Neither counts discouraged workers or those trapped in part time jobs that want a full time job.

The following chart corrects for that deficiency by factoring in U6 unemployment.

The U6 alternative measure of unemployment is 9.6% vs the “official” unemployment rate of 4.9%.

Job Openings vs. U6 Unemployment Level

Job Openings vs U6 level

There are problems in the above chart as well. For example, Some of the job openings may be part-time jobs, and some people who are unemployed may only want a part-time job.

However, that chart too likely understates the problem by a significant degree. Many millions of people really want a job but stopped looking. Others retired to collect Social Security when they would really prefer to work.

Off the Deep End

It is at this point O’Brien jumped off the deep end.

All you have to do is look at the late 1990s. Back then, the Fed allowed unemployment to get so low that the chances someone would end up long-term unemployed averaged just 5.9 percent between 1998 and 2000. Things never got so good during the mid-2000s, and might not now either.

 

Long-term unemployment isn’t a story about bad personal motivation. It’s a story about bad macroeconomic luck. After all, it’s not like the people who lost their jobs at the end of 2009 were three times lazier than the ones who did at the end of 2015. It was just that there were more people competing for fewer jobs back then, so much so that 30 percent of them were still looking for work six months later.

O’Brien clearly believes the Fed can “control” the unemployment rate as part of its “dual mandate” along with guiding the economy.

Dual Mandate Equals Mission Impossible

Here’s the deal.

1. The Fed can control money supply but it will have no control over interest rates (or anything else).

2. The Fed can control short-term interest rates, but then it would have no control over money supply (or anything else).

That is the full and complete extent of the Fed’s “control”. Note that neither price stability nor unemployment is in either equation. The reason is the Fed controls neither.

The idea the Fed can control the economy and unemployment at the same time is absurd. And if low interest rates caused jumps in employment, then France, Italy, and Greece would be shining stars of economic growth, not cesspools of stagnation.

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Putin Isn’t Responsible for How the Democrats Treated Sanders’ Campaign

Debbie Wasserman SchultzIt’s all too typical that Debbie Wasserman Schultz’s reign as Democratic National Committee chair came not from the crime but the cover-up. Emails obtained by WikiLeaks from a hacker revealed that the DNC appeared to be coordinating to make the Bernie Sanders campaign look bad, inappropriate behavior from what is supposed to be a neutral organization.

Wasserman Schultz will be stepping down as chair by the end of the week (she was booed at a delegate meeting this morning) and formally joining Clinton’s campaign.

The leak has exposed more of the rift between the Democratic establishment and the populist democratic socialist base that makes up Sanders’ support. It highlights that the Democratic Party is not as united as it would like to portray itself as (particularly as when it compares itself to the extremely fractured GOP).

The leak has also possibly (and to be clear, this is not conclusive) suggested that hackers serving the Russian government or President Vladimir Putin are attempting to influence the election. Cybersecurity experts are saying the hack likely originated from Russia or at least has the fingerprints of Russian hackers. There’s hardly a smoking gun as yet. The FBI has launched a probe to try to determine what happened to the committee’s cybersecurity and who is responsible.

But that the investigation is just now starting hasn’t stopped the Democrats and Clinton campaign to attempt to deflect away from the contents of the leak to try to implicate Donald Trump as Putin’s stooge. The Clinton campaign very quickly put out a statement calling the leak “evidence the Russian government is trying to influence the outcome of the election,” attempting to plant the seeds that a vote for Trump is supporting the kind of kleptocratic corruption that rules Russia. And while there’s a compelling case to be made that a Trump presidency would trend toward that direction, this response is a generalized dismissal of what the email contents actually say about the Democratic Party’s direction and how it feels about those who are trying to influence the party’s stances.

Putin may or may not have played some role in the hacking of the DNC, and certainly it’s proper that the government investigate and track down who is responsible. But neither Putin nor Russian hackers are responsible for the way the party treated Sanders and its supporters. And this attempt to quickly deflect the subject matter over to Trump and Putin has the side effect (intentional or not) of again dismissively treating Sanders and his supporters’ concerns as largely irrelevant to the establishment.

There is a rift in the Democrats that is reminiscent of the rise of the Tea Party back when Barack Obama was elected, and it’s not clear right now that the Democrats have learned much from the Republicans (it’s also not clear that the Republicans learned either or else we might not have had Trump). There’s an interesting paradox with Clinton here. Clinton is certainly the least-liked candidate the Democrats have put forward in modern times. But what has made her unlikeable in part is her naked political ambition and savviness in being difficult to nail down on actual positions. This means that once she realized the Sanders’ supporters weren’t going anywhere, she has carefully, diplomatically incorporated many of Sanders’ most-vocal positions into her campaign (if they weren’t already there). She’s signed on to an absurdly high increase in the minimum wage, to a limited free college campaign (after previously focusing on trying to reduce college debt), and has reversed herself on trade deals.

Really, Clinton has done a lot to try to avoid a party crack-up and bring Sanders’ supporters to her side (though this has made her an even worse candidate to libertarians). That the response to this email dump is to try to direct its talking points toward Russia and Trump serves only to again dismiss the part of the party’s voting base that is unhappy with the direction the party has taken. There are rumors that there will be more leaks of more emails. Pointing fingers at Russia won’t do much to stop unhappy voters who feel like the party is serving itself more than it serves them.

And that leaves an opening for third-party candidates. Check out what ReasonTV has discovered when interviewing Sanders’ supporters at the Democratic National Convention:

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FBI Launches Probe Of ‘Putin/Trump’ DNC Cyber-Attack

Following the release of greatly embarrassing emails that are forcing Hillary to lose control of the narrative, Politico reports, The Federal Bureau of Investigation has launched a probe into the hacking of the Democratic National Committee’s emails. We are sure Director Comey will be closely watching and AG Lynch will once again take his word as gospel as somehow, we suspect, a narrative of Trump-Putin partnership will be created (or at the very least questions raised).

“The FBI is investigating a cyber intrusion involving the DNC and are working to determine the nature and scope of the matter,” the agency said in a statement.

 

A compromise of this nature is something we take very seriously, and the FBI will continue to investigate and hold accountable those who pose a threat in cyberspace.”

The Trump/Putin narrative has begun (via The Observer)…

It turns out there’s hardly any mystery there. It’s no secret that the DNC was recently subject to a major hack, one which independent cybersecurity experts easily assessed as being the work of Russian intelligence through previously known cut-outs. One of them, called COZY BEAR or APT 29, has used spear-phishing to gain illegal access to many private networks in the West, as well as the White House, the State Department, and the Joint Chiefs of Staff last year. Another hacking group involved in the attack on the DNC, called FANCY BEAR or APT 28, is a well-known Russian front, as I’ve previously profiled.

 

These bears didn’t make much efforts to hide their DNC hack—in one case leaving behind a Russian name in Cyrillic as a signature—and Kremlin attribution has been confirmed by independent analysis by a second cybersecurity firm.

 

The answer then is simple: Russian hackers working for the Kremlin cyber-pilfered the DNC then passed the purloined data, including thousands of unflattering emails, to Wikileaks, which has shown them to the world.

 

This, of course, means that Wikileaks is doing Moscow’s bidding and has placed itself in bed with Vladimir Putin. In response to the data-dump, the DNC has said as much and the Clinton campaign has endorsed the view that Moscow prefers Donald Trump in this election, and it’s using Wikileaks to harm Hillary. This view, considered bizarre by most people as late as last week, is being taken seriously by the White House—as it should be.

But, as AP reports, Donald Trump on Monday dismissed as a “joke” claims by Hillary Clinton’s campaign that Russia is trying to help Trump by leaking thousands of emails from the Democratic National Committee.

Clinton campaign chairman John Podesta added fuel to the debate Monday, saying there was “a kind of bromance going on” between Russian President Vladimir Putin and Trump. The Clinton campaign says Russia favors Trump’s views, especially on NATO.

 

“The new joke in town is that Russia leaked the disastrous DNC e-mails, which should have never been written (stupid), because Putin likes me,” Trump wrote as part of a series of Tweets. “Hillary was involved in the e-mail scandal because she is the only one with judgement (sic) so bad that such a thing could have happened.”

 

Director of National Intelligence James Clapper has said U.S. officials have seen indications of foreign hackers spying on the presidential candidates, and that they expect more cyberthreats against the campaigns.

Clinton’s campaign stood firmly behind their claims of Russian involvement Monday.

“There is a consensus among experts that it is indeed Russia that is behind this hack of the DNC,” Clinton campaign spokesman Brian Fallon told CNN.

 

On Sunday, Clinton campaign manager Robby Mook said that it was “concerning last week that Donald Trump changed the Republican platform to become what some experts would regard as pro-Russian.”

Trump’s senior policy adviser Paul Manafort called statements by the Clinton campaign “pretty desperate.”

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China’s Rare Earth Minerals Mercantilism Totally Fails: I Told You So Six Years Ago

BaileyRareEarthsPhotoBack in 2010, Chinese central planners believed that they had the world over a barrel because their country was the source of 95 percent of various rare earth minerals used in many modern technologies. The Chinese government imposed limits on the amounts that could be exported with the goal of forcing Western technology companies to move their manufacturing operations to the Middle Kingdom.

As I argued in my column, “Rare Earth Ruckus,” back in 2010, this Chinese mercantlist ploy would backfire as entrepreneurs opened rare earth mining operations in nice stable countries like Australia, Malaysia, and Canada. In addition, innovators would develop technologies that did not depend upon the minerals that China was trying to cartelize. Of course, some American politicians panicked and introduced legislation offering federal loan guarantees to companies to develop rare earth supplies in the United States (as though higher prices wouldn’t incentivize that). I concluded:

In the end, new supplies and innovation will ensure that the future of the world’s high tech economy will not depend upon the whims of the mercantilist mandarins who steer Chinese industrial and trade policy.

And so it has come to pass. A nice Wall Street Journal op-ed, “China’s Rare-Earths Bust,” confirms my prediction. For example, the op-ed notes that Honda is introducing a hybrid car engine that does not depend upon magnets made using rare earth minerals and which is 10 percent cheaper and 8 percent lighter. From the op-ed:

Beijing’s mercantilist gambit had predictable effects—predictable, at least, for anyone familiar with the work of Julian Simon. The economist taught that fears over natural-resource scarcity often underestimate the flexibility of markets and the ingenuity of the human brain, which Simon called the ultimate resource. Those who warned about “peak oil” were blindsided by fracking, and rare-earth doomsayers failed to foresee how Beijing’s supply squeeze would spur overseas investment in new supplies and substitutes. RareEarthsPrices

Just last year, I participated in a Cato Unbound debate on this issue with economist Dambisa Moyo, author of Winner Take All: China and Global Race for Resources. I don’t know where she learned her economics, but it’s clear that Moyo simply doesn’t know what she is talking about. As I argued:

Moyo would do well to advise China’s leaders to stop their economically ignorant pursuit of resource nationalism. … The Party leaders evidently are still in thrall to the failed ideology of economic central planning and the ultimate results of those policies will not be pretty.

That’s still true.

H/T David Ridgely.

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To Speed Economic Recovery, Release the Brakes: New at Reason

“By most accounts, the current economic recovery has been slower than a tortoise with a bad hangover,” writes A. Barton Hinkle. And there’s plenty of reasons why.

Hinkle offers a few:

In Jacksonville and San Antonio, permits take about four months; over the past decade the housing supply increased 43 percent and 46 percent, respectively, and housing prices increased 107 percent in each city. By contrast, permits in San Francisco and Oakland take more than 10 months, the supply has increased only 12 and 17 percent and housing prices increased by 278 percent and 220 percent.

Sixty-four percent of new jobs are created by small businesses (those with 500 or fewer employees), startups especially. But such businesses are increasingly incommoded by government rules that restrict what they can do or require government’s permission to do it. And it is probably no coincidence that the rate of new-business creation has fallen behind the rate of business closures in recent years.

Half a century ago fewer than one worker out of 20 needed a government license to do his job. Now almost one in three does. The licensing regimes, frequently driven by industry incumbents, often make little sense: In Nevada, you need two years of training to become a travel guide, but only 26 days to become an emergency medical technician. If you want to shine shoes in the District of Columbia, you need four different licenses. Occupational licensing has grown so burdensome even the Obama White House has proposed reform.

View this article.

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Stocks Could Easily Fall 40% From Here

The US is in a recession.

Quarterly earnings by publicly traded corporations have fallen for SIX straight quarters. That covers a time of 18 months.

This has never happened outside of a recession.

Against this economic backdrop, stocks are in “la la land” rallying to new all-time highs.

The more earnings fall while stocks move higher, the BIGGER the bubble gets.

Stock bubbles are formed when stocks detach from fundamentals. By the look of things, this hit in 2015. And is has gotten significantly worse since then.

At current levels, the S&P 500 needs to fall almost 40% to catch up with earnings.

On that note, we are already preparing our clients for this with a 21-page investment report titled the Stock Market Crash Survival Guide.

In it, we outline the coming crash will unfold…which investments will perform best… and how to take out “crash” insurance trades that will pay out huge returns during a market collapse.

We are giving away just 1,000 copies of this report for FREE to the public.

To pick up yours, swing by:

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Best Regards

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Chief Market Strategist

Phoenix Capital Research

 

 

 

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“This Scares The Hell Out Of Me” – ISIS Claims Responsibility For First German Suicide Bombing In Years

Earlier today, German Interior Minister Thomas de Maiziere made waves when he said that the recent surge in deadly attacks on German soil is “unrelated to Merkel’s refugee policy” and instead suggested that  “psychiatric liability” is a possible motive behind the recent deeds.

German interior minister Thomas de Maiziere

Unfortunately, concurrent with his speech facts emerged which promptly refuted this hypothesis, when Bavarian Interior Minister Joachim Herrmann said that the Syrian refugee who blew himself up outside a music festival in Ansbach had pledged loyalty to the Daesh leader which confirmed an Islamist motive of the attack.

Fifteen people were injured in the Ansbach blast, four of them seriously, Ansbach Mayor Carda Seidel said. None of the injuries were life-threatening, she said.

“A video with a corresponding threat of an attack made by the assailant was found on his cellphone, in which he declares in Arabic…in the name of Allah allegiance to Abu Bakr al-Baghdadi, a known Islamist leader, and threatens vengeance against Germans because they stand in Islam’s way,” Herrmann told reporters.

The bomber, a 27-year-old Syrian man who was supposed to be deported, had bomb-making materials in his apartment, Herrmann said. Those materials included fuel, hydrochloric acid, alcohol-based cleaner, soldering irons, wires, and pebbles.

The past year’s influx of refugees and migrants to Germany has unsettled parts of the public, with some politicians claiming it was only a matter of time before Islamist terrorism also made its way in. They were right.

More than a million people seeking asylum have arrived in Germany since January 2015, among them more than 300,000 Syrians, according to government figures. Having sternly denied any linkes between refugees and terrorist, two weeks ago Angela Merkel for the first time admitted that some terrorists entered Europe among the wave of migrants that fled from Syria adding that the refugee flow was used in part to “smuggle terrorists” on to the continent.

 

Refugees waiting transportation to Germany

The late Sunday blast in Ansbach, a small town in Bavaria, marked the fourth high-profile act of violence within in a week in Germany and the third involving an asylum applicant, ramping up jitters over last year’s influx of migrants and refugees into the country. The suicide bombing was also the first such attack in Germany in recent memory. While Belgium and France have suffered from Islamist suicide bombings in the past year, Germany has avoided significant terrorist attacks.

This is how it happened: at 9:45 p.m., security personnel noticed a young man with a backpack walking back and forth outside the entrance to the concert attended by 2,500 people, police said in a statement Monday. He then walked to the outdoor seating area of the bar, where the explosion hit, they said. The alleged terrorist had sought to enter the concert but couldn’t get in, Herrmann said earlier Monday.

He was already known to police and had been treated twice after trying to take his own life, Mr. Herrmann said. He was also known because of a previous drug misdemeanor, a police spokeswoman said.

The man had come to Germany two years ago and applied for asylum. His application was rejected last year but he wasn’t deported to Syria because of the civil war, as is standard practice in Germany, Mr. Herrmann said.

A spokesman for the Interior Ministry said he was instead supposed to be deported to Bulgaria because the man had been registered there on his way to Germany. It wasn’t clear, the spokesman said, why the man hadn’t yet left the country.

The WSJ adds that on his phone, authorities found an Arabic-language video in which the bomber threatens an attack against Germans “in the name of Allah” and pledges allegiance to Islamic State leader Abu Bakr al-Baghdadi, Herrmann said.

He then warns explicitly of an act of revenge against the Germans because they are obstructing Islam,” Mr. Herrmann said. “According to this video, it is beyond doubt that this attack was a terrorist attack with a perpetrator who had Islamist convictions.”

In trying to moderate already rising resentment against refugees, Herrmann said violent extremism “wasn’t typical for refugees in our country.” But, he added, “it is clear that with these attacks in quick succession, the worries and fears in our population will grow.”

It’s not just the locals who will be worried. Ansbach hosts a U.S. military installation, United States Army Garrison Ansbach, which is home to the 12th Combat Aviation Brigade and has 7,000 soldiers, civilians, family members and retirees living on and off base.  The garrison implemented security measures on Monday that included two gate closures. A spokeswoman said no military personnel were among the injured in Sunday’s blast, and there were no indications that Americans were targeted. 

This scares the hell out of me,” said Gregory Garcia, a 31-year-old military veteran in Ansbach who is from Texas. “It does remind us of wartime”, Gregory added quoted by the WSJ.

One thing that will not help is that moments after the press conference determining that terrorism was indeed the cause, ISIS’ Amaq media outlet claimed that the Ansbach attack was carried out by an ISIS “soldier.” 

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